Blackmail, Bullying, Coercion: Lies, Ignorance, Callousness

Here is the claim:

Trump’s imposition of tariffs, wrecking the global consensus on free trade which has enriched the world and lifted one and a half billion of its people out of poverty, constitutes an act of blackmail, bullying and coercion towards other countries to force them to serve US economic interests, and it is based on lies, ignorance, and callousness.

Here is the justification for the claim:

Trump asserts that the US is the victim of discriminatory practices by other economies. He said in his ‘Liberation Day’ speech that ‘Our country and its taxpayers have been ripped off for more than fifty years’, the US economy having been undermined by other countries stealing its manufacturing industry and imposing punitive tariffs on US goods, ‘taking our jobs, taking our wealth’. Yet Biden left the US economy in a remarkably good condition despite the Covid pandemic, growing at a good clip of 3.1% annually, with rising wages and jobs being added every month that Biden was in office (the longest unbroken run of any presidency); £4 trillion went into infrastructure investment, the stock market saw historic highs, and a commendable grip was kept on inflation without precipitating recession even though world inflation caused by the pandemic meant that both borrowing and the cost of living increased and the US trade deficit in manufactured goods widened. These last two points were fastened upon by Trump in his campaign, who deliberately ignored the strength of the economy, as signs of the alleged ‘disastrousness’ of Bidenomics and – as regards the trade deficit in goods – the ‘raping’ of the US by other countries.

The strength of the economy was not just down to Bidenomics; it was the result of US ascendancy in world markets. Consider: at the time of the global crash in 2008 the US’s GDP was $14.77 trillion compared to the EU’s $14.3 trillion. By 2023 it had doubled to £27.72 trillion while the EU had risen only to $15.78 trillion (having lost £3.4 trillion by the UK’s own act of bizarre stupidity called Brexit). In the 1990s the US average wage was $53,776 compared to the OECD (advanced industrial economies) average of $43,963, while in 2023 it had grown to $80,115 compared to the OECD’s $58,232. In 1995 the average Japanese worker was fifty per cent richer than an American worker in GDP per capita terms; in 2023 the American worker was 150% richer than a Japanese worker. Workers in the poorest US state, Mississippi, have a higher GDP per capita than workers in the UK, France and Japan.

The point Trump is so massively missing is that the world is not the world of the 1950s when the manufacture of goods was the basis of economic strength. Today it is technology and services, which accounts for over 75% of the US’s GDP. The ‘calculation’ made by some idiot in the Trump administration takes account solely of the deficit in manufactured goods traded between the US and other countries, wholly leaving out the huge surplus in US tech and services exports. In every economy whose GDP has risen above a certain level, the significance of manufacturing has declined relative to technology and services.

The myth that Trump, Vance and the American Right have swallowed is that manufacturing is key, that China and other low-wage economies have stolen it, and that therefore protectionism will reshore manufacturing and return the US to the position of industrial dominance it had attained a century ago. Even if this were true it would take years to happen; building new factories and acquiring or reskilling people to work in them cannot be done overnight. In any case the US does not have enough in the way of energy supplies (hungrily consumed by data tech) or workers (having closed the southern border) to achieve this in the short to medium term even if the project of returning the US to a putative world of 1900 or even 1950 were feasible, given that the rest of the world – its trade and finances – have long since moved on, in significant part a change powered by the US itself.

The tariffs will hurt countries which export the goods to the US that the US needs – needs, indeed, to achieve the aim of reindustrialising itself, thus throwing another spanner into the work Trump thinks he is doing. The bullying aim Trump has is that countries frightened by this prospect will strike deals with the US for lower tariffs, deals that will advantage the US. Cambodia and Vietnam were the first to wave a white flag in this respect – only for Trump to impose tariffs on them anyway, on Cambodia at 49%.

The principal target for Trump is China. In his first term he raised tariffs on Chinese manufactured products to 22%, earlier this year he raised them a further 20%, and has now imposed a yet further 34%, totalling 76% in all – with a threat to go to 150% if China does not come to the negotiating table – the blackmail and bully tactic again. This is eye-watering, and because of the size and nature of China’s exports to the US will raise domestic prices in the US by over 50% in some cases. Retaliatory tariffs by China (at 34% on US goods), starting on 10 April, will hit US companies.

How were the tariffs calculated? It appears, by not-so-I AI: all of ChatGPT4o, Gemini 2.5, Claude 3.7 and Grok give the same answer to the question ‘how to calculate tariffs on imports from foreign producers’. The basic formula is ‘divide the US trade deficit with country X by its imports with X, and multiply by 0.5’. Nate Silver described this as ‘like every dumbass academic paper where they make some incredibly stupid claim but cover it up by using Greek symbols’.

The lies relate to what Trump said of the condition of the US economy while campaigning for his second term, the ignorance relates to the facts of world trade and the difference between ‘visible’ and ‘invisible’ trade, and the callousness relates to the effects on employment and the social fabric of societies whose economies will be damaged, and probably seriously damaged, by the global recession which Trump’s tariffs will cause. Here is where the poverty point applies: a system of near-free trade in most of the period since the 1980s has seen the number of people living in absolute poverty drop from 2 billion to 500 million. The numbers are rising again because of Covid, and will rise further now that the deliberate infliction of a shock to the world system equal in magnitude to 2008 and Covid has been administered by Trump’s trade war.

Inflation will rise and the US economy will shrink, adding to the loss of trust the US has already suffered as an ally and partner. The dollar is weakening and its status as the world’s reserve currency will come into question. World trade will reroute: China will see its opportunity to become the principal global trade hub, usurping the US’s position in that regard. To weaken the economies of other countries is no benefit to US exporters, because they will not be able to buy as much from the US. Even the US tech industries will suffer, because of the role in its supply chains of vital products from China and Taiwan. The several species of stupidity underlying Trump’s actions amount to the condition of psychopathy.

Trump went golfing after releasing his wrecking-ball onto the world economy. Even if he were to rescind some or all of the tariffs he has imposed, as the chickens come swiftly home to roost – see how many trillions of dollars of asset wealth have been incinerated on the world’s stock exchanges already – the damage is done: the world has changed, the US is no longer the lynchpin of a world-order that, despite all the turpitudes of its imperium since 1945, has also brought a large measure of prosperity to many and relative peace to most. And that is down to the US far right and the people who have captured the country’s government. The founders of the US aspired to build a system that would keep ‘unfit persons’ from office, and that system has failed. There is nothing to be done about it now; the two saddest words in any language here apply: too late. Perhaps a smaller and poorer US will reform itself, having like Samson pulled the temple down round is ears; but that will be too late to prevent the current global crisis from unfolding to its logical end.

There are all sorts of downsides from increased economic stresses. Poverty, inequality, hunger for resources, all promote conflict. International wars in history typically had as one of their chief motivations the last of these three factors, while civil conflicts had one or both of the first two. A weaker and poorer US gives opportunities to irredentists and revanchists, notably China in the Asia-Pacific region and Africa, Russia in Europe and Central Asia, and the multiplicity of angry and viciously unrestrainable actors in the Middle East.

Any upsides? The stalling of global economic growth might do something for the environment and climate – except that the amount of money available for the urgently needed clean-up is now less, and increasing conflicts will get in the way. But even here those two saddest words, too late, might already apply. For this, a callous lying bully might have had at least one mitigating feature to his character a hundred and fifty years ago. Now it only makes things severely worse.