Dale T Mathews-Creque

This post is meant as a follow-up to my previous one titled The US Dollar as Global Reserve Currency and its implications for the United States TODAY! (Note: if you aren't an economist, you might want to go there first and view the short introductory video titled "Why Is the U.S. Dollar So Popular Around the World?").

This document was written by Stephen Miran, the economist behind Trump's tariff policies. I'm still in the process of reading it since it is an obligatory assignment for any academic economist that is teaching these days. Granted, it is a bit wonkish for the layman, but I'll just draw your attention to a few statements in the introduction to the first chapter. Like most other significant economic policy changes (and this is one of the most significant so far this century), its effectiveness inevitably requires the implementation of a series of ancillary or "supporting" measures. This is where it gets a bit dicey.

For example, Miran states (emphasis in caps is mine):

President Trump has also discussed adopting SUBSTANTIAL CHANGES TO DOLLAR POLICY. Sweeping tariffs and a shift away from strong dollar policy can have some of the broadest ramifications of any policies in decades, fundamentally reshaping the global trade and financial systems. There is A PATH BY WHICH THESE POLICIES CAN BE IMPLEMENTED WITHOUT MATERIAL ADVERSE CONSEQUENCES, BUT IT IS NARROW, and will require currency offset for tariffs and either gradualism or coordination with allies or the Federal Reserve on the dollar. POTENTIAL FOR UNWELCOME ECONOMIC AND MARKET VOLATILITY IS SUBSTANTIAL, BUT THERE ARE STEPS THE ADMINISTRATION CAN TAKE TO MINIMIZE IT.

Hmmmmm, what are these measures, I wonder?🤔 As I alluded to in my previous post, the US needs to end the use of the dollar as the global reserve currency (to me as an economist, it seems as the only plausible alternative but it would mean that the USA wouldn't be able to have access to cheap money to finance its wars, ... err, I mean its "expenditures"🙄). Since I am profoundly anti-war, I would like nothing less than for the USA to be unable to finance its overseas imperialist wars, so I would favor ending dollar supremacy, hands down. However, does Trump want to do that? Of course not! He wants to have his cake and eat it too:

Trump has praised the reserve status of the dollar and threatened to punish countries that stop using the dollar for reserve purposes.

OK, so what are you going to do, Mr. Trump, in order to ensure the continued supremacy of the US dollar?🧐 The document continues:

I expect these tensions will be resolved by a suite of policies designed to increase burden sharing among trading and security partners: rather than attempting to end the use of the dollar as the global reserve currency.

What exactly does Miran mean (or might Trump mean) by those seemingly anodyne words? They mean Trump is going to force countries to PAY the US tribute to maintain its global financial and military empire! So, let me get this straight. The USA is going to ask a country like, say, China, to pay it funds so it can wage war against China? Good luck with that.

Regarding China in particular, there are good reasons to believe it is in a much better position to weather Trump's tariff wars. Better than even the United States! To this effect, I would highly recommend the worthwhile round-up by the very competent journalist Helena Cobban, titled China displays its chops in tech, mil-tech, manufacturing– and even political philosophy…. You might also want to check out an earlier interview with Columbia U. economist Jeffrey Sachs.