by Mike Whitney, The Unz Review:
Trump did not fully usurp dictatorial powers to impose his tariffs…. However, his actions, particularly his use of the International Emergency Economic Powers Act (IEEPA) and other emergency powers, have raised significant concerns among critics, legal scholars, and some members of Congress that he is pushing the boundaries of executive authority in ways that could be seen as authoritarian or dictatorial. Grok
Meet The New Boss, Same as the Old Boss
We just learned that the world’s most powerful person, Donald Trump, has a boss: the bond market.
He may not have acknowledged this to himself, but the global financial tumult he caused…. has locked him in a fiscal prison. ….He is totally in hock to the goodwill of bonds investors….
TRUTH LIVES on at https://sgtreport.tv/
He has also handed a loaded gun to his perceived enemy, China, and his supposed ally Japan…. The loaded guns they have are the… more than a trillion dollars of US Treasuries and China not much less. If they were to sell those bonds, or even if they chose not to refinance maturing bonds, that could be a disaster for Trump. Because it could cause another potentially crippling spike in bond yields.
Here is the measure of Trump’s debacle. He may well have trashed America’s single most important financial competitive advantage, namely that investors have traditionally bought the dollar and US Treasuries at a time of economic and political uncertainty. No more – because he personally has become the world’s source of economic uncertainty and anxiety. So, as I say he is now in a fiscal prison. And if bond investors, including Japan and China, see him imposing tariffs or cutting taxes in ways they don’t like,… they have the means and power to stop him. Robert Peston@Peston
Why have the markets responded so erratically to Trump’s “Liberation Day” announcement?
Investors don’t like uncertainty. Uncertainty breeds fear, fear breeds panic, and panic breeds crashing markets. Trump’s sudden imposition of sweeping tariffs triggered the fear that fundamental changes in global trade would produce higher inflation, slower growth, disrupted supplylines, and escalating conflict with America’s trading partners. These are the anticipated outcomes that put investors on edge and sent markets plunging.
Trump has tried to allay investor fears by presenting his tariffs as an essential part of his “America First” policy. He is trying to convince his supporters that these new duties will “liberate” working Americans from what-Trump-calls “unfair trade practices.” (In a speech “he compared the tariffs to a declaration of economic independence drawing parallels to other historic US milestones.”)
What can we extrapolate from this?
First of all, that (in Trump’s mind) the United States has been the victim of abusive treatment by allies and rivals alike. As Trump put it: “They are ripping us off”. This is the basic mindset that energizes Trump’s “Liberation Day” philosophy, a philosophy that the rest of the world should be punished for America’s deficit-generating over-consumption and its $36 trillion ocean of red ink. That is everyone else’s fault, not ours. And mainly it is China’s fault because China opened its country to the voracious American corporations who moved their industries to take advantage of China’s cheap labor. According to Trump, China should be blamed for that as well.
The problem with “America First” economic policy, is that other countries are going to defend their own economic interests, too. So, if someone like Trump tries to arbitrarily scrap the current system of international trade and impose his own version, he’s going to encounter stiff opposition. (which he has.)
