Tariffs and Continental Divides

The American president’s has launched disruptive and radical economic warfare against allies and adversaries alike. Some extracts of commentary over the last two weeks:

The entire world is trying to make sense of the American president’s disruptive and radical economic warfare against allies and adversaries alike. What could I possibly say about it that would be better than the various expert opinions about it that I have read over the last two weeks? This week’s post is a collection of speech and essay excerpts by intellectuals who, to my judgment, have made the best analyses of the situation.

Shahid Bolson: [Americans never realized] that they would inevitably be sacrificed for profit interest the same way that millions of people outside America have been sacrificed. Americans have been sacrificed. Americans created this psychopathic class of predators, and they expected them to never bite the hand that feeds them, even though the hand that feeds them has always been feeding them hands. Now they can’t tell the difference between the food and the feeder anymore. It’s all just flesh to them. You can’t raise a wolf on human flesh and expect him to distinguish between the human you are feeding to him and the human who is feeding him. Eventually, he doesn’t see you as his master or his owner anymore. He only sees you as food. America raised the wolf on the flesh of the Global South, and it turns out Americans taste just the same. Yes, wolves don’t care if it’s dark meat or light meat. They’ll chew you up either way.

1. Michael Hudson, January 25, 2025

The principles of reciprocity and stability were central to the economic arguments by John Maynard Keynes during the debate in the late 1920s … The Allies agreed to pay [debts to the US] by imposing German reparations to shift the cost onto the war’s loser …The fundamental problem, Keynes explained, was that the United States was raising its tariffs against Germany in response to its currency depreciating, and then imposed the Smoot-Hawley tariff against the rest of the world. That prevented Germany from earning the hard currency to pay the allies, and for them to pay America.

To make the international financial system of debt service work, Keynes pointed out, a creditor nation has an obligation to provide debtor countries with the opportunity to raise the money to pay by exporting to the creditor nation. Otherwise, there will be currency collapse and crippling austerity for debtors …

Keynes, as noted above, also emphasized that if creditors want to be paid, they have to import from the debtor countries to provide them with the ability to pay. This was a profoundly moral policy, and it had an additional benefit of making economic sense …

Under Donald Trump, the United States is violating that principle. There is no Keynesian … arrangement in place, but there are the harsh America-first realities of its unipolar diplomacy. If Mexico is to save its economy from being plunged into austerity, price inflation, unemployment and social chaos, it will have to suspend its payments on foreign debts denominated in dollars. The same principle applies to other Global South countries. And if they act together, they have a moral position to create a realistic and even inevitable narrative of the preconditions for any stable international economic order to function. Circumstances thus are forcing the world to break away from the U.S.-centered financial order.

https://www.nakedcapitalism.com/2025/01/michael-hudson-trumps-balance-of-payments-war-on-mexico-and-the-whole-world.html

2. Emmanuel Todd, 2025/01/13

I know that everyone sees or tries to see Trump as victorious, and he is in his own system, but he’s victorious in a society, in an economy, that’s falling to pieces. Above all, it is losing a war on a global scale against Russia. This comes as a surprise because I know that everyone is intoxicated by Trump’s power as a magical individual and so on, but he’s going to go down in history as the leader who presided over the defeat of the United States. Trump’s role is going to be to manage the defeat of the United States at the hands of Russia. We can’t see it yet, but that’s what we’re going to experience.

3. Shahid Bolson, 2025/01/31 (36 minutes) (partial transcript)

This transcript has been edited slightly to provide clarity for readers.

I think that the useful thing about Trump is that he can package the dismantling of American Empire as the building of American Empire. That’s what he’s doing because you have to sell to your demographic, and Americans are not the most mature, the most realistic, the most responsible people in the world, not the most well acquainted with history and so forth, so you cannot possibly sell to Americans the necessary downsizing and the managed erosion of America, and the hollowing out of America. They’ve made a lot of bad choices for a for a very long time. They’ve only ever really made short-term plans for the future, so it turns out that there’s a lot of unavoidable necessary changes that have to be made at their expense. You can’t really sell that to the American public. You can’t tell the American public that consequences are a thing. That demographic of political consumers simply cannot compute a message like that. Look at what Trump is going to do, what he is doing, and what he will do. These are all things that were going to happen anyway with or without him. He’s just the one who’s selling it to you as a good thing. That’s his job. He’s like the guy at a company who is designated as the one to deliver the bad news to you that you’re going to be let go. They designate him for that job because he has a way of presenting being fired as the greatest opportunity of your life—all the new horizons that you’re going to be able to pursue and so on. That’s Trump’s job. America has been stuffing balloons up its sleeves for a very long time and telling everyone that they’re muscles, but now even the balloons are deflating. The great American hoax is over, and Trump is there to oversee the dismembering of American Empire. The US is going to be isolated. It’s going to withdraw, and it’s going to be non-competitive globally. This is all unavoidable. This would have happened with or without Trump. You’ve simply come to the end of your life cycle as a hegemonic superpower, and the decay and the decomposition that will follow is just part of the natural process. Trump can’t be blamed for that, and he can’t be given credit for any of this, but his job is to make you think that none of it is happening, even while it is happening right in front of your face. This is what Trump’s main job is.

Look for example at “drill, baby, drill,” making America energy self-sufficient etc., fire up all of the dormant oil wells and so on while simultaneously asking OPEC to lower oil prices, which of course means asking OPEC to increase production… Then the oil price will drop, and cheap oil will flood the market, out of sync with demand, driving the price down even further. The price will be too low for it to even be profitable for American producers to drill, refine, or to extract. American oil producers need oil to be at a minimum of $40 per barrel for it to even be worth it to drill, extract and refine. Meanwhile, OPEC can still make a profit at just $10 a barrel, so America cannot play the oil game with OPEC. OPEC has the capacity to ramp up oil production if they want to. Anytime they want to, they can increase oil production. They can increase production to a level within just 90 days that America couldn’t reach even in five years. In other words, OPEC can decimate the American oil and gas sector anytime they want. The only reason they don’t do that is because they want to maintain price stability for their own benefit. For their own reasons, they would rather have oil at $70 a barrel or $100 a barrel, rather than $10 a barrel, so they choose to allow America to stay in the game. That’s the only reason, but if they’re going to ramp up oil production on the American end, then you better hope that OPEC responds by cutting production on their end just to stabilize the price because if they don’t, if they respond in kind, and they do what Americans do, and they also ramp up oil production, then they drive the price of oil down to their minimum profit level. That will nuke America’s whole oil industry.

The owners and controllers of global financialized capital are essentially the real unipolar superpower of the world, and Trump is their hatchet man in America. Generally speaking, this is going to be very good for the Muslim world and the global South more broadly, but I know that things are going to get very hard for people in the US. Things are going to get very hard for people in the West overall. Most people around the world in the Global South will react to that news the same way that someone would react to hearing about a serial killer getting shanked in prison. He had it coming. That’s how most people feel, to be honest, but I know that most people in the West already have it hard. I know that most people in the West are actually already suffering, and I know what it’s like to live in America. It’s not easy. Just because the consequences that you may suffer may be the result of your own actions, that doesn’t make the consequences any easier to endure. It’s going to be hard, especially when you’re suffering the consequences of actions that were taken by your elites, not necessarily the actions of the common people… Let me reiterate. This is not about Trump. The isolation, the degradation of America, was going to happen anyway. It had to happen. This is just the necessary course of the logic of Western predatory capitalism. Gorbachev wasn’t really the one who destroyed the Soviet Union. He just oversaw the inevitable self-destruction of the Soviet Union because it had run its course. America has run its course. When I say Western predatory capitalism, it’s not even really about capitalism in and of itself. It really mostly has to do with the culture and the civilizational peculiarities of the West. They don’t act like that because of capitalism. Their capitalism is like this because of the way they are. In fact, it’s because of the way they are, that they even approach capitalism, trade and business the way they do. It’s their particular version of capitalism and it’s because of the way they are and because of their approach to capitalism that the national global financial capitalists even are a thing. It’s also because of this that their own societies are now on the chopping block… The point is that this is something that has to happen.

Anyone who says, for example, “Well, that’s what you get for voting for Trump, you know. You should have voted for Harris,” is just thoroughly indoctrinated and participating in the deception and the deflection of that system. That person is just as much a cause for the collapse of the United States as anyone else that you blame for it. They created a class of a-national elites, oligarchical elites whose private profit interests are no longer connected to your own economy. Americans did that. They’re not connected to any productive activity. They’re not connected to any nationality. They’re not connected to your standard of living, nor to your stability or your safety or prosperity, your success as a nation, or anything. That class of private sector powers became essentially a nation unto themselves, like I’ve said many times, a nation that transcends borders. It transcends national interests. They don’t have any interest except their own interest. Americans created that and celebrated that. In fact, they still celebrate it, never realizing that they would inevitably be sacrificed for profit interest the same way that millions of people outside America have been sacrificed. Americans created this psychopathic class of predators, and they expected them to never bite the hand that feeds them, even though the hand that feeds them has always been feeding them hands. Now they can’t tell the difference between the food and the feeder anymore. It’s all just flesh to them. You can’t raise a wolf on human flesh and expect him to distinguish between the human you are feeding to him and the human who is feeding him. Eventually, he doesn’t see you as his master or his owner anymore. He only sees you as food. America raised the wolf on the flesh of the Global South, and it turns out Americans taste just the same. Yes, wolves don’t care if it’s dark meat or light meat. They’ll chew you up either way.

Nothing Trump says should ever be taken at face value. He never means anything that he says. His public positions are always either bargaining tactics or just sheer mis-directions. Both Panama and Greenland, and the idea of Canada becoming an American state: all of these are just moves, in my opinion, to try to estrange allies and isolate the US as much as possible. That’s what I think he’s doing. That is the desired outcome. That’s the real desired outcome, which is why I think it’s a serious mistake to ever think that any politician’s rhetoric about why a policy is being pursued is the actual reason the policy is being pursued, whether it’s Trump or anyone else… Analysts say that a policy didn’t work out as planned, or it really backfired, and so on because the outcome was not the outcome that was outlined by the original rhetoric. No, the outcome was exactly as desired. The rhetoric was the lie. It seems like this should be a basic understanding that people should have. Analysts say, for example, that the sanctions against Russia appear to have backfired. They seem to have actually hurt Europe more than Russia. Who knew? Of course, they hurt Europe more than Russia. That was obvious, and that was the intention all along. You know this is especially true when the outcome is predictable, and especially true when the outcome is actually predicted. When you have a predictable and predicted outcome, and that occurs, you should obviously deduce that that was the goal from the outstart. The negative policy outcome, the desired negative policy outcome, is never going to be stated as the desired outcome, obviously. You can’t sell that to the public.

Putting tariffs on Chinese goods is anti-American, not anti-China, but again this isn’t about Trump. I don’t want to keep making it about Trump. It was always going to happen. In fact, it’s been happening incrementally, gradually. It’s been happening for quite some time, but the process is accelerating. Nothing was ever going to prevent it in reality. The rise of BRICS is not an uprising. This has to be understood as a relative rise being facilitated by the a-national corporations … through several strategies which include deliberately expediting America’s decline. This is not a revolution. It’s a transition, and it is a managed transition. The sort of leftist anti-imperialist rhetoric on the issue of BRICS is inaccurate to some extent. It’s crucial for us to understand this properly. Multipolarity would be great if a private sector unipolar power did not exist, but it does, and multipolarity and national sovereignty mean something very different to that unipolar superpower than it does to the nations of the Global South. For the BlackRock’s of the world, the State Streets and so on, multipolarity and national sovereignty mean compartmentalized, vulnerable countries, most of whom have national economies that are a fraction of BlackRock’s assets, meaning they are susceptible to coercion. They’re susceptible to bribery, manipulation, and exploitation. The global capitalists are just as vicious and just as predatory as the nationalistic capitalists. They don’t care about BRICS. They don’t care about the Global South. They care about market domination. That’s all.

It just so happens that the Global South is the most important market of the 21st century. They’re not coming to help us. They’re coming to help themselves, and everyone should be very clear about that. That’s why I think that no one should ever talk about multipolarity without also talking at the same time about solidarity. You shouldn’t even talk about pan-Arabism or Pan-Africanism or Pan-Islamism, or anything like that. You should only talk about Pan-Southism, if anything, because the entire Global South needs to work together from Chile to Indonesia, from Saudi Arabia to South Africa, Regional blocs? Sure—ASEAN, the Arab League … the African Union, the OAS, and so on. Yes, but all of these blocs need to be linked together. They need to coordinate, and they need to fortify each other. We have to have protections against the very global capitalists whom we are partnering with because, even though it is necessary to partner with them, and it is strategic to partner with them, when they smile at us, it’s not because they’re happy to see us. It’s because they’re getting ready to bite. They’ll pat you on the back just to practice stabbing you. All they’re waiting for is the opportunity.

This is another practical reason, aside from the religious imperative. It’s another practical reason for supporting and backing up our rulers, backing up our governments in the Muslim world because if they fall, if our governments fall, if they get toppled, or if they get destabilized by internal unrest and strife and so on, the global financialized capitalists will just turn BRICS into a new platform for colonization and subjugation, and that glimmer of hope that we’re all seeing right now for real independence, for real sovereignty, and for the potential of a systemic global change in the economy and politics and so on: that will get snuffed out.

We’re wrestling right now for control over the BRICS project to make it truly what we all hope it is, or what we hope it can be, what we know it can be. The owners and controllers of global financialized capital are doing their best to shatter that, believe me, not so that they can keep the West on top. They don’t care about keeping the West on top. They want to make sure that they themselves are on top of the West and the Global South. This again is why I keep emphasizing the importance, the grave importance of solidarity between the rank-and-file average struggling people in the West, the struggling people of America, the so-called minorities in America, the members of the global majority who live in America. There is a need for solidarity between them and the people of the Global South, between them and the people of the Muslim world, because we’ve been colonized and they’re going to be colonized. Our struggle against colonization isn’t over. It’s just in a new phase. We’ve made it across the battlefield, but now we’re making our way through a minefield. America, the West—they’re going to turn into a battlefield. That’s the stage that they’re at now. Our history with the West is going to repeat itself. In the West, they’re like an old predator who has become prey for his own offspring. They’re coming to them. Their offspring is coming to them, and they think that there’s still some familial affection, so they’re glad to see them, and they think it’s going to be like the old days when they used to hunt together. That’s the way Trump is selling it to you because selling it to you that way is his whole job, but they’re coming to hunt Americans, not to hunt with Americans, so Americans need solidarity with the Global South. As I’ve said before, especially about African Americans, but really it applies to all so-called minority groups in America, and in fact it applies to every so-called race and so-called ethnicity in America who are struggling economically. You live really in reality… You struggle just the same as the people of the Global South. 22% of Americans are barely covering their basic needs, and 65% of Americans, low-income Americans, are in a constant state of worry and a constant state of anxiety about being able to pay their necessary bills. At least 10% of Americans are in persistent poverty, so if the low-income, struggling, working class populations living in America were their own country, they would apply to join BRICS.

Only your situation actually matters. They want your citizenship to make you forget about the situation … They want you to forget that you’re poor just by telling you that you live in the richest country on earth. Never mind that the country doesn’t have riches. It has some rich people, but increasingly even those rich people don’t identify with the country itself anymore. Donald trump is just one of those rich people. I’m telling you, millionaires and billionaires ought to be regarded as foreigners. They ought to be regarded as foreigners in America and everywhere else. They shouldn’t even be allowed to hold office, in my opinion, because they actually belong to a different nation than the rest of the people. They truly do. They belong to the nation of wealth. They have nothing in common with you and me. How many of those celebrities whose mansions were burned down in Hollywood are in shelters right now? How many of them are even homeless at all. What would you do if your house burned down? Do you have a helicopter that will whisk your way to your other home? These are people who have no stake whatsoever in our well-being. They have no stake in the well-being of the economy of the country. They have no stake in it because they’ve got theirs. They’re covered. It doesn’t matter to them one way or the other what happens to America. It truly doesn’t, and they’re going to sell you out. They’re going to sacrifice you. The ship is sinking and they’re already on the life rafts on their way to Dubai.

With the mass deportations Trump is going to leave all of these manual labor jobs without workers. Who do you think is going to do that work now? Who do you think is going to have to do all of those jobs that migrant workers have been doing for next to nothing? It’s Americans. That’s the new gig economy: picking fruit, washing dishes, cleaning hotel rooms, day labor, landscaping. Did Americans think that they were being told that they don’t need college or that college is pointless because of neo-Marxist post-modernism and critical race theory? Is that what they thought? It turns out that it is because they didn’t want Americans to be overqualified to pick oranges. They didn’t want Americans to think that they were too good to work at a warehouse. They didn’t want Americans to assume that they could make a livable income on just one job instead of two or three. The people on the upper decks of the ship know that the ship is sinking long before the people in the steerage, and they have first access to the lifeboats. The elites have known for quite some time that America is going under, and they’ve already made their plans. They’ve already made their arrangements, and they made very different arrangements for you. You’ve been chosen to go down with the ship. That’s America, and that’s Europe. Some of them have actually allowed themselves to believe, when they see the people rowing away in the life rafts, that they’ll be safe from the flood. They’ll be safe from drowning if they stay in the belly of that ship. You have to always read them backwards, always play them in reverse, then you’ll know what they’re really saying.