From Washington to Seoul, and New Delhi
to Tokyo, the global order is defined by stark contradictions. Laws are bent,
histories are rewritten, and principles are abandoned when they clash with
power or profit. A series of recent events reinforces my fear of this "twisted
world."
The US: A President vs. The Rule of Law (and Then, The Market)
While the decision didn't touch tariffs levied under other statutes (like Section 232 on national security or Section 301 on unfair trade), it left over an estimated $100-$175 billion in collected duties in legal limbo, potentially subject to refund claims.
Predictably, Trump’s response was swift and characteristic. He announced a new 10% global tariff under a different law (Section 122 of the Trade Act of 1974), a temporary measure meant to address balance-of-payments issues. But in a move that defines his modus operandi, he immediately raised the rate to 15% overnight, seemingly to "punish" the court and maximize the economic impact.
His verbal assault on the justices was even more scorching. He called them "a disgrace," "unpatriotic," "fools," and "lapdogs," even baselessly suggesting foreign influence had swayed them. In most common-law nations, this would be clear contempt of court. In the US, it is a protected, if corrosive, exercise of free speech.
Seoul vs. Washington: A Tale of Two Insurrections
To a lay observer, the parallels with January 6, 2021, are glaring. On that day, a mob incited by Donald Trump stormed the US Capitol to halt the certification of an election. Trump was impeached for "incitement of insurrection" but acquitted by the Senate. While "treason" is a narrow legal charge in the US that doesn't apply here, the core similarity—a leader using extra-legal means to subvert democratic processes—is undeniable. The wildly different verdicts are a stark lesson in how political systems, and the power of personality, can bend the application of justice.
The "Board of Peace": A Gaza Conference Without Gaza
But the meeting's true nature was revealed by two glaring absences. Neither Russia nor China sent representatives. More tellingly, no Palestinians were invited to discuss the future of their own homeland. The conference, chaired by Trump, felt less like a peace forum and more like a real estate development planning session. As one observer might cynically note, it is not hard to imagine Trump's son-in-law, Jared Kushner, positioning himself to profit from the development of a "Riviera Trump de Gaza." The "Board of Peace" may well fizzle out, but the deals made in the shadows could have a lasting impact.
Japan’s Irony: The Pacifist Constitution and the Return of Militarism
The irony is profound. Japan's post-war identity as a civilian power was enshrined in Article 9 of its constitution, a document largely imposed by the United States during the Allied occupation. Now, the US—seeking a stronger ally to counter China—is quietly encouraging Japan to rearm. Even more ironic is the response from Southeast Asia. Some leaders of nations that suffered brutal Japanese occupation during World War II are now welcoming a more militaristic Japan.
Whether Takaichi can overcome the hurdle of the upper house and a national referendum remains to be seen, but the momentum is unmistakable. The nation that was forced to renounce war is now being pushed to embrace the potential for it once more.
I do believe in physiognomy. Rightly or wrongly, my first and lasting instinct when I look at Takaichi is that her face conveys a slyness that makes me deeply uneasy — and it is an unease I cannot simply dismiss.
The Currency of Power: Technocrats, Bombs, and Bluster
Among Western leaders, Canada's Mark Carney stands out, not for military might or populist rhetoric, but for "Middle Power" strengths. A former head of two central banks, he understands the mechanics of economic warfare better than anyone. He could fight Trumpism on its own terrain, which all other Middle Powers seem incapable of wielding. Yet for all his technocratic skill, Carney lacks the raw political killer instinct of a Kim Jong Un, who holds a different, more existential form of power—for instance, in denying the US the right to use its airspace.
Elsewhere, leaders like those in Iran or Venezuela's Nicolás Maduro project defiance, but their threats often ring hollow. Venezuela has been robbed of its oil, and Panama of the right to exercise sovereignty over its canal. Yet they appear as regimes waiting for the next shock, their bluster masking deep-seated vulnerability.
India’s AI Aspirations and a Robotic Dog
Instead, it became a case study in the gap between aspiration and reality. The conference was overshadowed by a bizarre controversy when a professor from Galgotias University presented a robotic dog named "Orion" to the public broadcaster as an indigenous innovation from the university's "Centre of Excellence." It was quickly unmasked as a Unitree Go2—a commercially available model from a Chinese company retailing for just over $2,000. Apparently, other bogus AI feats were also exhibited. But the high praises continued, nonetheless.
The incident became an embarrassing metaphor for an event that, despite its high aims, seemed to lack the very organisational intelligence the conference was meant to celebrate. It was a small, farcical moment that perfectly encapsulated a "twisted world" where image is often mistaken for reality, and the substance of innovation is sometimes just a borrowed shell.
Of course, Google and Meta need look no further if they require a super CMO. This professor can guarantee instant publicity for any project they wish to promote.
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It's inconceivable Trump wasn't advised that the IEEPA requires US Congress approval. He must have thought he could swing the tariffs just by executive order. Strange no one immediately disabused him in April.
ReplyDeleteThe complications are two-fold: he leveled different tariff rates on different countries, and he blackmailed sovereign countries for investments and procurements.
Now that his IEEPA tariffs are deemed illegal by his own Supreme Court, he is trying to save face by insisting deals already made must not be broken on pains of higher tariffs; at the same time, he grasps Section 122 to level 10% to 15% back to 10% as replacement tariffs, all within 72 hours.
His Bessent and Lutnick noticeably silent, chaos must have erupted in the White House. Needless to say, governments, traders and investors all over the world are befuddled and the question hangs as to when the refunds of the 96% of IEEPA tariffs collected from US importers will be made, a question which Greer meekly says depends on the US courts which thus bursts Trump's lie that foreign exporters pay the tariffs.
Navarro's piece in the Financial Times today to try and defend his tariffs was roundly skewered by virtually all commentators; one described him as 'whistling past the graveyard for an audience of one'. Even Kavanaugh, appointed by Trump to the Supreme Court, opined refunds will be a mess. All of what is happening has already been commented much earlier in this blog.
A small point - Lutnick is Trump's commerce man. His employer firm for thirty years is one Cantor Fitzgerald. It started a scheme to pay 20 cents for every dollar of tariff refund. If the refunds come through, it makes 80% profit out of a bet abetted by insider information like how the Democrats' Pelosi had made stock pickings ahead of Biden's policy changes. Talk about cabals of crony carpetbaggers.
Other new complications also immediately arise. To operate Section 122 requires the US to apply to the WTO which will refer to the IMF for proof that the US faces a balance of payment deficit crisis, ergo it cannot pay for imports or service its foreign debt, to wit it cannot borrow from abroad and there is a massive depletion of foreign exchange reserves by a sudden and swift capital flight.
There is however no such crisis because if there is one, the US dollar as international reserve currency and its bond market would have collapsed, reverberating crises in most other economies. New phrase for the day? the alimony of hegemony.
Moreover, if Trump proceeds with the 10% tariff starting oh today without going through the WTO-IMF, then the US slaps itself because two months ago, it had insisted proceedings of the WTO be more transparent.
2/
ReplyDeleteAnd then, there's the matter of those agreements signed with other countries. They signed under protest in order to get reduced sentences made through no fault of their own; some suffer the ignominy of shakedown blackmails to invest money they can't afford to buy US goods or invest in the US when they have better and cheaper alternatives.
As their sovereignty has been outraged, they have locus standi to contest but only suppressed because they continue to be threatened, all of which points to the US marginalizing itself as they move away to trade and invest elsewhere so that without their trade and reflux of US dollars to buy US debt, the dollar weakens and with that, US hegemony domestic and foreign.
And if Trump next uses Section 232 on national security, his Lutnick will have to first prove within 270 days that it has been broken. For example, take apart an EV and show exactly where there is surveillance data ported overseas, or peel open an antibiotic to show any infra-RED (italic) marker. As he will fail completely, the crushing implication is that ALL of the US entity and exclusion lists and sanction policies enacted so far whether under Biden or Trump are - illegal.
And if he tries Section 301, he opens a retaliatory can of worms. Other countries can also hit US digital and banking services to show unfair trade in services.
Lastly, the erasure of the IEEPA tariffs means Trump doesn't have the tax revenue to pay for his BBB tax reliefs to his upper crusts, let alone funds for his beleaguered agricultural farmers who are already suffering from loss of migrant workers.
In sum, Trump's wrecking ball leveled at others has swung back suddenly.
3/3
ReplyDeleteFaced with loss of lustre, he may deflectively outlier a war on Iran with the backing of his Israel-compromised Congress. The scenario calls for hitting all of Iran's missile defenses and military infrastructure while instigating ground-level mass rebellion. But that assumes the Iranian military forces won't retaliate by infiltrating neighbouring oil-refineries and firing the new Russian handheld missiles, thereby sparking another oil crisis besides a number of intifada's. The Middle East will conflare and a global recession may ensue, thus putting a damper on the S&P especially the AI wave, the pride and hope of the US.
At the same time, seeing how the US will be mired in the Middle East, Takaichi will push through the remilitarisation of Japan. This will bring back memories of its past brutality on other Asian countries including the enslavement of Korean comfort women not to forget 5,000 from the island of Taiwan.
Looking at Takaichi, no one can be faulted for remembering the brutal pillage on Korea by Toyotomi Hideyoshi, said to have the impish size and look of a cunning monkey. The brutality of his invading forces was evident in one mount in a Tokyo park said to contain the noses cut off fallen Korean defenders and brought back as trophy evidence and war booty. So Seoul needs to remember no amount of sushi can erase history. If worried about losing photomasking chemicals that are the province of Japanese lithographic monopoly, China has substitutes.
As for India, what is there still left to say? It has to look inwards for wisdom from meditation on honesty and propriety as foundation for real progress.