A Grab Bag: Patrushev Interview; Trump Doctrine? Hudson: Road to Chaos?

In chronological order.

About a week before Trump officially became president, Special Putin Advisor Nikolai Patrushev gave an interview to Kosmolenskya Pravda, ‘Nikolai Patrushev: "It is possible that in the coming year Ukraine will cease to exist,"‘ which was republished by many Russian media outlets and mentioned by Dr. Doctorow in a chat with Judge Napolitano, but otherwise has seen little discussion in the West because no one has translated it until now. Pravda’s preamble comes first then the interview:

The change of power in the United States promises to greatly change the global world agenda. Some high-profile foreign policy initiatives of President-elect Donald Trump turned out to be quite unexpected and caused confusion even among the most loyal American allies.

To determine what Russia should expect from the new Washington administration and how to respond to possible shifts in policy towards our country, we talked with Nikolai Patrushev, Assistant to the President of the Russian Federation, permanent member of the Security Council.

THE DEEP STATE IN THE UNITED STATES IS STRONG

- Nikolai Platonovich, for many years you have been closely involved and continue to be engaged in geopolitical issues, participate in decision-making in the field of international security. Don't you think that the world is now hiding in anticipation of serious changes on the eve of Donald Trump's inauguration?

- A significant part of the world still looks to America. Meanwhile, the American elite itself is split and does not have a single idea of how exactly to build policy both in the world and within the country.

Trump's main slogan is that he allegedly has a plan to return the United States to a pragmatic policy that would be beneficial to both the state and its citizens. How this will relate to the interests of other countries and peoples is not yet clear.

One way or another, today we are witnessing serious changes in the world. I am referring not only to the geopolitical situation, but also to the state of affairs in the economy, the technological sphere, social and cultural processes. The last time such tectonic shifts took place was after the collapse of the USSR. At that time, the West could not adapt normally to the new realities and continued to live as during the Cold War, constantly looking for enemies.

- Trump's daily statements cannot be called anything other than revolutionary: hostility to everything that the Biden administration has done, declarations of radically new ideas...

- Biden's presidency has shown that the priorities of the White House and ordinary citizens were significantly different. The words familiar to every American from school textbooks that in America the people rule for the people and on behalf of the people are at odds with reality. Therefore, ordinary Americans will accept any ideas that can contribute to their well-being. They will welcome measures to support family values, improve the health situation, fight fires and illegal migration.

Of course, time will tell whether Trump will be able to fully realize his intentions. As his first term has demonstrated, the notorious deep state in the United States is very strong. It may not allow him to unfold. And the experience of the election campaign and the attempt on his life have shown that you need to be prepared for the most unthinkable scenarios.

It is clear that Trump's positions are not shared by all US elites. His views are significantly at odds with the plans hatched by representatives of the Democratic Party, individual owners of industrial giants and transnational corporations. Therefore, it is extremely important that the safety of Trump and his entourage is ensured before taking office as head of state, as well as in the presidency.

THE UNITED STATES WILL PUT A LOT OF PRESSURE, BUT THEY WILL NOT FIGHT

- Donald Trump has already outlined his interests in relation to Greenland, the Panama Canal, Mexico, Canada, and other states on different continents. Why, unlike Biden, does he not talk so often about the future of Ukraine?

- For the Biden administration, Ukraine was an absolute priority. It is clear that the relationship between Trump and Biden is antagonistic. Therefore, Ukraine will not be among Trump's priorities. He is more concerned about China.

In addition, as you said, he outlined his interests in relation to Greenland, the Panama Canal, Mexico and Canada. It is an American tradition to redraw the map of the world to suit one's interests and interfere in the affairs of countries on different continents.

At the same time, talk that Trump will send the armed forces to conquer new states for the United States can hardly be called justified. Nevertheless, there is no doubt that in all these areas, the new administration will very assertively push through its own interests.

As for relations between the United States and China, I believe that Washington's disagreements with Beijing will escalate, and the Americans will inflate them, including artificially. For us, China has been and remains the most important partner with whom we have relations of special privileged strategic cooperation. These relations are not subject to conjuncture, they remain regardless of who occupies the Oval Office.

WE WILL NOT LET RUSSIAN PEOPLE BE OFFENDED

- Our interests are not limited to partnership with China. In other regions, they have to be protected. What can you say about relations with the Baltic States and Moldova?

- The main priority for us is the protection and well-being of our citizens and compatriots around the world. If we talk about the international aspect, then discrimination against the Russian population in a number of countries, and, of course, in the Baltic States and Moldova, must be stopped. The authorities of these states continue to lead themselves into the deepest crisis with ill-conceived actions and at the same time stubbornly spin a Russophobic hurdy-gurdy. Especially indicative is the energy crisis, the blame for which lies one hundred percent with the Moldovan authorities, who obediently carry out the orders of Brussels to reduce gas dependence on Russia.

Therefore, Chisinau does not need to deceive either itself or its people. The Moldovan authorities should not look for enemies inside the country or in Transnistria but admit their mistakes and begin to correct the situation.

I do not rule out that Chisinau's aggressive anti-Russian policy will lead to the fact that Moldova will either become part of another state or cease to exist altogether. In this situation, we can look at the example of Ukraine, where neo-Nazism and Russophobia led the country to collapse, and long before the special military operation.

THE CESSION OF TERRITORIES IS NOT EVEN DISCUSSED

- Representatives of the new US administration, in particular, advisers appointed by Trump, admit in some of their speeches that Russia will under no circumstances cede either to Ukraine or to anyone else the territories that have already become part of the Russian Federation...

- This is not even discussed. The territories that were once ruled from Kiev became part of Russia as a result of the expression of the will of citizens in accordance with international law, the laws of the Russian Federation and the legislation of these regions.

As for Russia's policy towards Ukraine, it remains unchanged. It is important for us that the tasks of the NWO are resolved. They are known and have not changed. They have been repeatedly named by Russian President Vladimir Putin.

It is also important that the world recognizes the entry into the Russian Federation of the DPR, LPR, Zaporozhye and Kherson regions, the Republic of Crimea and Sevastopol, which are an integral part of our country in accordance with the Constitution.

I would like to emphasise once again that the Ukrainian people remain close and fraternal to us and linked by centuries-old ties with Russia, no matter how much the Kiev propagandists obsessed with "Ukrainianism" claim the opposite. We are not indifferent to what is happening in Ukraine.

It is particularly troubling that violent coercion to neo-Nazi ideology and virulent Russophobia are destroying Ukraine's once-prosperous cities, including Kharkiv, Odessa, Nikolaev and Dnepropetrovsk.

It is possible that in the coming year Ukraine will cease to exist altogether.

If we talk about specific prospects for further developments, taking into account the Trump factor, we respect his statements. I believe that negotiations on Ukraine should be conducted between Russia and the United States without the participation of other Western countries.

There is nothing to talk about with London or Brussels. The EU leadership, for example, has long been unable to speak on behalf of many of its members, such as Hungary, Slovakia, Austria, Romania and some other European countries that are interested in stability in Europe and take a balanced position towards Russia. [My Emphasis]

Again, what legal basis would the Outlaw US Empire have in negotiating for Ukraine since Ukraine has a no-negotiate law that must be rescinded first before any surrogate can be named as its power of attorney. The big impediment are the Nazis that hold the power behind Zelensky the Empire has refused to purge. Zelensky knows to lift the no-negotiating rule is to condemn him to death as the Nazis have no desire to negotiate. IMO, that’s the biggest unspoken aspect/hurdle Trump faces. Patrushev would also know the General Staff’s 2025 plans that would lead him to the provocative statement he shares with Medvedev that “Ukraine “will cease to exist altogether.”

And then we must consider the actual amount of power/leverage the Outlaw US Empire has in relations with Russia, China, India, and Iran. A maritime power without a formidable navy ceases to be a maritime power, and that’s precisely what we’re seeing with US/UK/NATO, while their publics are sick and tired of paying for a military that continues to seek conflicts.

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Meanwhile, there’re other views of the situation emerging from Russia that merit knowing about. This op/ed by Sergey Strokan, a Kommersant writer, republished in English by RT, “Russia and the Trump Doctrine: Adapting to the ‘Rules of the Strong,’” presents the idea that a “Trump Doctrine” exists. So, lets read what that’s all about:

The inauguration of Donald Trump as the 47th President of the United States is this week’s main news story, not only in America but also in domestic Russian politics. Though all eyes on that day were fixed on Trump, it is telling that he also became the subject of intense discussions in this country, ranging from political circles to ordinary kitchen conversations. This is no anomaly — it is entirely logical.

For Russia, Joe Biden was not just another departing American president. He was the leader who, following Moscow’s launch of its military operation in Ukraine in February 2022, built a global framework of confrontation against the country. By the time Biden left the White House, this structure was visibly fraying.

The once-unshakable international coalition supporting Ukraine faced growing cracks, while the West’s resolve to maintain unconditional support for Kiev was visibly waning.

Enter Donald Trump. In Russia, both politicians and the general public are consumed with the question: will Trump dismantle Biden’s anti-Russian framework, allow it to collapse under its own weight, or paradoxically, tighten its screws?

The future of Biden’s hostile construction hinges on whether Moscow and Washington can chart a path out of the Ukraine conflict that enables both sides to save face without feeling like losers. For the incoming Trump administration, it is critical that any resolution does not appear as an unconditional surrender — not necessarily for Ukraine, which the new president is largely indifferent to, but for Trump himself. Allowing Putin to emerge as the winner in a psychological and geopolitical duel is inconceivable for Washington. For Trump, the optics of a personal defeat would be absolutely unacceptable.

How the Ukrainian crisis is ultimately resolved depends largely on the interpretation of the terms “victory” and “defeat.” Both sides must align their definitions and find political will to declare a solution where “nobody has lost to anybody.” This is where the room for negotiation lies—if the desire exists.

But while the Ukraine crisis has dominated Russian politics and perceptions of the US since February 2022, it is critical to recognize that, for Trump’s America, Russia and Ukraine are far from the central concern. Many in Moscow find this difficult to comprehend.

Those who frame Trump’s presidency as a grand chess match with Russia are succumbing to naïve delusions. Trump has already signaled that his administration’s primary focus will not be resolving the Ukraine crisis. Instead, Trump envisions a bold session of simultaneous play on multiple geopolitical boards, stretching across continents.

Canada, Greenland, the Panama Canal — the list goes on. Trump’s approach reflects both an audacious attempt to reshape the global order and a rejection of the so-called “rules-based order” promoted by Joe Biden. Trump seeks to replace this outline with his own — “Trump’s rules” — which also remain unwritten but are already beginning to take shape.

What are these rules? They are rooted in a classic “right of the strong” framework, where the sovereignty of one country is not inherently equal to another’s. Strength, rather than norms or equality, will define the balance of power in Trump’s vision of the world. For Russia, understanding and adapting to this will be essential in its relations with America, which remains the preeminent global superpower.

Yet, for Trump’s rules to succeed, America must also learn to respect Russia’s strength — something Biden repeatedly failed to do. Trump, who prides himself on being a dealmaker, may attempt to strike a balance where power is acknowledged on both sides.

That said, Russia must not mistake Trump’s rhetoric for a singular focus on Ukraine. For the Trump administration, the Ukrainian crisis is just one of many pieces on a sprawling global chessboard. Trump’s geopolitical ambitions extend far beyond Eastern Europe. His focus lies on rewriting the international order in ways that consolidate America’s primacy while renegotiating the terms of engagement for allies and adversaries alike.

Trump’s return, therefore, represents a profound challenge for Moscow. His presidency will not be defined by any one conflict, but rather by his attempts to rewrite the rules of the international order itself. Whether this results in stability or chaos remains to be seen. For Russia, this is both an opportunity and a challenge — a chance to assert its sovereignty and strength, but also a test of its ability to navigate a world where the rules are constantly being rewritten. [My Emphasis]

There’re several assumptions made that aren’t necessarily correct. The first is the ongoing continuity of the Rules Based Order that’s existed since 1945, UN Charter be damned. As with previous presidents, Trump will have his own spin. Second, economic numbers are deceptive and in this case mask the fact that Rusia has a more powerful economy and a much better social system than the USA—Russia has no geoeconomic dependencies while the Outlaw US Empire has many, some of which are with Russia—reactor fuel being one major item. Biden’s team was told at the outset by China that they had “no position of strength” from which to negotiate. Trump’s team is shackled in the same manner except worse since the gap has widened over the four years. The above facts and more deem the assumption that the Outlaw US Empire “remains the preeminent global superpower” incorrect. The fact that Russia doesn’t need the Empire to broker a treaty is a truth Team Trump has yet to face.

Trump’s #1 card is the American market which forms the basis for his tariff war. And that brings us to the third item that directly deals with that possibility and its potential pitfalls, Dr, Hudson’s “Trump’s tariff threats could destabilize the global economy: Trump’s protectionist policies threaten to radically unbalance the balance of payments and exchange rates throughout the world, preventing debtor countries from earning the dollars needed to pay their foreign debts. This makes a financial rupture inevitable.” The Hollywood analogies are perfect, although many will be stumped by them:

The 1940s saw a series of movies with Bing Crosby and Bob Hope, starting with the Road to Singapore in 1940. The plot was always similar. Bing and Bob, two fast-talking con men or song-and-dance partners, would find themselves in a scrape in some country, and Bing would get out of it by selling Bob as a slave (Morocco in 1942, where Bing promises to buy him back), or committing him to be sacrificed in some pagan ceremony, and so forth. Bob always goes along with the plan, and there’s always a happy Hollywood ending where they escape together – with Bing always getting the girl.

In the past few years we have seen a series of similar diplomatic stagings with the United States and Germany (standing in for Europe as a whole). We could call it the Road to Chaos. The United States has sold out Germany by destroying Nord Stream, with Germany’s Chancellor Olaf Scholtz (the hapless Bob Hope character) going along with it, and with European Commission President Ursula von der Leyen playing the part of Dorothy Lamour (the girl, being Bing’s prize in the Hollywood Road movies) demanding that all Europe increase its NATO military spending beyond Biden’s demand for 2% to Trump’s escalation to 5%. To top matters, Europe is to impose sanctions on trade with Russia and China, obliging them to relocate their leading industries in the United States.

So, unlike the movies, this will not end with the United States rushing in to save gullible Germany. Instead, Germany and Europe as a whole will become sacrificial offerings in our desperate but futile effort to save the US Empire. While Germany may not immediately end up with an emigrating and shrinking population like Ukraine, its industrial destruction is well under way.

Trump told the Davos Economic Forum January 23: “My message to every business in the world is very simple: Come make your product in America and we will give you among the lowest taxes of any nation on earth.” Otherwise, if they continue to try and produce at home or in other countries, their products will be charged tariff rates at Trump’s threatened 20%.

To Germany this means (my paraphrase): “Sorry your energy prices have quadrupled. Come to America and get them at almost as low a price as you were paying Russia before your elected leaders let us cut Nord Stream off.”

The great question is how many other countries will be as quiescent as Germany as Trump changes the rules of the game: America’s Rules-Based Order. At what point will a critical mass be achieved that changes the world order as a whole?

Can there be a Hollywood ending to the coming chaos? The answer is no, and that the key is to be found in the balance-of-payments effect of Trump’s threatened tariffs and trade sanctions. Neither Trump nor his economic advisors understand what damage their policy is threatening to cause by radically unbalancing the balance of payments and exchange rates throughout the world, making a financial rupture inevitable.

The balance-of-payments and exchange-rate constraint on Trump’s tariff aggression

The first two countries that Trump threatened were America’s NAFTA partners: Mexico and Canada. Trump has threatened to raise U.S. tariffs on imports from both countries by 20% if they do not obey his policy demands.

He has threatened Mexico in two ways. First of all is his immigration program of exporting illegal immigrants and permitting short-term work permits for seasonal Mexican labor to work in agriculture and household services.

He has suggested deporting the Latin American immigration wave to Mexico, on the ground that most have come to America via the Mexican border along the Rio Grande. This threatens to impose an enormous social-welfare overhead on Mexico, which has no wall on its own southern border.

There also is a strong balance-of-payments cost to Mexico, and indeed to other countries whose citizens have sought work in the United States. A major source of dollars for these countries has been money remitted by workers who send what they can afford back to their families. This is an important source of dollars for families in Latin America. Deporting immigrants will remove a substantial source of revenue that has been supporting the exchange rates of their currencies vis-à-vis the dollar.

Imposing a 20% tariff or other trade barriers on Mexico and other countries would be a fatal blow to their exchange rates by reducing the export trade that U.S. policy promoted starting under President Carter to promote an outsourcing of U.S. employment by using Mexican labor to keep down U.S. wage rates.

The creation of NAFTA under Bill Clinton led to a long line of maquiladora assembly plants just south of the U.S.-Mexico border, employing low-wage Mexican labor on assembly lines set up by U.S. companies to save labor costs. Tariffs would abruptly deprive Mexico of the dollars received to pay pesos to this labor force and also would raise costs for their U.S. parent companies.

The result of these two Trump policies would be a plunge in Mexico’s source of dollars. This will force Mexico to make a choice: If it passively accepts these terms, the peso’s currency exchange rate will depreciate. This will make imports (priced in dollars on a worldwide level) more expensive in peso terms, leading to a substantial jump in domestic inflation.

Alternatively, Mexico can put its economy first and say that the trade and payments disruption caused by Trump’s tariff action prevents it from paying its dollar debts to bondholders.

In 1982, Mexico’s default on its tesobono bonds denominated in dollars triggered the Latin America debt bomb of defaults. Trump’s acts looks like he’s forcing a replay. In that case, Mexico’s countervailing response would be to suspend payment on its U.S. dollar bonds.

This could have far-reaching effects, because many other Latin American and Global South countries are experiencing a similar squeeze in their balance of international trade and payments. The dollar’s exchange rate already has been soaring against their currencies as a result of the Federal Reserve raising interest rates, attracting investment funds from Europe and other countries. A rising dollar means rising import prices for oil and raw materials denominated in dollars.

Canada faces a similar balance-of-payments squeeze. Its counterpart to Mexico’s maquiladora plants are its auto-parts plants in Windsor, across the river from Detroit. In the 1970s the two countries agreed on the Auto Pact, allocating what assembly plants would work on in their joint production of U.S. autos and trucks.

Well, “agreed on” may not be the appropriate verb. I was in Ottawa at the time, and Canadian government officials were very resentful at being assigned the short end of the auto deal. But it is still going today, 50 years later, and remains a major contributor to Canada’s trade balance and hence the exchange rate of its dollar, which already has been falling against that of the United States.

Of course, Canada is no Mexico. The thought of it suspending payment on its dollar bonds is unthinkable, in a country run largely by its banks and financial interests. But the political consequences will be felt throughout Canadian politics. There will be an anti-American feeling (always bubbling under the surface in Canada) that should end Trump’s fantasy of making Canada the 51st state.

The implicit moral foundations of the international economic order

There is a basic illusory moral principle at work in Trump’s tariff and trade threats, and it underlies the broad narrative by which the United States has sought to rationalize its unipolar domination of the world economy. That principle is the illusion of reciprocity supporting a mutual distribution of benefits and growth – and in the American vocabulary, it is wrapped together with democratic values and patter talk about free markets promising automatic stabilizers under the U.S.-sponsored international system.

The principles of reciprocity and stability were central to the economic arguments made by John Maynard Keynes during the debate in the late 1920s, over U.S. insistence that its European wartime allies pay heavy debts for arms bought from the United States before its formal entry into World War One.

The Allies agreed to pay by imposing reparations on Germany, to shift the cost onto the war’s loser. But the demands by the United States on its European allies, and in turn by them on Germany, were far beyond the ability to be met.

The fundamental problem, Keynes explained, was that the United States was raising its tariffs against Germany in response to its currency depreciating, and then it imposed the Smoot-Hawley tariff against the rest of the world. That prevented Germany from earning the hard currency to pay the allies, and for them to pay America.

To make the international financial system of debt service work, Keynes pointed out, a creditor nation has an obligation to provide debtor countries with the opportunity to raise the money to pay by exporting to the creditor nation. Otherwise, there will be currency collapse and crippling austerity for debtors.

This basic principle should be at the heart of any design for how the international economy should be organized with checks and balances to prevent such collapse.

Opponents of Keynes – such as the French anti-German monetarist Jacques Rueff and the neoclassical trade advocate Bertil Ohlin – repeated the same argument that David Ricardo laid out in his 1809-1810 testimony before Britain’s Bullion Committee. He claimed that paying foreign debts automatically creates a balance in international payments. This junk-economic theory provided a logic that remains the basic IMF austerity model today.

According to this theory’s fantasy, when paying debt service lowers prices and wages in the debt-paying country, that will increase its exports by making them less costly to foreigners. And supposedly, the receipt of debt service by creditor nations will be monetized to raise its own prices (according to the Quantity Theory of Money), thereby reducing its exports.

This price shift is supposed to continue until the debtor country suffering a monetary outflow and austerity is able to export enough to afford to pay its foreign creditors.

But the United States did not permit foreign imports to compete with its own producers. And for debtors, the price of monetary austerity was not more competitive export production but economic disruption and chaos.

Ricardo’s model and U.S. neoclassical theory were simply an excuse for hard-line creditor policy. Structural adjustments or austerity have been devastating to the economies and governments on which they have been imposed. Austerity reduces productivity and output.

In 1944, when Keynes was trying to resist the U.S. demand for foreign trade and monetary subservience at the Bretton Woods conference, he proposed the Bancor, an intergovernmental balance-of-payments arrangement calling for chronic creditor nations (namely, the United States) to lose their accumulation of financial claims on debtor countries (such as Britain would become).

That would be the price to be paid to prevent the international financial order from polarizing the world between creditor and debtor countries. Creditors had to enable debtors to pay or lose their financial claims for payment.

Keynes also emphasized that, if creditors want to be paid, they have to import from the debtor countries to provide them with the ability to pay.

This was a profoundly moral policy, and it had an additional benefit of making economic sense. It would enable both parties to prosper instead of having one creditor nation prosper while debtor countries succumbed to austerity, preventing them from investing in, modernizing, and developing their economies by raising social spending and living standards.

Under Donald Trump, the United States is violating that principle [well, since 1945 to be honest]. There is no Keynesian Bancor-type arrangement in place, but there are the harsh America First realities of its unipolar diplomacy.

If Mexico is to save its economy from being plunged into austerity, price inflation, unemployment, and social chaos, it will have to suspend its payments on foreign debts denominated in dollars.

The same principle applies to other Global South countries. And if they act together, they have a moral position to create a realistic and even inevitable narrative of the preconditions for any stable international economic order to function.

Circumstances thus are forcing the world to break away from the U.S.-centered financial order. The U.S. dollar’s exchange rate is going to soar in the short term, as a result of Trump blocking imports with tariffs and trade sanctions.

This exchange-rate shift will squeeze foreign countries owing dollar debts in the same way that Mexico and Canada are to be squeezed. To protect themselves, they must suspend dollar debt service.

This response to today’s debt overhead is not based on the concept of odious debts. It goes beyond the critique that many of these debts and their terms of payment were not in the interest of the countries on which these debts were imposed on in the first place. It goes beyond the criticism that lenders must have some responsibility for judging the ability of their debtors to pay – or suffer financial losses if they have not done so.

The political problem of the world’s overhang of dollar debts is that the United States is acting in a way that prevents debtor countries from earning the money to pay foreign debts denominated in US dollars.

U.S. policy thus poses a threat to all creditors denominating their debts in dollars, by making these debts practically unpayable without destroying their own economies.

The U.S. policy assumption that other countries will not respond to its economic aggression

Does Trump really know what he’s doing? Or is his careening policy simply causing collateral damage for other countries?

I think that what’s at work is a deep and basic internal contradiction of U.S. policy, similar to that of U.S. diplomacy in the 1920s. When Trump promised his voters that the United States must be the “winner” in any international trade or financial agreement, he is declaring economic war on the rest of the world.

Trump is telling the rest of the world that they must be losers – and accept the fact graciously in payment for the military protection that it provides the world, in case Russia might invade Europe or China might send its army into Taiwan, Japan, or elsewhere.

The fantasy is that Russia would have anything to gain in having to support a collapsing European economy, or that China decides to compete militarily instead of economically.

Hubris is at work in this dystopian fantasy. As the world’s hegemon, diplomacy in the U.S. rarely takes account of how foreign countries will respond. The essence of its hubris is to simplistically assume that countries will passively submit to U.S. actions with no blowback. That has been a realistic assumption for countries like Germany, or those with similar U.S. client politicians in office.

But what is happening today is system-wide in character. In 1931 there was finally a moratorium declared on Inter-Ally debts and German reparations. But that was two years after the 1929 stock market crash and the earlier hyperinflations in Germany and France.

Along similar lines, the 1980s saw Latin American debts written down by Brady bonds. In both cases, international finance was the key to the system’s overall political and military breakdown, because the world economy had become self-destructively financialized.

Something similar seems inevitable today. Any workable alternative involves creating a new world economic system.

U.S. domestic politics is equally unstable. Trump’s America First political theater that got him elected may get his gang unseated, as the contradictions and consequences of their operating philosophy are recognized and replaced.

His tariff policy will accelerate U.S. price inflation and, even more fatally, cause chaos in U.S. and foreign financial markets. Supply chains will be disrupted, interrupting U.S. exports of everything from aircraft to information technology. And other countries will find themselves obliged to make their economies no longer dependent on U.S. exports or dollar credit.

Perhaps in the long-term view this would not be a bad thing. The problem is in the short run, as supply chains, trade patterns, and dependency are replaced as part of the new geopolitical economic order that U.S. policy is forcing other countries to develop.

Trump bases his attempt to tear up the existing linkages and reciprocity of international trade and finance on the assumption that, in a chaotic grab-bag, America will come out on top. That confidence underlies his willingness to pull out today’s geopolitical interconnections.

He thinks that the U.S. economy is like a cosmic black hole, that is, a center of gravity able to pull all the world’s money and economic surplus to itself. That is the explicit aim of America First. That is what makes Trump’s program a declaration of economic war on the rest of the world.

There is no longer a promise that the economic order sponsored by U.S. diplomacy will make other countries prosperous. The gains from trade and foreign investment are to be sent to and concentrated in America.

The problem goes beyond Trump. He is simply following what already has been implicit in U.S. policy since 1945.

America’s self-image is that it is the only economy in the world that can be thoroughly self-sufficient economically. It produces its own energy, and also its own food, and supplies these basic needs to other countries, or has the ability to turn off the spigot.

Most important, the United States is the only economy without the financial constraints that constrain other countries. America’s debt is in its own currency, and there has been no limit on its ability to spend beyond its means by flooding the world with excess dollars, which other countries accept as their monetary reserves as if the dollar is still as good as gold.

Underneath it all is the assumption that, almost with a flick of the switch, the United States can become as industrially self-sufficient as it was in 1945. America is the world’s Blanche duBois in Tennessee Williams’ Streetcar Named Desire, living in the past while not aging well.

The American empire’s self-serving neoliberal narrative

To obtain foreign acquiescence in accepting an empire and living peacefully in it requires a soothing narrative to depict the empire as pulling everyone ahead. The aim is to distract other countries from resisting a system that actually is exploitative.

First Britain and then the United States promoted the ideology of free-trade imperialism, after their mercantilist and protectionist policies had given them a cost advantage over other countries, turning these countries into commercial and financial satellites.

Trump has pulled away this ideological curtain. Partly this is simply in recognition that it no longer can be maintained in the face of U.S.-NATO foreign policy and its military and economic war against Russia and sanctions against trade with China, Russia, Iran, and other BRICS members.

It would be madness for other countries not to reject this system, now that its empowering narrative is false for all to see.

The question is, how will they be able to put themselves in a position to create an alternative world order? What is the likely trajectory?

Countries like Mexico really don’t have much of a choice but to go it alone. Canada may succumb, letting its exchange rate fall and its domestic prices rise as its imports are denominated in “hard currency” dollars.

But many Global South countries are in the same balance-of-payments squeeze as Mexico. And unless they have client elites like Argentina – its elites being themselves major holders of Argentina’s dollar bonds – their political leaders will have to stop debt payments or suffer domestic austerity (deflation of the local economy), coupled with inflation of import prices as the exchange rates for their currencies buckle under the strains imposed by a rising U.S. dollar. They will have to suspend debt service or else be voted out of office.

Not many leading politicians have the leeway that Germany’s Foreign Minister Annalena Baerbock has, of saying that her Green Party does not have to listen to what German voters say they want. Global South oligarchies may rely on U.S. support, but Germany is certainly an outlier when it comes to being willing to commit economic suicide out of loyalty to U.S. foreign policy without limit.

Suspending debt service is less destructive than continuing to succumb to the Trump-based America First order. What blocks that policy is political, along with a centrist fear of embarking on the major policy change necessary to avoid economic polarization and austerity.

Europe seems afraid to use the option of simply calling Trump’s bluff, despite it being an empty threat that would be blocked by America’s own vested interests among the donor class.

Trump has stated that if other NATO members do not agree to spend 5% of their GDP on military arms (largely from the United States) and buy more US liquid natural gas (LNG), he will impose tariffs of 20% on them.

But if European leaders do not resist, the euro will fall perhaps by 10-20%. Domestic prices will rise, and national budgets will have to cut back social spending programs such as support for families to buy more expensive gas or electricity to heat and power their homes.

America’s neoliberal leaders welcome this class-war phase of U.S. demands on foreign governments. U.S. diplomacy has been active in crippling the political leadership of former labor and social democratic parties in Europe and other countries so thoroughly that it no longer seems to matter what voters want.

That is what America’s National Endowment Democracy (NED) is for, along with its mainstream media.

But what is being shaken up is not merely America’s unipolar dominance of the West and its sphere of influence, but the worldwide structure of international trade and financial relations – and inevitably, military relations and alliances as well. [My Emphasis]

So, the circularity of history is finally coming round as mixtures of the two post-war periods are now operative. What’s different today is the Global South is more organized than ever before, while the Outlaw US Empire is weaker than at any point since 1945—it lacks the military, force projection capabilities it once had to whip those nations unwilling to become its debt slaves. The philosophical conflict between Win-Win and Zero-sum can’t be made much starker. IMO, Trump is making it easier for nations to get off the fence. Given the fragility of the US banking system, how much inflation can it take and for how long? And then there’re the retailers who’ll be slammed and the housing market since almost all tools and many fittings are made elsewhere. And then there’s the utterly inane notion that the Outlaw US Empire can switch-off brains in China so they will cease innovating and advancing faster technologically than the US. First Biden/EU now Trump/EU policy is to drive away foreign expertise as with Chinese and Indian techs. This Global Times editorial deals with the repatriation of those people as this one excerpt from the body shows:

Compared to developed countries, China still has a significant gap in attracting and utilizing talent. However, the continuous influx of top talent in recent years indicates that China's competitiveness and influence are steadily increasing. According to statistics, from 2020 to 2024, the number of leading scientists in China increased from 18,805 to 32,511, with its global share rising from 16.9 percent to 27.9 percent. This indicates a significant shift in global talent dynamics. None of this is coincidental. Some foreign media outlets said that today's China is no longer just the "world's factory" or "a giant market for the world's companies;" it is increasingly becoming the "world's research-and-development laboratory."

That’s what one expects to see in a world where “developed countries” are in the process of “de-development” also known as deindustrialization pushed by Neoliberal dogma. Looking down from high above, one can see the schizophrenia of the US policy—an attempt to attract industrial capital while pushing away the human capital that makes industry capable of innovation and technical modernization.

The plundering, colonial mentality that’s driven the Outlaw US Empire since 1763 when its British parent said it couldn’t expand into the Ohio Territory continues. Trump has lied to one and all when he said he was against and didn’t like war as he’s unleashing an Economic War on the planet that already has its Arc of Resistance, its institutions and leaders. As Lavrov said today at the end of an interview, “And [when it comes to standing by our principles] we are stubborn guys.” The number the Global Majority needs to keep in mind: We are 7 Billion; they are only 350 Million. It’s our time to call the tune.

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