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Trump Tops Tariffs On China With Sanctions
This will be fun:
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President Trump has announced to put secondary sanctions, i.e. prohibition of any commerce exchange with the U.S., on any country that imports oil or oil products from Iran.
This is just another click on the sanction ratchet. The last ones, six or so weeks ago, had no serious impact:
The tightened U.S. sanctions on Iranian oil flows under the Trump Administration’s renewed maximum pressure campaign have created chaos in Iran’s oil exports to its single biggest buyer, China.
However, Iranian exports to China, which buys around 90% of the Islamic Republic’s oil, continue as traders and middlemen rearrange tanker flows and increase ship-to-ship transfers, especially offshore Malaysia, vessel-tracking analysts say.
The latest U.S. sanctions have managed to disrupt trade as the number of non-sanctioned tankers is steadily falling. But exports from Iran to China continue at a rate similar to those of the past few months …
The original 'maximum pressure' sanctions were solely aimed at Iran:
The Trump Administration .. is actively seeking to collapse these exports – currently estimated at 1.5 million bpd-1.6 million bpd – by ratcheting up pressure on the financial system and governments in the region, which aid Iran’s oil export efforts and oil revenue collection.
“We will close off Iran's access to the international financial system by targeting regional parties that facilitate the transfer of its revenues. Treasury is prepared to engage in frank discussions with these countries,” Secretary Bessent said at the Economic Club of New York last week.
“We are going to shut down Iran's oil sector and drone manufacturing capabilities.”
That did not work as expected. The new secondary sanctions are targeting Iran's best customer – China.
I have no doubt that China, despite the threat of secondary sanctions, will continue to buy oil from Iran.
Trump already had to make carve-outs for automobile parts and other irreplaceable stuff from the sky-high tariffs he had imposed on products from China. There are also exemptions for pharmaceutical precursors and products. U.S. healthcare depends on those products from China.
As China is unlikely to give in the secondary sanctions related to Iran will make these exemptions irrelevant.
The fun part of this will come when Trump will have to retreat from it as soon as the results of his bluster threaten to hurt the U.S. economy.
Excerpt from indi.ca’s blog post:
The First Contradiction Is No Contradictions
In 1989, Francis Fukuyama declared the end of history, calling time saying “the fundamental principles of socio-political organization have not advanced terribly far since 1806.” He declared National Capitalism the last ideology standing, and said it would be a thousand years right. Describing the ideal Naci state, Fukuyama said, “We might summarize the content of the universal homogenous state as liberal democracy in the political sphere combined with easy access to VCRs and stereos in the economic.” So really just the Nazi Axis again, with the Japanese safely nuked into submission.
Fukuyama dismissed contradictions entirely saying “surely, the class issue has actually been successfully resolved in the West.” This was laughable when he wrote it, and should be a riot today. Fukuyama also said, “Are there, in other words, any fundamental “contradictions” in human life that cannot be resolved in the context of modern liberalism, that would be resolvable by an alternative political-economic structure?” Like an over-confident American at a job interview, Fukuyama said, essentially, our only contradiction is that we have no contradictions.
This belief in no contradictions leads to one big contradiction, which is that you actually do have contradictions, you’re just not paying attention. America actually does have class issues, it does have cash issues, it has the same issues any other society has, and none of them disappeared by virtue of the USSR falling over. That was a different country a continent away, America didn’t cause the fall of the USSR and they’re not immune to the effects of ideological sclerosis themselves. Competition with the USSR had, in fact, motivated the USA; fear of socialism led to many of their social programs, and the productive power of socialism inspired their own production. The fall of their competitor was the worst thing that happened to them, they stopped competing after that. Without the USSR, the USA was like Larry Bird without Magic Johnson. They honestly didn’t know what to do with themselves, and retired in pain shortly afterwards.
Since the end of the Cold War (actually a hot war for colored people), America has been pointlessly dunking on Muslims in a long genocide now culminating in Gaza, pointlessly punking Russia in a conflict now fulminating in Ukraine, and pointedly dumping Japan for China, a trade now terminating in trade war. Now that great power conflict has resumed, however, America discovers that they’re not a great power anymore. Their proxy army is beaten by Russia, their paltry navy is beaten by Yemen, their pussy air force is only good for bombing children from afar, and their pathetic economy is beaten by China. The Nacis are catching a righteous beating, and you can’t say they didn’t have it coming. They’re still trying to cross the bar to hit China but can’t even get there without everyone else hitting them first.
Like the hare losing the race to sleeps, America thought the space race gave them the earth for keeps. In your dreams. The Nacis thus fell into the worst of contradictions, which is thinking that you have none (only true for the deceased, or about to be). This leads to all sorts of diseased thinking, and morbid symptoms (now is the time of morons). Worst importantly, it leads to stasis, which is death for any organism that must adapt or die.
But why improve ideologically, if all other ideologies are disproven? Why progress historically if history is over? Why hedge your bets at all if you’re hegemon? This is how the end of history became a self-fulfilling prophecy. The capitalist hare fell asleep thinking no way the commie tortoise could outrun them, and now it’s too late. All they can do is cry foul and blame the judges for a race they set and just slept through of their own accord. Thus the first lesson of the first contradiction is this. If you rest on your laurels, they soon enough become a funerary wreath soon enough.
Catchecism-22
The Nacis second contradiction is that they need direct government intervention to beat the commies, but they can’t because that would make them commies. America has made the very idea of governance seem communist and a bit gay, which makes them ungovernable. All the US government can do is give money away to rich people and hope that some invisible hand compels them to do something useful, which it doesn’t, it’s just giving everyone the finger while pocketing the difference. Sometimes government has to ‘just do it’ themselves, but private companies have trademarked the very phrase and you just can’t. Even Naci dicktators can’t do much directly, just raise tariffs on a spreadsheet. They can’t even control interest rates cause that’s run by a private banking cartel (the Fed is not, in fact, federal). America has been dismantling the very idea of government for decades and now they get what they wished for. The place is ungovernable and the people are helpless.
In 1986, America’s patron Satan said, “The nine most terrifying words in the English language are “I’m from the government and I’m here to help.” This has become a capitalist catechism, what I call Catechism-22. The basic idea is that governing itself is suspiciously communist. ‘Small government’ has been the animating principle of American politics since the 1980s and they haven’t had an original idea since. They just keep reanimating Reagan in different forms, and he was just a phony spokesman in the first place.
Remember that every US President since 1980 has been a pale Reagan impersonator, including Reagan himself. From senile Reagan to venal Reagan now, it’s all Reagan, all the way down. Like the astronaut from Ohio said, always has been. America was always by the money, for the money, and everything else was just marketing. At the beginning, rich people thought they should keep their money from the king using ‘the people’, and now they want to keep their money from the people using a king. Americans pretend like they follow a leader, but America has always followed the money. This does not really connect to anything but I’m keeping it because the lines are good.
To return to the party line, Catechism-22 states that governing itself is communist and quite possibly gay. You want to have as small a government as possible, small enough to drown in a bathtub as Grover Norquist said. The catch is that America needs, nay, requires government programs to beat the communists, but they can’t do it because that would make them fucking communists! As the book Catch-22 goes, “Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle. “That’s some catch, that Catch-22,” he observed. “It’s the best there is,” Doc Daneeka agreed.”
The Catch-22 of the book was that you had to stop flying bombing runs if you were crazy, but if you wanted to stop those suicidal raids you were obviously not crazy and had to do it. Catechism-22 is that America has to do government programs to beat the commies, but if they want to do government programs they are commies and have to beat themselves up over it.
Hence the venal Reagan, Donald Trump is caught in all sorts of contradictions. He wants to rebuild manufacturing without building a single factory. He wants to refine rare earths without building a single refinery. He wants to reorient the entire workforce, but without hiring people. Governments can actually just do things, but that idea has been trademarked by Nike and you just can’t. All they can do is motivate rich people with money or poor people with poverty, psychological experiments on entire populations without consent or even a coherent theory. They do they worst and hope for the best and call this economics. Nacis can’t do anything directly because that would imply a nation not run by capitalists, which isn’t Nacism, which is the best ever, as mentioned.
The whole thing is worth a read though.
Posted by: Tom_Q_Collins | May 3 2025 3:53 utc | 237
Tom Pfotzer @231
That’s an admirable effort to find an escape hatch for the US-based Empire! It looks thought-out, so deserves a response.
Tom:
If the U.S. gets good enough at key export products, the unfavorable exchange rate caused by Reserve status can be offset by the comparative advantage of … a theoretical product line that the US is really good at producing. Switzerland, for ex., exports management services even though their currency (has historically) been “expensive” due to its “store of value” traits.
“If…”? That’s a multi $trillion “if”. More importantly, it is an “if” built around real productive economic activity and not just financial circle-jerking. AI was going to be that Holy Grail until the Chinese grabbed it with almost no effort at all.
Aside: Reason is that for all American software devs since Microsoft scammed their way onto the throne, the response to performance issues has always been “That’s a hardware problem. Get more hardware”, while Chinese devs tend to think about software performance like “I wonder if I can code this complex algorithm to run efficiently on a toaster?” American software development industry has been so completely dependent upon Moore’s Law for so long that real development skills have atrophied away.
But even a must-have new product on the scale of the automobile cannot save the Empire. When the US became the dominant global industrial powerhouse, it wasn’t on the back of auto sales. It was on the power of dominance in the production of many thousands of different products. As an example, many decades ago when you went to the pub for a few, and after swigging down a couple you visit the boy’s room, what sight greeted you as you drained the tank into the urinal? “American Standard”, cast into the thickly, almost luxuriously, chrome plated brass of the valve at the top of the urinal.
That is just a lowly plumbing fitting, and you can still find more than half-century old examples of them still in use all over the world. Everything Made in America had that kind of global reach back then. From pipe fittings to Bridgeports, light fixtures to Hobarts, if you wanted something that just worked, then you bought American. You might be underestimating the scale of that global market domination. Finding some niche product, while adequate to sustain some piss-ant microstate, cannot restore America.
Tom:
Unless the investment is in a sector that has high export value, and is defensible.
Boeings and F-35s, perhaps? How’s that working out?
Tom:
Pretty grim, because U.S. is not currently trying to create these “products” or industrial sectors that offer defensible, long-term profit margins. And even if we did try, there’s 7.95 billion other people that would readily copy them.
Yes, that is the way capitalism works. You honestly would not want it any other way. You can try to change that leopard’s spots through legislation and sanction, but the spots stubbornly remain exactly as they were. This is an inseparable aspect of capitalism, and in fact one of its premier selling points as a societal structure: Capitalists are driven to increase profits by any means necessary, including “stealing” competitors’ processes and improving upon them. Indeed, that is a defining feature of capitalism, and part of what Marx was referring to when he discussed “The tendency for the rate of profits to fall”.
No, your economy needs some other selling point. Carefully protected secret processes cannot do it.
I’m not sure how much of a factor that Reserve status is, William. I think the key points that most affect our trade imbalance are:
a. Cost of running a household…
b. We’re too rich…
c. Mfg’g doesn’t need that many people….
d. If we indeed do have declining U.S. ability to buy new production, who are we going to export to that can afford to buy?…
Points a, b, and d above are all outgrowths of the US$ being global reserve currency, and the resulting “financialization” of the economy. In essence, the US “sells” the dollars that other countries need to conduct trade with; dollars that America just prints, so the US ends up getting other countries’ products basically for free.
As for c above, that is part of the “The tendency for the rate of profits to fall”, as the organic composition of capital declines. Ultimately, machines cannot create surplus value that can be realized as profit. Machines can only transfer the labor value crystallized in their own production into whatever they are producing. Depreciation tables capture this effect. The race to find other ways to increase profits because of this tendency is what cause capital flight from the US in the first place. There is no fix for this other than world war to destroy a significant portion of the global productive capacity.
Here’s a question for you, William. Many U.S.-based investors / rich people are sitting on vast piles of money in the form of stock-market or bond securities. It’s possible that both instruments are going to be worth progressively less over the near term.
Yes, as the US$ loses global reserve currency status and less world trade is transacted in dollars, those pieces of paper that assert that the holders are rich will lose significance and become just meaningless pieces of paper. The relative wealth of people who own real and tangible properties will increase. What a tragedy 🙂
If said rich people are shut out of Asian and Russian markets, where is that mountain of wealth going to go? That’s a big “investment pool”. Where will it go? There’s increasing pressure to move it from where it is… but no obvious place to put it.
Well, first they must find people willing to trade real and tangible wealth for meaningless pieces of paper. There are still plenty of suckers now, but there will be less so as dedollarization progresses. Ultimately, that paper wealth will just evaporate as it is not backed by anything tangible. The financialization circle-jerk doesn’t actually produce anything of value by itself and has more of a parasitical nature. Disconnected from its host, the parasite will just dry up and whither away, and loss of the US$ GRC will be the realization of that disconnection.
But you are correct. That disconnection will usher in a rather grim period for the American Empire. In the larger scheme of things, though, that is a better thing than global nuclear war to try and keep the Empire going for another cycle, isn’t it? And people who can maintain ownership of real and tangible properties will come out of that grimness is decent shape.
Posted by: William Gruff | May 3 2025 13:58 utc | 269
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