Everyone knew that President Trump as going to pull the trigger on his big tariff policy on Wednesday but he actually dropped a nuclear bomb. He put a 10% tariff on every nearly country in the world and added even more on a number of them based upon a goofy formula that reflected false assumptions at best or Trump’s personal whims at worst. It sent shock waves across the globe, with the markets taking a massive tumble and economic forecasters scrambling to revise upwards their predictions for a recession. Let’s just say it was not well received.
Everyone knew something was coming but no one expected his plan to be so random and incoherent. The fact that it included tariffs on uninhabited islands and territories that are essentially U.S. military bases just proved that it was sloppily put together, likely by AI, and hadn’t been vetted by anyone who knew what they were talking about. It is a radical, re-ordering of the global trading system by a president who is clueless about how any of this works.
The big question hovering over all these tariffs, starting with Mexico and Canada and now the rest of the world, is what does Donald Trump really want? It’s not been entirely clear. He claims that Canada must stop the flow of fentanyl into our country in order to get their tariffs lifted but there is no flow of fentanyl. He wants Mexico to stop immigrants from coming over the border and likewise stop fentanyl from coming into the country and they’ve done everything asked of them to make that happen. It didn’t matter.
Canada has come to believe that Trump is actually serious about wanting to annex their country and is intent upon collapsing their economy in order to make that happen. Mexico almost certainly understands that Trump is readying a military incursion of some kind ostensibly to “take out” the drug cartels. Neither of those things have anything to do with trade. In fact, Trump himself negotiated the USMCA trade agreement just 7 years ago between the three countries calling it “the largest, fairest, most balanced, and modern trade agreement ever achieved, there’s never been anything like it.” This is something else entirely.
But what about all these other countries? What does he want from them? He doesn’t believe in the idea that has organized global trading for almost a century now, which Amanda Taub of the NY Times defined as, “the ‘positive-sum’ game: a collection of overlapping systems that benefit all who participate in them, even if the costs and benefits of participation aren’t distributed equally.” Or as we might call it, “win-win.” That is anathema to Donald Trump. To him all of life is zero-sum.
So this isn’t really about “trade” at least as it’s commonly defined, as we can see with his behavior toward Mexico and Canada. This isn’t really a trade war. It’s a shake down. Trump simply sees tariffs as a weapon to be used to force the rest of the world to America’s will.
Trump has been on this crusade since the 1980s when he saw Japanese businessmen buying up U.S. properties and getting rich selling their cars to Americans eager to buy them. According to Barbara Res, a former Executive Vice President of the Trump Organization, “he had a tremendous resentment for Japan” and was jealous that they were considered business geniuses. He felt they were “taking advantage” of the United States by not paying for their defense and should be “taxed” accordingly.
He took out an ad in the New York Times back in 1987, expressing all of this in no uncertain terms and has not changed his rhetoric at all except to add more countries to his list of grievances:
He came to believe that tariffs were the tool you could use to force these nations to pay for their security.
He was uninterested, or perhaps unable to understand, the reason why America had been the “free world’s” security guarantor during the cold war and almost certainly failed to grasp the complexities of the nuclear age. During the 2016 election he had no idea what the nuclear triad was in one of the presidential debates and once said “Let it be an arms race. We will outmatch them at every pass and outlast them all” after he was elected. (In the years since he has pretended to fret about nuclear arms even as he was telling his military leaders he wanted to build back the nuclear arsenal to what it was at the height of the cold war.) His erratic and provocative behavior since he took office the second time has now raised the spectre of a new nuclear arms race.
His belief that the allies should be paying America for their defense has now evolved into a full-fledged protection racket in which he is using these tariffs to say “nice little country you have here, be a shame if anything happened to it.” Last night, on Air Force One, as he was jetting off to attend a golf tournament at his club in Florida (sponsored by his partners and for which he receives a cut of the profits) he told the press corps:
Every country is calling us. That’s the beauty of what we do. We put ourselves in the driver’s seat. If we would have asked these countries to do us a favor, they would have said no. Now they will do anything for us. The tariffs give us great power to negotiate. They always have.”
Note that he used the words “do us a favor” the same words he used to shake down Volodymyr Zelensky in the “perfect phone call” that got him impeached the first time. He’s not negotiating, he’s extorting.
We don’t know what he specifically wants from all these countries. I would assume that some of them will gain his favor with elaborate obsequiousness and flamboyant flattery. Others may have to offer up something a bit more material, perhaps a nice gift of some sort. And he will punish others, particularly those he sees as having been disloyal. In other words he’s going to treat the world as if it’s the Republican Party, under his thumb and answering to his whim.
It’s possible that he will be able to coerce some companies to move their manufacturing to the U.S. (or at least make an announcement to that effect which is what he really wants.) But it’s unlikely that he’ll ever take tariffs off the table regardless of whatever “deal” is made. Why would he? If they get him what he wants he’ll use them over and over again.
He has gotten away with everything in his life and his belief in his own power is now limitless. It sounds crazy to say it but it’s true — Donald Trump is trying to dominate the world. As I have said many times, “America First” never meant isolationism to Donald Trump. It meant “America Above All.” And yes it does sound better in the original German.
Salon
