20.03.2025

Notes on America

Donald Trump’s administration is contemplating a grand reordering of global finance and trade. Europe will suffer, but, argues Jack Conrad, China is the main target

We are in the opening stages of a series of trade wars. Amongst many other measures the US has already slapped an across-the-board 25% tariff on steel and aluminium. In response there have been counter-tariffs. Showing who has the strongest hand, they have been met with an instant response: eg, the imposition of a 200% tariff on European wines and spirits.

True, spooked by the uncertainties, this has hit US stock markets harder than those in China and Europe. However, taking into account the fact that US stocks have in historic terms been way outperforming most others, this amounts to next to nothing.¹

While a slowdown of the US economy is quite conceivable - even to be expected - the old adage that ‘when the US sneezes, the rest of the world catches a cold’ still applies. The US remains the global hegemon. Canada, Mexico, Europe … China too, therefore, face stagnation, maybe a recession. Be that as it may, in and of themselves tariffs will tend to strengthen the dollar and therefore not give US manufacturers a competitive advantage, when it comes to exports.

So it would appear that the Trump administration is on a self-defeating course. The considered opinion of countless mainstream and left liberal commentators. Unable to think outside the post-1945 box of Bretton Woods, legally binding treaties and the neoliberal ideology of free trade, they think that the Trump administration thinks that tariffs are all that is needed. But, in fact, Trump thinks nothing of the kind. That is why recent speculation about a ‘Mar-a-Lago accord’, designed to depreciate the dollar and boost US competitiveness - and therefore devalue the $36 trillion US national debt too - helps explain what seems to many to be utterly irrational.

Forty years ago the Plaza Hotel in New York became famous in economic circles. On September 22 1985, the US administration of Ronald Reagan arm-twisted the UK, West Germany, France - but crucially Japan - into agreeing what became known as the Plaza Accords, which allowed the dollar to depreciate: it was that or the sledgehammer of US protectionism. Japan took the main hit and tumbled from double-figure growth rates to decades of stagnation.

It looks like there will be an attempt - some expect it this year - at a new Plaza Accord under Trump. Naturally, there are some considerable hurdles to overcome. Germany, Japan, Britain and France will show not the least enthusiasm. Indeed Bruno Le Maire, Emanuel Macron’s finance minister from 2017-24, calls upon Europe to avoid being “subjugated” and rediscover its purpose by “resisting” Trump’s new empire.² China will be even more hostile. But, presumably, the current barrage of tariffs are designed to soften up friends and foes alike to ensure that they each agree, in turn, to US unilateral measures that allow the dollar to depreciate and thereby allow a corresponding industrial renewal in the USA.

There will, this time round, be no top-secret get-together of finance ministers in some swanky hotel. Trump prefers one-to-one negotiations. He wants a ‘hub and spokes’ relationship with the rest of the world, in which none of the individual spokes makes much of a difference to the functioning of the wheel. Trump feels confident that he can tackle each spoke sequentially. With tariffs on the one hand and the threat of removing America’s security shield (or deploying it against them) on the other, he feels he can get most countries to bend the knee. It amounts, suffice to say, to a grand plan to “force” the “reordering of global finance and trade”.³

Stephen Miran, chair of Trump’s Council of Economic Advisers, outlined the grand plan in a recent essay, A user’s guide to restructuring the global trading system (November 2024). Miran expects economic and market volatility in the short term, but he is convinced that the long-term benefits for the US will be considerable. Because the dollar serves as the world’s reserve currency, this means it is “persistently overvalued” and that weighs heavily on the manufacturing sector, while “benefiting financialized sectors of the economy in manners that benefit wealthy Americans”.⁴

Trump has bemoaned the decline of US manufacturing for decades: “if you don’t have steel, you don’t have a country”.⁵ Whether or not he is prepared for a confrontation with Wall Street remains to be seen. Either way, Miran proposes to simultaneously maintain the dollar as the world’s main reserve currency and “capture back some of the benefits other nations receive from our reserve provision”.

He also writes about “a suite of policies designed to increase burden sharing among trading and security partners”: in short the US will demand extra tribute from abroad. We have already seen the results in Britain, with cuts to the overseas aid budget and disability benefits. It will be a similar story in France, Germany and elsewhere in Europe. There is bound to be an elemental rebellion from below, from the working class. Not something Miran or other Trump advisors factor in to their calculations.

Sinister plot

But what is behind the proposed Mar‑a‑Lago accords? Yanis Varoufakis usefully explains: it is not that foreign central bankers are engaged in some sinister plot to bring down America. It is simply the fact that the dollar is the world’s reserve currency. The euro, the yen, the renminbi do not make the cut. Therefore European and Asian central banks accumulate the dollars that flow in when Americans import European and Asian commodities. By “not swapping their dollars for their own currencies”, the European Central Bank, the Bank of Japan, the People’s Bank of China and the Bank of England suppress the demand for (and thus the value of) their own currencies. This helps their export companies to boost sales to America and earn even more dollars. In a “never-ending circle”, these fresh dollars accumulate in the coffers of the foreign central bankers who, “to gain interest safely, use them to buy US government debt”.⁶

The purchasing of US government bonds in turn underpins American hegemony by allowing it to maintain its huge budget deficit and ability to finance an oversized military machine that would bankrupt any other country. And, by controlling the international payments system and possessing unmatched armed might, the US can cock a snoop at international treaties, sanction any country and, when push comes to shove, mete out terrible punishment on any small to medium-sized country that dares show defiance.

In fact, the world is awash with surplus capital - capital that cannot be profitably invested in the production of surplus value. So, by fair means or foul, those with money seek out the “deepest, best-governed and friendliest markets they can find”, which, as Miran notes, invariably means the US and, to a lesser extent, markets like those in the UK.⁷ Hence, the Mar-a-Lago accord could see taxes imposed on capital inflows and other countries being “encouraged” to agree to the whole package: a depreciated dollar, hiking spending on expensive US weapons systems and perhaps swapping holdings of dollars, short-term Treasuries or even gold for long-term, even perpetual, low-yielding American bonds.

Under the Trumpian version of mercantilism, foreign governments would be asked to categorise themselves as ‘red’, ‘green’ or ‘yellow’ - ie, choose to be foes, friends or adjacent players. Green countries get US military protection and tariff relief, but must embrace the Mar‑a‑Largo accord. Some yellow - or even - red - countries could conceivably negotiate transactional deals.

The FT’s Gillian Tett is not convinced that the Mar-a-Lago accord will succeed. Nor should we be. There are all manner of unpredictable factors - not least the class struggle - that can suddenly impose themselves. But Mar-a-Lago does make sense of the ongoing tariff wars. They are not for sure the result of Trump being “ignorant” or “stupid” - a stupid claim made by genuinely stupid people, including on what passes for the ‘left’.⁸ No, says Tett, the plan for a Mar-a-Lago accord has “a potent internal logic”.⁹

Trumpian mercantilism is redevelopmental. That explains the ability of Trump to reach out to and connect with sections of the US industrial working class that feel, and were, abandoned by the 1980s turn to financialisation and neoliberal offshoring. Hence the United Steelworkers Union welcomed Trump’s tariffs - but not when applied to Canada (where the union organises too). Instead, pitting worker against worker, it wants the president to concentrate on ‘unfair’ Chinese competition.

Of course, Trumpian mercantilism ignores, or refuses to acknowledge, the ultimate source of profit lying in the surplus value pumped out of living labour. It is a form of nationalist mystification, but one admirably suited to the needs of a US state determined to reverse its relative decline - crucially by stopping the ‘inevitable’ rise of China.

Bridgewater, the hedge-fund manager, has modelled what it calls the “four tenets” of modern mercantilism. They are: (1) The state has a large role in orchestrating the economy to increase national wealth and strength; (2) Trade balances are an important determinant of national wealth and strength, and trade deficits should be avoided; (3) Industrial policy is used to promote self-reliance and defence; (4) National corporate champions are protected.¹⁰

Trump is, therefore, doing nothing more than following in the footsteps of China, which, although a member of the World Trade Organisation, has long pursued a policy of currency management, public procurement, state subsidies, protectionism and other implicit subsidies. As a result China has become the world’s leading industrial country, including when it comes to high-tech sectors, such as electric vehicles, solar power, wind turbines, industrial robots and lithium-ion batteries.

While the administrations of Barack Obama and Joe Biden worked against the grain of the WTO order - tariffs on Chinese imports, using export controls to limit China’s access to advanced semiconductors, and pushing industrial policies like the Inflation Reduction Act and the Chips Act - Trump has in effect adopted the old motto: ‘If you can’t beat them, join them’. He has gone ‘full Chinese’ in the attempt to Make America Great Again.

Strong state

Interstate competition requires, by definition, a strong state. Clearly, the Trumpians believe that for their state to be exceptionally strong they need an exceptionally strong leader. True, some see nothing more threatening in Trump than an attempt “to recreate the imperial presidency that was buried in the mid-1970s after Richard Nixon’s resignation”.¹¹ A complacent, though thoroughly reassuring, establishment claim, somewhat strangely echoed by the SWP’s Alex Callinicos.¹²

But, no, Trump is intent on going far beyond that. He wants to be America’s uncrowned monarch. A combination of “a start-up CEO and a Roman Caesar who exercises absolute power”.¹³

Ever eager to feed an already inflated ego, Trump has actually crowned himself “king” and likened himself to a king in social media posts. Eg, on February 19, following his administration’s push to strike down new tolls for Manhattan drivers to raise funds for the city’s ageing mass transit system: “CONGESTION PRICING IS DEAD,” he wrote on Truth Social. “Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!”¹⁴

No less to the point, since assuming office on January 20 Trump has used the monarchical powers of the presidency to launch a counterrevolution against environmental protection, established working conditions, women’s reproductive health, sexual minorities, migrants and civil-rights-era gains. This has seen the defunding of programmes, mass sackings, hundreds of Venezuelans flown off in chains to El Salvador’s notorious CECOT mega-prison using the 1798 Alien Enemies Act, and Mahmoud Khalil facing deportation for the crime of leading Columbia University students in pro-Palestine protests.

His language has been incendiary. Trump compares undocumented immigrants to an infection that is “poisoning the blood of our country”. He pledges to “root out the communists, Marxists, fascists, and the radical left thugs that live like vermin within the confines of our country”.¹⁵

There is, as a result, an almost hysterical liberal and left consensus that Donald Trump is taking America straight through the gates of fascism and into the abyss. Joe Biden says it. Kamala Harris says it. Mark Milley says it. Gilbert Achcar of the social-imperialist outfit, Anticapitalist Resistance, says it too … except he calls it “neofascism”.

Neofascism differs from traditional despotic or authoritarian regimes (such as the Chinese government or most Arab regimes), in that it is based, like last century’s fascism, on an aggressive, militant mobilisation of its popular base on an ideological basis similar to that which characterised its predecessor. This base includes various components of far-right thinking: nationalist and ethnic fanaticism, xenophobia, explicit racism, assertive masculinity and extreme hostility to Enlightenment and emancipatory values.¹⁶

That describes reactionary socialisms of many stripes, reactionary nationalisms too. But, shorn of non-state fighting formations and negatively resolving an unresolved revolutionary situation, whereby the ruling class cannot rule in the old way and the ruled refuse to be ruled in the old way, then using the term ‘fascism’ - or ‘neofascism’ - owes more to fixed thinking than results from a scientific investigation.

There are too many on the left who are locked into the idea that the 1945-79 period represented some kind of capitalist normalcy: universal suffrage, strong trade unions, the social democratic consensus. That its defining capitalist ‘other’ began in 1922 with Benito Mussolini’s march on Rome. ‘Official communism’ detected the seeds of fascism in everything, including left social democracy - till, that is, the 1935 decree urging, demanding the unity of the working class movement with the least reactionary sections of the bourgeois class in the name of defeating the growing and ever more ghastly fascist menace. Hence during this 1945-79 period, and thereon after, anything that challenged, let alone overturns, the so-called normalcy is classified as fascism, or something going in the direction of fascism (and not only by ‘official communism’).

I well remember Edward Heath being branded a fascist, Margaret Thatcher too. In the US it was Richard Nixon, then Ronald Reagan. Today it is Nigel Farage, Marine Le Pen, Alice Weidel, Georgia Meloni and, of course, Donald Trump. But, to use a phrase, there are more things than are dreamt of in the black and white philosophy of fascism and anti-fascism.¹⁷ In other words, we need to take time to think and try to grasp things in terms of where they come from and where they are going.

Trump, stating the obvious, has nowadays absolutely no need for non-state fighting formations - a defining marker of fascism qua fascism. The totally botched January 6 2021 attempted self-coup with its Proud Boys, Oath Keepers, Three Percenters and other boogaloos was another matter. Not that if his self-coup had succeeded - a highly unlikely scenario - that would have made the US a fascist state. Why? Because his bid to remain president relied on the cooperation of vice-president Mike Pence, congress, the supreme court … and, ultimately, the army. The Proud Boys, Oath Keepers, Three Percenters, etc were mere bit players. They certainly never constituted the disciplined fighting core of the Maga movement, as did the blackshirts with Mussolini’s fascisti or the brownshirts did with Hitler’s Nazis.

Be that as it may, today Trump has executive orders, a thoroughly purged state apparatus, majorities in both houses of congress, the supreme court … for Christ’s sake, he even has a spaceforce. There is, moreover, no unresolved revolutionary situation. The working class poses not the least threat, neither to him nor the ruling class, that is for sure.

So Donald Trump, Narendra Modi, Vladimir Putin and their ilk need to be classified, grasped, both according to their political origins, but more importantly according to their being and becoming. In other words, if there is any ‘neo’ going on, it is closer - much closer - to neo-Bonapartism. Of course, each is an autocrat in their own unique way. Trump, Modi, Putin, etc each come with their own individual ambitions, quirks and absurdities, each stands atop a complex, constantly shifting, political and economic coalition which both propels and limits their actions, each uses, and doubtless internalises, their own national history and ideology: America’s manifest destiny, Hindutva, a Greater Russia, etc.

Made greater

Abroad, Trump’s revolutionary counterrevolution has seen him threatening to close the Mexican border, offering to buy Greenland, promising to take back the Panama Canal and incorporate Canada as the 51st state.

With the cold war won and long gone, Trump has no need to cover America’s imperialism with cant about freedom, justice and democracy. Trump can afford to arrogantly parade America’s power and naked greed. America no longer asks the world to love it: instead the world is expected to fear it. Liberals are mortified, often reduced to spluttering incoherence. And most of the left miserably tails liberal opinion.

But here is Trump’s Greater America. And it makes a perfect fit with manifest destiny. Beginning as 13 seaward-orientated former British colonies, the United States expanded westwards and southwards through genocide and seizing native lands, wars of anti-colonial colonial conquest and cash buy-outs. Alaska was bought from tsarist Russia for a paltry $7.2 million in 1867. The Louisiana and Florida purchases served as the model. And throughout there were intermittent claims over British Columbia, Quebec and the whole of Canada.

No less to the point, what is to stop the US unilaterally annexing Greenland as some sort of incorporated territory? Indian troops overran the pocket-sized Portuguese colony of Goa in just 36 hours in 1961. The 626,000 population were not consulted. Why do liberals assume that Greenland’s 57,000 population would be given any say (except in a sufficiently well-rigged referendum)? Were they consulted when Denmark first incorporated Greenland after the Danish and Norwegian kingdoms separated in 1814? Obviously not. Does anyone really expect Denmark to fight if American forces based in Greenland stroll in to occupy the key centres of Nuuk? Again, no. Will Greenland’s indigenous population launch a winnable war of national liberation? Hardly.

Not that we communists are indifferent. On the contrary, we favour the voluntary union of peoples. But that does not prevent us from recognising the role of brute force in the past ... and in the future.

The same goes for Panama. Trump has recently ordered the US military to draw up plans to seize - ‘reclaim’ - the Panama Canal. The US Southern Command has produced a series of options to ensure that America has “full access”, reports the Daily Mail.¹⁸ They range from partnering closely with Panamanian security forces to using American troops to forcibly take the waterway - which, it should be stressed, officials say is the least likely option. Note, defence secretary Pete Hegseth is expected to visit Panama next month, with, one presumes, the expectation of extracting a deal that satisfies Trump. Failing that, yes, there is brute force.

Remember, in December 1989 the US invaded Panama to overthrow the de facto ruler, Manuel Noriega, who was wanted in the US on drug trafficking charges. Operation Just Cause concluded in January 1990 with the “surrender of Noriega” and Panama’s defence forces “dissolved”.¹⁹ Will it be any different in 2025 or 2026? Unlikely - the odds are simply overwhelmingly against Panama.

True, Canada is a different matter. It has a population of over 40 million and would be no pushover. No wonder Trump talks of persuading Canada to join the United States … in return for the lifting of those tariffs.

Pan-Americanism has, though, little purchase in Canada at the moment. Only 25% are prepared to consider the proposition, only 6% positively support it.²⁰ Pierre Poilievre, leader of its Conservative Party - endorsed by people close to Trump - has made his position abundantly clear: “We will never be the 51st state.”²¹ A short while ago he was the shoo-in to be Canada’s next prime minister. Now, because of his association with Trump, polls show him running neck-and-neck with Mark Carney, the new Liberal leader.

So America has to find, or create, a unionist party, and bring around a good section of the electorate. Not impossible. England did something like that with Scotland in the late 17th and early 18th centuries. Swingeing tariffs were imposed, Scotland’s Darien colonial adventure wrecked and bribes were liberally doled out. The union of the two parliaments in 1707 saw an end to tariffs, compensation paid to the elite for Darien, and an economic boom in Scotland.

Ukraine

JD Vance spelt out the new global realities at the 61st Munich Security Conference on February 14. Breaking with the normal diplomatic conventions, the vice-president berated European mainstream politicians for their liberal intolerance and apparent indifference to mass migration. Hence, he described the greatest dangers in Europe being “internal”, rather than from the external challenges of Russia or China. Adding insult to injury, he subsequently met with AfD leader Alice Weidel - not chancellor Olaf Scholz, not the CDU’s chancellor-in-waiting, Friedrich Merz.

Weidel and Vance discussed the war in Ukraine. Weidel and Vance discussed German domestic politics. Weidel and Vance agreed that the so-called Brandmauer, or ‘firewall’, that bars the AfD from joining governing coalitions in Germany, was an outrage that should immediately be extinguished. Those who do not, or cannot, understand the significance of this change in US policy and its impact (and not only in Germany) understand nothing.

What about Ukraine? Instead of Joe Biden’s ironclad insistence on Ukraine getting everything back and seeing the back of the last Russian soldier, there are bilateral negotiations. Vance bluntly announced that neither Europe nor Ukraine have a seat at the table.

Trump wants an agreement with Russia, freezing the whole of the 800-mile front line and then, immediately after, establishing a buffer zone. We have seen Volodymir Zelensky humiliatingly whipped into line. We have also had the first formal negotiations between Trump and Putin.

Trump is ready to allow Russia to keep what it has got: ie, around 20% of pre-2014 Ukrainian territory ... the return is not so much peace: rather cleaving Russia away from China (a long shot, in my opinion). Doubtless, if negotiations continue, as is generally expected, there will be haggling over nuclear power stations, contested towns and rare metals. Given the Ukrainian scuttle, Kursk it is now a non-issue. So Vladimir Putin can claim a victory. He has already won a commitment that there will be no Ukrainian membership of Nato for the foreseeable future. Also Russia will once again be able to base its warships in Crimea’s Sevastopol and thereby allowed free access to the warm waters of the Mediterranean.

However, things are not so straightforward. Sir Keir Starmer has put together a 30-country-strong ‘coalition of the willing’ - the idea being to act as a peacekeeping force in Ukraine (something only possible with full US approval). Hence, we can envisage 100,000 foreign troops stationed along the expanded borders of the Russian Federation. Putin might not like it. But he might have to live with it though. Meanwhile, one might guess that the rump Ukraine will be armed to the teeth and provided with various security guarantees. A sort of Israel, but much, much bigger.

For the moment Trump has discarded Biden’s goal of regime change in Moscow. However, a de facto extension of Nato could easily see splits and divisions open up around Putin. Once that happens - more accurately, if that happens - conditions could be readied for a colour revolution.

Meanwhile, Trump comes not only bearing an olive branch: he carries a big stick too. If the Putin-FSB regime rejects his peace deal, there is the threat of “increased American support for Ukraine”.²² Perhaps Trump would dust off Zelensky’s now almost totally forgotten victory plan … and then add some more. Not only more and better military supplies, but the direct involvement of those 100,000 ‘peacekeepers’ as peace enforcers.

In other words, though Trump is seeking some kind of accommodation with Russia, failing that, there is the “phasing into World War III” that he once warned against.

1. The New York Times March 16 2025.↩︎

2. B Le Maine Le Grand Continent March 3 2025.↩︎

3. G Tett ‘What a Mar-a-Lago accord could look like’ Financial Times March 7 2025.↩︎

4. www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf.↩︎

5. x.com/realdonaldtrump/status/969558431802806272.↩︎

6. www.yanisvaroufakis.eu/2025/02/21/donald-trumps-economic-masterplan-unherd.↩︎

7. M Pettis ‘Five smart reasons to tax foreign capital’: www.bloomberg.com/view/articles/2019-08-01/trade-deficit-could-be-reduced-under-baldwin-hawley-senate-bill.↩︎

8. C Ryan ‘A general strike to stop Trump’ Solidarity February 12 2025.↩︎

9. G Tett ‘What a Mar-a-Lago accord could look like’ Financial Times March 7 2025.↩︎

10. www.bridgewater.com/what-trumps-global-order-could-look-like.↩︎

11. E Luce ‘Trump’s imperial emporium’ Financial Times February 5 2025.↩︎

12. Socialist Worker February 12 2025.↩︎

13. J Conrad ‘Notes on the war’ Weekly Worker February 20 2025: weeklyworker.co.uk/worker/1526/notes-on-the-war.↩︎

14. The Independent March 17 2025.↩︎

15. abcnews.go.com/Politics/trump-compares-political-opponents-vermin-root-alarming-historians/story?id=104847748.↩︎

16. anticapitalistresistance.org/the-age-of-neofascism-and-its-distinctive-features.↩︎

17. To paraphrase Hamlet, act 1, scene 5.↩︎

18. Daily Mail March 14 2025.↩︎

19. en.wikipedia.org/wiki/United_States_invasion_of_Panama.↩︎

20. www.cbc.ca/news/canada/canada-join-u-s-poll-1.7434317.↩︎

21. The Independent February 17 2025.↩︎

22. The Independent June 25 2024.↩︎