I’m gonna start calling it Trump’s musical chair.
Trump is expanding the American casino capitalism and force the whole world to participate in it. And because you cannot predict when the music is going to stop, the competition and backstabbing becomes even more intense among the countries hit by tariffs because nobody wants to be the loser during every round of reshuffle.
Somebody help me here, despite the denial from the Iranian side, is this not compatible with Lavrov’s speech at the BRICS summit last week?
As for Russia, we are not talking about mediation. President Vladimir Putin recalled that, when the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear programme was agreed, Russia’s possible role was considered, particularly in depleting the enriched uranium stockpiles accumulated by Iran prior to the agreement, rendering them suitable for peaceful energy use in nuclear power plants. In the years since the US unilaterally withdrew from the JCPOA, Iran has not been bound by its earlier enrichment limitations, but now that is the subject of renewed discussions. You have just reminded us that we have the necessary technological solutions. We are ready to provide them, including processing Iran’s surplus highly enriched uranium in Russia and returning it to Iran in a form suitable for energy purposes.
Of course, this would happen if both parties are comfortable with Russia helping to bridge the gap. At present, the US is showing an interest in resuming dialogue with Iran, with support from Oman and several other Gulf states.
It is worth noting that the JCPOA was the result of multilateral diplomacy involving not only the US, but also European partners, Russia, and China, and it was widely welcomed by the international community before its collapse. Should Tehran – its central party – express a desire to move forward, Russia would have no objections to contributing to the mediation effort.
Russia is saying that they are willing to be the one to perform the enrichment/depletion and supply the “suitably” enriched products to Iran as a potential solution.
Reading between the lines, this solution implies that Iran would no longer need to have the enrichment capacity if Russia is going to be the supplier of enriched uranium.
What sort of evidence are you looking for?
All the major Southeast Asian exporters e.g. Thailand, Indonesia, Malaysia are talking about hoping to reach a deal with Trump by the August deadline. These are all over the news. We even have reports from Vietnamese officials saying they felt they were screwed by Trump with the 20% tariff when they thought they had negotiated a lower rate.
If the US trade is really dispensable, these countries could simply not sell to the US and they won’t have to deal with Trump’s tariffs. However, they couldn’t. Why?
This goes to the most fundamental question that I raised above: where else are they going to sell to? If they can’t sell their surplus goods, then the workers will lose their jobs and those countries will enter a recession, and likely have to take IMF loans to bail themselves out of an economic crisis.
So for them, it’s between taking a painful and humiliating deal now, or the humiliation of letting IMF/foreign capital strip off your national assets later when your economy enters a recession. Peer competition makes this pressure even more intense, because your neighbors might get a better deal from Trump and you would turn out to be a loser in this reshuffle. Nobody wants to be the ultimate loser in this race, so they all try to cut a deal with Trump. The goal isn’t even to get the best deal, it’s to not get the worst deal among your peers.
To render Trump’s coercion toothless, somebody else would have to step up to buy the export goods from these countries. There are only three major economies outside of the US that can absorb these surplus goods: China, the EU and Japan.
The EU would have been a good choice ~5 years ago since the euro is a commonly accepted currency that many countries would be happy to save in, but this is no longer possible after the Nord Stream bombing and the EU economies are now entering austerity - i.e. they can no longer play the consumer role to replace the loss US consumption demand. (There is a reason why Trump didn’t start a global trade war back during his first term and only limited to China. The US realized that the EU could pick up the slack. And so Biden’s Ukraine War had to happen so Trump can launch his global tariffs.)
Japan is slowly crawling out of its decades-long zero growth economy but it is still far from having the capacity to absorb the global export surplus.
This really only leaves us with China, with a far larger consumer market that can easily absorb these export goods. I’ve explained the reasons above why China is reluctant to do so so I won’t be repeating them here.
The end of an era. The fracture of the axis.
“Victory of the Axis (of Resistance)” (cover of Maraya Magazine, October 2018 issue)
China allied with the US to fight against the USSR - the country that kickstarted its industrial, scientific and technological base - not even 20 years after the US killed half a million People’s Volunteer Army during the Korean War.
Vietnam was carpet-bombed to hell by the US with millions and millions of casualties, and yet they are just as keen to serve the US empire today, and has been so since the end of the USSR.
This is just socialist countries using their understanding the material reality to do what they have to do to get ahead in the world, because they very consciously do not want to end up like the DPRK. To pretend otherwise is to assume that the leaders of these socialist countries are stupid.
It’s not the “importance” in trade, it’s how you want to build a new future economic doctrine that can make these developing countries become independent from US imperialism.
I have said this many times, the current trajectory with Trump’s tariffs is just going to intensify the competition of all these countries with China as they have to sell their surplus goods elsewhere. They cannot compete with China - this is a fact. I’m not going to sugarcoat it, but these countries do not have the capacity nor the technology to compete with the Chinese export industries.
This is why many countries are desperately trying to make deals with Trump, because there is nowhere else for their surplus goods to go, and this makes them vulnerable to financial warfare from the US.
More investments from China simply means China helping to build the supply chain for the US, for the US finance capital will take over these assets when businesses begin to fail and countries go into recession.
Ironically this was exactly what happened after the 1997 Asian Financial Crisis with mass IMF bailouts that killed the rise of ASEAN as a regional economic power. And guess who’s in charge of Trump’s trade negotiations these days? That’s right - it’s Scott Bessent. Read my comment here about Bessent and the Asian Financial Crisis.
At a meeting in ASEAN, Chinese Foreign Minister Wang Yi stressed that American tariffs are trying to prevent the growth of countries in Southeast Asia. Cambodia, which was slapped with a 36% tariff, was cited as an example of Washington’s pressure.
Then why don’t just China use its vast amount of wealth to purchase from them? Why not let all these countries tap into the huge Chinese consumer market? Right, because China will then have to increase the wages of its own working class and that will hurt its own export industries against these other Southeast Asian countries.
Ridiculous neoliberal brained defense of free market. Returning to the status quo = wage depression for the rest of Global South countries, but good for China to keep its 5% growth to prop up the financial sector and property markets I guess
Plenty of us also grew up watching Top Gun (loved American war movies as a kid) and played 1990s DOS military sims (anyone remembers Jane’s Combat Simulations with AH-64D Longbow Apache?) with low polygon count 3D graphics lol. Good times.
western economies can’t just keep running larger and larger deficits forever
The question is, why not?
You have the entire developing world having listened to the IMF that their way to “climb up the value-added chain” is to transform their economy into an export-oriented economy at the expense of serving domestic populations (of course, also under much coercion of the global imperialist institutions like the World Bank), so if no other country is going to take up their surplus export goods, they still have to sell to the country that is willing to run a deficit to buy from them.
The main issue for the US trade deficits comes internally, as decades of de-industrialization (a very deliberate neoliberal policy to crush trade union movements as its economic policies failed to resolve the inflation and later stagflation problems starting in the 1970s) disenfranchised its own domestic working class base, which after enduring the severe impact of the 2008 GFC, finally unleashed their discontent in the form of populist movements in the mid-2010s represented by Bernie Sanders and Donald Trump.
What Trump has been doing since his first term (and followed by Biden) was exploring the means to resolve this inherent contradiction of American capitalism - how can the US continue to dominate while also reducing its own trade deficit.
There are plenty of non-Marxist/non-materialist “analyses” on the social media, mostly libertarians who fell for the Austrian school myth, that talks about dollar hegemony in the form of Petrodollar and various other nonsense, but truly one needs to understand it at the real production and consumption level taking place in an international system of free-floating exchange rate regimes (as opposed to the gold standard/Bretton Woods fixed exchange rate regimes that no longer happen and many still cannot come to terms with)
No disagreement there. We’re seeing precious resources being funneled into boosting defenses instead of creating robust safety nets for the society that improves living standards.
The empire does what it does best at creating chaos and regional instability, which amplifies the risk of a war and putting everyone involved under intense pressure, and the fallout of which will create new opportunities for multinational capital to harvest. If this is the strategic goal of the empire, it appears to be working.
Thank you for the detailed explanation!
Don’t have access to the paywall material, but anyone who can read French, can you summarize how exactly did they propose to resolve the following problems?
As you can see, nothing short of a complete overhaul of the neoliberal economic order can these fundamental contradictions be resolved. And if they are not proposing that, it’s not serious and should be treated like a fantasy novel.
I’m not going to comment on the national security aspect nor am I qualified to do so, but from an economic perspective it makes sense if you understand what’s going on in China’s economy these days.
I’m not going to repeat many things I already said but surely you know that government finances aren’t doing so well since Covid, tax revenues actually decreased the last financial year and since China adheres to IMF guidelines, it is afraid of running large deficits and has to find ways to make up for the budgetary gap.
With consumption remaining dampened and failed to drive up corporate profits and return of investments (i.e. failing to drive wage growth for workers), and the expensive outstanding interest and debt servicing for many corporations and local governments, turning toward militarization helps alleviate two critical problems at the same time:
It is not a coincidence that I also noticed an increase in military recruitment ads in China. In fact, this is not even particular to China. The world is turning towards militarization as the global economic instability is amplified further under Trump’s erratic policies. The US, Europe and many other countries are also investing heavily into militarization.
The world is heading back to the 1930s once more with intense militarization that increases the risk of a global conflict, if not another world war. Lenin already commented on this a hundred years ago as soon as WWI ended.
Absolutely. But the India-Pakistan conflict recently also exposed the mediocrity of European and Russian weapons systems that had been hyped through the roof for years.
Egypt confirms acquisition of Chinese HQ-9B long-range air defence system Military Africa
Egypt has officially confirmed its deployment of the Chinese HQ-9B long-range air defence system, a move that marks a notable enhancement of its military capabilities and reflects a growing partnership with Beijing. This confirmation came from retired Major General Samir Farag, a former high-ranking official in the Egyptian Armed Forces, during an interview on Sada El-Balad TV. Farag revealed that Egypt’s arsenal includes various modern defence systems, with the HQ-9B—a system comparable to Russia’s S-400—being a key component. This disclosure, reported by Israeli media outlet nziv, reveals Egypt’s strategic shift toward diversifying its arms suppliers and strengthening its air defence network. The HQ-9B’s advanced capabilities, including its ability to engage a wide array of aerial threats, position Egypt to better address regional security challenges while navigating complex geopolitical dynamics.
…
Egypt’s decision to acquire the HQ-9B stems from a combination of strategic, economic, and political factors. Frustrated by Western restrictions on arms sales, Cairo has turned to China for advanced systems that come without the political constraints often imposed by the United States and European nations. For instance, Egypt’s F-16 fleet, supplied by the U.S., is equipped with outdated AIM-7 Sparrow missiles, while France has withheld long-range MICA missiles for its Rafale jets. In contrast, China’s export terms are more flexible, offering Egypt access to cutting-edge technology without restrictive end-user agreements. The HQ-9B’s cost-effectiveness also makes it an attractive alternative to pricier Western systems like the U.S.-made Patriot PAC-3, which carries both a higher price tag and political strings. Compared to Russia’s S-400, the HQ-9B provides similar capabilities at a lower cost, though it lacks the same combat-tested pedigree.
The timing of this acquisition is tied to Egypt’s evolving security concerns. Tensions with Israel over its actions in Gaza, along with Turkey’s support for Islamist groups in Syria and Libya, pose direct threats to Cairo’s interests. The Western-backed assault on Libya in 2011, with Turkish involvement, left a lasting impression on Egyptian leadership, reinforcing the need for independent aerial warfare capabilities. Egypt’s air force, while sizable, remains constrained by its reliance on Western suppliers, who have been reluctant to provide the most advanced munitions. The HQ-9B, alongside other Chinese systems like the Wing Loong-1D drones and reported interest in J-31 stealth fighters, signals a deliberate pivot toward Beijing as a defence partner. This shift not only enhances Egypt’s deterrence capabilities but also strengthens its bargaining power with Western allies, who may now feel pressure to loosen restrictions on arms sales.
The HQ-9B’s deployment in Egypt also has broader implications for the Middle East’s balance of power. Israel, which maintains a qualitative military edge in the region, must now account for Egypt’s bolstered air defences. The system’s ability to detect stealth aircraft and intercept precision-guided munitions complicates Israel’s operational planning, particularly in scenarios involving strikes on Egyptian targets. Turkey, another regional rival, could face similar challenges if tensions escalate, as the HQ-9B extends Egypt’s defensive reach. Beyond Egypt, China’s growing role as an arms supplier challenges the dominance of Western and Russian systems in the Middle East. Countries like Turkmenistan, Uzbekistan, and Pakistan have already acquired the HQ-9B, drawn by its affordability and China’s willingness to transfer technology without political preconditions. Egypt’s procurement could inspire other nations to follow suit, further eroding the West’s influence in the region’s defence markets.
This is the end of Russian military industrial complex. The India-Pakistan conflict truly marked the turn of the tide and the ascendence of Chinese military technology displacing those of Russia’s among Global South countries.
I predict Russia’s economy will continue to worsen as it loses global market in military export, one of the few things Russia is actually good at and a major source of foreign income, and will in turn stifle investments in research and development over the longer term, ultimately leading to the demise of its status as a global leader in military technology.
PS. Europe’s as well, no doubt.
Very nice write up.
Can you comment on the Brazilian soybean production and supply chain with respect to foreign vs local bourgeois ownerships?
I did some homework a while back and the data suggest that apart from the farming, the vast majority of the soybean supply chain in Brazil is under control of foreign multinational corporations:
China’s “diplomacy for economic interest” is impossible if the US will just attack and destroy your “trading partners”.
Are you seriously suggesting that Israel and Palestine are more important trading partners for China than the US?
The entire point of the rare earth export restriction from China is to let the US know that it cannot survive without China, and that they both cannot live without each other.
If China truly wants to punish the US and decouple, it could just… stop selling stuff to the US? Why waste all the efforts into negotiation with the US when it could be forging a new economic bloc with the rest of the world?
Well, turns out China has benefited so much from dollar hegemony that it is already addicted to it. The whole rare earth card was to tell the US to stop walking away from their marriage.
If you can’t understand this then god you’re truly beyond hopeless.
Oh I understand, I simply question the “China’s foreign policy position is unsustainable” notion as an objective statement, given what we’ve seen with its foreign policy history over the past few decades.
lol people have been predicting “China collapse” for decades and yet China continues to surprise and slap them in the face.
If there is one country that can successfully fuse socialism with neoliberalism, it’s going to be China. I’m not saying it will certainly succeed but do not underestimate China’s ability of making “contradictions” work in its favor.
Besides, you forget that China allied with the US to destroy the USSR in just two decades after the US literally killed half a million People’s Volunteer Army during the Korean War and threatened to nuke Beijing. I’m not so sure about China’s foreign policy being unsustainable if you see how successfully it has been able to navigate among world’s superpowers starting from a nation in deep poverty.
Just because I say an article is good doesn’t mean I agree with every single one of the author’s points.
Good article. As an additional point, it is also strategically prudent for China to let the regional conflicts elsewhere distract the empire against itself.
When people meme about China “do nothing and win”, it must also include that China will literally do nothing in response to these regional conflicts except for playing both sides and increase the sales of Chinese businesses (see the Russia-Ukraine conflict for the most recent prominent example).
I think you’ll have a faster way of provoking a response out of China if Israel somehow boycotts Chinese companies and fucks with their profit margins (like the recent incident of Brazil investigating BYD treatment of its construction workers, which China responded in kind by investigating and halting Brazilian beef import), and Israel has so far been very astute when it comes to not pissing off China.
Honestly I think your position is too cynical. It is entirely possible to be anti-imperialist/America while still being an adherent of neoliberal economics. Russia and China as you mentioned are the two prime examples of this.
Both of their policies aren’t necessarily that they want to become “friendly” with the US, and it would be ludicrous to suggest that either of the leaderships isn’t aware of the danger of making deals with the empire.
However, when you only have the neoliberal toolbox, your solutions are going to be constrained by what’s available in the box.
For Russia, if you’ve seen my past comments, it’s becoming clear that the prolonged period of high rate (20%) from Russia’s central bank (Nabiullina-Siluanov-Kudrin neoliberal faction) has finally impeded the Russian government’s effort to drive domestic investment (Mishustin-Belousov nationalist faction). Without the high interest rate, Russia would have been in a far better shape today since the war started. It’s not that they are not trying to do anything, but they are ideologically constrained by what’s available in their neoliberal toolbox.
And for China, again, I’ve said many times that they have fully bought into the IMF “balance the budget” indoctrination and believe that they have to rely on export-led growth to drive domestic investment (so as to keep government deficit low). As such, when the economy is slowing down, they only have the neoliberal toolbox to rely on due to ideological indoctrination by the IMF/Western neoliberal economics. In fact, the CPC is very adamantly against welfare state and has publicly stated this many times, and Xi Jinping has said before that Latin American-style “welfare state” will only encourage the people to turn lazy. This is also a major reason why they keep missing the obvious solution to alleviate the domestic consumption problem. These people aren’t stupid, you know.