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The Heard & McDonald Islands and Global Capital Allocation, since it's never been about tariffs [1]

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Date: 2025-07-13

Maybe it’s about penguins and anti-coercion strategies.

The ability to impose tariffs at will lets Trump dictate winners and losers, punish or reward entire industries and nations, shake down CEOs and generally feel like the most important man in the room.

x The sloppiness of the tariff letters is a measure of the White House's lack of interest in economics and disrespect to our trading partners. It's literally impossible to read these letters and know what the tariff rate is. — Justin Wolfers (@justinwolfers.bsky.social) 2025-07-13T21:56:45.375Z The "reciprocal" tariffs that President Donald Trump announced ... are based on a flagrant fallacy: the idea that there is something inherently suspicious about trade deficits. Unlike many of the positions that Trump has adopted as a politician, this one seems heartfelt and long predates his presidential campaigns. His comments on the subject during the last four decades reflect an unshakable belief that international trade is "fair" only when the dollar value of imports from any given country happens to match the dollar value of U.S. exports to that country. Trump's long history of economic illiteracy suggests he is determined to pursue this trade war, which features import taxes that are much steeper and far broader than the ones he imposed during his first term, no matter how much pain it inflicts on American consumers and businesses. If there is any cause for hope on that score, it is Trump's similarly long-standing eagerness to look like a winner by making shrewd deals. The tension between those two instincts explains why Trump contradicts himself by presenting his tariffs as both a short-term bargaining tactic and a long-term strategy for raising revenue and boosting the U.S. economy. www.yahoo.com/...

Penguins pay no taxes.

Two tiny, remote Antarctic outposts populated by penguins and seals are among the obscure places targeted by the Trump administration's new tariffs. Heard and McDonald Islands - a territory which sits 4,000km (2,485 miles) south-west of Australia - are only accessible via a seven-day boat trip from Perth, and haven't been visited by humans in almost a decade. Australian trade minister Don Farrell told the Australian Broadcasting Corporation (ABC) that the tariffs were "clearly a mistake". "Poor old penguins, I don't know what they did to Trump, but, look, I think it's an indication, to be honest with you, that this was a rushed process." www.bbc.com/...

It’s always been about global capital.

“‘A group of economists at Stanford and Columbia have set up the so-called Global Capital Allocation Project (GCAP) Allocation Project to conduct research that “leverages recent advances in large language models to identify the areas of the global economy that are particularly vulnerable to geoeconomic pressure”. Their core thesis is that China today has hegemonic control of manufacturing (via its dominance of key supply chain nodes such as rare earth minerals) but the US has hegemonic control of finance (because of the dollar’s reserve currency status). Hence one way to make sense of White House actions is that America is trying to undercut China’s industrial hegemony while also protecting its own financial dominance, and vice versa. Tech hegemony, in my view, is still being contested. Such thinking not only explains US-China relations; it also sheds light on how other countries are reacting, since the priority for them now is to create “anti-coercion” strategies, as the GCAP says. Unsurprisingly, this is sparking intense debate in places such as Britain” https://t.co/lo5XSMnKwW

Techno-feudalism’s move back to a perverted mercantilism because taxes.

Trump’s embrace of the Republican cult of William McKinley—invented a generation ago by Karl Rove—is a vision not, as Rove’s was, of Republican political realignment but rather of eliminating the income tax. Since the 1950s, tariffs have raised no more than 2 percent of federal revenue, but throughout the nineteenth century, except for a brief period during the Civil War, there was no federal income tax and tariffs were the principal source of federal revenue. McKinley was the last Republican president to resist establishing an income tax. Trump wants to bring those days back. Here’s what Trump said in his inaugural address: Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens. For this purpose, we are establishing the External Revenue Service to collect all tariffs, duties, and revenues. [...] Which may mean Trump’s price for dropping his hugely costly fantasy of resurrecting William McKinley will be not better behavior from China or Mexico or Canada on trade or border crossings or fentanyl, or even Canada becoming the fifty-first state. It may be that Trump is running a straightforward protection racket on his billionaire new best friends. Is that an outrageous accusation? It is. But tell me with a straight face he wouldn’t try it if he could. newrepublic.com/...

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[1] Url: https://www.dailykos.com/stories/2025/7/13/2333039/-The-Heard-amp-McDonald-Islands-and-Global-Capital-Allocation-since-it-s-never-been-about-tariffs?pm_campaign=front_page&pm_source=latest_community&pm_medium=web

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