Finally, does Trump have a plan? Yes. Can it deliver the results America needs? Reply hazy, try again. I lay out the plan and my issues with it here. Then, finish this series with a BANG over the next three killer episodes. All the charts and thoughts that couldn’t make it into the video, below.
First, NOBODY gets manufacturing back by changing one incentive. Some of Trump’s tariff edicts barely last one week. Meanwhile, supply chains are long, complex, expensive investment decisions that require certainty and stability — contracts, legislation, ecosystems (universities, job training, infrastructure, housing), and tax abatements…or as my transcription software called it, “Jason Batemans”. On Trump’s terms, this is like building your dream home on a raft. Or, in the Palisades.
These moves are not designed for long-term investment decisions, but invitations to negotiate. Not great invitations. Like 4th of July at Ted Kaczynski’s .
This is a chaotic turducken of high stakes bets, built on the idea that America can force other countries to capitulate. Everything has to go right. Even then, we will have alienated our allies and damaged trust in the US and the dollar.
This video is a more coherent breakdown of Trump’s plan than anyone, including him, has ever articulated. The steps make sense, on the surface. I’ll break down how they fall apart, in practice.
This is one of the best NPOV explanations I've seen of the Trump tariffs and how they fit into his strategy to create a new global security and economic order, whether you agree with it or not. @JoeriSchasfoortpic.twitter.com/zMRAR4Xxsg
— Michael Shellenberger (@shellenberger) April 9, 2025
1. chaos as leverage
Using chaos to stimulate manufacturing is like yelling at a fat friend to run faster. Maybe they can, or maybe they’ll die.
Trump’s first move is meant to destabilize opponents by expanding the Overton Window. That makes previously unthinkable positions look like rational compromises. A 10% global tariff may have been unthinkable, until a 110% tariff was a reality. It’s all part of a pattern.
Remember when he announced we’re taking over Gaza? Suddenly every Arab nation that was sitting out this latest war, woke up. ‘Oh my God, we don’t want the US in our backyard!’ Now, Egypt, Jordan, Saudi Arabia and Qatar are all trying to figure things out on their own.
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Or when Trump threatened to drone bomb Mexican Cartels? The goal was to push Mexico to handle the problem so we didn’t have to. Same thing with leaking plans to bomb Iran. Same with threatening to annex Greenland, Canada, Panama Canal, and Ukrainian minerals. Now, Canada dumped Trudeau and Arab states are working on their own solution for Palestine.
In a trade war, our panic is the point. It’s what convinces adversaries that this is real, that we’re ready to gut this out. Except…
If you pull the trigger, you can’t blink. Trump’s been blinking like a Bedouin in a sandstorm, with one backtrack after another. Blinking invalidates not only the tariff threat, but every other use of this tactic. Now the only way to regain credibility is to bomb Cleveland. OK, Iran will do.
Even Trump’s ‘blinks’ are incoherent. Giving Apple and Nvidia tariff exemptions on iPhones and other finished goods, while hiking it for steel, is the exact opposite of bringing manufacturing back. It raises costs on inputs, lowers them on outputs. According to Goldman-Sachs, US input tariffs could raise US manufacturers’ production costs by 5-15%, making them less competitive vs foreign producers, especially overseas. This is not a strategy, unless the strategy is chaos. And it is.
Paper tigers get shredded. Ours is about to get shredded by a panda.
2. Reciprocal tariffS
Trump’s second step uses the leverage created by chaos to ‘level the playing field’ with reciprocal tariffs. The formula is basically DEI for countries. Instead of judging each country’s ability to import or its specific trade restrictions, its total trade surplus is deemed “unfair” and ‘zeroed out’ with a tariff rate. That means Vietnamese workers, who earn $0.94 an hour, better stock up on Squarespace and Schwab brokerage services, if they want us to keep buying those Nikes they stitched until midnight.
Expecting country by country trade balances is as ridiculous as expecting every job, company, and industry to be perfectly representative of a country’s entire demography— or it’s discrimination! Fact is there are very few viable consumer markets that can consume our goods.
The theory is we have so much leverage because of the global demand for dollars that countries will trip over themselves to give in. Not only that, these countries will absorb most tariff costs, without raising prices. Now that poor Nike stitcher is down to $0.66 an hour and no breaks! She may gnaw on some rawhide to keep her stomach from growling.
It’s so laughably easy to beat up on poor nations that you have to wonder, why was this broad sweep necessary? So much unnecessary animosity. We could have gotten everything we wanted with one blurry fax.
Our real target is China.
Truth is, we are rich. We’re too big a consumer market to ignore. We will eat, wear, or sit on anything the world sends us. That’s what makes us great. And that’s what the world depends on, especially exporters. Who else will pick up that slack? Europe is shrinking and dying off. China is shrinking and not rich enough to consume all this stuff. India is China’s adversary and too poor. Latin America? Africa? We are the world’s garbage disposal. No one can consume as much plastic trash.
One of the officials said Chinese companies were struggling to replace the U.S. market because developing nations cannot buy as many items, and that for many firms this was an existential threat that needed to be resolved in days or weeks. In addition, Beijing was worried it was left without a place at the negotiating table while its major trading partners, such as Vietnam, India and Japan, began talks with Washington, said two officials familiar with Beijing’s thinking.
For a while, it was working. Everyone was caving in. Singapore, announced they won’t do retaliatory tariffs. Europe was ready to talk. Vietnam proposed 0% tariffs on all US goods. I’ll suck your d\*\*k!
Then came China.
When Trump hit them with a 127% tariff, they dug in. And they’ve got leverage. Though both China and US have been decoupling from each other, diversifying away from co-dependence perhaps in preparation for a day like this. China is about 15% of US imports and the US is about the same percentage of Chinese exports. It’s big but not insurmountable.
China remains a critical exporter in categories we’d have a hard time replacing, especially in smartphones. We’re also reliant on Taiwan for semiconductors, whose independence from China hangs by a thread:
Meanwhile, we’ve grown MORE dependent on China for inputs to our own manufacturing.
China holds three important cards – manufacturing expertise, scale, and exclusive access to rare earth minerals needed to make high-end electronics.
Maybe China’s biggest advantage is it plays the long game and its people are team players, eager…or forced, to play along. Famously, China created a 100 year plan to surpass the US as the leading global power by 2049. Our leaders make 100 character tweets and 2-day tariff edicts. We have the gravitas of a bad intern.
China’s already posted a video called “Never Kneel Down!” in which China’s Foreign Ministry denounces ‘bullying’ on tariffs and calls on other countries to isolate the U.S. as a ‘small, stranded boat’
— CHINA MFA Spokesperson 中国外交部发言人 (@MFA_China) April 29, 2025
3. Mar-A-Lago Accord
The fourth and final step of Trump’s Master Plan is the Mar-A-Lago Accord, apparently modeled after the Bretton Woods Summit, when the US left the Gold Standard. This rumor has been substantiated by Barrons and interviews with reputable right-leaning economist Oren Cass, among others.
What is The Mar-A-Lago Accord? Like that last battle in every Bruce Lee movie, this is when we renegotiate our debt and devalue the dollar. It’s a fancy way to say, do-over. The disruption caused by these initial tariffs was meant to make other countries more receptive to a new trading system or global order.
What would this new order entail?
Weaken the US dollar while preserving its global reserve currency status, likely also restructuring foreign debt obligations. This weaker dollar would help balance trade deficits by making US exports more competitive globally.
Let “green country” countries peg their currencies to the US dollar, with a mechanism to appreciate if the dollar gets too strong. In exchange, “green countries” would get access to the US consumer market, security benefits, and the US dollar system.
The US might also seek payment for providing security to these nations, Blackwater USA, if you will.
The overarching aim is to reorder international economic, military, and political relationships to benefit the US.
Take a minute to process this.
This is the gamble Trump is making: He’s going to make Americans poorer, diminish our buying power with a weaker dollar, in exchange for less debt and the possibility of more American exports. While at the same time, potentially committing us to new security entanglements that may exceed those of NATO. What could possibly go wrong?
Weakening the dollar in exchange for protection money is self-undermining. Our ability to police the globe will be impaired. Same goes for our ability to consume. Suddenly, the reserve currency and security pitches don’t look so hot.
This grand vision requires goodwill and trust, something Trump has undermined by subverting NATO, rescinding defense commitments to Ukraine mid-war, threatening annexation, and starting a global trade war. At this point, most countries would sooner get protection from Tony Soprano.
So far, the only sure thing Trump’s accomplished is a major tax hike from tariffs.
