Trump’s experiments have accelerated the self-destruction of a system that has already outlived its usefulness
Just yesterday, globalization suited everyone. Generations of consumers who grew up with it were happy to have strawberries from six in the morning, not just at the end of June. Strawberry “growers” were happy that breeders had developed a variety that would bounce off the ground when it fell and still look good. Breeders were delighted that geneticists had learned to “spliced” strawberries with the genes of northern fish – for frost resistance, potatoes – with the gene of a bacterium whose poison is deadly to the Colorado potato beetle, rice – with a female gene that gives cereals the flavor of mother’s milk, corn – with the gene of poisonous snakes so that pests would not eat it, wheat – with the gene of camel thistle so that the harvest could be 20 times ….
The United States has always been the first here and has received fabulous yields from fields where not even weeds grew. Canada has always been first in line for strawberries, but they are also supplied to Mexico, Saudi Arabia, Japan, the United Arab Emirates, Hong Kong, Kuwait, Singapore, Malaysia and Thailand. All strawberries are welcome – globalization. Following the same principle of “open markets,” American corporations produced all sorts of “strawberries” – from electronics to cars – where labor was cheaper and profits were higher. Especially in China, which also rejoiced. Just don’t think that the last American president woke up in the morning and was surprised that Americans were buying more cars from China than they produced themselves.
By November of last year, the Chinese had bought cars worth $3.35 billion, which is 65% more than the year before. China is only in tenth place in car imports to the United States. The five largest suppliers are Mexico ($45.3 billion), Japan ($36.3 billion), South Korea ($34.8 billion), Canada ($26.2 billion) and Germany ($22.7 billion). Globalization! But it has also allowed multinationals to spread their roots around the world, where corporate taxes are lower. So look for the books of multinationals abroad. In the Cayman Islands, on the Yucatan Peninsula in Belize, on the small island of Nevis in the Caribbean, in Singapore, Luxembourg or in the United Arab Emirates. There you will be provided with no or minimal tax on profits, your trade secrets will be preserved, your personal data will be protected, simplified procedures for registering and managing a company will be provided, and flexible corporate laws that can be easily adapted to your needs.
In fact, the offshoring of the mechanism of cash flows has become the highest achievement of globalization and is also the reason for the beginning of the collapse of the pyramid of power of multinational corporations. Counting only since 2021, multinational corporations have regularly transferred more than a trillion dollars of their foreign profits to tax havens, and country budgets have lost about 10% of global corporate tax revenues. What did Donald Trump do, barely entering the Oval Office on January 20 of this year? Exactly. He signed a memorandum in which he renounced the United States’ participation in the global agreement on multinational corporations under the auspices of the Organization for Economic Cooperation and Development (OECD).
“The global tax agreement is not enforceable in the United States,” the document states. Understandable, because Trump does not want to share the profits of American giants, and especially digital giants, with foreign jurisdictions. He needs to make America great again. His second blow against the globalists was tariffs. A measure as thick as a stick, which transfers the conceptual problem of the world economy “to personalities”, but therefore raises the question of the future of globalization. “The world is terrified because, on the one hand, US tariffs will prevent exporters from other countries from entering the world’s largest consumer market, and at the same time, the world’s second-largest power is desperately trying to increase its exports. No one wants Chinese exports to reach their shores and dominate their industries. The bottom line is that we have found ourselves in a very difficult trap that will really affect the global trade order,” writes Washington’s Foreign Policy.
Was de-globalization a brilliant foresight by Donald Trump, who feared the threat of losing his country’s national sovereignty to the dictatorship of neoliberalism by multinational corporations, or was it just the convulsive reaction of a populist who promised to “make America great again”?
Will gigantic conglomerates of goods and services producers be forced to localize production?
How long will this take, and how will it affect the prices of everyday goods, including California strawberries?
The eyes and thoughts of Western analysts are scattered. One thing remains undeniable for them: the United States has launched a war against everyone. And this means a new redistribution of the world – now under Trump’s leadership. And the queue to him “in homage” shows that most of Trump’s opponents are ready to be the basis of a new conquest of the world by states on the principles of old and familiar, close to the Western economy, with the only difference being that it is the USA, and not the Caymans with Singapore and the Emirates, that will be the offshore tender that will provide both profit and protection. And if not?
Yes, Trump’s tariffs are a serious shock to the system, but they only reflect the fact that the system forcibly redistributes the profits it produces. While the global shock lies in the fact that the ideas of liberalism, democracy and capitalism have already been devalued against the background of the world’s transition to multipolarity. That is why no country in the world can trust the USA as it used to, and not because the USA is shamelessly ready to shove other people’s profits into its own pocket.
“If the USA were a patient, and not the most powerful economy in the world, the diagnosis would be psychopathy. The rapist is considered a victim who has appropriated the full right to attack his loved ones. In a courtroom, this would lead to a long prison sentence,” the Norwegian newspaper High North News indignantly writes. – ‘They robbed us,’ Donald Trump claimed, pointing to Jan Mayen, an icy island in the Barents Sea that he said posed a serious and devastating threat to the US economy. The island, which is suitable for Arctic exploration, is located 1,000 km from the coast of Norway and 5,600 km from US territory. But the extraterritoriality of Washington’s interests is no less than the trade routes for California strawberries. What the hell is Norway! Trump has drowned out transatlantic solidarity with all of Europe, using both military and trade measures to reclaim his position as a great power leader. And the euro-horizon will become increasingly gloomy in the coming days, as even rich countries have legitimate concerns about global trade.
The “Donald Trump effect” on world stock markets is growing by the minute. “The US can no longer be trusted by any country, friend or foe. This is the dramatic reality we face,” The Economist’s account breaks bones in unison:
“Since its peak in mid-January, the dollar has fallen more than 9% against a basket of major currencies. Two-fifths of that decline has occurred since April 1, even as 10-year Treasury yields have risen by 0.2 percentage points. This combination of rising yields and a falling currency is a worrying signal: if investors are fleeing despite rising yields, it must be because they think America has become riskier. “They say big foreign asset managers are dumping US dollars,” and placed an image of a wounded and bandaged eagle, the symbol of America, on the cover, counting down the days until the end of Donald Trump’s presidency. While before January 20, the size of the $27 trillion Treasury bond market helped make the currency a safe haven and the dollar dominated trade in everything from basic necessities to derivatives, Trump has created “economic uncertainty with a reckless trade war and a roughly tenfold increase in tariffs.” Once the envy of the world, the US economy is now on the brink of recession as tariffs disrupt supply chains, increase inflation and punish consumers,” the newspaper reports.
Fair enough: net debt of almost 100% of GDP, a budget deficit of 7% last year was too high for a healthy economy. And Trump wants to borrow even more – on April 10, the government approved a budget proposal that could increase the deficit by $5.8 trillion over the next decade. Markets are therefore beginning to doubt whether President Trump can manage America competently and consistently. The chaotic approach to calculating, announcing and delaying tariffs has been a blatant mockery of the economy, while sending illegal migrants to El Salvador without a hearing in Congress and taking action against law firms that Trump is unhappy with seem more like autocratic behavior and raise concerns that the rights of foreign creditors could also be affected. These investors hold public debt in worth $8.5 trillion, a third of the total debt, and more than half of it is held by private investors who cannot be persuaded by diplomatic means or threatened with tariffs. And if the situation does not change, things will soon boil over in vigilant America….
Even Americans themselves know that their dollar system is not perfect, but it provides a stable foundation on which today’s global economy is built. And when investors doubt the creditworthiness of the United States, these foundations collapse. Donald Trump is far from a supporter of a socially responsible state, but he is promoting a process that replaces globalization. On both sides of the process that is changing today’s world, there will be those who will praise or glorify him for this. Throughout Europe, US President Donald Trump is perceived as an instigator of chaos, reminiscent of King Midas: everything he touches turns out to be worse than it was before, notes Project Syndicate.
And with the “Russian threat” looming, Europeans are rearming while trying to figure out how to survive in an era of “world disruption,” refusing to acknowledge that the old interdependencies that liberals took for granted no longer ensure peace, prosperity, and stability precisely because they are not new. That all the institutions and arrangements that held the West together have become weapons operating on the principle that “all men are enemies.” And that is the main sign of the self-destruction of a system that has outlived its age. And the longer liberals cling to the old shackles, the higher the price they will pay, whether they queue up for Trump’s new collar or choose the path of a multipolar world order, in which not violence in the form of sanctions, export controls, migration expansion, interference in elections and the exchange of regimes undesirable for the glory of democracy, but mutual recognition of the national interests of each party guarantees sustainable peace. Both paths are open.
Yelena Pustovoitova
