{"id":93857,"date":"2025-04-25T04:51:21","date_gmt":"2025-04-25T04:51:21","guid":{"rendered":"https:\/\/neclink.com\/index.php\/2025\/04\/25\/trump-wants-world-to-subsidise-us-empire\/"},"modified":"2025-04-25T04:51:21","modified_gmt":"2025-04-25T04:51:21","slug":"trump-wants-world-to-subsidise-us-empire","status":"publish","type":"post","link":"https:\/\/neclink.com\/index.php\/2025\/04\/25\/trump-wants-world-to-subsidise-us-empire\/","title":{"rendered":"Trump Wants World to Subsidise US Empire"},"content":{"rendered":"


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Yves here. This effort to \u2018splain Trump tariffs, that keeping up an empire is costly and other countries should pay for all the benefits they derive from it, was made in all seriousness. It oddly has not gotten much traction despite the high odds that it reflects the beliefs of a large faction of Trump insiders.<\/p>\n

By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development. Originally published at\u00a0Jomo\u2019s website<\/a><\/strong><\/em><\/p>\n

Donald Trump\u2019s top economic advisor claims the President has weaponised tariffs to \u2018persuade\u2019 other nations to pay the US to maintain its supposedly mutually beneficial global empire.
Geopolitical economist Ben Norton<\/a> was among the first to highlight the significance of Trump\u2019s Council of Economic Advisers chairman Stephen Miran<\/a>\u2019s briefing at the Hudson Institute.<\/p>\n

The Institute is funded by financiers such as media czar Rupert Murdoch, who controls Fox News, The Wall Street Journal<\/em>, and other conservative media.<\/p>\n

Miran made his case<\/a> just after Trump\u2019s electoral victory in A User\u2019s Guide to Restructuring the Global Trading System<\/em>. Miran attempts to rationalise Trump\u2019s economic policies, which are widely seen as at odds with conventional wisdom and reason.<\/p>\n

Enhancing US Dominance<\/strong><\/p>\n

Miran defends Trump\u2019s tariffs as part of an ambitious economic strategy to strengthen US interests internationally with a \u201cgenerational change in the international trade and financial systems\u201d.<\/p>\n

\u201cOur military and financial dominance cannot be taken for granted, and the Trump administration is determined to preserve them\u201d. Miran claims the US provides two major \u2018global public goods\u2019, both \u201ccostly to us to provide\u201d.<\/p>\n

First, Miran claims US military spending provides the world a \u2018security umbrella\u2019 that others should also pay for. Second, the US issues the dollar and Treasury bonds, the main reserve assets for the liquidity of the international monetary and financial system.<\/p>\n

Miran seems blissfully unaware of longstanding complaints of US \u2018exorbitant privilege\u2019. The dollar\u2019s reserve currency status has provided seigniorage income to the US while Treasury bond sales have long financed US debt at very low cost.<\/p>\n

Miran\u2019s Case for Trump<\/strong><\/p>\n

The White House has threatened others with high tariffs unless they make concessions, at their own expense, benefiting the US. Miran\u2019s defence of tariffs<\/a> is indirect, as part of an ostensible grand strategy.<\/p>\n

\u201cThe President has been clear that the United States is committed to remaining the reserve [currency] provider\u201d, Miran added. He claims US dollar hegemony is \u201cgreat\u201d and denies \u201cdollar dominance is a problem\u201d.<\/p>\n

While this \u201chas some side effects, which can be problematic\u201d, Miran \u201cwould like to \u2026 ameliorate the side effects, so that dollar dominance can continue for decades, in perpetuity\u201d.<\/p>\n

For Miran, these side effects are supposedly largely adverse while ignoring the benefits to the US. Chronic US trade deficits have been possible and financed by mounting US debt, enabling the dollar to serve as a global reserve currency.<\/p>\n

Hence, US trade deficits have been sustained since the 1960s, rather than \u201cunsustainable\u201d, as he alleges. US manufacturing has been \u201cdecimated\u201d by its consumers and transnational corporations, not by an extensive foreign conspiracy.<\/p>\n

Miran\u2019s Guide<\/em> acknowledged the \u2018Triffin dilemma\u2019. In 1960, Robert Triffin warned that the dollar\u2019s status as global reserve currency posed problems and risks for US monetary policy.<\/p>\n

He invokes Triffin to argue that the US must import more than it exports to provide liquidity to the world, which needs dollars for international trade and to hold as reserves.<\/p>\n

Miran adopts the Trumpian narrative of only blaming others. However, the US expected to benefit from continuing trade surpluses at Bretton Woods. In 1944, it opposed alternative payments arrangements to deter excessive trade surpluses.<\/p>\n

US trade deficits have grown since the 1960s with post-World War II reconstruction of the Global North and uneven \u2018late industrialisation\u2019 in the Global South.<\/p>\n

The Empire Must Pay<\/strong><\/p>\n

The Trump administration wants to eat its cake and still have it. It intends to strengthen US empire while minimising adverse side effects and costs.<\/p>\n

Miran wants foreign nations to \u201cpay their fair share\u201d in five ways. First, \u201ccountries should accept tariffs on their exports to the US without retaliation\u201d. Tariffs provide revenue, which has financed its global public goods provision. Second, they should buy \u201cmore US-made goods\u201d.<\/p>\n

Third, they should \u201cboost defense spending and procurement from the US\u201d. Fourth, they should \u201cinvest in and install factories in America\u201d. Fifth, they should \u201csimply \u2026 help us finance global public goods\u201d, i.e., foreign aid should go to or via the US.<\/p>\n

Miran then emphasises that Trump \u201cwill no longer stand for other nations free-riding\u201d, and calls for \u201cimproved burden-sharing at the global level\u201d.<\/p>\n

\u201cIf other nations want to benefit from the US geopolitical and financial umbrella, then they need to \u2026 pay their fair share\u201d, i.e., the world must \u201cbear the costs\u201d of maintaining US empire.<\/p>\n

Trump Dilemmas 2.0<\/strong><\/p>\n

Trump wants to use tariffs to force countries with trade surpluses with the US to buy more from the US. Ending these deficits would undermine dollar hegemony, which, paradoxically, Trump obsessively wants to preserve.<\/p>\n

Miran wants other countries to convert their US Treasury bills into 100-year bonds at very low interest rates, effectively subsidising the US over the long term. He also wants nations running trade surpluses with the US to buy more long-term US Treasury securities.<\/p>\n

Trump has threatened 100% tariffs on BRICS members and all countries promoting de-dollarisation or undermining dollar hegemony in the international monetary system.<\/p>\n

During his first term, Trump wanted to do the near-impossible by boosting exports while preserving a strong dollar!<\/p>\n

Miran acknowledges that the \u201croot of the economic imbalances lies in persistent dollar overvaluation that prevents international trade balancing\u201d. But he also insists that dollar \u201covervaluation is driven by inelastic demand for reserve assets\u201d.<\/p>\n

Trump now hopes to kill both US trade and fiscal deficit birds by cutting imports and raising revenue with higher tariffs. He also wants the world to continue using dollars despite the US budget and trade deficits and policy uncertainties.<\/p>\n

Meanwhile, official US debt, financed by selling Treasury bonds, continues to grow. Trump has to deliver his promised tax cuts soon before his earlier measures run out. Trump is falling foul of his bluster and may have to revert to the status quo ante while denying it.<\/p>\n

Despite Miran\u2019s best efforts, he cannot provide a coherent rationale for Trump\u2019s rhetoric. But dismissing Trump as \u2018mad\u2019 or \u2018stupid\u2019 obscures the impossible dilemma due to and obscured by post-war US dominance.<\/p>\n

\"Print<\/a><\/div>\n<\/div>\n


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