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Trump's thuggery is changing world finance

  • 05 October 2018


That Donald Trump is a narcissistic braggart was never in doubt, and was confirmed again with the delegates' ripples of laughter at his recent speech in the United Nations. The more intriguing question was always how would a lifetime businessman behave once he became president? We now have the answer: intense finance nationalism.

Much of the attention on Trump's posturing has been focused on his economic (as opposed to financial) nationalism, particularly the trade surplus with China. This is significant, but mainly for smaller economies like Australia, not the two giants in question. America and China are continental economies — trade is only on the margin — and they would not be greatly damaged by a sharp reduction in mutual commerce, at least in purely financial terms. The more significant question is how China will be affected if its systemic acquisition of American technology and knowhow is impeded.

Trump's weaponising of America's financial advantages is a more important and novel development. He seems to have concluded that financial war is more effective than military war. America's proxy war in Syria is close to lost, and the US is running out of countries to attack. Just the threat of bombing Iran would have catastrophic consequences, because it is likely insurers would refuse to guarantee the ships coming from the Persian Gulf through the Straits of Hormuz, imperilling about two fifths of the world's oil supply.

At a localised level the administration's use of finance as a weapon is becoming extreme. For example, Trump's bloodthirsty national security adviser, John Bolton, has threatened to freeze the US assets and impose a travel ban on judges, prosecutors, and staff of the International Criminal Court in the Hague because they have shown an interest in investigating America and Israel.

Asset freezes (which is really theft) have been used against Russians, Venezuelans, Nicaraguans and Turks. The Trump administration has threatened to freeze the assets of Cambodian President Hun Sen, and is contemplating doing so on Iraqi Prime Minister Haider al-Abadi because he has not been hostile enough towards Iran.

Trump's predilection for business thuggery has even been turned towards allies. When the Saudis failed to raise its production of oil, which led to prices being at a four year high, Trump tweeted that Opec 'must get prices down now!' by raising global output. 'We protect the countries of the Middle East. They would not be safe for very long without us, and