Donald Trump is using his trade wars to support the part of the US capital that has heavily lost from free trade globalization, which is more powerful than ever in our days. This is also part of the Trump agenda to persuade Americans for his "patriotic devotion" based on his "America First" slogan.
The reality is that the US empire was always conducting trade wars that included not only tariffs on specific products, but even deliberately created cartels.
In the early 90s the Clinton administration uncritically adopted the neoliberal doctrine from Ronald Reagan and continued the big fraud against the majority of the Americans.
On the one hand, the Clinton administration was selling the big fairy tale of neoliberalism to the American public: free market capitalism would bring prosperity for all through that trickle-down fiasco. And it was translated, as always, in further cuts in public spending - more tax-cuts for the super-rich. On the other hand, behind the scenes, the same administration was implementing the most aggressive protectionism in favor of some US corporations and against consumers.
In his book Globalization and its discontents, Joseph Stiglitz describes how the United States under Clinton administration set up a cartel in favor of the US aluminum industry:
The United States supports free trade, but all too often, when a poor country does manage to find a commodity it can export to the United States, domestic American protectionist interests are galvanized. This mix of labor and business interests uses the many trade laws - officially referred to as "fair trade laws," but known outside the United States as "unfair fair trade laws"- to construct barbed-wire barriers to imports.
These laws allow a company that believes a foreign rival is selling a product below cost to request that the government impose special tariffs to protect it. Selling products below cost is called dumping, and the duties are called dumping duties. Often, however, the U.S. government determines costs on the basis of little evidence, and in ways which make little sense. To most economists, the dumping duties are simply naked protectionism. Why, they ask, would a rational firm sell goods below cost?
During my term in government, perhaps the most grievous instance of U.S. special interests interfering in trade - and the reform process - occurred in early 1994, just after the price of aluminum plummeted. In response to the fall in price, U.S. aluminum producers accused Russia of dumping aluminum.
Any economic analysis of the situation showed clearly that Russia was not dumping. Russia was simply selling aluminum at the international price, which was lowered both because of a global slowdown in demand occasioned by slower global growth and because of the cutback in Russian aluminum use for military planes. Moreover, new soda can designs used substantially less aluminum than before, and this also led to a decline in the demand.
As I saw the price of aluminum plummet, I knew the industry would soon be appealing to the government for some form of relief, either new subsidies or new protection from foreign competition. But even I was surprised at the proposal made by the head of Alcoa, Paul O'Neill: a global aluminum cartel.
Cartels work by restricting output, thereby raising prices. O'Neill's interest was no surprise to me; what did surprise me was the idea that the U.S. government would not only condone a cartel but actually play a pivotal role in setting one up. He also raised the specter of using the antidumping laws if the cartel was not created. These laws allow the United States to impose special duties on goods that arc sold at below a "fair market value," and particularly when they are sold below the cost of production.
I worked hard to convince those in the National Economic Council that it would be a mistake to support O'Neill's idea, and I made great progress. But in a heated subcabinet meeting, a decision was made to support the creation of an international cartel.
While I had managed to convince almost everyone of the dangers of the cartel solution, two voices dominated. The State Department, with its close connections to the old-line state ministries, supported the establishment of a cartel. The State Department prized order above all else, and cartels do provide order. The old-line ministries, of course, were never convinced that this movement to prices and markets made sense in the first place, and the experience with aluminum simply served to confirm their views.
Rubin, at that time head of the National Economic Council, played a decisive role, siding with State. At least for a while, the cartel did work. Prices were raised. The protfits of Alcoa and other producers were enhanced. The American consumers - and consumers throughout the world - lost, and indeed, the basic principles of economics, which teach the value of competitive markets, show that the losses to consumers outweigh the gains to producers.
It was the time where the Democrats had become Republicans and the US bipartisan dictatorship was established for good to serve the corporate America.