Trump is clearly resorting to economic warfare. Threatening U.S. allies and now even Ukraine. Demanding billions of dollars from sale of its rare minerals, to threatening punitive taxation of foreign firms if their countries are discriminating against U.S. firms (under rarely used Section 891 of Internal Revenue Code). Economic warfare is not new and generally not effective. Often causing negative repercussions. This has been particularly true for U.S. farmers. Who during Trump 1.0 lost millions in sales on Chinese retaliatory tariffs and then had to be rescued by massive federal bailouts and payments. (By the way, one reason for Japan’s attack on Pearl Harbor was because of the U.S. oil embargo of it in 1941.

     Of course, much of the tariffs, global tax and investment proposals (CFIUS) are intended to further economic warfare but also to provide further tax relief for American corporations. But this is a part of an even larger story attempting to undo the world order (trading and political) as we know it. Reflecting Trump’s atavistic view of his youth that focused on the America and the world of the 1930’s. Namely a world of power politics, spheres of influence and no rules.

     To me, Trump simple does not understand today’s global economy and underestimates the U.S. leverage in the global trading and political system. He does not understand international relations. His view is an atavistic notion of power politics and misreads the true U.S. national interest.  (Trump 2.0 = Munich 2.0, sorry Ukraine.) Trump’s attack on the WTO and its dispute resolution system is simple outrageous. But it is part of his attack on the international system generally. Upholding the rules and laws of the international system today is critically important. Do not want a return to ‘law of the jungle’ in either foreign affairs or trade relations.

“The new shape of geopolitics—one in which the U.S. mobilizes its economic and financial pre-eminence for geopolitical objectives, especially in its clashes with China, Iran and Russia. It’s the story of a world economy that has moved from confident globalization to increasing fragmentation and in which economic warfare has become a baseline feature of our world.” “The New Economic Warfare.” Wall Street Journal (2.22.25).

“Trump’s enthusiasm for increasing taxes on all imported products could ignite a global trade war that boomerangs on American farmers, the principal targets of foreign retaliation in Trump’s first term …. At the time, China retaliated by erecting its own barriers to U.S. goods, including a steep tariff on soybeans. Chinese purchases of American soybeans fell from $12.2 billion in 2017 to barely $3 billion in 2018 …. Trump got Congress to approve a $28 billion bailout to cover farmers’ losses, more than three times what the federal government spent to rescue the auto industry during the 2008 financial crisis.” “Tariffs and Farmers.” Washington Post (2.22.25).

“By use of tariffs Trump wants to shift the tax burden away from the well-off and toward the poor and middle class …. The signature legislative achievement of Trump’s first term was the Tax Cuts and Jobs Act, legislation that permanently lowered the corporate tax rate by 14 percentage points, alongside temporary tax cut provisions that expire at the end of 2025 …. the United States and more than 130 other countries reached a tax agreement in 2021 to fix that problem, coordinating a minimum tax rate of 15 percent on multinational income for companies with annual revenue of more than 750 million euros, or $784 million …. Consumers and voters are now making a link between tariffs and higher prices.” “Trump’s Tariffs, Globa Tax and Tax Breaks.” New York Times (2.23.25).

“In his first month in office, President Donald Trump has upended the nation’s nearly century-old approach to global affairs. The speed and energy with which the president has moved to remake Washington’s role in the world has been most visible in his approach to the war between Russia and Ukraine …. Trump has no overarching national security philosophy. He doesn’t do grand strategy.” ” “Trump and Going Back to an Older World Order.” Washington Post (2.24.25).

“Investment at all costs is not always in the national interest, however.  Certain foreign adversaries, including the People’s Republic of China (PRC), systematically direct and facilitate investment in United States companies and assets to obtain cutting-edge technologies, intellectual property, and leverage in strategic industries.  The PRC pursues these strategies in diverse ways, both visible and concealed, and often through partner companies or investment funds in third countries. Economic security is national security.  The PRC does not allow United States companies to take over their critical infrastructure, and the United States should not allow the PRC to take over United States critical infrastructure.  PRC-affiliated investors are targeting the crown jewels of United States technology, food supplies, farmland, minerals, natural resources, ports, and shipping terminals. The PRC is also increasingly exploiting United States capital to develop and modernize its military, intelligence, and other security apparatuses, which poses significant risk to the United States homeland and Armed Forces of the United States around the world.  Related actions include the development and deployment of dual-use technologies, weapons of mass destruction, advanced conventional weapons, and malicious cyber‑enabled actions against the United States and its people … Those Chinese companies also raise capital by:  selling to American investors securities that trade on American and foreign public exchanges; lobbying United States index providers and funds to include these securities in market offerings; and engaging in other acts to ensure access to United States capital and accompanying intangible benefits.  In this way, the PRC exploits United States investors to finance and advance the development and modernization of its military.” “America First Investment Policy Memo.” White House (Feb. 21, 2025).

“Trump’s tariffs are a twentieth century tool that simply won’t work in the 21st century global trading system …. What we had was a brand-new type of globalisation opened up in the late ‘80s, early ‘90s, where we had offshoring and outsourcing of manufacturing …. The big trigger was information and communication technology ….  China now accounts for 35 per cent of the gross production of manufacturing in the whole world, and Chinese gross production is now larger than the next nine countries put together ….Trump is not understanding the modern economy. I don’t know when he first read about tariffs, but surely it was when the world was a simpler place before all these global supply chains got put up …. Trump is totally overestimating the leverage he has over the entire world. So US imports are only about 11 per cent of world imports overall, and the US economy is only about 25 per cent of the world economy ….  You have to retaliate when people do unfair, unusual things in trade. That is the basis even of the World Trade Organization system …. Trump playing is what we call the mad-dog strategy …. The thing is about it’s not just its services are growing faster than goods trade. I think there’s a systemic, long-term technological reason why trade, especially in manufactured goods, is declining.” “Future of Global Trade.” Financial Times (2.25.25).

“For over 75 years, the multilateral trading system has helped ensure stability and order in the global economy. The General Agreement on Tariffs and Trade and its successor, the World Trade Organization (WTO), brought states together to cooperate in lowering tariffs and other trade barriers, promoting global economic integration and establishing rules to govern trade. This system has proved extraordinarily effective and fostered an era of unprecedented global prosperity. But now this liberal trading order is in crisis. International cooperation on trade has largely broken down. The United States, the longtime champion of open markets, has abandoned its commitment to free trade, multilateral cooperation, and respect for the rule of law. By imposing tariffs and providing massive subsidies across multiple industrial sectors, Washington has openly violated the WTO’s rules and principles. China has likewise distorted and increasingly weaponized trade through its own use of subsidies and economic coercion. To avoid punishment for its violations, the United States has also paralyzed the existing system’s enforcement mechanism, thus risking the complete unraveling of the trading order …. The greatest and most immediate threat to the liberal trading order comes from the weakening of the WTO’s dispute-settlement mechanism. The WTO’s system for adjudicating trade disputes is essential for enforcing global trade rules, and it has had very high rates of compliance. If a state is found to be in violation of WTO rules, it is required to stop the offending measure or provide proportionate compensation; if it fails to do so, affected states are legally authorized to retaliate …. The United States is the single biggest source of appeals into the void, accounting for 38 percent …. India has taken similar steps. Seeking to emulate China’s development model, India put in place an extensive system of subsidies tied to “special economic zones” to promote its exports …. These are not isolated cases: two-thirds of WTO rulings are now being appealed into the void. Countries are also taking fewer cases to the WTO in the first place. The number of disputes initiated at the WTO has dropped to about one-third of what it was before the Appellate Body collapsed. This precipitous drop in the number of disputes taken to the WTO comes even as more states adopt protectionist trade measures contrary to WTO rules. Countries no longer see the WTO as an effective means to enforce their rights in the international trading system. With this breakdown in the WTO’s enforcement mechanism, rule violation will only spread …. The crisis in the liberal trading order now goes far beyond competition between the United States and China. The two countries’ disregard for long-established norms and institutions has weakened the incentives for other states to abide by and maintain that order …. Once ignited, the flames of economic nationalism are difficult to contain. The world risks returning to the trading environments of the 1930s and 1940s, when a widespread turn to protectionism led to a dramatic contraction of world trade that exacerbated the Great Depression and helped precipitate World War II.” “Abandoning the WTO.” Foreign Affairs (March-April 2025).