My apologies for a lack of recent posts but I had some personal matters I had to attend to so while still following the markets closely I lacked the time to compose regular updates. That will now change and I expect to keep you informed about events at least several times a week going forward. I will say, however, that most of my analysis of the current U.S .regime’s motivation and perspective on tariffs have been confirmed as correct. This includes the fact that Brazil and PBR which I write about a.lot here was likely to be spared from being a target of tariffs which was certainly the case with the country getting the lowest level.
As always, the purpose of the site is only educational so let me begin by saying that the following discussion is politically neutral. Those who are supporters of Trump may like the fact that I compliment his power skills, but I would contend that the opposition on the left better wake up fast to the difference between the cartoon presentation of Trump they’ve pushed and the reality of his calculations if they are to have any chance at all of being a genuine alternative party after what in many ways, and this is also said neutrally, may have been what political scientists call a turning point election.
In an earlier post I spoke of the genuis of Trump’s tariff policy in discovering the key weakness of globalism and in Feuerbach like fashion flipping its key premises upside down. And I spoke about the difference between the international organization approach that dominated American foreign policy for the most part after the end of the Cold War for decades and the return by Trump to an earlier real-politique view. Consider those earlier posts among others for a fuller picture.
This is the second installation on the genius of Trump and again all concerned make a mistake if they underestimate it. I once many years ago in what was in some ways a different lifetime did a lot of martial arts. It was great exercise and I got into the top shape of my life. Also as a result of this I had the opportunity at that time of doing an instructor course with a quite famous martial artist who will remain nameless here. He came to the US to teach the course and I believe it was the first time he had done that not in his own country. The thing about this martial artist was that as my own very talented instructor who had been his long time student put it everyone in what was a fairly rough part of the world always underestimated this individual’s ability who didn’t know who he was, even though as I said his name was quite famous to anyone who knew the martial arts. This was because he was a big and some people might say overweight guy. My instructor even joked that he had a hard time tying his shoes and this was in the days before step-in shoes. But what became clear almost immediately doing the long classwork led by him was that despite his initial appearance he was incredibly talented and fast, really fast. He had technique and speed to an incredible degree and obviously he had size to his advantage also. I felt sorry indeed for anyone who underestimated him.
Trump even now has a tendency to be underestimated and it actually gives him an edge. You would think that would be totally over by now since just like that instructor I had all those years ago he has more than shown his skills in this case to the entire world. It should have been obvious anyway. The left hates capitalism and they underestimate how hard it is to be a billionaire. Their own ideology and propaganda in this case gets in the way of fully understanding what that means. Everyone who has played sports knows how hard it is to become a pro athlete. The odds are a mere .08, not 1 per cent but 8/100ths of 1 per cent. which is incredibly difficult to say the least. How many highly talented athletes do you know who never were able to succeed at doing that. Now consider the odds. of becoming a billionaire, a mere .000032 per cent. No that’s not a misprint. The left talks about the “1 per cent” so what does that make Trump? And , of course, its not just Trump, Howard Lutnick—billionaire, Elon Musk—billionaire, obviously, Linda MacMahon—billionaire, Doug Burgum–billionaire, even Scott Bessent half a billion which is laso very hard to do. Now I know that fuels calls by the left of oligarchy but remaining neutral, that’s an awful lot of extremely rare skill not usually found in a regime ever, anywhere, especially since those fortunes were not made from politics. That should have given Trump’s opposition an idea of what they were up against, but no they often continue to say and believe otherwise.
So the new number of countries trying to negotiate with the US is supposedly an amazing over 130. Each of those countries will have to make a “couture” deal as its been referred to with Trump heading the bargaining. All of those deals are going to be made by people who for the first time ever have spent their entire lives making nothing but deals and using leverage at the highest possible levels. That unlike the international organization approach where we all just get along is a dream come true from a real-politique and power perspective. It means the US suddenly has leverage over the economic futures of at least 130 countries which before the tariffs took place was not direct like this and to a large extent minimal at best.
Now of course the rejoinder of those who do not understand the incredible power implications of this is to say Trump is being too unpredictable and making the markets too volatile and that Trump and his regime misunderstands that wealthy countries because they have more to spend always have bigger deficits. Both statements are true and obviously Trump who graduated from one of the top business schools in the country, Wharton, knows all of this as do people like Bessent and Lutnick, but the genius is these facts have almost nothing to do with Trump’s actual goals here. The policy may be from a purely economic standpoint theoretically incomplete or even inaccurate in some ways, but from a power standpoint it remains brilliant and incredibly cunning. The bigger the trade barriers one can say the more independent of American influence and power a country is at two levels: First, they symbolize as in the case even of the E.U a stance intended to limit the power of the US in their region economically and they even more to the point exist to limit the ability of U.S. companies and economic power to be deployed in the domestic economies of those countries. Any trade deal reached means that power on both fronts increases not slightly but significantly for the U.S. It also changes all the broader incentives for big global companies, which have in many cases limited loyalties to any country, to shift production to the U.S. which is also a big deal. If you live in another country you now have a legitimate excuse to build out in major ways and spend a lot of your time not in your own country but in America. For many CEOs this may seem at a personal level superb.
The international organization soft power approach was that the U.S. is so powerful that it can organize the global system as a whole and not really push its power further and after the Cold War perhaps that made sense at least for a while. But it’s a long time since the U.S. became hegemon at that point and the world has changed. The new real-politique approach is a heavier power that seeks much more control. The way Trump looks at it is like a trader not an economist. Traders see a zero sum game in markets. Now economists will tell you that’s not really exactly how it all works. But Trump, Luttnick, Bessent, Musk didnt get to where they are listening to economists in that manner, but acting like the world was a zero sum game. This is the complete opposite of the Trust fund, 3 generations removed from the actual source of fortunes worlds that animates many of the participants in the international organization ambassadorial world.
Also they recognize a deeper truth which the left used to also get which can be described as follows. If you really want the international organization not zero sum approach to fully prevail than the entire world will have to become equalized and just one big giant market where every worker is interchangeable with every other worker. And if that actually occurs than wages will have to equalize across the entire globe. That’s what the broader economic theory actually says. But that’s the little higher level secret they haven’t told fully the citizens of the wealthier countries, but have been trying to put into effect in many ways. It’s a secret Trump understands and rejects. Not that countries can’t change their economic position and equality get fuller—but are Americans really politically prepared for the full consequences of an unchecked globalism according to those economic principles tariffs supposedly flout where wages equalize across the entire globe?
One last key point on this idea. If you really want to understand the genuis of Trump’s tariffs you need to consider two cornerstones of Western thought. China has Sun Tzu, the West has Thucydides and Homer. It is out of Thucydides that the real politique approach at first emerges. Trump does not understand why the US being the hegemonic power is not more fully leveraging its authority. In his view the failure during the last so many decades to do so has actually made the world less not more stable, made it that countless wars have emerged which could have been avoided, and significantly decreased the standard of living of US citizens.
The second key lesson Trump has based his rule on is that of Homer, a key figure at the very dawn of Western civilization. Now this is not the place for a fuller account of the great strategist Sun Tzu I referenced earlier nor a full account of Thucydides, let alone the more complicated Homeric account of the Iliad and Odyssey. But I just want to make a point here that Trump himself has recently tried to convey publicly with a new wall analogy a key idea from Homer. At the time Homer wrote his great epic the Greeks he felt were faced with a choice. They were basically conquering barbarians expanding their own territory. Their mentality was that of Achilles. Faced with an enemy fortress they just repeatedly banged against it. On the other hand Odysseus is the actual blueprint in Homer’s view for leadership and an alternative rule. He uses cunning and guile not only brute force like Achilles. Homer never ceases to remind us that power must not just be brute force to succeed. The media and his opponents think of Trump as Achilles, the unsophisticated, reckless leader lacking that international organization elite sense of propriety. They see the changes with tariff policy as a sign of that Achillian nature. But as Trump suggests on several occasions recently confronted with a wall as he puts it sometimes you have to go under it or over it or around it. Trump has learned a great deal from the Homeric ethos and if the reader would wish to understand his regime they might want to read these classic works and reappraise there own characterization of Trump and present a more thoughtful alternative or as Bill Maher recently discovered they might be way underestimating his identity and what that .000032 means. There are no Achilles billionaires only Odyssean ones or at least as a rule that’s the case and at least for the original makers of such fortunes.
Are there any weaknesses with such a real-politique perspective even brilliantly deployed like Odysseus? Sure and we will discuss a few of them in later notes that whoever wields such power needs to be especially reflective about, but it matters a lot if you’re dealing with Odysseus and the only analysis and critique ever being made is incorrectly that of Achilles.
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