Written March to April 2025
Very briefly, the Trump tariffs are very important. Whether they are the best way of upending the global economic order is doubtful; I don’t think Trump particularly cares, getting people’s attention that actual meaningful change is happening is the point. Change for the economic order that broke in 2007 and has been made worse by the actions of politicians since is long, long overdue. The world of dollar hegemony, unipolarity, China dumping its surplus of manufactured goods, the EU pretending it is a big shot through its regulatory prowess etc etc are gone. What replaces the system and the politicians associated with it are open questions. Having said all this, the details of what the Big Bad Orange Man does aren’t that important. There’s little plan, though on a main issue (USD devaluation) it does seem to be working so far. The energy and emotion expended on Trump hatred/adulation does serves as a useful heuristic for political seriousness/depth.
There is an element of seeing through a glass darkly to all this: we have numerous experts telling us what the plan is, how terrible it all is and so on but as usual they miss the important fact that the one thing they are expert in is gone and is not coming back. Philip Pilkington is a typical economist/geopolitical commentator in that he is convinced he is the smartest guy in the room but the recent Multipolarity space on Twitter is well worth a listen: the world of huge, growing and unsustainable deficits is coming to an end; hopefully through a negotiated settlement for the coming decades between the US and China rather than chaotic breakdown and war. This spells the end of the surplus recycling centres (the City, Wall Street etc). This will mean short term pain as we adjust but a much better future for all, most notably in better employment opportunities in the West and higher consumption in China. We will see the end of fast fashion, ever rising house prices and other outworkings of the gigantic surpluses slopping around in the globalised finance industry to be invested only in societal stagnation. Politically, we will also start getting serious (the decadence of much Western politics is also an outworking of owners of these gigantic amounts of unearned wealth in the West turning against their own populations). Interesting times, but Humpty Dumpty will not be put together again: it was a mistake after 2007 to try, we’ve lost nearly twenty years while things have got worse.
A minor postscript: amusingly, there is talk of the UK Government attempting to negotiate a trade deal with the US. I don’t really care either way on this, but it’s funny reading comment about the “whole point” of Brexit being a US trade deal (it wasn’t at all) and it being negotiated by a government made up of people who campaigned to overturn the referendum result.