Trump Threatens 100% Tariff to Protect the Dollar

Peloni:  Make no mistake, the US will defend the Dollar, but unless the reckless abuse of sanction policies which gave strength to the insurgency against the dollar are first addressed, Trump’s efforts to stem this tide will prove to be only a temporary setbacks to the dollar’s growing unpopularity.

December 2, 2024 | 12 Comments »

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  1. @Reader

    Won’t those other countries have to jack up their prices to cover for the tariffs or get out of the American market?

    Is the American market essential to them?

    I think this question answers itself when reflecting upon the use of tariffs under Trump’s fist term.

  2. @Vivarto

    I actually don’t see much meaning in other countries supporting American economy and power by using Dollar as reserve currency.
    Why should the?

    There are many reasons why they should.

    I wrote the following in a personal correspondence some months ago, but it still remains relevant today on this topic:

    As the world’s reserve currency, the monetary system of the US has built-in redundancies to maintain it as the world’s reserve currency, even as the value is plummeting. For great nations to simultaneously purge themselves of their dollars, it would require them to take something of value, albeit of diminishing value, and literally throw it in the wind. As the dollars quickly flood the market, those nations which are not de-dollared will have a choice. They can go deeper into their dollar dependency or join the de-dollared nations who are essentially launching an economic war on the US. Few nations will have the interest to so openly abuse the US, much less to deal with their own economic hardships which will result from joining in the de-dolarization. Notably, the economic war would arguably lead to a real war given the risks and costs at stake in such a gambit, and the very real likelihood that the American empire would defend itself (ie, Black Flag operations) from such an attack, if for no other reason than to prevent anyone joining the dedollared nations out of fear that the dollar will fail. In other words, by the US responding militarily to an economic attack… , it would shore up strength and confidence in the dollar continuing, and keep all the dollar invested nations on board. It could also lead to those nations acting to, themselves, actively defend the dollar, alongside the US. Black Flags would be useful in such situations to encourage those dollared nations to maintain faith with the US, somewhat similar but in a starkly different circumstance in which the US blew up the German access to Russian oil to keep them on board against Ukraine.

    Hence, I would argue that it is unlikely that the process of de-dollarization will take place in a hurry, even while it is very likely to take place over time. In fact we are already seeing it take place over time, but this delayed and slow move from beer to water, so to speak, is stabilizing in its effect, not only on those nations surrendering their dollars, but also those nations who continue to maintain their dollar addiction, and this latter group would certainly include the US. Economic shifts, if subtle, will likely maintain and reinforce a sense of economic and military stability around the world, but any radical simultaneous purging of dollars would likely result in the loss of stability, again both economically and militarily.

    When the US launched its economic assault on Russia with its acute sanctions policy and reserve theft, Russia was given the impetus to create an economic refuge from the US, and many nations found merit in supporting such an enterprise. Yet, by doing so, it should be reasonable to grasp that the US regards any attempt to rapidly de-dollarize as an economic attack on the American empire, and they will respond to it as needed to secure their role in the world, again, even as that role is slowly diminishing over time.

    There is of course merit in what Putin states in this video, but the reality is that Putin wants to put the genie back in the bottle as much as does Trump, but acquiescing to Trump’s demands requires an assessment of US long term strategy in the world by the dollar dissidents, but most acutely by Russia, themselves. The return of good governance in the US must be assessed by Russia and other dollar-dissidents as being either temporary under Trump or just the beginning of a period of Pax Americana, so to speak, with the reforms which are being implemented. I wouldn’t have thought it, but Trump has aligned himself with many Deep State allies to effect the reforms he needs to implement, and this fact will not be overlooked by foreign interests, even as it might be by some domestic interests.

    In any event, Trump is intent on defending the dollar, and so, those caught in the dollar trap will likely remain there, while anyone doing otherwise will be cut off from business in the US, and likely US allied markets as well.

    Trump should, and I would argue will, see that the pirated Russian reserves are returned and the sanctions war against Russia is ended, thus allowing Russia back into the Western markets as part of the reproachment over the Ukraine war. You see, the US has something which it wants for peace in this war as well, and that something is to retain the role of being the economic master on the street, so to speak. Hence, Russia must choose between being China’s pet ally or returning to business as usual with the US, which has for twenty-five years sought his country’s ruin – which is why it is critical to understand if Putin will perceive the US reforms to be only a Trump-tempest or a true change in the sails of US economic and geopolitical policy.

    Russia’s growing military achievements of late have given it some significance in how it chooses to proceed, but I do not believe Putin will easily choose war over peace, particularly if choosing peace leads to him retaining power and having access to Western markets, but as I just noted, the calculus for Russia is far more complicated than this short term judgement alone.

  3. @Reader
    I rescued your comment to Vivarto. When you keep reposting the same message, the system, which thought your comment was spam, becomes convinced and won’t let the comment appear, so it doesn’t pay to keep posting it, just FYI.

  6. @Vivarto

    The US has no need to print money.?

    It has the free cash in the shape of 30-some trillion $ “loans/debt” that the US never intends to ?repay.?

    In 2024 the US government collected all of $4(four).94 trillion of tax revenue.?

  8. @peloni

    Won’t those other countries have to jack up their prices to cover for the tariffs or get out of the American market?

    Is the American market essential to them?

  9. @Reader

    Raising tariffs will mean a huge retail price inflation.

    Not true. This false conjecture never materialized in 2019 and it won’t materialize in 2025. The reason is the Trump card which everyone wants, and which Trump alone controls, is access to the American markets. So to play, these other nations will have to pay, not the US taxpayer.

  11. I actually don’t see much meaning in other countries supporting American economy and power by using Dollar as reserve currency.
    Why should the?
    IT simply means that US can print as many dollars as they like and other countries will give real goods for the American paper.

  12. Just 150 years ago, gold was the universal currency.
    It made very little difference whether the coin was printed in Spain, USA, or Russia.

    I think Dollar dominance is unnatural and therefore temporary.
    A new universal means of exchange will be found. Or perhaps we’ll return to gold.

    To me it seems that land is an universal value.