The World Under Trump’s Capitalist Oligarchy And Its Daily Arm Twisting

The US media has cited two reasons for US president Donald Trump’s 90-day pause of his “reciprocal” tariff rates: pressure from his bond market-hit billionaire friends and to provide breathing space to the affected countries, allowing them to negotiate separate deals with him.

Trump has mocked the countries seeking trade deals with the US. “‘Please, please Sir, make a deal. I’ll do anything, Sir, I’ll do anything, Sir,’ they pleaded with me,” he said, mimicking the leaders, clearly delighted to report them grovelling.

But he vowed to punish China, the world’s second biggest economic power, for daring to impose counter-tariffs on the US. Trump started with a 34 per cent tariff on China and, as Beijing retaliated, kept raising the figure. Last heard, it was as high as 145%.

Lobbying

Corporate barons and conglomerates have had a firm grip on successive US administrations to be able to control public policies and influence allocation of resources. “They have effectively captured the United States: its judiciary, its political system and its national wealth, without assuming any responsibility,” a study posted by the Harvard Law School in 2012 said. This is done through hefty donations to political parties, endorsing presidential candidates and aggressive lobbying.

Corporate groups spend about $2.6 billion a year on lobbying. The biggest companies in the US have well over 100 lobbyists to cover all areas of the administration. Corporate hegemony has been an everyday reality in the US, with big business influencing political debate and the government’s economic decisions. A study of 30 years of data sets had found that American administrations tilt in favour of the very wealthy. Now, Trump has gone a step further and imposed a full-fledged capitalist oligarchy on America. In his sweep, he has reversed well-established traditions and practices and impacted institutions.

The term oligarchy was first used by President Joe Biden in his farewell address, where he said billionaires would henceforth decide how the government will be run. This was at a time when super-rich supporters of Trump were rushing to Washington to buy prime property to move into.

Biden has been proved right. Look at the constellation of America’s powerful CEOs and the rich in Trump’s team. Over a dozen billionaires have been put in crucial government positions to help the President run the administration. At the top is Elon Musk, the world’s richest man with a net worth of $439 billion, who has been assigned the Department of Government Efficiency. Trump’s largest donor now has access to sensitive and top-secret information, and influences policy decisions. He has sacked over a thousand government employees in the name of removing deadwood, touching off widespread protests.

Billionaire diplomats

Over a dozen billionaires have been picked for other important departments. Among them are Linda McMahon, education secretary; Howard Lutnick, commerce secretary; Jared Isaacman, Nasa administrator nominee; Frank Bisiganano, nominated as social security administration commissioner; Scott Bessent, treasury secretary; Vivek Ramaswamy, who was chosen as Department of Government Efficiency co-head but has since left; David Sacks, AI and crypto czar; Doug Burgum, interior secretary; and Mehmet Oz, administrator of the centres for medicare and medicaid services.

Billionaires have also been placed in diplomatic positions. These include Leandro Rizzuto Jr., ambassador to the Organization of American States; Warren Stephens, ambassador to the United Kingdom; Charles Kushner, ambassador to France; Thomas Barrack Jr., ambassador to Turkey; and Steven Witkoff, special envoy to the Middle East.

Trump’s is the wealthiest administration in US history, and his colleagues are in a position to use their role in government to further their own business interests. As against this, all but two of the 15 officials in Biden’s cabinet were millionaires, not billionaires. The total net worth of the Biden team was $118 million, Forbes reported, and that of Barack Obama’s second cabinet was $2.8 billion. Trump’s own team in the first term had a total net worth of $6.2 billion.

Arrogance

Besides introducing a capitalist oligarchy, Trump’s three months in power in his second term have presented a highly egocentric and dictatorial working style — more brazen than his first term. For democracy, it is a deadly combination, the consequences of which are already manifest. His personalised style of decision-making short-cuts the established government hierarchy. The daily shockers, the threats and jeers, the impromptu announcements of bilateral concessions and retaliation smack of an arrogant dictatorial stance.

Third, and most ruinous, have been the long-term consequences of such off-the-cuff policy pronouncements and instant reversals. Other countries are at sea, unsure of how to move forward. Industry is no longer in a position to plan long-term investments, production and marketing strategies. Entrepreneurs the world over will wait and watch for the next Trump announcement.

Consider also the way Trump has meddled in prestigious academic institutions such as Harvard, Columbia, Cornell, Brown and Northwestern, using funding to arm-twist them. The universities as well as the traditional institutions of democracy were the country’s soft power, which Trump appears out to demolish.

Fourth, in the process, he has battered the world economic order assiduously built by his predecessors: the World Bank, IMF, WTO, WHO, Unicef, Kyoto protocol and so on. Incidentally, these were bodies the US had established to maintain its financial hegemony and diplomatic hold. Every country is now assessing the disruptions to its ongoing programmes.

Fifth is the demise of diplomacy. The Trump regime has done away with elements of US statecraft such as back-channel dialogue and economic pressures and lures, which have been replaced by blunt threats, dictatorial ultimatums and bombing reprisals as in the case of Iran.

The fallout

Over decades, back-channel diplomacy and the use of US soft power had worked well with the allies. Trade and tariffs, investments, embargo and emigration were instruments of Cold War diplomacy. The US frequently resorted to embargo — China, the former Soviet Union/Russia and their allies, North Korea, Iraq, Iran, Syria and Egypt were among the targets. It also accepted as immigrants large numbers of victims of communist ‘uprisings’. The $15 billion Marshall Plan of 1948 was a US project for the economic reconstruction of war-ravaged Europe and to ward off communist influence. The presumption was that economic stability was most crucial as a deterrent against the spread of Soviet sway.

When a proposal for replicating the Marshall Plan or a variant of it in Asia came up, it was decided that the Japanese model was best suited for Southeast Asia. The US-aided post-war reconstruction of Japan had been based on an assured market for its goods in America. The US first groomed Hong Kong, Singapore, South Korea and Taiwan — called Asian Tigers — by offering heavy investment, technology and a market. Their industrial production was tailored to the US markets. The export-led growth of the Asian Tigers became a model for the rest of the developing countries.

Then, the Asian Cubs were chosen for export-led growth, again with US investment, technology and market. These were the other countries in the region, including Indonesia, Malaysia, Thailand, Philippines and later Vietnam. In the 1980s, the US decided to groom China as a counterweight to Russia.

Now, these countries are among the worst affected in Trump's first hit list: Cambodia was slapped with a tariff of 49%, followed by Vietnam at 46%, Thailand at 37%, Taiwan at 32% and Indonesia at 32% — all well above the 20% rate imposed on the EU countries. Donald Trump has let down the former ‘trading partners’ and ‘most favoured nations’ of the US.

P. Raman is a veteran journalist.

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