Trumpet Voluntary

To all the Trump-toasting tariff-trashers out there, like Stewart and Campbell (sounds like a re-run of the battle of Culloden) and their dumbbell devotees, here’s a simple home truth. No one knows what’s going to happen as a result of Trump’s Tariffs (TTs), because it all depends on how other nations respond. Retaliatory tariffs will have a very different outcome from a plethora of trade agreements, both including and excluding the USA. Nations also have the option of playing around with their exchange rates, interest rates and taxes. Or nuking New Jersey.

The fact of the matter is, economics is not a natural science – there are too many dependent and independent variables operating in too many open systems. Economists, market analysts and other ‘experts’ often disagree: some say tax the rich; others – the more insightful ones – say taxing the rich won’t achieve the desired consequence of a more equal society.

Stock markets have reacted negatively to TTs, because they don’t know how other nations will respond and what the eventual collective impact will be. Markets hate uncertainty more than they hate negative outcomes. At least the latter can be planned for. But not knowing what the outcomes will be means the safest option is to liquidate assets that are suddenly deemed risky and find safer havens for the dosh until the direction of travel is clear. This explains why shares in industries, where difficulties are expected as a result of TTs, have bombed, while shares in other industries have held up nicely thank you very much, one such being (fanfare) UK water. Gotta love privatisation now, eh? Providing comfort and succour in our hour of need.

Thames Water isn’t a publicly traded entity, so its current fortunes are less clear. Trump might well push potential white-knight investors into Thames’ non-tariffed arms, or scare them away because Thames is one too-risky investment too many. Should the former transpire, Trump will have saved the poster boy for all that lefties say is wrong with capitalism, privatisation, Thatcherism, meat and dairy, and Zionism. Cue outraged letters to The Guardian penned by Wailer from Windrush, Wally from Wye, and Witless from Windermere.

Regardless, now’s a good time to buy some shares at rock-bottom prices and recoup your losses / make a killing down the line. That’s how the markets work – they’re self-correcting.

I mentioned above that the markets don’t know what the outcomes will be, which begs the question, what are they intended to be? Why is Trump doing this? Well, you have to look at TTs in a wider context. Get out of the wood and see the trees differently. Join the tariff-dots with Trump’s and Vance’s discourse on the war in Ukraine, free-loading Europeans, wresting control of Greenland from Denmark, and seizing Canada. It’s all part of a long-term economic strategy intended to: re-set the strength of the dollar and realign global trade in favour of the US; reduce the US debt burden; reduce the US international defence burden; and exploit raw materials as a new ‘currency of power’. TTs are a tool for leveraging compliance by other nations as much as they are about raising revenue and reducing costs.

I’d love to claim that I worked all this out myself but, as a certain great American said, “I cannot tell a lie.” The above strategy is called the ‘Mar-a-Lago’ accord and has been discussed on many forums. So far, I haven’t found anyone who can explain why Trump slapped tariffs on a bunch of penguins. He probably did it as a joke – Liberation Day was the day after April Fools’ Day.

One of my Brexit heroes, Lord (David) Frost, explains the ‘accord’ more philosophically and lyrically than I. He wrote in the Telegraph: “… try to look at tariffs in a non-hysterical way, as a policy with rational political aims. I don’t claim that Donald Trump has reinvented the laws of economics; I claim that he may be trying to do something other than maximise short-run output. 

“The world isn’t made up of businesses but of nations … your own nation will only work well if there is a common sense of solidarity and political community: if the people who live there are ‘all in it together’. That social contract is breaking down…

“It is therefore an absolutely crucial MAGA political project to try to put the country back together and generate a sense of ‘Americans first’. If citizens aren’t prioritised then what is the point of a nation at all? … in current conditions, where Western nation states are starting to fray and national solidarity is collapsing, then maybe making borders meaningful and ensuring the wellbeing of your own citizens is worth doing?”

Now we know what Tramp is doing and why – he has a plan – we can assess how other nations are reacting. First out of the blocks were the EU’s von der Liar and Canada’s Mark Carnage. They bleated that trade tariffs were very bad, so they’re going to retaliate with – er – more trade tariffs. Now isn’t that the global economic equivalent of rubbing salt into a wound? I wouldn’t expect anything competent from Carnage though. It was he who messed up at the Bank of England and was the primary cause of Truss’s disastrous mini-budget. Had he been a competent Governor, we might not now have a Labour Government. Carnage has a lot to answer for!

Regarding Blighty, Frost concludes, “… we don’t need to imitate Trump’s measures. But we absolutely should share his broader goals – and find ways of achieving them here too.”

Starmer does say he’s going to act in the interests of Britain and Britain alone – first time for everything I suppose. He also says he is prepared and has a cool head – he just can’t stop lying. He says he will negotiate a trade deal with Trump … which would be, ladies and gentlemen (there are only two genders), a Brexit benefit! Not only does Trump whack us with lower tariffs than he does the EU, we can now negotiate our own trade deal because we’re not prevented from doing so by the EU. Had we still been a vassal state, we’d be suffering higher tariffs and no Blighty-bespoke way out. In addition to Trump potentially saving Thames Water, he’s now saved Brexit. More outraged letters to The Guardian, this time by Rejoiner from Redbridge, Remoaner from Richmond, and Recreant from Rushcliffe.

Final thoughts. Trump is putting America first to the detriment of his (former) allies, including Blighty. Compare with Starmer, who puts other nations and cultures ahead of Britain and British values. Trump’s economic plan might backfire. Starmer’s already has. Trump’s a bully. So’s Starmer. So’s the EU. Trump’s a liar. So’s Starmer. So’s the EU. Trump’s approach is bad for the environment. So’s Starmer’s. Trump is manipulating the whole world for his agenda; Starmer is manipulating just Blighty for his; therefore, Trump’s stakes are much higher, but that doesn’t justify his hysterical detractors from ignoring Starmer and his crimes against free speech. If I were Trump negotiating a trade deal with Starmer, I’d insist he reverse all anti-freespeech legislation  and guidelines, or I’ll deploy the chlorinated chickens.