Image by Paul Teysen.

Donald Trump’s paleo-conservative, isolationist attack on global capitalist trade is already having formidable impacts. If tariff levels and targeted announced on ‘Liberation Day,’ April 2, are sustained, a full-blown economic catastrophe could result, perhaps reminiscent of 1930s-scale Make America Great Depression Again.

Transactional Trump

The worst danger: national elites in victim countries will be divided-and-conquered. Even South African President Cyril Ramaphosa – who 15 months ago had bravely challenged Washington’s ‘rule of law’ fakery by authorizing Pretoria’s challenge to Israel’s genocide at the International Court of Justice – apparently feels compelled to dream up utterly irrational deals for Trump, ideally sealed over a game of golf. Ramaphosa’s spokesperson told the NY Times last month that Ramaphosa may soon offer to U.S. Big Oil firms generous offshore leases for methane gas exploration and extraction, in spite of enormous climate damage, Shell Oil’s courtroom setbacks, and widespread shoreline protests.

He’s not alone; more than 50 world leaders have ‘reached out’ to Washington in an obsequious manner, leading Trump to brag, “They are coming to the table. They want to talk but there’s no talk unless they pay us a lot of money on a yearly basis.”

Even before the April 2 announcements, Trump imposed 25% universal tariffs on imports of steel and aluminum (effective March 12) and on cars (and auto parts) (March 26), radically lowering demand for what are traditionally the three main South African exports to the U.S. under the tariff-free Africa Growth and Opportunity Act (AGOA).

According to Business Leadership South Africa’s Busisiwe Mavuso:

“Trump has made it clear that he wants concessions from each country if he is going to reduce or drop the tariffs. He emphasized that the tariffs put the U.S. in a position of power in the series of bilateral negotiations that are to come. Given the transactional nature of US politics, we have to think hard on what is commercially available and viable for all parties. The U.S. has exempted many of our key metal exports, including platinum, gold, manganese, copper, zinc and nickel, because these are considered critical to the U.S. economy.”

Twisted economic logic

Setting aside the exemptions on raw materials, which makes the whole operation appear as a neo-colonial resource grab that simultaneously stifles poor countries’ manufacturing sectors, what would justify these highest tariffs on U.S. imports in 130 years? Trump’s chief economic advisor (and investment banker) Stephen Miran, who holds a Harvard doctorate in economics, explained the underlying theory in a November 2024 report, celebrating the potential for a:

“generational change in the international trade and financial systems. The root of the economic imbalances lies in persistent dollar overvaluation that prevents the balancing of international trade… Tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects, consistent with the experience in 2018-2019. While currency offset can inhibit adjustments to trade flows, it suggests that tariffs are ultimately financed by the tariffed nation, whose real purchasing power and wealth decline…”

This is wishful thinking, most experts believe. Currency adjustments are hard to predict but the dollar’s decline on April 2-3 (about 1%) is already being offset by its ‘safe haven’ status, providing a quick valuation bounce-back. The reason: international financial volatility always encourages global footloose capital’s short-term flight to dollar-denominated assets, no matter how irrational that may be in the medium term.

U.S. consumer inflation will soar, it’s fair to predict. Already, those whose pensions have been invested in the world’s (admittedly way-overvalued) stock markets have suffered major losses, e.g. in South Africa and the U.S., more 10% on April 3-4 alone. As nervous money floods out of vulnerable countries, the interest rates investors demand to fund 10-year bonds are soaring, in South Africa’s case by 2.2%, from 8.9% at the end of January to a painful 11.1% in early April (at a time of long-term average inflation of 5%).

And as a distributional matter, left economist Dean Baker of the Center for Economic Policy and Research points out,

“Import taxes are highly regressive, meaning that tariffs will cost ordinary working people a much higher share of their income than for high income people. This is because working people tend to spend most or all of their income, while high income people save a large portion of their income. Also, working people are more likely to spend their money on the goods subject to tariffs, whereas higher income people spend more money on services.”

Splintered oppositional narratives

Beyond Miran’s fantasies, five other narratives are generating anti-Trump ideologies that – without a coherent stitching together – risk........

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