Declan Hayes
As America metaphorically turns its guns on China, Uncle Sam can be sure that any trouble emanating from Europe over Greenland or anything else can be easily dealt with.
No llores por mí Argentina ~ Evita Perón
After one of my European Central Banking chums told me that "Trump is chaotically entertaining and MAGA economic logic even more so", I suggested he turn to Argentina, the land of Di Stéfano, Maradona, Messi, mate, tango and the Pope to get a handle on what the golf-playing, wrestling-watching Donald John Trump is really up to.
When we couple the populism of Juan and Eva Perón, which still reverberates far beyond Argentina and the madcap policies (and hair cut) of current Argentinian boss of bosses, Javier Milei, with Trump's over-arching need to contain China, side line Europe and do Israel's Middle Eastern bidding, his policies, irrespective of how futile they may turn out to be, make some degree of sense.
Let's start with his border policy, which basically means that any foreigner who does not hold Israeli citizenship runs the risk of arbitrary arrest and a one way ticket to El Salvador's vast CECOT Terrorist Confinement Prison. Though European Union business people are being advised to take only burner phones with them to the States, even that is grounds for suspicion because who, only a criminal with something to hide, would use such a tactic? Never mind, off to El Salvador with them all, and let God sort it all out in His own good time.
Although many of these deportations are blatant abuses of power and any semblance of justice, what of it? Fox News and similar outlets ensure they are popular with Trump's base, which is as divided as Perón's was and, fake news notwithstanding, that is the end of it. No need to tackle the multi-layered problems America's rampant opioid addiction gives rise to when you can pretend to solve those problems by sticking lowly agricultural workers' organisers on a one way plane trip to El Salvador's gulag.
My original chat with my ECB buddy was prompted by this report about this over-priced spider the Irish Central Bank erected in front of their Dublin HQ, and how that contrasted with the fine paintings by Goya their Spanish equivalents display in their Madrid HQ, and the fine marble staircase that adorns the Czechs' HQ in Prague. This got my friend to quip that he was sure the spider "is worth every cent! There's a chapter in a book by Pawel Huelle where this Polish guy convinces the U.S. modern art world that his live installation of a cement mixer and other items allowing the public to make blocks is high-end performance art with a strong social message".
The point being made there is, though Argentina's Javier Milei Gifts "Chainsaw of Bureaucracy" to Elon Musk | Firstpost America | N18G to America's ubiquitous DEI epidemic was a smart move, it is largely mis-placed as all that nonsense is better made wither on the vine by tearing up its roots. But, instead of doing that, Trump preferred to simply prune the weeds, give them a cursory nick and tuck and move on to China, Iran and Europe, to which we now also turn.
Trump's Middle Eastern policy boils down to being complicit in genocide for the sake of Israel. Not only is that an increasingly hard sell in some non-American quarters, but it also complicates matters with the side show that is Europe, but especially with the eagle-eyed Chinese, where America's military focus currently lies and where Milei's madness is most evident in Trump's economic policies.
America has been most successful in Europe, which is now stuck with the Ukrainian albatross as Uncle Sam disengages, with crippling energy prices as Europe committed economic hara kiri by disengaging from Russia's energy supply lines and by its own Everests of red tape, which dictate that Europe must act, however lethargically, as one, under the leadership of corrupt Adolf Hitlers in drag like von der Leyen, Kallas et al. As America metaphorically turns its guns on China, Uncle Sam can be sure that any trouble emanating from Europe over Greenland or anything else can be easily dealt with. Europe is an afterthought and Sir Keir Starmer's "offer he can't refuse" to allow POTUS Trump kiss King Charles' ass rather than play golf is only one more ridiculous part of this ongoing pantomime of the economically absurd.
The issue with China is not whether to fight but when to fight, as America cannot surrender hegemony and the rents that flow from that to any Chinese or other usurper. Although I have previously written umpteen articles on America's Asian military build up, I am not going to speculate on which of them might win the looming slug fest but I can tentatively begin to spell out what Trump's Argentinian inspired game plan with respect to Beijing is.
The core complaint of Washington, and not just Trump, is that China stands to usurp them as the world's main shot caller and that all the rents that currently accrue to them from being the world's top dog would be lost if that were to happen. The only way to stop China's ascent is to cause internal turmoil within China, and then blockade her ports and stop her trading on whatever pretexts, such as the defence of the Uyghurs' rights to wage sex jihad in Syria, that are necessary to cause China to implode.
Because that is the objective, the American navy must, like the Japanese Imperial Navy before it in the lop-sided 1944 Battle of the Philippine Sea, be ready to confront the Chinese in the South China Sea and the Indian Ocean, no matter what the outcome of such a dust up might be.
Although the bookies should make a killing over that updated Thrilla in Manila, betting on the economic outcomes of Trump's gambits is a very different matter, not least because Trump has dispensed with the Coalition of the Willing playbook and, Panama and Argentina aside, is threatening to lay waste to just about every other nation under the sun in an effort to kick them in line.
Trump's policy resembles Milei's crass populist one in that those who do not kowtow to him can, as he indelicately puts it, Trump Says Countries Are "kissing my ass" over Trade War . All fine and dandy for those into that sort of thing, and Trump's monetary policies will definitely help get a lot of those ass kissers in line in the hope that they can ride out the tempest.
Japanese auto companies, to take but one example, are already figuring out how to work around Trump's tariffs and, as Japan is the biggest holder of American debt, their actions are not unimportant. Although talk of selling off American bonds and t bills has been doing the rounds for at least the last 40 years, as long as the Americans continue to service their debt and offer competitive returns, that will not happen.
But the fact that American debt continues to climb northwards brings its own problems and Trump's Milei-like cure, which consists of facing down truculent lenders like China, is one possible way out of the abyss. If, to take an extreme but not unrealistic example, the United States were to default on all its Chinese debt obligations, who is going to square up to them? Not the British, who got badly stung by the federal United States government in the great Mississippi default or even the French who are still trying to get Russia to pay back the tsar's pre-1917 obligations.
And, though Trump's chums obviously recently did a bit of insider trading, that is of no consequence as, the laws of the land notwithstanding, those closest to the powers that be in Washington have always had that option open to them. Trump's challenge is not to make a few million bucks in a once off pump and dump scam but to keep the rents that accrue from being the world's top dog flowing into Uncle Sam's coffers.
To do that, Trump has a vast array of monetary tools at his disposal. He can tinker with interest rates, with short and long term bonds rates, with stock market levels, with the dollar and much else besides but all that tinkering is as illusory as is the chainsaw of Milei, who has recently gone, cap in hand to the IMF, who fronted him another debilitating loan.
Though Di Stéfano, Maradona, Messi, tango and even the Pope have their many admirers, the fact of the matter is Argentina's economic viability has been been in terminal decline since the heady import substitution days of Juan Peron and Evita, his still-revered wife. And, though an army of economists, like these here, here, here, here, here, here, here, here, here, here and here could be easily assembled both to promote and demolish Trump's economic policies, all of them are as tangential to the crux of the matter as would have been similar armchair generals advising Admirals Jisaburō Ozawa, Kakuji Kakuta and Takeo Kurita what to do prior to the Battle of the Philippine Sea.
Although much, perhaps far too much, has been written about China's meteoric economic rise, few pieces are better than this, which goes from the global theft of manhole covers to the dismantling, and shipping off to China, of German steel factories and China's subsequent economic pre-eminence in all corners of the earth. Although the United States can loot the Congo and Bolivia, or strike deals with Russia or Ukraine in its efforts to keep strategic metals and rare earths flowing its way, time and numbers are on China's side and, if Trump somehow manages to throttle China's expansion through its main trading partners of South East Asia, the resulting Chinese reaction will be at least as explosive and far more long lasting than was the reaction when Japan's far famed Admiral Yamamoto dropped his calling card on Pearl Harbor in 1941 and thereby turned the simmering Pacific conflict into a very hot one.
And, though Trump has much more to learn in terms of managing expectations from Juan and Evita Perón than he has from showboaters like the chainsaw wielding Milei, and he might be better employed with watching reruns of of Di Stéfano, Maradona and Messi kick ball, or even taking up tango with his wife, none of that will cut much muster in China which, if it is to be replaced as the world's workshop, will only yield that position to another Asian nation, such as India or a confederation of such Asian nations that might include Japan and Vietnam, the two countries that pioneered Asia decoupling from Uncle Sam's apron strings and that might, with the right Chinese and Russian inducements, complete that overdue divorce.