THAT an economic world war has already started is beyond dispute. Whether it is the United States or President Donald Trump who has lost is immaterial but between the sanctions imposed on several countries and prohibitive tariffs inflicted on friends and foes alike most are warning against a catastrophe, not just for those directly involved, but the world generally.
Trump’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA) otherwise known as the Iran nuclear deal is, arguably, at the heart of the recent trade spats between the US and the five other signatories. Although it must be said that US sanctions were not unique to Iran; Cuba, Venezuela, North Korea and Russia and many others were and are victims of American sanctions declared on a capitalist whim. Iran itself was victimised on no other pretext than its Islamic revolution.
Abandoning the JCPOA on the pretext that Washington wants the treaty renegotiated opened the way to a new barrage of sanctions against Iran with Trump declaring that state parties and commercial entities found breaking them will be penalised. The other five signatories to the JCPOA protested. Russia, already a victim of US sanctions, openly declared that she will continue normal relations with Iran. China, with tariffs already imposed on her for some nefarious allegations, among them currency manipulation, which to all intents and purposes has escalated into a trade war, saw fit to find ways around the sanctions against Iran.
For their part the European signatories, namely, Britain, France and Germany were disgruntled. The JCPOA debacle resulted in the reactivation of the “blocking statute” to protect European companies doing business in Iran. A “blocking statute” is a piece of legislation that blocks the application of the law of another state on its citizens. But Washington had by then assaulted Europe with the 25 per cent steel and aluminium tariffs slapped on Mexico, Canada, China, Russia, Turkey et al.
Meanwhile, when sanctioned by the Obama administration Russia looked east towards China as an ally, now declared a strategic alliance. Trump then is forced, at least for now, to write off a hot war as an option to bring everyone to heel. Defeat in Syria is no help. Fortunately for Trump, whose 2020 reelection depends on the success of his first term, today’s war is hybrid, asymmetrical and can be executed on several platforms simultaneously.
An economic assault by the world’s number one economy under the circumstance must seem to him feasible. Fortunately for the world, America’s economy is groaning under the burden of massive debts caused by her perpetual war policy financed by printing dollars, the world’s number one reserve currency backed by petrodollar, whose guardian is Saudi Arabia.
But to overcome unreasonable American sanctions and exorbitant tariff increases that go against World Trade Organisation regulations, countries are beginning to trade in their own currencies and the euro. The oil and gas trade has found an alternative in the petroyuan, which has shown strong growth indicating that it has the ability to challenge the petrodollar. Its success will destroy the US dollar’s dominant position.
Trump himself appears unable to push his campaign pledges through. On the foreign front, under him Russophobia has gotten worse. At home “Making America Great Again” is driving him ever fiercer towards protectionism and trade wars. As a result the
US is now regarded as unpredictable, unreliable and maybe even dangerous. So why is Trump pushing hard on sanctions and tariffs?
Despite his Helsinki meeting with President Vladimir Putin, Trump has imposed even harsher sanctions on Moscow based on allegations made by London reminiscent of the false narrative leading to the Iraqi invasion.
On China, Trump threatens further tariffs as high as US$500 billion (RM2.06 trillion). Can China withstand such an onslaught? Beijing, however, holds over a trillion US dollars in American debt instruments. When push comes to shove will this be weaponised?
A number of factors have come together to drive the trade wars: the American mid-term elections; military defeat in Syria; and, de-dollarisation.
An off-ramp is, then, sorely needed especially when the trade wars have added momentum to de-dollarisation which, when accomplished, loosens the stranglehold of the dollar over the global economy. When the trade wars backfire on Washington can Trump be persuaded to step back from the brink and gracefully accept the end of US hegemony?
But what if the US will not relinquish its imperial ambitions? What if the US is not looking for an off-ramp? If so, why wouldn’t she? Could it be that her imperial agenda is long term and not easily surrendered?
It is fair to argue that with regard to Iran and Turkey — and Syria too — all three being staunch supporters of Palestine, America is looking for trouble in an effort to execute the Zionist “Greater Israel” project, whose objective is to make Israel the regional imperial power, which in turn is the proxy for the West, namely, the United States.
Greater Israel would roughly stretch from the Nile in the west to the Euphrates in the east into Iraq, north through Lebanon to southern Turkey and in the south it cuts the Arabian peninsula into two, all areas rich in oil and gas.
Nevertheless, this does not completely explain Trump’s global rampage. But if the Greater Israel project is a part of a Zionist US imperial plan — in less emotive terms the neo-conservative global New World Order — then a plausible answer is possible. The trade war is Washigton’s strategy of choice to bring the world to its knees.
But why would Moscow and Beijing surrender to Washington’s imperial will when they hold the trump card, the former militarily and the latter financially? President Putin has said, “Why would we want a world without Russia?” And would not President Xi Jinping be thinking the same?
The writer is executive director of International Movement for a Just World (JUST)
