Alternative Visions – Is There a Trump Trade War Brewing? – 03.09.18

Dr. Rasmus takes up the key economic news of the past week that Trump is launching a trade war by raising tariffs on steel and aluminum imports. Contrary to press and media, it’s not a general ‘trade war’ but another example of US capitalists—the national ‘America First’ wing allied with Trump in the current case—signaling they intend to renegotiate trade agreements with US trading partners. After announcing, Trump immediately exempted NAFTA partners, Canada and Mexico, the US main steel importers. Trump further announced more exemptions coming for Europe and elsewhere. SO the main target is…China, even though China is responsible for less than 1% of steel imports to US.  Rasmus explains how historically the US has always turned aggressive on trade when the global trade pie, or its share of it, was threatened: Reagan did it in 1985, Nixon in 1971, and Hoover in 1930. Further explained is how the Fed rate hike policy underway will raise the US dollar and make US exports less competitive, so the trade renegotiations are anticipating this by making US trade partners pay for the rate-dollar hikes coming. How US trade policy is a response to US monetary policy which, in turn, is a response to Trump tax cuts, defense spending, and $trillion annual deficits and $10 trillion US debt. It’s all US Capital on the offensive in a new Trump aggressive ‘Neoliberalism 2.0’ taking form.

 

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