Transcription - 2025.05.08 - Dialogue Works
NIMA ALKHORSHID: Hi, everybody. Today is Thursday, May 8th, 2025, and our friends, Michael Hudson and Richard Wolff, are back with us. Welcome back.
RICHARD WOLFF: Thank you. Glad to be here.
NIMA ALKHORSHID: Let's get started with what the U.S. Treasury Secretary Bessent said about the conflict in Ukraine and the way of Trump's approach to that. And then I'm going to ask my question to you. Let's talk to you about this.
[clip start]
SCOTT BESSENT: Ukraine Investment Partnership, the Economic Partnership, was his idea, and he believed that it would do several things. One, it would create more leverage for him with the Russian leadership when it was time to go to them. So the idea was start with Ukraine, sign a deal that shows that there is no daylight between the U.S. and the Ukrainian people.
It would be a symbol to Ukrainian people that the U.S. is still there. It would be a symbol to a tired American public, skeptical of more financial commitments, that it was possible to have a shared prosperity with Ukraine. And then it would, in essence, be a tacit security guarantee because of the economic partnership.
[clip end]
NIMA ALKHORSHID: Yeah, here is, Michael, the question to you would be, can the United States continue to rely on a transactional approach to foreign policy when the global powers are pursuing long-term structural alternatives to the United States-led order?
MICHAEL HUDSON: It looks like other countries are reacting against this. And the effect of what Trump imagines is a transactional approach is actually to drive them to do deals with each other. And all the attention has been focused so far on this flurry of action during Trump's first 100 days in office.
But how much real action has there been? Trump's announcements have been more of a set of threats against other countries. That's not a transaction yet. And yet he's been quickly walking back all of these threats. It's as if he's negotiating with himself, arguing himself back down as he sees what the foreign reaction is. So I think this morning was the first transaction with England.
Trump's already relented on his 25% tariffs on auto parts with Canada and Mexico. He's relented on America's imports of iPhones and other products from China. He's been walking back all of his talks with European countries. And the effect he's had with his transactional approach saying let's make Canada the 51st state has been to reelect Mark Carney as Canadian prime minister on a program of let's have a nationalistic reaction against the United States and see what all of our options are.
So this transaction approach is if Trump is trying to treat international relations as a real estate deal. His strategy is to make an extreme demand to frighten other countries. And just making this demand of these enormous tariffs that he's proposed is supposed to expand their mind to think, well, oh dear, this can really screw up our economies, certainly in the short run.
And Trump's objective is not really to get any of these claims at all. That's what's so bizarre. It's to meet them halfway. And that compromise is what he wanted all along. And the compromise often has nothing to do with tariff rates itself.
He just made a deal this morning with London. And the deal, what did he want from London to give up for only taxing British imports by 10% apart from special aluminum and steel and other add-on taxes.
He wanted England to give special tax preference for U.S. information technology firms and the NASDAQ stocks that have been driving up the stock average for NASDAQ. Essentially, as we discussed last time, he's threatened to use tariffs to destabilize foreign trade unless they basically give the U.S. a free ride.
With Panama, for instance, he's asking that U.S. ships not have to pay any charge at all for going through the Panama Canal. And that's in response to Panama's claim that, well, the U.S. ships are so much larger, we have to charge the fees according to the size and the tonnage and the difficulty of getting them through the canal.
So far, he's been essentially using tariffs not really as a way of trying to raise tax revenue, but just to threaten to create chaos in other countries.
Well, what's the response for all these transactions? It has been to make other countries rethink all of their transactions with each other. And the funny thing is while Trump has not done very much for himself, the attention, I think, should be focused on what's happened to the other 100 days, the other countries have been doing during these 100 days.
And that's where the real action has been taking place, not in Mar-a-Lago.
And obviously, there's a big difference in the European and Asian reactions from what Trump expected. He had expected other countries to be desperate to make a deal. This is just as he'd expected Russia to be so desperate to make a deal in Ukraine that its economy was collapsing, its army was losing, it had lost a million men. All of this was propaganda given to him by Kellogg. And it didn't have any basis in reality at all.
But he thought that Russia was desperate. He then came out and said, "China's desperate." Look at the financial problems that it's having with banking and real estate. He thought that China was so desperate that he could make a deal with them." None of these countries are desperate.
But what they realized is they would be desperate if they actually took Trump's transactional threats at face value. And so they've been trying to make deals with each other. And the most important countries that have been making, changing their reactions have been America's closest allies.
The European countries have actually been standing up for themselves and making deals to, again, have imposed special taxes on the big internet companies, on Google, on Meta, and even to break them up or put very heavy fines on them. Just the opposite of what Trump wanted to do with them and with England.
In Japan, they've said, "Well, we've really got to rethink what we're going to do with all of our U.S. Treasury holdings if we're really not able to export to the United States anymore and to trade with it. What's the point of holding all of these treasury bills? And Japan holds more U.S. Treasury securities than any other country, even more than China."
So you're having a reaction take place in other countries. That's the reality. That's the real transaction. And as we said last time, this change in the structure of world trade that is a reaction to Trump's actions is irreversible.
And once other countries make deals with each other to undertake the enormous expense of changing their production and trade relations to fit each other's markets instead of the U.S. markets, they're not going to roll things back the way they were, because that would take a whole other duplicate, enormous expense of restructuring their industry and trade.
And it would also involve breaking all of their relations with each other and with China and with the parts of the world that are actually growing instead of the American economy shrinking. So here you have Trump making threats from an economy that's shrinking, that is dependent on other countries, acting as if other countries need to make the deal.
And what they realize, they do have to make a deal, not with the United States, but with each other.
NIMA ALKHORSHID: Richard.
RICHARD WOLFF: Yeah, since Michael has talked about the international, let me talk a little bit about the domestic here inside the United States, just to round out the picture. And then I want to talk about two things.
First, the tariffs, in terms of their internal effect on the U.S. And then the particular little story that isn't very little, which was the agreement, I think, since our last meeting, or at least very recent, to change what's called the de minimis rule, which is the rule that if your package coming into the United States is worth 800 or less, you do not pay a duty of any kind, you do not get inspected, you are just a retail transaction.
Why is that important? Because the greatest use of that has been made by the lower half of the income distribution in the United States. Because what this is about is a way of cheapening the purchase. The reality is, and I'll say it as starkly as I can, that in recent weeks and months, we have learned from the Starbucks corporation, the coffee shop chain, from the McDonald's corporation, the hamburger chain, two of the most important widely distributed fast food service industries, that they are in financial trouble.
And they have released information indicating that their research in both cases shows that they're losing business from the lowest income groups that patronize them.
In other words, it's becoming unaffordable to get the latte at Starbucks or the Big Mac at McDonald's.
All right. If that's the case, then I need to explain to everybody, if you haven't understood it, that both a general tariff and the de minimis moving it from the 200$ to the 800$, and now taking it away, I believe, as of tomorrow, or in any case, about now, it's being phased out. And all of those low income packages will now be hit with duties, and very high duties, we're talking 145%, doubling, more than doubling the price.
Okay. A tariff is like a sales tax. It's a regressive tax. It makes no effort to account for the purchaser's ability to pay. It's not like the federal income tax. It's a regressive, not a progressive tax. Removing the $800 exemption for the de minimis is likewise a regressive act because it doubles the price, like a sales tax might, and that's a well known regressive.
So what are you doing? This entire package of policies can only worsen the already extreme inequality of income and income and wealth inside the United States. And I believe almost everyone, even right-wingers, understand what happens to social divisions, to animosities, to hostilities, to discrimination, when you do that, that every social problem we know is aggravated.
You know, the recent books, the work by the Princeton researchers about the middle class that's committing suicide and all the rest of it. The research is overwhelming that this is a, here we go, self-destructive program.
So Michael just finished talking about how it's self-destructive globally. And I want you to see it's also extraordinarily self-destructive, I think, domestically. Mr. Trump is really strongly favoring the rich at the expense of everybody else.
Systematically, step-by-step, whether he's aware of it or not, I don't know and I don't care. But the interesting reality is that this is, this is extraordinary. One last point. I think it's crucial to remind people, I know we've said it before, but it's crucial at this moment, given what Michael just said, to remind people that the transactional approach that Michael just, you know, illustrated or summarized, on again, off again, now you have a tariff, now you don't, now it's high, now it's low, now it may be just a negotiating ploy to get little gifts.
He can run around the country and say to the American people, I got the minerals in Ukraine, or I got whatever the British gave away, etc., etc. That the uncertainty, the non-fixity is an enormous reason why what Michael talked about will not be undone.
Because even if you believe that Mr. Trump will simply be who he is for four years, you don't know whether the Democrats, if they win the next election, will not simply undo every tariff he did. Which means you can't come back. They make no sense. But it even means that the only thing now is to get out of the dependence on the United States, it's too uncertain.
And why is that important? Because even if it's less profitable temporarily for the Chinese to sell what they sell to Indonesia rather than to New York, they'll do that because a lower profit for a while is a better bet than the uncertainty of the deal they had in the United States.
That will be as important a factor in the calculations of businesses around the world that are now going to do everything in their power to reduce their connection to the United States. It's the same thing.
If he undoes, he cuts a deal with Xi Jinping and the tariffs against China disappear or are reduced. It's too late. You've shown what you're prepared to do. Every Chinese company, even if they applaud reducing the tariffs, worry, when will they be imposed again? What set of difficulties in the United States and for the United States will lead it to try to solve its problems in this way?
This is an empire whose decline is causing it difficulty, which it's trying to solve by making the rest of the world pay, not understanding that the decline can't be fixed that way, because it'll make the decline worse.
That's what we're doing. Every other empire has done things like this. We're doing it as if it had never happened before, as if no one had Mr. Trump's ear to say, "Be very careful. Declining empires have a nasty habit of trying to solve their problems by exploiting their empire situation, which only hastens then the demise."
MICHAEL HUDSON: Richard mentioned before the effect of Trump supporting the wealthy and the lower-income consumers and wage earners in America suffering. But the Wall Street Journal has been filled with accounts of small businesses in the U.S. that have been negotiating with Chinese companies to provide key products that they've been selling.
And the number of small businesses that have been operating in China is a very significant proportion of China's industrial factory production. And it's these small businesses that are being subject to these tariffs.
Some of the small businesses have actually arranged with their customers for the products for the Chinese companies indeed to send their packages either from China or sometimes from Hong Kong by the de minimis package sales to customers.
But most of the companies simply have been importing what they have hired the Chinese factories to produce on highly specific product designs to sell to the customers. These small businesses are the single major sufferers of the tariffs that Trump has imposed on China. He's exempted the big companies and especially those of his biggest campaign contributors like Amazon or the iPhones from having to pay the tariffs.
But he hasn't paid any attention at all to this large trade in small businesses. So it's not only the lower income McDonald's customers that are being squeezed, it's the small businesses that are being squeezed. And that was because they were supposed to have been part of the Republican Party's designated constituency.
So all of this, I want to talk about what's likely to happen this weekend in Switzerland when the American trade negotiators finally sit down with the Chinese negotiators to decide, you know, what is going to happen. Because after all, it's the U.S.-China antagonism that's created all of this.
And I think that I can just imagine how the discussion is going to go. It's not going to go the way that Mr. Trump expected. I think China is going to insist as a precondition, it's asked to revive the World Trade Organization by permitting a quorum of judges to be filled instead of the current paralysis.
They're not enough - the United States has refused to appoint a judge to the World Trade Organization, which is preventing China from using the rule of international law to say the United States is breaking the law. We need compensation.
The United States has crippled the WTO to enable it to break the law without any recourse. And what on earth, you know, even if you break the law, what's the point if there's no court to impose fines or sanctions or otherwise protect these countries?
I think that Bessent is going to offer to cut U.S. tariffs to only 40%, maybe even less. And China recognizes that a 40% tariff on its goods or whatever Bessent asks for following Trump's orders is the equivalent of a total block of Chinese imports.
And so China is going to insist on no change at all. In fact, it said before we can negotiate, we're not going to negotiate with a gun to our head, which is Trump's idea of a transaction. I can shoot you, wreck your economy if you don't do what I want. That's a transaction Trump style.
China is going to say, first of all, abolish all your tariffs on China. Then we can sit down and negotiate what kind of mutual tariffs we're going to have. And that kind of negotiation usually takes three to five years.
And Bessent has already said, well, all right, we're going to offer no tariffs at all on specific categories of goods to the United States. For instance, your rare earths, the materials we need for national security to make our arms so that we can bomb you when we go to war with you in two years. No tariffs at all on those!
And I think China is going to realize that these offers of trade with no tariffs, such as iPhones, are no U.S. sacrifice at all. They're an indication that the United States needs these imports from China, that it's dependent on these imports from China, and that all China has to do is nothing.
And let Trump roll back the imports on designated products, just as he's been doing with iPhone and with similar products for other countries. But what I think Bessent is really arguing for, remember, he's a financial guy. He was part of George Soros' team that raided the British sterling to force its devaluation a few years ago.
Trump is going to say, well, you know, we can talk about lowering tariffs, but we want you to give special favoritism. Let U.S. banks come into China. Instead of having your socialized banking system, let American banks come in and make loans to your population.
He's going to want financial access. We'll give you access to our markets for goods, you give us access to your financial markets. I think that's - China would have to roll back its whole revolution to do that. I think the U.S. will ask China to stop its sanctions against exporting rare earths and other national security items.
And there's no way that China is going to agree to this. Any tariff agreement that China makes is subject to a parallel just as the United States blocks anything having to do with national security to China, such as advanced computer chips or the Dutch computer chip engraving machinery.
China is going to say, well, you know, we're going to trade in normal consumer goods, but not goods that are needed for Americans to be in direct military or monopoly competition, especially in the fields of information technology, high-tech processing. And I think that other countries are going to see that this is basically the approach that they're going to be taking.
I think, as Richard was just saying, they realize that any agreement they may make with the United States over the next three months - we're still in the three-month interim that Trump has said he's negotiating on a country-by-country basis- we will wreck you if you don't give us a gift. All of these can - they make an agreement, and then Trump can change it unilaterally on a moment's notice, leaving with other countries the same threat as before.
But the United States will have used this time to insulate itself from foreign moves. This is very similar to the kind of ceasefire that Ukraine wanted. The United States wants a ceasefire in the trade war with China to say, well, you know, at least keep exporting to us the materials we need, rare earths, other materials, and we'll see what we can do later.
He tries to make a promise. Other countries know that he has no obligation to live up to these promises, and what Trump wants, just like Ukraine wants to use a ceasefire to mobilize its army and bring in the German weapons and missiles and the English troops to fight Russia, so the United States wants to use this total free trade to build up its national security reserves of products that it needs from China so that then it can go back to total trade war with China.
Obviously, China's not going to give up on that. So the real split in today's relations among countries is, I think, countries that look at the short run, here's the choice they're given.
They can look at the short run and say, all right, well, we don't want our trade to be disrupted. And so we're going to focus our trade still on the United States, even though it's a shrinking economy in the long run. Or other countries are going to recognize the need for a long-term transformation of the world economic order to reorient their trade with China, Asia, the Belt and Road countries.
The real choice is between independence from the United States or dependence on the United States and a U.S.-centered economic order that was put in place in 1945 that is now obsolete or the creation of a new economic order. Trump's transactional approach has led to a transaction of consciousness on the part of other countries.
And this change of consciousness is what is irreversible. And that's the real effect of his first 100 days and the April 2nd tariffs that he imposed.
NIMA ALKHORSHID: Richard.
RICHARD WOLFF: Today's Financial Times carries a story that EU companies, European companies, are busy in China, capturing or trying to capture the market that can no longer be served by American companies because of the tariff blocking them.
Now, here's why that's an important story. It is a problem for China to find a market to replace the United States. They had not an overwhelming but a significant export business to this country. And there are very few places they could hope to replace it.
But Europe is number one on the possible places for them to do that. But the Europeans wouldn't allow the Chinese to do it unless, of course, the Chinese did for the Europeans what they need, because they're losing their market in the United States.
So you have, you know, a marriage of convenience between the Europeans and the Chinese as each of them uses the other to soften the blow of anything Mr. Trump might do.
NIMA ALKHORSHID: Richard, you may bring Japan in as well.
RICHARD WOLFF: Yeah, and now, well, Japan's a little different. But yes, especially after the bond market troubles of a few weeks ago now. Is it a few weeks ago when the Japanese were saying to the Americans, if I read it correctly, if you hit us with tariffs, we're going to rethink the purchase of U.S. treasuries that we have so conveniently done for you for 30, 40, or 50 years. That this is, that's another danger lurking.
But let me finish this point. You are bringing together Europe and China. Let me stop everybody. That's an enormous part of the world economy right now. Anything that even a transactional president might do that would bring together the Europeans and the Chinese and with the Chinese, the BRICS alliance into, you know, working together with the Europeans in jointly shared hostility to the United States.
Well, that, you're now moving out of the range of a mistake into the range of stupid. This is stupid. What are you doing? This is, you know, you're creating enormous difficulties for the Europeans who don't want to deal with the Chinese because of the Chinese closeness to Russia.
And the fact that all European center and center-right governments now have nothing left but their anti-Russian politics as they die there. And Michael mentioned the Canadian election. Yes, but let's also add the Australian election of a few days ago, which did the same thing, in which a candidate, Albanese, who was far behind in the polls, became the major anti-Trump candidate and walked away with a very profound win.
This is, these are straws in the wind you do not want to pretend that you don't see. And yet here they are. And then today's, you know, I couldn't believe it today's Financial Times major story about EU companies grabbing market share from the Americans who can't do their business anymore. This is, this is a concrete exemplification of what Michael was getting at in what he said at the beginning.
MICHAEL HUDSON: So Trump is, integrating the whole rest of the world and here, all along we've been describing what the BRICs and other countries should be doing, if they want to create an alternative.
And they've been - there was just a meeting a few days ago in Brazil with Lula where he was not taking a confrontational approach with BRICs at all. And you could see that his idea of BRICs, at least at the Brazil meeting, was to try to be a mediator between the global majority and the United States.
Well, it's the other countries, it's Trump's allies that are making the big pressure for all of this to create some kind of new order, and since Richard mentioned Japan, I'll give you an example. I was in Japan some years ago and met with the CEO and the vice president of a major company for a long strategy dinner, one of the biggest companies in Japan. And one of the things that Japanese like to do is to sing songs at the dinner, and they sang one song. And I'd had quite a bit of sake and the only songs that I could remember were the old socialist songs that I knew as a child, since they said here are the songs you meant as a child.
And I sang something like working men unite, you must put up a fight, et cetera. Well, all of a sudden the CEO, who'd looked like a Buddha was glowering and the vice president who had rather a threatening look on his face, had a big smile.
He took me aside later and explained that his Japanese company always had a plan B as an alternative to a pro-U.S. plan A. And his job was to head plan B, which was to restructure the company's trade and investment with China away from the United States.
Well, China had lost very heavily in the Plaza and the Louvre accords with the United States that forced its currency up. And Japan had to agree, not the tariffs, but to voluntarily cut their automobile and electronics exports to the United States within limits so that the United States auto industry and electronic industry can become more competitive.
But, as you can imagine, the United States agreements led Japanese industry to crash since 1990. It's Nikkei stock average needed, I think, to be around 36,000 in order to maintain growth. And it's still going way, way, below that. And Japan doesn't ever want to repeat this again.
So I would imagine that there are talks going on now about, indeed, talking to China about well should we really have a phase change in our relations? Should we really reorient our trade with you? Can we agree on some kind of specialization of production, mutual investment, and markets that can help us replace the United States with China?
Well, that's how world economic works. It's a step function. It's not a world - the economy doesn't evolve as a smooth evolution. It's a quantum jump. And this is called a phase change. And we're in a phase change like that, reflecting entirely new rules of trade and investment. And, today we're seeing the rest of the world preparing for that while they're making their own plans for how are we going to meet with Trump when he meets with us. And tries to do with us what he was able to do with England.
RICHARD WOLFF: Well, the irony also is, and I think we've approached this in other discussions we've had in the past, that this is a bizarre process in which the pursuit of the United States against China, calling it, and I think this is significant, another cold war means that there's the notion that your enemy now, China, is in some way comparable to the enmity with the Soviet Union of the second half of the 20th century.
And that is a colossal mistake. Russia was a poor, backward economic mouse relative to the American elephant. That is not the case with China. And it's not a case with the rest of the world. It is not emerging out of its colonial status. It has had now 40 years or 50 years or 60 years to begin slowly, but significantly, to achieve an independence.
It's not just political, but also as much as a world economy allows anyone to be independent, to have an independent policy, to make a deal with China, which a colony could never have done before, et cetera, et cetera.
So what you're seeing is the ironic consequence that a cold war shifted from Soviet Union to China will have the opposite effect. You can argue that the cold war against the Soviet Union isolated and eventually undid the Soviet Union.
The reality is that the same policy of a cold war against China is isolating the United States. It is literally removing the United States, moving it in an autarkic direction. I want to remind everyone that tariffs that make everything more expensive here, one way or another, means that other countries who have competitors to the United States will be able to buy their inputs at lower prices than American companies will have to pay because of the tariff wall.
And that will diminish the competitiveness of the United States globally. And that will cost jobs, incomes, and will have a cumulative effect. To use the Marxian language, you are constricting the production of surplus here. And in the end, that's the lifeblood of the system's growth. And there's no financial manipulation that will help you escape from that self-destructive, self-isolating policy.
MICHAEL HUDSON: Well, I'm glad, Richard, that you mentioned the comparison between the new Cold War with China and the Cold War against the Soviet Union. What was really the source of this Cold War?
It wasn't just geopolitical. The Soviet Union wasn't a trade rival or an investment rival. It was a different economic system. And that's what led the United States to start the Cold War right away in 1917. As soon as you had the Bolshevik Revolution there, the U.S., along with England, tried to invade Russia and overthrow the revolution.
The whole fight against communism, they didn't say it's against the Soviet Union or the Russian people or Russian production. It was against communism.
And the threat of communism, what was it? The Americans feared that it was an alternative economic organization to that of American finance capitalism. And in the negotiations in 1944 and 1945, leading up to the World Trade Organization creation, the International Trade Organization, the U.S. negotiators said, "how are we going to deal with a socialist economy?" Because socialist economies are lower cost than Western capitalist economies.
Socialist economies are more efficient because they don't have a predatory financial class. They don't have a real estate class. Their housing costs are much lower because you don't have an absentee landlord class that is able to maximize its land rent. You don't have debt. The government of Russia simply creates the money.
Well, we all know that the Russian system really wasn't a workable economic threat to the West because it was basically, under Stalin, a bureaucratic collectivism. They didn't let a hundred flowers bloom as Mao did. They didn't let what had been Lenin's new economic policy of 1921 actually create any kind of competition there. China did.
And so China's threat isn't simply that it's producing low-price exports. That's what America wanted with the class war of outsourcing its labor to China, that China was doing exactly what the United States wanted it to do, produce cheap labor to keep down America's manufacturing labor.
But what China did by being so successful was a system that the financial sector was part of the socialist government, it was the government that created money. China did not have a banking system that lent for corporate takeovers, for stock buybacks, for all of the things that the American banking system did.
China did not have privatized transportation and other public utility monopolies, because these were public investments providing low-priced transportation, low-priced communication, and all of the things that socialism set out to do during the progressive era over a hundred years ago.
That's the threat to the United States, the specter of socialism being more efficient than the American financial system that has moved far away from the industrial capitalism idea of efficiency in the late 19th century to something completely different.
The financial sector, finance capitalism has taken over industrial capitalism in the United States and the great threat is other countries saying this doesn't work. Why has China grown and not the United States and Western Europe? It's a different economic system and political organization. That is why there is a cold war today against China.
NIMA ALKHORSHID: Richard.
RICHARD WOLFF: The irony is, you can't run it the same way because China isn't small and poor. China, in addition to everything you've said, the Chinese are now showing that their system has enabled them to become rich and powerful enough that they are a competitor for the United States that the Soviet Union never came close to being.
And so it's completely different, you can't, you know, it's a joke. It's that old joke. You can't have the same policy approaching a radically different situation and hope for the similar result. And that's not a sign that you're saying you're not doing the normal intellectual process of asking the relevant question.
And the relevant question here is illustrated by that headline in today's Financial Times, where you scratch your head and say, yeah, duh, the Europeans, while arguing against Mr. Trump, are quietly sending trade missions to China because they have a lot to talk about the two of them.
China needs to export to Europe. Europe needs to export to China. Germany has been exporting to China in a crucial way for many years. So the relationships are there. The systems are there. The trade routes are there. Everything is in place for them to be able to do this. And they're now going to do it.
And they're going to do it no matter what agreements are made by Starmer and Trump, because, again, for the British, unless they are unbelievably stupid, they are going to understand. They're going to understand that the uncertainty alone means they have to do this, not to do this with China, given what Trump has already shown him.
And by the way, not just Trump. But the fact that at least for the moment, there's no visible corporate opposition. The corporate sector seems to be saying, let's see what Trump can do. Well, that's sending a message to everybody. It isn't just Trump.
And even if Trump were to disappear in some magical way, why should they believe that there isn't another Trump waiting in the wings? And certainly, Mr. Vance, if you know his career, that this is a man who puts his finger in the air, to see which way the wind is blowing and makes his political decisions based on that. We used to call that the activity of the Clinton family, but Mr. Vance has learned how to be another Bill Clinton.
MICHAEL HUDSON: Well Trump, in fact, has come right out and said that in these negotiations he's undertaking with every single country bilaterally, the number one ask is you have to agree not to trade with China. Well, the way that from what you and I have just been describing, this is not going to be successful.
So the whole idea of these threats that Trump has made that has disrupted the whole economy that is driving other countries together, leaving the United States self-isolated was all based on the erroneous belief that Trump could say we will lower the tariffs if you will make your economic trade and investment focus on the United States and boycott China and impose sanctions upon it. That has already been shown that it's going to be a failure.
The strategy that he said underlay the next three months of negotiations has collapsed. It's not really a transaction at all from America's point. To get back to Nima's question at the beginning, other countries are making their own transactions. And the transactions is not only in trade and investment. The transaction is to create an entirely different structure and reorganization of the world trade and investment system.
RICHARD WOLFF: So, Michael, I don't know, I was just wondering whether Michael or you, Nima, whether there's a provision in whatever was agreed between Trump and the British about what Britain is or isn't free to do with China. In other words, was the 'boycott China' a component that was agreed to by Britain?
MICHAEL HUDSON: And I think Trump is giving the speech on that even as we're speaking today. Well, we can't listen to that and talk at the same time.
NIMA ALKHORSHID: Richard, just before wrapping up this session, I think the crucial point right now is for some countries like Brazil would be the following question. Can a middle ground strategy like the one Brazil's Lula is attempting right now realistically exist in an increasingly polarized global order? And as we're watching, as you've mentioned.
RICHARD WOLFF: Well, on one fundamental basis, I don't think so. And that fundamental basis is the fact that the Chinese keep outgrowing the United States. And what that means is, to be blunt, time is on the side of the Chinese. And they know it. And I believe Mr. Trump knows it. And they don't have the time. They don't have a middle ground compromise they could reach that would somehow be a plausible solution here.
Because I think the United States, if it were to sign such a deal, would then observe in the following months and years a further deterioration. So what's the point? You know that they can't.
Now, you might answer me by saying the apparent decision to continue the war in Ukraine is also an American agreement to something that can only get worse for the United States. Since, from everything I can tell, nothing is stopping the Russians from making a steady progress as they move westward across what remains of the Ukraine, period.
You know, so they're willing, apparently, to let that get worse in order not to have to take a position now. Well, maybe, I don't know, maybe they would be willing to do that, if Michael is right, and if their effort to get countries around the world to break with China, if that fails, especially if it fails publicly so that it's clear in the media that this hasn't worked out. The way it's quite clear now that the American effort to get a ceasefire in Ukraine did not work.
Okay, well, maybe then they would have to do it. And then we will learn in the next two, three months, if that happens, and that will be the determinant of whether Mr. Lula's effort to find the middle ground has a ghost of a chance to succeed.
But sitting where I sit now, no. No, I'm fearful that the American recognition of the dead end it is in will make the attractiveness of doing something militarily sooner rather than later become a persuasive argument in Washington. And then, you know, I have no idea where that goes.
MICHAEL HUDSON: Well, Richard, maybe our materialist approach to history will begin to work out after all as a means of forecasting. Maybe countries are going to work in their own self-interest instead of in the self-interest of other countries.
RICHARD WOLFF: They might and they might not have done it individually. Clearly, Europe's demise is in large part the product of the inability of the European countries to make a union strong enough to deal with the large union of China and its allies and the large America and its allies.
And so, look, they are, this goes back to the beginning of what Michael said, they are being pushed together by the United States on the one hand, and the victimization of China by the United States leading the Chinese to be more willing than ever to make a deal with the Europeans who are more willing than ever to do the same.
That is, that might be very, very dangerous for the United States, because it could mean the salvation of Europe and of China by them coming together. Who would have thought it, given the three poles of the world that we were in up to a few years ago?
MICHAEL HUDSON: Trump the Liberator. So that's what he meant by Liberation Day on April 2nd.
NIMA ALKHORSHID: Thank you so much, Michael and Richard, for being with us today. Great pleasure as always.
RICHARD WOLFF: All right. Thank you very much.
NIMA ALKHORSHID: Take care. Bye-bye
Image by Vilius Kukanauskas from Pixabay