Abstract: The difference between savagery and civilization is manufacturing.. Those who advocate deindustrialization vouch for cannibalism.
The US administration wants to reduce the income tax, and go back to a user fee model of government financing (think California vs Texas). That means tariffs. It is not necessarily a bad idea as considerable non-tariff trade barriers affect world trade (2/3 of world trade is nominally tariff free; but that does not mean the strategic trade is somehow “free”; it isn’t!), However, on top of that there a very good reason for tariffs.
The USA has a one trillion dollar trade deficit with the world. That’s 3% of US GDP. More worrisome, much of this deficit is in manufactured goods. So the US doesn’t make enough manufactured goods for its own usage. However, if one loses manufacturing, one does NOT KNOW HOW TO MAKE WHAT MAKES CIVILIZATION POSSIBLE, So one becomes like cannibals in the forests, woke with sticks in the nostrils, but not much else. (France has recently tried reindustrialization, and has found herself incompetent at that task…)
It is hilarious but really stupid and dangerous to see states which have massive surpluses with the USA threaten to retaliate… When they actually are the AGGRESSORS! Imagine merchants threatening their clients if they buy less in the future…
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Here is an example of an outrageous deficit: Ireland has a gigantic trade surplus with the USA caused by TAX AVOIDANCE by pharmaceutical companies (some of these are US companies!) Ireland had an overall trade deficit with the US of €93 billion in 2024. That amounts to nearly 20% of Irish GDP! Those numbers are grotesque. Tax cheating by Ireland makes it by far the wealthiest (significant) country in the EU per capita. This has been going on like forever, in spite of the European Commission’s feeble bleating in Brussels that Ireland should stop not taxing giant tax cheating corporations… This, from a country which sent condolences to the Nazis after the suicide of what it viewed as the regretted Adolf Hitler.
As the BBC observes: “Benefit payments given to Ukrainian refugees arriving in Ireland reached €232 a week but in December 2023 the payment rate was reduced to €38.80 …” Ireland is the second most wealthy country in the world per capita, out of 192, according to the IMF (above $133K in PPP) . Why doesn’t Trump put a 100% tax on it?
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GOVERNMENTS WERE ALWAYS THE MAIN ACTORS OF TRADE. THERE ARE NO FREE MARKETS. .
The Queen of Sheba really existed (where now Houthis thrive!). She is referred to in Ethiopian, Egyptian, Arabian, Yemeni and Jewish traditions. She allegedly visited the Israelite king Salomon. The queen’s capital was Ma’rib next to which a large irrigation dam was erected around 8C BCE… Five or four centuries after the queen graced the earth. There is little doubt that she herself took care of an earlier dam next to her capital, as her military power depended upon the dam (the dam, in used for more than 22 centuries, fed a lot of people by capturing monsoon rains, in an otherwise desertic area, and when there were dam breaches whole scale devastation, and emigrations ensued; there is thought given to rebuilding the old dam…)
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Governments led by traitors:
The trade deficits relative to China have been engineered by elected traitors who actually worked not for the peoples who elected them, but for huge international companies and the plutocrats who lead them… who profited enormously from having serfs, or slaves, or ultra cheap labor from the countryside in China work for them. The plutocrats achieved again what made the success of their ancestral alter-egos in the Roman Republic, causing its collapse into a fascist god-crazed evil empire. The global plutocrats rendered the core of the empire impotent, ensuring their own power.. and increased profits were only part of it.
This was done, in Rome as now, by sending the economic production overseas, and escaping taxes (see Ireland above!).
Trump is also a global plutocrat, but he always hated his colleagues, their arrogant lies, and fake concern for everybody else, while he arguably sincerely wants to MAGA, Make America Great Again. There is little doubt his efforts ought to be applied in Europe for MEGA, Make Europe Great Again. Countries like France ought to negotiate directly with the US (the France-USA trade is in balance… Not so Germany…). Am I a bad European? Not so: the EU and EC have done their best to demolish French tech leadership and tech leadership is France’s DNA, so to speak…
In the EU, the situation has been even worse than in the USA, as the exportations of manufacturing to China has been even greater.
1929: Governments led by imbeciles:
The Great Depression of the 1930s was engineered deliberately by complete idiots, who were located around Washington. Before extending the remark to Trump, let’s point out that the massive MANUFACTURING trade deficits are unsustainable, and have affected other leading countries even worse, for example France.
Those manufacturing trade deficits brought a LOSS of EXPERTISE.
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In 1930 the Smoot Hawley bill passed, augmenting tariffs in the idiotic scheme of saving the overproducing auto industry. The idea was that if Americans paid more for European cars, they would buy US cars. The flaw in that imbecility is that at the time the US manufacturers were selling lots of cars in Europe. Once tariffs were reciprocated, those car sales would stop.
Wall Street crashed as it expected European retaliations, especially considering that at the time the US trade balance was positive. The US current account SURPLUS (which includes trade balance) was roughly 1.4% to 2% of GDP in the late 1920s, due in part to the US status as a great creditor (having exploited the UK and France that way in WW1).
In 1929, the US goods trade SURPLUS alone was in the ballpark of 1% to 1.5% of GDP. The USA had more to lose in a trade war. (Not the case in 2025!)
By the time President Hoover signed it, the Great Depression was already underway (triggered by the October 1929 crash caused by anticipation of the Bill and frothy economy under Coolidge), Smoot-Hawley intensified the downturn, which was further extended by retaliation from foreign countries and a deliberate policy of letting banks fail .
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The situation in 2025 is completely different: the USA has a MASSIVE MANUFACTURING deficit, especially with its potential main enemy and actually rival, China.
Like Greenland, that situation is STRATEGICALLY significant.
In WW2 US manufacturing crushed the Axis powers. The USA sent an enormous quantity of manufactured goods to the USSR (mostly through Iran)… extending to Stalin, as early as 1941, a crucial help it had refused to the French Republic, a year earlier. Arguably, that’s how the USSR survived./
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Trump changed NAFTA into USMCA. The deficit with Mexico has exploded.
To Trump’s infuriated dismay, the U.S. trade deficit with Mexico has grown to $172 billion in 2024 from about $78 billion in 2018. Trump now wants to stop what it views as a major loophole in the trade agreement he signed with the US neighbors.
One reason? Chinese companies have invested massively in Mexico so that their goods could enter the US without tariffs. Trump can only blame himself, he was outfoxed by the wily Chinese…
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So what? IF, and ONLY if, engineering and manufacturing EXPERTISE is transferred to Mexico, civilization in the Americas (thus the USA) should profit. As long as this is kept within bounds.
So Trump has to be careful here. Surely what the Chinese companies are making and how strategic that stuff is ought to be considered. Running out of dishwashing soap is one thing. Running out of semiconductors, another… And this is a general observation…
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Debt can advance civilization and democracy:
When Florence decided to become a republic, it needed an army. To pay for it, Florence issued bonds, BINDING Florence to repay that debt. Three centuries later, Florence lost its republic to the Medici, who were not just plutocrats, but also bankers.
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What Trump is saying is that he doesn’t want the WTO to do to the USA what the EU did to France:
If France has stayed independent (99.6% of the time) and spawned civilization in the last 15 centuries it was because of her ability to have a Defense Industrial Base and a ferocious military (first the Franks then Feudal Nobility circa 1000 CE, then a republican people army after 1789). The ability of having enough wealth and knowhow to make superior weapons was front and central. From the francisca to field guns in the 1430s, to the nuclear program started in 1939, France kept superiority in MANUFACTURING… Until the EU came around and defanged France’s advanced industrial programs and insisted cheaper (Chinese) goods were better for consumers… By that token, opium is even easier, and death of everything a great relief…
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Civilization in the past millennium was essentially led by three states, historically the most democratic, and their satellites or creations: France, Great Britain and the USA (the former having given birth to the latter ones, but the USA, master of the Americas since the Monroe Doctrine, has acquired huge importance since 1941… when the US Deep State decided to save Stalin’s USSR…)
The three leading states have developed huge trade deficits and other forms of deficits, real or potential. Now a deficit means that they owe money to actors who lent to them. A deficit and, or debts, can be a good or a bad thing for the DEMOS.
Not uncoincidentally, those three states have huge nuclear arsenals and the capacity to grow them more. Historically, when a physically stronger state owes to a physically weaker state, the latter is rarely satisfied in its financial demands. (The money the French, mostly, and other Europeans invested to create the industrial area of Ukraine Putin is presently occupying, the Donbas, was never repaid.. and ruined many a family…)
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Whether the rest of the world likes it or not, France, the UK and the USA and their satellites have been the leading edge of the thrust of civilization. Should they NOT preserve a technological edge, world war would follow. And they can’t maintain it if they lose their manufacturing, especially in the most added value products. .
Thus, although it looks like world trade, it is potential future war that one is talking about here.
The world governments must keep this in mind.
Retaliating against US tariffs when one has a huge trade surplus is beyond grotesque, it is war for no good reason. So the European Union and China, instead of replying with tariffs, should inspect the outrages they have been committing.
Ireland, and pharmaceuticals in general, would be a good start for the UE (and Switzerland!). (The huge service deficit with Ireland is caused mostly by royalty payments on pharmaceuticals).
China has placed all sorts of restrictions on trade, for example blocking the US software giants. That could be corrected easily.
Patrice Ayme.
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Patrice Ayme's Thoughts 