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Phase 1: Impose Tariffs – Phase 2: ? – Phase 3: Profit
The underpants gnomes (vid) had a great plan:
1. Steal underpants, 2. …, 3. Profit
bigger
The Trump administration seems to think likewise:
1. Impose tariffs, 2. …, 3. Profit
There was already some struggle while implementing phase 1.
Phase 2 seems to create even more serious problems:
Charles Gasparino @CGasparino – 16:42 UTC · Apr 21, 2025
BREAKING: Japanese negotiators are complaining that the problem with the trade negotiations with the White House, what's delaying concrete progress and a real deal, is that US keeps changing its ask in terms of exactly what it wants, said one financial CEO who speaks regularly to country officials. Maybe it's a negotiating tactic. But the lack of publicly announced deal progress is depressing the dollar, spiking bond yields and leading to a flight to quality to gold and now Bitcoin. Developing
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Gregg Carlstrom @glcarlstrom – 17:38 UTC · Apr 21, 2025
Not just Japan. Every diplomat I've asked about tariffs in the Middle East has told a similar story: they don't know how to engage with the Trump administration because everyone makes different demands
Also, we are really in trouble if Bitcoin is now a "flight to quality"
Every single person who works for the White House on trade seems to have a different idea of how to (ab)use the tariffs. There seems to be no big common plan to which they are all aligned to. This won't work.
Markets need rules and assurances that the rules will be adhered to. Any factor that increase insecurity will require additional security margins within each deal. When all this gets too expensive, unpredictable and complicate people will simply bail out. Money is leaving the U.S. dollar denominated markets. This creates the unusual case where share prices, treasuries and the dollar conjointly decline.
But "trust us" some pro tariff folks might say. "Phase 3 will soon come and its gonna be huge."
May be. I for one am not yet convinced.
The goal of the US-Imperialist-Bloc the Anglo-Americans is to break up and destroy Russia and China.
There is no difference between the GOP and the DEMS, no difference between Biden-Trump-Obama-Bush, no difference between Rubio-Blinken–they are all cut from the same cloth–they either serve Imperial Capitalism or they are removed.
Under neo-liberalism 1970s-1990s, the relative autonomy of the US state eroded, and private capital exerted more direct control of much of the state (MIC/Techno Deep State). Today, however, faced with rising international economic threats to the US position, and the failure of neo-liberalism to maintain US economic dominance, the collective political interests of the ruling class are being asserted by an increasingly autonomous state (as opposed to representing the interests of individual capitalist groups). To borrow from Lenin, for the capitalists also, ‘politics must take precedence over economics’.
Financialisation or accumulation under the phase of monopoly-finance capital is truly a parasitic development aimed at drawing blood from a sponge and marking the structural crisis of capital. US capital has an internal contradiction. As US capital seeks to increase surplus extraction from its own working class, it risks losing support for its external military wars, which are aimed at removing international obstacles to US capitalist economic interests. The US ruling class (and Congressional Uniparty) is therefore forced into simultaneous attacks on the Global South and its own working class – this necessitated the rise of increasingly right-wing currents in US capitalism.
In the 1930s, the US had sufficient reserves to confront a deep crisis of capitalism with a reformist domestic programme, unlike the open attack on the working class in Germany or Japan. However, it took WWII for the US to escape the economic depression not, as is popularly purported, the Keynesian New Deal. Today, in this new situation, the US has no alternative but to rely on combining external aggression with an increasingly repressive domestic agenda–be it via Trump or Biden or the next Clown hired for the top PR job.
The US utilises inflation to attempt to increase profits – a trend exacerbated by military spending and the debt it incurs. Interest on US military debt now accounts for around 70% of US federal government net interest payments. In the 1970s, the US was able to manage the consequences of its Viet Nam Bonanza in military spending by removing itself from the gold standard to push the cost of this debt onto other countries. This successful attack on imperialist rivals strengthened US economic and financial power compared to them.
An accurate historical perspective, as well as short-term shifts, is required when analysing a potential decline of an empire. In Europe, the transition from slavery to feudalism took several centuries as did the transition from feudalism to capitalism. France was still fighting remnants of feudalism in the 19th century, hundreds of years after European capitalism had begun on a small scale in Italian city-states.
A country’s balance of payments is equal to the difference between its domestic capital creation (savings/surplus) and its domestic capital investment. If a country’s ‘domestic’ capital creation is larger than its domestic investment, it is, therefore, exporting capital and runs a balance of payments surplus. If a country’s domestic capital creation is less than its ‘domestic’ capital investment, it runs a balance of payments deficit and is importing capital, that is, it has a surplus in its capital account.
From 1913 to the early 1980s, with rare exceptions, the US generated more surplus than it invested ‘domestically’. It had a surplus of capital that it could invest in other countries and extend its international hegemony not only through violence. Post-WWII, the particular beneficiaries of this were imperialist countries whom the US wished to enmesh, integrate, and dominate, as seen by the Marshall Plan in Europe. Other beneficiaries, such as the Republic of Korea, became military frontier states to constrain Russia and China and thus received US economic investment.
By the late 1960s, the US understood that the most urgent economic, as opposed to political, threat did not come from communism. The attention began to focus on curtailing the growth of other capitalist rivals. A few capitalist economies – first Germany in the immediate post-war period and then Japan until the late 1970s – achieved investment rates far higher than the US, reaching 30% of the GDP or above. This enabled these countries to achieve higher GDP growth rates than the US. This was a historical result of the immense defeats of the German and Japanese working classes by fascism – the consequences of which continued into the post-war period. German and Japanese capitalists were able to increase the rates of exploitation, which financed high rates of capital investment. Simultaneously, their ‘late industrialisation’ also allowed them access to better quality technology, which further increased productivity. While the US was prepared to accept the economic consequences of this in the immediate post-war period, the continuation of this process began to impact US economic growth.
To prevent effective economic competition from these countries, the United States used political and military pressure to force down their rates of investment and, therefore, growth rates. The decoupling of the US dollar from gold in 1971, and therefore the removal of restraints on the weaponisation of the US control of the international monetary system, played a key role in this process.
But despite this ability to slow down imperialist rivals, the US proved incapable of raising its own economic growth rate (to achieve a new higher rate of investment and exploitation), partly because of the withdrawal of US-based capitalists from long-term productive investments within the United States — productive investments went overseas to CHINA and others instead–offshoring US Manufacturing and hurting the working class yet again. Indeed, US economic growth decelerated further – the average annual economic growth of the US today is only 2.0%, less than half its growth rate in the 1960s and far behind the rate of growth of China or indeed of a series of Asian states.shows that the US has had a long-term overall decline in average growth rate since 1953.
Confronted with this situation the US Imperialist UniParty (GOP/Dems) has subsequently turned to TARIFFS, economic sanctions, and technology bans, leading to an increasingly protectionist environment. However, despite this economic decline, as already analysed, the US still maintains a military lead over all other states. US Imperialism, therefore, now turns to a growing reliance on force.
Tracing the processes underlying this and showing the inability of the US to raise its rate of growth without a complete restructuring of the US economy (which is not on the agenda).
No matter how often these truths are told people still default to declaring TRUMP and or TDS is the problem. Ridiculous.
By 2002, for the first time, US borrowing from abroad was higher than its domestic net capital creation – i.e., for the first time, even the immediate increase in US capital stock was being financed more by capital from other countries than from the US itself. This slightly reversed and then fluctuated until 2020, when, once again, more of the addition to the US capital stock was financed from other countries.
To summarise this overall process, the US has structured the world economy to its advantage. Its corporations obtain gargantuan amounts of surplus value through the global arbitrage in the Global South and the entire imperial system forces US dollars on foreign countries – including via not only economic processes but through US military bases and other means. The aim is to create a system whereby countries have no choice but to put their US dollars into US securities, financing the US deficit and US domestic investment. This is how global monopoly-finance capital, which is an advanced form of financial imperialism backed by military and political power, works—-GOP or DEMS, Trump or Biden Project2025 or not it makes no difference to anything.
What is upsetting this system is that monopoly capital is relatively stagnant in terms of production (the real economy), which has allowed China and other countries in the Global South to leap forward in production. Hudson’s Super Imperialism provides useful insight on what the consequences would be if the US lost its dollar hegemony.
US Imperial Economic and Military Power overwhelms Russia-China and Global South power by orders of magnitude. Negotiating any kind of “deal” any agreement economic or military with the USA is lunacy.
Posted by: William | Apr 22 2025 3:39 utc | 120
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