Tariff Mania: The US Helps China Destroy The Western Vassals

Whilst Also Degrading US Relations With All Other Nations

China has already responded to the US tariffs in kind, raising its tariffs on US imports by 34%. Unlike the US, China can relatively easily find new domestic and foreign sources for US imports which are predominantly hydrocarbons, food, basic chemicals, and metals. It can even replace Boeing planes with those from Airbus, COMAC etc., and imported US cars with domestic brands. China also extended the list of critical minerals that are subject to export controls.

In recent years China has moved up the value chain while also selling more and more China-brand products as it moves beyond just being a cheap manufacturer for foreign brands. This deeply threatens the industrial strength of Germany, Japan, South Korea and Taiwan as well as other European nations. These vassal nations are the buttress of US power in both Asia and Europe, so as they weaken so does regional US power. China threatens the core productive sectors of motor vehicles, heavy engineering, machine tools, and electronics that are the bedrock of these nations productive strength.

With the start of the Russo-Ukraine War (really a Western proxy war with Russia), the US weakened its vassals through the sanctions that lost them their markets in Russia and lost them their access to the cheap energy that is critical to manufacturing industries. To add insult to injury, the Nordstream pipelines were also blown up. Recent actions by Ukraine have reduced the flow of cheap hydrocarbons to Europe even more. Due to these factors, and the new Chinese competition, the vassal nations were looking at long-term stagnation or decline; with the added dimension of population decline for Japan and South Korea.

And now we have the US import tariffs added to the mix, with a 25% tariff on imported cars, steel and aluminum which will hit the German, Japanese and South Korean car companies, together with Japanese steel and aluminum exporters. These have now been added to with an across the board tariff for all other goods of 20% for the European Union (e.g. Germany, France, Italy), 24% for Japan, 25% for South Korea, and 32% for Taiwan. For Japan this is on top of the blocking of its purchase of the US steel maker US Steel. Astonishingly, China, Japan and South Korea have already agreed to respond in a coordinated fashion to the new US tariffs, and to increase trading between the three nations. There goes the buttress of US power in Asia.

Not only will these tariffs significantly damage the vassal economies, they will create much negative feelings toward the US in those nations. The US is helping China weaken the economies of its vassals while at the same time turning the populations of those vassals against the US. Even the vassal-poodle Britain gets a 10% tariff (as well as Australia and New Zealand). The EU has already stated that it will be retaliating if these tariffs stay in place.

The US has also been pushing its vassals to greatly increase defence spending, to help enrich the US Military Industrial Complex (MIC) as the vassals have become more and more dependent upon the US for the weapons of war. There are already the start of moves in Europe to rebuild their own MIC capabilities, and even Canada is looking at cancelling a major part of their F35 order in favour of purchasing from Sweden. Of course, increases in war spending will only weaken the vassal economies even more.

The new tariffs on the Association of South East Asian Nations (ASEAN) countries are even more astonishing; Vietnam is hit with 46% tariffs, Laos 48%, Malaysia 24%, Indonesia 32%, Thailand 36%, Cambodia 49%, Philippines 17%, Singapore 10%, Myanmar 44%. These are all medium and low income nations, excluding Singapore, in the process of climbing up the development ladder, and the US is most obviously attempting to remove that ladder. The US unstinting support for the Zionist genocide has already turned the elites of ASEAN generally against the US, and these new tariffs will escalate the move away from a US that is closing its markets and toward a China that has opened its markets to such nations and offers productive investments rather than bullying and profiteering. India gets a 26% tariff, Bangladesh 37%, Pakistan 29%, Sri Lanka 44%.

The U.S. also seems to want to arrest the development of Africa, with a 30% tariff on South Africa, 28% of Tunisia, 47% for Madagascar, 37% for Botswana and 21% for Cote d’Ivoire. This will not aid US relations with these nations, many will turn to China even more for help. Thankfully, Africa as a whole had already moved in the past decades to replace its trade with the US with trade with China. Only two African nations out of 54 now trade with the US more than they trade with China.

Jostein Hauge on Twitter

Latin America seems to have gotten off rather lightly, apart of course from the 25% tariffs on cars, steel and aluminum. Trump seems to have remembered that he both signed and celebrated the USMCA free trade agreement and is respecting that for both Canada and Mexico goods that fall within the USMCA (i.e. most of them). Brazil, Colombia, Chile, Peru, Costa Rica, the Dominican Republic, Argentina, Ecuador, Guatemala, Honduras, El Salvador, Trinidad & Tobago all got just a 10% tariff. It seems that Nicaragua had to be singled out for political reasons, so it got a 17% tariff, but still nothing like the levels of the Asian nations.

There will be exceptions to the tariffs for:

• Pharmaceuticals

• Semiconductors

• Lumber

• Copper and gold

• Energy resources and select minerals not found in the US

The US has a very high level of import dependance, and in many cases moving production to the US will take many years, be extremely expensive and produce significantly higher costs. It was the “China Price” that allowed the majority of US citizens to maintain somewhat decent living standards (aided also by greatly increased debt levels) as the US oligarchy took all economic efficiency gains and more for itself for the past decades. Those living standards have been significantly over-stated by the extensive games played by US statisticians when it comes to the calculation of domestic inflation and what constitutes economic value added. The majority of US citizens feel the reality of their falling living standards every day. With the “China Price” now gone, and the supply chain dislocations driven by the new tariffs, inflation in the US will pick up significantly; driving down living standards for the vast majority.

Tariffs are in reality a tax on the domestic population, one that is extremely regressive. Within the highly monopolistic and oligopolistic domestic markets, dominated by corporations with profiteering leaderships, the new market power gained from the reduction in foreign competition will lead to price rises and more oligarch profits. Increases in the price of imported products will also predominantly feed through to domestic price rises. With wages not keeping up with these price rises, and the debt option very much exhausted for many Americans, the outcome will be an economic recession at the least. At the same time as his administration is firing legions of federal employees and slashing government research and other grants. With Trump planning to keep his 2017 tax cuts that mostly benefit the rich, and add even more, his “populist” message can be seen as the utterly fake front that it is. With the revenues from the tariffs being frittered away on tax cuts for the rich and yet more war spending, the Trump administration will be in no way fixing the very large US federal deficit.

This is End of Empire stuff, as the imperial centre both escalates its extraction of value from its vassals, and its oligarchs do the same to the domestic population. Weakening both power abroad and power at home rather than pull back on its military spending and make the oligarchs give back some of the gains they have made over the past few decades for the good of the country. The removal of the ability of many nations to earn the US dollars that they need to pay for imports from the US, US$ denominated raw material imports, and US$ denominated debt will also help drive nations away from the US$, undermining the reserve currency status that the US enjoys.

As Trump removes the ability of other nations to earn dollars by exporting to the US, he is also threatening anyone that acts to reduce their dependency on the US dollar as a reserve currency. This is utterly financially illiterate as a country can simply not have both the reserve currency and an unwillingness to provide the ability of other nations to get access to that currency. A reduction in a nation’s export surplus with the US will produce a reduction in its US$ export earnings, pushing it to diversify its exports and foreign currency holdings, while also driving it to deal in local currencies for other imports instead of using the US$ as an intermediary.

All the while, China will become relatively stronger as it has greatly diversified away from exports to the US (direct trade with the US represents 3% of GDP) and is driving increasing trade within the world outside the West. The now 54% US tariffs on imports from China (in addition to the 100% tariff on imports of Chinese EVs) will be much more destructive to the US, given the widespread dependency of the US economy on such imports.

That will be on top of Chinese restrictions on the export of critical minerals and other retaliatory actions. China will once again not “collapse” but weather the storm and emerge stronger. China recently stopped BYD from building a plant in Mexico due to worries about the US stealing technology secrets from it, and has placed a full moratorium on new Chinese investments in the US.

The European Union may also now be much more ready to enact a trade agreement with China, and welcome in Chinese companies. The massively sanctioned nations such as Russia, Belarus, Iran, Venezuela, Cuba and North Korea are of course unaffected by these new tariffs.

President Trump is playing neither chess nor checkers, rather he is doing anything but what is needed to MAGA; cut the financiers and oligarchs down to political and economic size and tax them a hell of a lot more, reduce the incredibly wasteful war spending, slash the huge tax breaks for oil and gas and the real estate industry, aggressively attack monopolies, oligopolies and monopsonies, flush out the real extensive corruption in the organs of state, create and execute an effective industrial policy. All of these are an anathema to a president who dutifully serves the oligarchy and the Zionists. Due to the latter, combined with anti-China paranoia, he is also driving out the best and the brightest of US STEM researchers just as China is overtaking the US in so many areas of technology. While the US Immigration and Customs Enforcement (ICE) arm of the US state has been set loose to destroy the US tourism industry and give further reasons for foreign scholars and researchers to stay away from the country.

Quite a few US companies which have gotten used to manufacturing all of their goods abroad while they control the global supply chain through marketing, finance and intellectual property, such as Apple and Nike, will be very negatively impacted. Such companies are also rapidly losing market share in China, producing a double-whammy. US brand value abroad will also be heavily impacted by these new tariffs, which will be seen by many as simple bullying by an imperial power that no longer wants to pay for its empire.

Trump was never “Putin’s friend” but he is turning out to be a great unintended ally of China in its rise to be the primus inter pares of a truly multi-polar world. April 2nd 2025 may well be seen in the future not as “Liberation Day” but as “End of Empire” day.

Trump is now “damned if he stays the course and damned if he retreats” as any reversal will make him look very weak while also underlining the incredible volatility of US foreign policy. All the while the MAGA folks are waking up to the reality of Trump, an oligarch-serving grifter.