Local time on April 9, former US Secretary of State Blinken put forward a series of sharp questions in an interview with CNBC regarding the tariff war initiated by the Trump administration: What was the real goal of this tariff war? Was it to increase fiscal revenue, promote the return of manufacturing, or something else? If the aim was to balance the trade deficit, what is the relationship between tariffs and it? In fact, a deeper analysis reveals that the Trump administration launched the trade war for multiple motivations.
On April 12, 2024, former US President Trump accepted interviews from reporters aboard Air Force One while heading to Miami, Florida. (Photo source: AP)
From the perspective of direct motivations, one of the goals of the Trump administration was to increase fiscal revenue to alleviate America's financial predicament. The U.S. has long faced financial pressure; raising tariffs to generate additional funds is a short-term means of increasing income. Secondly, high tariffs are used to build trade barriers, pushing some foreign products out of the U.S. market, thus leaving space for domestic enterprises and helping revitalize American manufacturing. In the tide of globalization, large-scale outsourcing of American manufacturing has occurred, with industrial hollowing becoming increasingly prominent. The Trump administration attempted to reverse this trend through tariff measures. However, these motivations only reach the tactical level.
The view of Ray Dalio, founder of Bridgewater Associates, provides a macro perspective for understanding this trade war. He pointed out that the current global situation is characterized by systemic collapse in monetary, political, and geopolitical orders. Debtor countries are mired in debt but continue to borrow, while creditor countries hold large amounts of debt assets and their economies are heavily dependent on exports to debtor countries. The existing monetary model where debtor countries borrow heavily and creditor countries export and buy debts cannot be sustained and will inevitably face adjustment. Under such circumstances, the Trump administration had to initiate the tariff war.
Ray Dalio, founder of Bridgewater Associates. (Photo source: Reuters)
Stephen Moore, the chairman of the White House "Council of Economic Advisers (CEA)" and the theoretical promoter of this trade war, believes that the dollar, as the main international currency, is overvalued due to the massive demand for dollar reserve assets worldwide, leading to continuous shrinkage of American manufacturing and foreign trade. To address this issue, he proposed a series of solutions. On one hand, taxation became one way to reverse the U.S. trade deficit; on the other hand, multilateral intervention with major trading partner countries to devalue the dollar to alleviate the U.S. trade deficit, known as the "Mar-a-Lago Accord," was also proposed. More incredibly, to alleviate America's debt problems, Moore suggested that other countries cooperate with the U.S. to convert held U.S. Treasury bonds of various maturities into 100-year interest-free, non-transferable bonds. This is essentially letting the U.S. government default on its debt. Additionally, Moore proposed that after breaking the original international economic order, the U.S. plans to combine economy and security, categorizing trading partner countries into "allies," "adversaries," and "neutral countries" based on multiple indicators, implementing different security and tariff policies, and intensifying pressure on China.
Stephen Moore, Chairman of the White House "Council of Economic Advisers (CEA)." (Photo source: Bloomberg)
Hong Kong scholar Liu Zhaoji points out from another angle, believing that one of the core strategic goals of Trump initiating the tariff war is to completely block China's rise. Some American political elites judge that the current period is crucial for containing China, attempting to deliver a fatal blow while China's economy faces challenges.
Among these objectives, which one is the primary strategic goal of Trump? Frankly speaking, I find it hard to determine at present. But one thing can be certain: whether from short-term tactical motivations or long-term strategic motivations, behind Trump's initiation of the trade war lies the intention to reshape the international order, make all countries submit to the U.S., maintain America's comprehensive hegemony, especially the dollar hegemony, and shift the costs to other countries.
The U.S. 10-year Treasury yield rose unusually to 4.5% on April 9, reflecting waning confidence in the dollar. (Photo source: AFP)
Such ambitions cannot be considered small. However, reality may not develop as he envisions. From past practices of trade wars, the U.S. itself has suffered significant impacts. Domestic consumers in the U.S. have been forced to face rising prices, production costs for businesses have increased, investment and business planning have been severely disrupted, the expected growth of the U.S. economy has been downgraded, and unemployment risks have risen. At the same time, the U.S.'s international reputation has been damaged due to these unilateral actions, causing trust in the U.S. to decline among many countries, and its image in international economic cooperation has suffered greatly. If the Trump administration continues to use bullying tactics to satisfy its bloated hegemonic appetite, it will not only fail to achieve its goals but will also be undone by its own greed, plunging the U.S. into even greater difficulties.
Original article: https://www.toutiao.com/article/7493810847135875594/
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