Mike Whitney – The Unz Review April 27, 2025

“This is one of the most important days in American history. It’s our declaration of economic independence. Jobs and factories will come roaring back into our country, and you see it happening already. We will supercharge our domestic industrial base.”

President Donald Trump announces unilateral tariffs on 180 countries despite warnings of inflation, recession and supply chain disruptions, April 2, 2025

This is probably the worst economic policy I’ve ever seen…. There is no way that this policy will bring manufacturing back to the United States and “make America wealthy again”… if anything, it’ll make us much poorer. Many are saying that this tariff policy is the “end of globalization”. I don’t think so….. This is the end of America’s participation in globalization….

Molson Hart@Molson_Hart, Founder and CEO of Viahart, a consumer products company

The purpose of President Trump’s tariff policy is not what he says it is. If the goal of the tariffs was to reindustrialize the country and create more jobs in manufacturing, the announcement would have been accompanied by an industrial policy that would outline a coordinated government effort to rebuild America’s critical industries. It would have provided details on tax incentives, infrastructure investment, workforce training, government subsidies and R&D funding; all aimed at achieving Trump’s stated objectives. By now—late April—Trump would have made numerous public appearances with important banking and business leaders who would have expressed their support for this ambitious project of rebuilding the country into a manufacturing powerhouse. Trump also would have presented an overview of the many public-private agreements that had been made with wealthy capitalists who supported the idea and wanted to participate in its implementation.

But none of these things have happened, because there is no industrial policy; just as there is no expectation that the imposition of onerous duties on foreign imports will magically “bring jobs back to America”. It’s all a pipedream aimed at hoodwinking the public. So, what is the tariffs business really all about? Here’s how the WSWS answers that question:

The real purpose of Trump’s tariffs (in the words of socialist Tom Hall) is “to prepare supply chains for world war, especially against China.” (The administration) “is promoting a policy which recalls the darkest period of the 20th century under the Nazis, where trade war preceded the outbreak of World War II in September 1939.” World Socialist Web Site

We find this analysis compelling, but not particularly believable. True, Trump has failed to back his tariff edicts with any solid proposals for rebuilding America’s anemic industrial base. But that doesn’t mean he’s gearing up for a war with China. That seems like a bit of a stretch. Even so, it’s worth putting the question to Grok to see if the historical analogy is accurate.

Question—Did Hitler use the trade war to strengthen supply lines to Germany before the war?

Grok—Yes, Hitler exploited the global trade war and economic turmoil of the 1930s to strengthen Germany’s supply lines and prepare for war. The Smoot-Hawley Tariff Act and subsequent retaliatory tariffs by other nations disrupted global trade, creating opportunities for Germany to pursue autarky (economic self-sufficiency) and secure strategic resources through bilateral agreements. Here’s how:

Hitler’s regime aimed to reduce reliance on imports by boosting domestic production, particularly in agriculture and synthetic materials (e.g., fuel, rubber). The Nazi “Four-Year Plan” (1936) prioritized rearmament and self-sufficiency to insulate Germany from trade disruptions.

Bilateral Trade Agreements: With global trade hampered, Germany negotiated barter deals with smaller nations, especially in Eastern Europe and the Balkans….

Exploiting Weakened Economies: The trade war weakened economies globally, making countries more willing to trade with Germany on favorable terms….

Control of Neighboring Economies: Germany’s economic influence over Austria and Czechoslovakia before their annexation (1938-1939) ensured access to their resources and industries, further strengthening supply lines….

While the trade war wasn’t the sole factor, it created a fragmented global economy that Hitler manipulated to bolster Germany’s war machine. By 1939, these efforts gave Germany a robust, though not complete, supply network for the early stages of World War II. (Grok)

So, a case could be made that Trump is thinking along the same lines as Hitler, trying to make the US more self-sufficient in the event of a military confrontation with China. That might explain why he is patching up relations with Putin (so he can shift his attention to China). It might also explain his sudden interest in Greenland which would provide the US with easy access to precious metals, rare earth, and oil and gas reserves in case war breaks out in the Asia-Pacific. The de facto seizure of the Panama Canal could fit within this same paradigm as it relates to the control of critical sea lanes and maritime passageways. These are all actions you would expect the government to take if they were planning a long-term conflict with a peer competitor located halfway around the world.

But we’re still not convinced that this is the opening volley in a war with China. We think it’s the Shock-and-Awe phase of an aggressive containment strategy that seeks to isolate and encircle China without actually veering into a shooting war. Even so, it should be fairly obvious by now that the Liberation Day extravaganza was merely a way to conceal Trump’s real motive, which was to formally launch a trade war on China. That’s what’s really going on behind the scattershot tariffs that have been haphazardly aimed at friend and foe alike. The real bullseye is on China, the greatest emergent threat the US has ever faced.

The embargo on Chinese goods suggests that Washington is finally making its definitive pivot to Asia. Ukraine is being handed over to the NATO allies while the US shifts its attention to the Far East. The administration is already committed to strengthening its military presence in the region, building support for an anti-China coalition, inciting incidents in the Taiwan Strait and the South China Sea and now, imposing a complete embargo on China without any prior notice and without the slightest provocation. The new tariffs fit seamlessly with Washington’s broader strategy of containing the one rival that is most likely to become the undisputed regional hegemon.

But whatever Trump’s intentions may have been, there is no doubt that the plan was poorly thought-out and is not having the impact he had hoped for. For example, Trump thought his gigantic tariffs would send Chinese Premier Xi Jinping racing for the phone to see what concessions he could make to placate strongman Trump. But so far, that hasn’t happened, and it doesn’t look like it will. Instead, China’s Foreign Minister has repeatedly stated that “all unilateral tariffs must be removed” before China will even talk to Trump. In short, China has left Trump with no choice but to capitulate now or watch as the US economy goes into cardiac arrest. Check out this shortlist of recession predictions by some of the bigger names in finance:

Goldman Sachs: Prediction: Raised U.S. recession odds to 45% for 2025… If reciprocal tariffs proceed, they expect a recession, albeit mild, similar to 2001’s dot-com bust….

JPMorgan Chase: Prediction: Sees a 60% chance of a global recession by year-end 2025 CEO Jamie Dimon predicts tariffs will slow growth and boost inflation...

TD Securities: Prediction: Raised U.S. recession odds to 50% due to “blunter than expected” tariffs.

Moody’s Analytics: Prediction: Chief Economist Mark Zandi raised recession odds to 40% calling tariffs “fodder for an economic downturn”....

Deutsche Bank: Prediction: Sees a “meaningful increase in recession risk,”… Tariffs raise core PCE inflation by 1–1.5 points and reduce growth via higher costs and reduced competitiveness. Uncertainty and retaliation amplify downturn risks.

Morningstar, Prediction: Calls tariffs a “self-inflicted economic catastrophe,” predicting a recession with reduced GDP growth for 2025–2026…Reasoning: Tariffs raise effective rates to 20–25%, the highest since the 1930s Smoot-Hawley Act, increasing inflation and reducing consumer demand. Supply chain disruptions and retaliation worsen outcomes.

So, while no one can predict a recession with 100 percent accuracy, there’s a mounting consensus that tariffs are going to impact spending, inflation and growth. The anticipated outcomes are simply ‘baked in the cake.’

So, what should Trump do?

Well, the data’s clear that he has made a serious blunder that requires immediate action. He needs to acknowledge his mistake and make a course correction before the supply chain disruptions deteriorate and the hole he’s dug for himself gets even bigger. He needs to remove the tariffs, comply with WTO rules and regulations, and replace the members of his economics advisory team who concocted this madcap idea. We have to assume that it wasn’t Trump who thought tariffs could be used to counter China’s so-called “unfair practices” that “hollowed out U.S. manufacturing.” No, it was likely Robert Lighthizer (who is a key architect of Trump’s first-term trade war) and Peter Navarro, a former Trump trade advisor who co-authored Death by China (2011) and who influenced Trump’s tariff policy during his first term. These are the brainiacs responsible for the current debacle. Trump is merely the unwitting accomplice implementing the destructive views of loony ideologues. We are reminded of a quote by John Maynard Keynes, in his seminal work The General Theory of Employment, Interest and Money (1936), who made the following observation about the influence of deceased economists:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.

While neither Lighthizer or Navarro are yet “defunct”, it’s clear that Trump is in the grip of their misguided ideas.

Here’s a short sketch of both men:

Robert Lighthizer—who is a key architect of Trump’s first-term trade war and likely influenced the current tariff strategy—is a trusted Trump advisor whose protectionist views jibe with the majority of the other Trump appointees. “Lighthizer views China as an economic adversary exploiting globalization to undermine U.S. manufacturing. He advocates high tariffs, export controls, and decoupling to protect American industries and reduce trade deficits ($295 billion with China in 2024). His approach prioritizes economic nationalism over military or ideological confrontation… Lighthizer’s ideas directly inform Trump’s 2025 tariff hikes(125%–245% on China) justified as countering China’s “lack of respect”…

Lighthizer’s protectionism mirrors Smoot-Hawley’s intent to shield U.S. industries but ignores how such measures can deepen global economic strife… Robert Lighthizer remains an informal advisor in 2025, shaping Trump’s tariff strategy through his protégés like Jamieson Greer. (Grok)

Then, there’s Peter Navarro, who views China as a predatory economic power, stealing U.S. jobs through unfair trade practices. He advocates aggressive tariffs, export bans, and reshoring manufacturing to counter China’s $640 billion trade advantage…. Navarro’s ideas reinforce Trump’s 2025 tariff hikes and decoupling goals… Navarro’s tariff-heavy approach echoes Smoot-Hawley’s protectionism, which backfired by deepening the Great Depression…. Navarro’s policies under Trump may disrupt global markets without a robust U.S. industrial policy. (Grok)

Finally, we have Stephen Miran, Chairman, Council of Economic Advisers (CEA):

Miran is a chief architect of Trump’s tariff strategy, proposing a “Mar-a-Lago Accord” to restructure global trade, using tariffs to force countries to “pay tribute” for U.S. military and financial dominance (Geopolitical Economy Report, April 10, 2025). In an April 7, 2025, speech, he called China “our biggest adversary” and argued tariffs could win a trade war by leveraging U.S. consumer market power. He defended tariffs as historically successful, stating, “American economic history has seen periods of high tariff rates coincide with extraordinary economic success”

(Note—Treasury Secretary Scott Bessent and Kevin Hassett, Director, National Economic Council (NEC) appear to be only minor players in the tariff’s fiasco.)

These are the men whose ideas are driving the current tariffs policy. The unfolding economic crisis can be traced back to them and their deluded views.

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