From hegemon to blackmailer

From hegemon to blackmailer. The aggressive tariff policy of the USA turns against former allies
By Ernst Lohoff
[This article posted on June 14, 2025 is translated from the German on the Internet, https://www.krisis.org/2025/vom-hegemon-zum-erpresser-die-aggressive-zollpolitik-der-usa-wendet-sich-gegen-bisherige-verbuendete/.]

Originally published in Jungle World 2025/21 on May 22, 2025

The Western camp led by the US after World War II was based on cooperation between the core capitalist states. The rise of economic nationalism in the US is now leading to a more aggressive policy toward former allies.

What does Donald Trump want? This question is likely to be asked not only by EU representatives who are currently negotiating a new trade agreement with the US. Since Liberation Day in early April, when the US president announced tariffs of up to 50 percent on imports from nearly 60 countries, which he soon reduced again on a temporary basis, tariff rates and exemptions have been changing on an almost weekly basis. Basic tariffs of 10 percent remain in place on almost all US imports, 25 percent on steel, aluminum, and cars, and Trump is threatening numerous countries with even higher rates. In the case of the EU states, tariffs of 20 percent are to be reintroduced if there is no trade agreement, and Trump has suspended a punitive tariff of 145 percent on China.

To make matters worse for the EU, it is simultaneously negotiating with Trump over his Ukraine policy, while in an interview in early May, Trump did not even rule out annexing Greenland to the US by military means if necessary. At least Trump said in the same interview that he “can't imagine” annexing Canada by force.

When it comes to the foreign policy consequences of Trump's “America First” policy, two keywords regularly come up: a return to imperialism and isolationism. The two terms obviously refer to opposites. Imperialism means the direct or indirect subjugation of foreign territories and populations. Isolationism, on the other hand, stands for the urge to decouple the fate of one's own country from that of the rest of the world.

Before World War I and in the interwar period, the US actually pursued a mixture of both. In the Pacific region and south of the Rio Grande, it acted imperialistically, but in Europe, it acted isolationistically. The US stayed out of the conflicts between the imperialist powers there and did not participate in their race for Africa. Imperialism in South America continued after World War II. In contrast, after the Japanese attack on Pearl Harbor at the end of 1941, the US broke with isolationism and assumed the leading role in the emerging Western camp.

There is no doubt that the Trump administration is acting aggressively toward its former European allies. Trump has as much contempt for the supranational institutions that the US itself once played a key role in establishing as he does for multilateral agreements and the EU. The lamentation about “the return of imperialism” spread by the left-liberal media is a metaphor for this – but a misleading one. As far as relations with poorer countries are concerned, there can be no talk of a return to imperialism, simply because it never disappeared. What is changing now is rather the content and form of relations with the rest of the world.

Left-wing and right-wing anti-Americanism
The United States Agency for International Development (USAID), which Donald Trump has almost completely shut down, was the most important instrument of imperialism with a human face. With its dismantling, the US is abandoning its only partially successful efforts to reconcile the integration of poorer countries into the global market with improving the prospects for the people living there. The US is withdrawing from regions of the world where there is nothing to be gained economically and leaving the field to its rival China. Foremost among these is Africa, where the US has been the largest donor of aid funds to date. This indifference stands in stark contrast to the deference Trump shows to the rulers of the Arab Gulf states.

New times are also dawning for the US's Latin American “backyard.” Carrots are now only being offered to friendly dictators such as El Salvador's Nayib Bukele, who has proven himself an accomplice to US deportation policy; otherwise, the US is testing what can be achieved through blackmail, as in the case of Panama.

Traditionally, Europe's nationalist right wing was anti-American, and parts of the left also denounced Western European governments for decades as “vassals of US imperialism,” as if they had to submit unilaterally to US interests. That was always pure ideology. The formation of the Western camp during the Cold War marked the transition from hostile coexistence and confrontation between the core capitalist states to cooperation between them. In the postwar period, the West proved to be stable precisely because cooperation was fundamentally voluntary, despite continuing conflicts of interest, and all participating countries benefited economically.

“Make America Great Again”
Even after the demise of real socialism, this constellation continued to exist insofar as the growth of the global economy was increasingly based on a division of labor between the US and the rest of the capitalist world, with the US absorbing the production surpluses of industrial producers throughout the world. Supported by the global currency function of the US dollar, the US financial industry has been flooding the world market with stocks, debt securities, and other promises for the future since the 1980s.

This enabled countries such as Germany, Japan, and China to export industrial goods to the US on a large scale for decades. Because the influx of foreign capital drove up stock prices in the US and simultaneously pushed down interest rates, domestic investors and borrowers also benefited. In a country where pension provision is largely privatized, this includes broad sections of the population.

However, in addition to its vulnerability to crisis, the system has two other flaws for the US: growing foreign debt and the intensification of the country's deindustrialization.

Under the slogan “Make America Great Again,” the profiteers and social losers of this system have come together. This unequal alliance is based on a remarkable feat of projection. In reality, deindustrialization and the associated social disintegration are the result of the economic liberalization program of recent decades and the ongoing tendency of capital to reduce the amount of human labor in commodity production through productivity gains.

In MAGA ideology, “woke” left-wing liberalism and “globalist elites” are responsible for this. Forgetting their own nation, they have allowed foreign powers to exploit the US. The transnationalization of commodity and money capital flows, initiated primarily in the interests of US corporations, is transformed in the fantasies of Trumpists into an anti-American project of China and the EU.

The anti-globalism of the Trump administration
The Trump administration's anti-globalism is, of course, only truly consistent on the issue of migration. When it comes to the flow of goods and capital rather than the harassment and deportation of people, the new administration is pursuing a contradictory agenda. It loudly condemns the huge trade deficit that “globalism” has brought upon the US, but assumes that financial flows from abroad will continue in the future. However, these are two sides of the same coin.

And there is another issue where Trump's program is characterized by doublethink. Although US industry lost market share, US corporations achieved a virtual monopoly in important parts of the IT sector. This is reflected in considerable surpluses in the services balance, to which the US entertainment industry and the financial sector also contribute. The Trumpists want to restrict trade in industrial goods, but they want open markets for Google, Microsoft, Hollywood, and Wall Street.

Rhetorically, the MAGA movement ties in with the isolationist tradition of the US. However, behind this lies a new, contradictory content. Historical isolationism was the accompanying ideology of a development strategy that was actually focused on the US continent. The aim was to build an industry independent of Europe.

Now the Trumpists want to externalize the costs of a globalized economy while retaining its benefits for the US. Their aggressive stance toward their unpopular allies in Europe is nothing more than a display of military strength. The ruler in Washington threatens to withdraw the nuclear shield and indulges in annexationist fantasies with regard to Canada and Greenland because the US's overwhelming military superiority is the remaining asset with which the former Western superpower can still speculate. However, this will only allow concessions to be extorted as long as the remaining allies remain fixated on saving as much of the status quo as possible, both politically and economically.

Local economists largely agree that Trump's protectionist policies are deeply irrational. There is a lot of truth in this: the constant back-and-forth in his tariff policy is destabilizing the global economy and also placing an enormous strain on the US economy. However, while shaking their heads at the supposedly crazy president, these economists fail to mention that globalized capitalism and free trade are by no means a wonderfully functioning economic system that increases prosperity for all, but rather an irrational and crisis-prone order that primarily produces losers. Trump's policies are a symptom, not a cause, of the crisis of globalized capitalism.