Yves here. This effort to ‘splain Trump tariffs, that keeping up an empire is costly and other countries should pay for all the benefits they derive from it, was made in all seriousness. It oddly has not gotten much traction despite the high odds that it reflects the beliefs of a large faction of Trump insiders.
By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development. Originally published at Jomo’s website
Donald Trump’s top economic advisor claims the President has weaponised tariffs to ‘persuade’ other nations to pay the US to maintain its supposedly mutually beneficial global empire.
Geopolitical economist Ben Norton was among the first to highlight the significance of Trump’s Council of Economic Advisers chairman Stephen Miran’s briefing at the Hudson Institute.
The Institute is funded by financiers such as media czar Rupert Murdoch, who controls Fox News, The Wall Street Journal, and other conservative media.
Miran made his case just after Trump’s electoral victory in A User’s Guide to Restructuring the Global Trading System. Miran attempts to rationalise Trump’s economic policies, which are widely seen as at odds with conventional wisdom and reason.
Enhancing US Dominance
Miran defends Trump’s tariffs as part of an ambitious economic strategy to strengthen US interests internationally with a “generational change in the international trade and financial systems”.
“Our military and financial dominance cannot be taken for granted, and the Trump administration is determined to preserve them”. Miran claims the US provides two major ‘global public goods’, both “costly to us to provide”.
First, Miran claims US military spending provides the world a ‘security umbrella’ that others should also pay for. Second, the US issues the dollar and Treasury bonds, the main reserve assets for the liquidity of the international monetary and financial system.
Miran seems blissfully unaware of longstanding complaints of US ‘exorbitant privilege’. The dollar’s reserve currency status has provided seigniorage income to the US while Treasury bond sales have long financed US debt at very low cost.
Miran’s Case for Trump
The White House has threatened others with high tariffs unless they make concessions, at their own expense, benefiting the US. Miran’s defence of tariffs is indirect, as part of an ostensible grand strategy.
“The President has been clear that the United States is committed to remaining the reserve [currency] provider”, Miran added. He claims US dollar hegemony is “great” and denies “dollar dominance is a problem”.
While this “has some side effects, which can be problematic”, Miran “would like to … ameliorate the side effects, so that dollar dominance can continue for decades, in perpetuity”.
For Miran, these side effects are supposedly largely adverse while ignoring the benefits to the US. Chronic US trade deficits have been possible and financed by mounting US debt, enabling the dollar to serve as a global reserve currency.
Hence, US trade deficits have been sustained since the 1960s, rather than “unsustainable”, as he alleges. US manufacturing has been “decimated” by its consumers and transnational corporations, not by an extensive foreign conspiracy.
Miran’s Guide acknowledged the ‘Triffin dilemma’. In 1960, Robert Triffin warned that the dollar’s status as global reserve currency posed problems and risks for US monetary policy.
He invokes Triffin to argue that the US must import more than it exports to provide liquidity to the world, which needs dollars for international trade and to hold as reserves.
Miran adopts the Trumpian narrative of only blaming others. However, the US expected to benefit from continuing trade surpluses at Bretton Woods. In 1944, it opposed alternative payments arrangements to deter excessive trade surpluses.
US trade deficits have grown since the 1960s with post-World War II reconstruction of the Global North and uneven ‘late industrialisation’ in the Global South.
The Empire Must Pay
The Trump administration wants to eat its cake and still have it. It intends to strengthen US empire while minimising adverse side effects and costs.
Miran wants foreign nations to “pay their fair share” in five ways. First, “countries should accept tariffs on their exports to the US without retaliation”. Tariffs provide revenue, which has financed its global public goods provision. Second, they should buy “more US-made goods”.
Third, they should “boost defense spending and procurement from the US”. Fourth, they should “invest in and install factories in America”. Fifth, they should “simply … help us finance global public goods”, i.e., foreign aid should go to or via the US.
Miran then emphasises that Trump “will no longer stand for other nations free-riding”, and calls for “improved burden-sharing at the global level”.
“If other nations want to benefit from the US geopolitical and financial umbrella, then they need to … pay their fair share”, i.e., the world must “bear the costs” of maintaining US empire.
Trump Dilemmas 2.0
Trump wants to use tariffs to force countries with trade surpluses with the US to buy more from the US. Ending these deficits would undermine dollar hegemony, which, paradoxically, Trump obsessively wants to preserve.
Miran wants other countries to convert their US Treasury bills into 100-year bonds at very low interest rates, effectively subsidising the US over the long term. He also wants nations running trade surpluses with the US to buy more long-term US Treasury securities.
Trump has threatened 100% tariffs on BRICS members and all countries promoting de-dollarisation or undermining dollar hegemony in the international monetary system.
During his first term, Trump wanted to do the near-impossible by boosting exports while preserving a strong dollar!
Miran acknowledges that the “root of the economic imbalances lies in persistent dollar overvaluation that prevents international trade balancing”. But he also insists that dollar “overvaluation is driven by inelastic demand for reserve assets”.
Trump now hopes to kill both US trade and fiscal deficit birds by cutting imports and raising revenue with higher tariffs. He also wants the world to continue using dollars despite the US budget and trade deficits and policy uncertainties.
Meanwhile, official US debt, financed by selling Treasury bonds, continues to grow. Trump has to deliver his promised tax cuts soon before his earlier measures run out. Trump is falling foul of his bluster and may have to revert to the status quo ante while denying it.
Despite Miran’s best efforts, he cannot provide a coherent rationale for Trump’s rhetoric. But dismissing Trump as ‘mad’ or ‘stupid’ obscures the impossible dilemma due to and obscured by post-war US dominance.
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“Topics: Currencies, Economic fundamentals, Garrulous insolence, Globalization, Guest Post, Income disparity, Ridiculously obvious scams”
My failure of imagination never ceases to amaze me. Garrolous Insolence.
Never would have conjured that as a search term.
I strive to learn something new every day. Thanks for the poke and prod!
“Ridiculously obvious scams” would make a great “Jeopardy” category.
“I’ll take Ridiculously obvious scams for $200, Alex.”
“This technology is touted by CEOs to reduce workforces, improve profit margins, and cure your asthma!”
“What is Artificial Intelligence?”
I love the Zappa (Cosmik Debris) reference!
So the tariff fight is all about the Cold War. It is an opportunity to shake down other countries. Over the next three months Trump will agree NOT cut the tariffs that he has threatened, IF countries agree to cut back their trade with China, and even to impose sanctions on trade with it.
I will discuss this on Nima’s Dialogue Works today, and I did on my Geopolitical Hour with Radhika yesterday and even Danny Haiphong.
Is there a Cold War or is all this conflict an excuse to get everyone talking about Trump? Given his ever shifting statements (today that he is negotiating with China) one suspects his real goal is having everyone staring at his face if not actually kissing his a**. Also being able to manipulate the stock market like a yoyo no doubt has its advantages.
Personally a life goal is to pay as little attention to Trump as possible. Maybe “Silent Cal” Coolidge wasn’t so bad.
Thank you, Professor Hudson. I listened to your discussion on Nima’s Dialogue Works over the morning. Not only is this article a great accompaniment, but so too Nick Corbishley’s morning post China Sends a Strong Message to “Global South”…
I was struck by the Al Jazeera maps in Nick’s post contrasting trading partners of the US and China in 2001 and 2023. I was reminded of European WW2 maps showing the extent of German control, say from December ‘42 and December ‘44. Will Trump’s trade war be comparable to the temporary bulge of the Ardennes offensive?
https://en.m.wikipedia.org/wiki/World_War_II#/media/File%3ASecond_world_war_europe_animation_large_de.gif
plus, theyre butthurt that china didnt play ball, and remain a peasant nation.
it left a mark, it seems.
Thank you, Professor Hudson! It was wonderful to see you enjoying yourself!! I think this is a moment not unlike when the sanctions backfired. A moment of clarity!
Michael, as you have said elsewhere, the US offers only the following: “Do as we say (which includes letting us loot you) or we will sanction and/or bomb you.”
It’s the World Mafia …
#HudsonHawks
#HUDSON2028
This all sounds like the people in the White House have taken that line from the film “Killing Them Softly” to heart when Brad Pitt said-
‘I’m living in America, and in America, you’re on your own. America’s not a country. It’s just a business. Now ****ing pay me.’
To the Trump White House, there are no allies but only vassals and their sole purpose is to subside the US. And if they have to de-industrialize and ship their factories to America to avoid punishment, then the resulting unemployment will be their problem. Buying American weaponry will get you in the good books of the US no matter how ineffective it is on the battlefield. And if a country has to eliminate their financial safeguards and protections so that US corporations can go in and loot the place clean, well that is just survival of the fittest. There may be initial success but you just know that there will be hell to pay not that Trump will worry. He probably plans on sitting with Bibi drinking Marguerites at the poolside of Trump Hotel in the New Gaza Resort.
He probably plans on sitting with Bibi drinking Marguerites at the poolside of Trump Hotel in the New Gaza Resort.
A guy can dream, can’t he?
The Riviaza.
with Bibi drinking Marguerites
You mean Diet Coke surely?
Something to embroider on your next pillow.
Should have linked to the original scene from that film-
https://www.youtube.com/watch?v=5V6GHnxEJjg (2:58 mins)
The Rev Kev: That’s a brilliant summary, no doubt. Thanks for your various outputs too.
I think the real statement is “Trump is open and transparent about wanting the rest of the world to subsidize U.S. Hegemony”.
The US position as global leader in “the unipolar era” allowed it to skim profits for decades already. Now we are just going to be a little more honest about it.
Example- If Burkina Faso would just let us take “10% for the big guy” we might not need to topple the Traore govt.
Important to ask, at every step, just how much of what we’re looking at is continuity and contiguity–with previous administrations and the post-WWII global order as led, Marshall Plan forward, by the United States. To paraphrase something I saw yesterday, the Clintons and Bush/Cheney walked so that Donald Trump. And to ask, in turn, which moves are breaks, the flouting of conventions and rules–WTO and IMF regs, for example–that were mostly there to discipline the poor countries, us, even the professionals who thought they were administering. And, again important, what moves are all but dictated by a global crisis and living-through of the cruel logic that intensifiying neoliberal order and disorder inevitably bear with them? Nature living and dying through the consequences?
An irony is that here in Brexitland people are also susceptible to “Do not buy USA”
I predict collapse in USA imports.
OP: “If other nations want to benefit from the US geopolitical and financial umbrella, then they need to … pay their fair share”, i.e., the world must “bear the costs” of maintaining US empire.
I definitely paid attention to the Miran piece when it came out. That the “intellectuals” in the Trump regime — as the likes of Miran and Bessent are, relatively speaking — were apparently living a fantasy of ultimate have-your-cake-and-eat-it entitlement was striking.
Frankly, this is delusional entitlement of Qing Dynasty-level proportions, expecting the rest of the world to kowtow to the US as the Central Kingdom and send tribute. And for what?
We know how this ended for 19th century China. Specifically, as regards how this plays out in 21st century reality for the US, Miran, Bessent, et al are right inasmuch as the US faces a debt rollover in 2025, with $9.2 trillion worth of debt set to mature. That’s 25.4% of the total US national debt, which itself has ballooned to $36.2 trillion. Interest costs on that debt are rising rapidly, moreover. In 2024, the U.S. paid $881 billion in interest, and projections suggest 2025 interest costs will reach $952 billion—an 8% increase from the last year. So the Federal government will need to issue new bonds to cover the maturing debt, putting pressure on bond markets and driving yields even higher.
What can’t go on, won’t go on. Thus, Miran, Bessent, and co. have seemingly decided that with average interest rates on U.S. Treasury debt at 3.2%, if they can begin devaluing the dollar now they can reduce the costs of rolling over that debt this year. Yet even as they devalue the dollar, they simultaneously expect US Treasuries to maintain their ‘safe status’ as a store of value for the rest of the world, and also to ignore the fact that for the dollar to be the global reserve currency the US has to run deficits with the rest of the world so the rest of the world has enough dollars to invest and save so that the dollar can be the reserve currency.
What this amounts to is that Miran, Bessent and co are attempting ‘a controlled flight into terrain’ by trying to devalue the dollar like this. I’ve even seen one of them describing it openly as a ‘controlled demolition’ to ‘rebuild the greatest era of US power ever.’ Nevertheless, they and those around them are finance guys, as evidenced by their ignorance of the US’s real-world supply-chain problems. Consequently, at some point they or some among their contingent will settle for simply front-running the collapse of US preeminence and the dollar’s ‘exorbitant privilege’ by triggering that collapse early, using Trump as a blunt instrument.
In other words, this will be ‘shock therapy’ akin to what US elites implemented in the former USSR during the 1990s, with everything privatized that can be privatized: an elite reactionary pre-emptive counter-revolution aimed at cramming the consequences of the last 40 years down on the non-elite. And not only the non-elite. A bunch of folks who thought they were along for the ride as part of the ownership class will find that in the opinion of the crew using Trump, they are not or don’t need to be.
The lifeboat may be luxurious, but it’s too small for everyone who expected a place. And why share?
What if the interest is mostly in making the USA a workshop for some kind of neo-feudal ideology?
The Gilead Christian Republic of Theotyrannistan.
The United Freedom Cities of America, where the world’s corporations can enjoy cheap labour, low taxes, the benefits of the US dollar, Freedom™, and Democracy ™! (Sponsored by Metastlé)
aye, Mikel.
it occurred to me during clintontimes…long before i undertook to actually study economics…that eventually, us and china would trade places. when amurkins were poor and desperate enough to do those factory jobs again, for a “reasonable wage”(and suicide nets)…manufacturing would come back.
add in Dark Enlightenment neomonarchism arglebargle, and here we are.
China still has to beware of some of the same demons. They aren’t out of the woods.
The DT2 regime policies are reckless, desperate and idiotic attempts to coerce/extort even more tribute from vassals and rivals, and as many have observed is only going to expedite the decline of the US, both domestically and abroad. The kleptocratic oligarchy looks like they are shifting the asset-stripping into high gear domestically and more economic warfare, siege warfare (Venezuela, Cuba etc.) and outright genocide of Palestine.
Of course, there is always plenty of money and weapons for Israel to exterminate thousands of Palestinian children. (targeted population control). Yet both Ds and Rs are lockstep in support of all this. No matter who one “votes” for (or not) the policy continues.
One “good” thing bout the current regime that the Aussie journalist Caity Johnstone pointed out months ago: the mask is fully off and the ugly face of empire is exposed. The malfeasance and lawlessness of the Empire is more obvious now, The DT and his kakistocrat crew are also cartoon-like buffoons. Peak Kakistocracy? The tragic humor is available by the truckload and it’s free.
Thanks for the edification. I studied econ and poli sci as minors to hunting and fishing in college. Missed this one, or forgot it.
Kakistocracy (/ˌkækɪˈstɒkrəsi/ KAK-ist-OK-rə-see) is government by the worst, least qualified, or most unscrupulous people.[1]: 54 [2][3]
The word was coined as early as the 17th century[4] and derives from two Greek words, kákistos (κάκιστος, ‘worst’) and krátos (κράτος, ‘rule’), together meaning ‘government by the worst people’.[5]
Phonetically like caca, spanish poop, BUT, not the derivation, apparently.
The world is already subsidizing the us, accepting green paper in payment for 1.1T trade deficit. Plus buying demonstrably inferior armaments, without which the deficit would be larger. As well as inferior commercial aircraft. What trump is doing in trying to get an even better deal is to jeopardize the existing one.
Trump and his merry band of vandals never understood that the trade deficit is the neocolonial equivalent of tribute in the empires of old — they likely never even heard about Michael Hudson’s Super Imperialism (first published in 1971) let alone have the capacity to understand its implications.
This is only made more ironic since I believe the State Department bought many copies of Hudson’s book in the ’70s and even had him lecture senior American officials about it, including top military personnel.
First as tragedy, then as farce … 🤦♂️
From Lutnick to Bessent to Miran to Hegseth…Trump team is, in trump-speak, a disaster.
It depends what the goal is. If the goal is to make America ungovernable, then the team is a pretty good one.
I believe the goal was simple, to have tariffs (a tax on the entire population), so that Dear Leader could give tax breaks to the filthy rich American Oligarchs.
Q: “China says it’s fake news that trade talks are happening.”
TRUMP: “Well, they had a meeting this morning.”
Q: “Who is ‘they’?”
TRUMP: “Doesn’t matter… We may reveal it later… As usual, you’re reporting wrong.”
*ENDS PRESSER*
https://x.com/TheTNHoller/status/1915447961095491626
China calls it “fake news.”
Much has been said of course about Donnie baby being a disingenuous clown.
https://pbs.twimg.com/media/GpUO6XmXEAAcdp-?format=jpg&name=small
Twas either someone very senior in Parliament of Singapore or Japan who outright called Trump 2.0 an extortionist. Either one to say this out loud means his reign is over.
Now just to watch for entry of the fat lady to sing. Wonder if she’ll be from a three letter organisation? Because whilst I wish harm to nobody, I merely predict Trump won’t reach end of his 4 year term. And they have more then enough material on Vance to make him toe the line. The man with two beards for heaven’s sake!
The video was the remarks from the Japanese official opposition.
Considering how much the Japanese value decorum and subtlety, and behind the scenes negotiation, this would be the British equivalent of angrily shouting vulgar insults… (it may not amount to much yet, but it is a clear sign of dissatisfaction…)
A remarkable spectacle, for the Japanese.
Seems EU’ians just love Trump and the Empire – https://x.com/SpencerHakimian/status/1915440518806249629/photo/1
Can’t wait to see it with their own two eyes … and enjoy the experience for themselves.
China on the other hand … Nationalist sentiment is high, the Century of Humiliation is a phrase being used often far and wide. I ponder the results of a nation with 600-ish Financial Billionaires extracting rents vs. a nation with Billion consumers that is enjoying a unprecedented Mfg/knowledge boom. Especially since the former has had stagnate wages [PPP] for 30 yrs and just the opposite for the later. Just from a social cohesion aspect alone …
There’s an uncomfortable precedent here.
The British Empire grew rich on a mixture of colonial and domestic markets for its industrial goods and capital surplus and cheap domestic coal energy and cheap foreign commodity extraction to create that profit. At the height of its *growth* it believed in free trade, enforced on others with gunships (the Opium wars etc) and enforced on certain sectors domestically by the Corn Laws, Combination Acts etc which kept food and labour prices down.
But then, when the growth slowed at the height of its power and expansion, the UK was riven by a policy dispute. To deal with the threat of France, rising Germany, the USA: should the UK continue with free trade or adopt Imperial Preference and circle the wagons? After the abandonment of the gold standard and globalisation v1 in WW1, the old orthodoxy lost ground and Chamberlain succeeded in getting Imperial Preference adopted as policy. The Empire chugged on until WW2 and then collapsed (hastened in its collapse by the USA kicking the props out financially and politically).
Is Trump Chamberlain and this is the USA’s Imperial Preference moment? How many decades left then, until China plays the part of rising industrial colossus that the USA played with Britain?
First hubris, then nemesis …
If other nations want to benefit from the US geopolitical and financial umbrella, then they need to … pay their fair share”, i.e., the world must “bear the costs” of maintaining US empire.
While we are on the topic of justice, its not the American tax payer who is benefiting from the US geopolitical and financial umbrella or the Empire in general. The benefits only flow to the apex predators at the top of the food chain, while the burdens are placed on all the “food” below.
This is the supreme irony — while the Trump administration is braying “blame China!” it was the failure of America’s (mis)leadership class (both in the C-suite and the Swamp) to distribute the benefits of the US neocolonial empire’s “exorbitant privilege” more fairly over the course of 50 years which led to the “American carnage” which got Trump elected — twice!
(Aided and abetted of course by the feckless Democratic Party whose Clintonite cabal first betrayed its erstwhile base among working people, and then strangled a nascent populism in its cradle by shivving Bernie by queering their own primary process [twice] before just doing away with a primary altogether with the coronation of the electorally useless Kamala)
1/2 – USA politics 1945/46
I bumped into this last night researching Vol. I of “The History of the US Atomic Energy Commission”, covering 1939-1946 as written in 1962 by Richard G. Hewlett and Oscar E. Anderson Jr.
This excerpt is describing the domestic situation after bombing Hiroshima and Nagasaki.
– As an historic “supplement” perhaps to the current state of affairs –
“(…)
On the domestic scene, political fortunes were changing quickly.
Franklin D. Roosevelt’s death and the growing coalition between southern
Democrats and conservative Republicans in Congress had undermined the
majorities the President had carried to victory in 1944. In the face of such
unpromising odds, his successor launched in September, 1945, a twenty-onepoint
reconversion plan as a return to the “progressive” tradition and the
New Deal. Truman had to fight every inch of the way against the strong
current of reaction to wartime controls, high taxes, and “government from
Washington.”
A wave of strikes in major industries in 1946 alarmed business
interests while the President’s harsh action against John L. Lewis for his
open defiance of the Government in the coal strike alienated some of the
party’s labor support. The Administration’s efforts to extend price controls,
rationing, and universal military training in peacetime met with failure.
By the end of 1946, the Administration had made but two lasting achievements.
One was the Employment Act, a mutilated version of the original
Murray bill but still a step in the direction of economic controls. The other
was the Atomic Energy Act, which passed only after a year of acrimonious
debate by 9 votes out of 200 in the House of Representatives. Within the
Administration itself, smouldering hostility ignited such explosions as the
resignation of Harold L. Ickes as Secretary of the Interior and the dismissal of
Henry A. Wallace as Secretary of Commerce.
These awkward episodes, the President’s failure to control Congress, and the inflation that occurred with
the abandonment of price controls just before the November elections gave
the Republicans their most effective slogan, “Had Enough?”
That 1946 would be a Republican year seemed certain, but few expected
the landslide that occurred at the polls in November. Gaining twelve
seats in the Senate and more than fifty in the House, the GOP took control of
Congress and captured governorships in twenty-five of thirty-two nonSouthern
states.
(…)”
2/2 – USA politics 1945/46
“(…)
When the Eightieth Congress assembled on January 3,
Arthur H. Vandenberg became president pro tempore of the Senate and
Joseph W. Martin speaker of the House. Robert A. Taft, the Republican
power in the Senate, stepped aside to permit Wallace H. White of Maine to
serve as Senate majority leader. Taft was reserving for himself the chairmanship
of the Senate Labor Committee, which would seek legislation to prevent
recurrence of the strikes that had paralyzed the nation in 1946.
The character of the Senate, which would pass on the interim appointments
to the Atomic Energy Commission, seemed transformed by the
presence of such newcomers as Joseph R. McCarthy of Wisconsin, Henry
Cabot Lodge, Jr., of Massachusetts, Irving M. lves of New York, Edward
Martin of Pennsylvania, Arthur V. Watkins of Utah, and John W. Bricker of
Ohio. New members of the House included some young war veterans destined
to make their mark: William G. Stratton of Illinois, Richard M. Nixon of
California, and John F. Kennedy of Massachusetts.
Back in power after fourteen years, the Republicans were in a
fighting mood as they talked of a 20-per-cent cut in federal taxes and appropriations,
a drastic revision of the Wagner Labor Act, complete reorganization
of the housing program, and a critical examination of reciprocal
trade policies and foreign spending. Assuming that the Republican nominee
in 1948 would succeed Truman as President, the principal aspirants were already
engaged in a struggle for power. Robert A. Taft, Senate spokesman
for the Midwest, seemed the leading contender. Thomas E. Dewey had
bounced back from his defeat in 1944 with a resounding victory in the
gubernatorial race in New York. Not out of the running were a dozen other
hopefuls led by Harold E. Stassen of Minnesota, who had already announced
himself a candidate.
Developments abroad looked no more promising for the Administration than did those at home.
Though farm output in the United States hit a
record high in 1946, millions of Europeans faced starvation. The devastation
in Germany continued to tax the descriptive powers of American journalists.
France was threatened by inflation and colonial unrest. The United
Kingdom, for which the war had proved almost fatal, accepted indefinite
rationing of consumer goods and transferred its coal mines to government
ownership as a first step toward nationalizing basic industries.
(…)”
Start here: U.S. should have never went into WWI.
This isn´t bad at all I found: Two views by two union labour guys:
Doug Henwood in conversation:
Jason Wade of the UAW explains the union’s endorsement of Trump’s auto tariffs
Sam Gindin former long-time adviser to what used to be known as the Canadian Autoworkers Union, on what issues the tariff controversy obscures
April 3, 2025
53 min.
https://shout.lbo-talk.org/lbo/RadioArchive/2025/25_04_03.mp3
linked by Henwood
Sam Gindin´s text:
The Man Who Would Be King: Method in Trump’s Madness, Contradictions in Trump’s Method
https://nonsite.org/the-man-who-would-be-king-method-in-trumps-madness-contradictions-in-trumps-method/