The USA will make the UK a "vassal state" – Scottish independence is essential.
Having watched the media coverage of the tariff debacle with interest from an economist’s point of view, rather than that of a political journalist, it all makes sense.
The media narrative is all about Trump being volatile, changing direction with the wind, unbelievable hubris and then quickly backing down, living in his own fantasy life, a Walter-Mitty-type-president, who doesn't even understand how tariffs work. A lot of that is true and you can add narcissism on an industrial scale and a huge bully to that list. For a one-word definition of the man's personality one can refer to the late great Janey Godley.
But here is what most commentators seem to be missing. America is using tariffs as a way to bully smaller nations and wants to create a two-tier trading system. A system made up of American vassal states and those locked out of the American market.
In historical terms a vassal state is one that accepted the overall sovereignty of a larger stronger neighbour and was subordinate to the more powerful king. They often paid annual tributes in gold or silver and had to back the bigger state militarily but in return, they were not invaded by the stronger king and they would even sometimes be protected by them if attacked. Trump sees himself as the "stronger king" and tariffs as tribute. World trade is his ball and he decides who plays.
But who would ever accept the USA’s overlordship and why?
Weaker nations such as Argentina could give up currency sovereignty, and Ukraine will need to give its mineral wealth to America or be wiped off the map. Post-Brexit UK leaves Labour desperate for a deal that allows them to claim there is (at last) a Brexit Bonus, “We can trade with the USA” (on hugely unfavourable terms).
This is why Musk has been talking of funding key political parties such as Reform in the UK and proto-fascist parties in Germany and France and appearing on stage with the Argentinian president. He is looking for empty-coats to lead vassal states.
In order to sell this idea the USA needs a bogey man, someone that Europe must fear or sheltering under the American military umbrella isn't that appealing. Trump can't afford Russia to be humiliated and for Ukraine to win. Hence the withdrawal of vital US military intelligence support which led directly to recent Ukrainian defeats and even his public undermining of Zelenskyy. So yes, he is evil but not completely stupid – the strategy isn't going to work, but it's not the headless chicken style governance it seems at first glance.
The USA wants to resign the world's economy to only benefit the USA. Some commentators think it's dumb that Trump is ripping up global trade agreements and ending an era of free trade that massively benefited America but it's just a little bit of history repeating. Post Second World War, America hosted the Bretton Woods Conference that reorganised world trade into the current free trade model that suited the USA which at the time was a manufacturing powerhouse. America offered protection from the USSR and that heralded America's so-called leadership of the free world.
Over time, the outsourcing of manufacturing to the lower wage economies ended the USA’s massive manufacturing trade advantage. What’s left is a nation that had a big economy but it’s being torn apart by inequality. Those that have no economic hope for the future, in the rust belt and rural America, have turned to Trump in desperation and he wants to reset the terms of word trade so his voter base will back him when he tries to become president for life.
Trump sees currency pegging as key to reindustrialising America. A key reason the US can’t manufacture and export is that American workers wages are too high compared to Asia, so they want to level the playing field. The dollar is the world's trading currency and so it's overvalued, but America's financial markets want that.
So to make American manufacturing competitive, the weaker vassal states will be told to use the US dollar and stronger ones to peg their currency to the US dollar at a higher rate to make US exports less expensive and imports more expensive. Vassal states without tariffs or trade enemies with tariffs (he thinks) will create fertile ground for reinvestment in US manufacturing justifying massive tax cuts as incentives to investors.
A comparatively cheaper currency, that still brings the commercial clout of being the world's reserve currency without the overheating currency value that makes manufacturing impossible is Trump’s hidden goal.
The UK will become a vassal state and Europe will rise again.The UK will capitulate but the EU led by France (who maintained an intact industrial military complex having always mistrusted the US) will refuse (especially on currency) and Europe will remerge from its economic coma. Ironically the massive increase in European military spending across Europe will provide the economic boost that France and Germany need.
When the UK/US trade negotiations start, the first thing the US will demand is that the NHS be opened up to US pharmaceutical companies and lower food standards (chlorinated chicken etc) and the 2020 Internal Market Act will be used to force Scotland to follow Westminster lead. Why capitulate? Because trying to re-enter the EU would destroy any UK political party as the deal the UK gets would be far worse than the one it left for – it would be political suicide and hand Downing street to Nigel Farage.
So an independent Scotland adapting the wellbeing economic approach and rejoining the EU just became more important than ever. The latest 56% Yes poll reflects this but the Scottish Government must act to progress independence now or the moment will be lost.
Gordon MacIntyre-Kemp is the CEO of Business for Scotland, the chief economist at the wellbeing economics think tank Scotianomics, the founder of the Believe in Scotland campaign, and the author of Scotland the Brief.
