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Tariffs—Donald Trump famously called them his favorite word, and recently, he's imposed them aggressively, targeting even America's closest allies. This surprising and disruptive approach to US trade policy prompts essential questions: What exactly is the reasoning behind Trump's widespread tariff use? Why is he seemingly indifferent to potential damage to stock markets and economic stability? Is there a structured plan beneath the apparent chaos in Trump's economic policy?
Surprisingly, the answer is yes. Believe it or not, there's indeed a strategic vision behind these actions. Trump's new Treasury Secretary, Scott Bessent, explained that these tariffs mark only the initial stage in fundamentally reshaping global economic relationships. According to Bessent, the disruption caused by tariffs is the start of a calculated attempt to overturn the international trade system originally established by the United States, addressing trade imbalances and global competition. This approach forms the core of Trump's economic policy, which aims to reshape trade agreements and address the persistent trade deficit.
Historically, major global economic shifts occurred:
Is 2025 signaling another such global restructuring—a new American-centric global order? Bessent outlines categorizing countries into three clear groups—green, yellow, and red. "Green" countries would enjoy low tariffs, military alliances, and privileged access to the U.S. dollar, while others could be significantly disadvantaged. This approach aims to reshape trade agreements and address trade deficits, with a focus on improving economic efficiency.
Central figures shaping Trump's economic plan include:
Both advisers consistently point to one existential threat to U.S. economic strength: deindustrialization. This deindustrialization threat is a key driver of Trump's trade war and economic sanctions strategy, including the implementation of China tariffs and other trade restrictions.
Trump's team emphasizes America's declining industrial capacity for two primary reasons:
Vice President JD Vance highlighted that last year alone, China's state-owned firms built more commercial ships than America has produced since World War II ended—underscoring this alarming gap in US manufacturing capabilities. This decline has affected various sectors, including the garment industry.
Bretton Woods System (1944–1973)
The Bretton Woods system was born out of the 1944 United Nations Monetary and Financial Conference. Economically, it tied participating currencies to the U.S. dollar, which was itself pegged to gold. Militarily, it coincided with the rise of formal alliances such as NATO and the U.S.-Japan Security Treaty, laying the groundwork for a unified economic and security structure.
Joining this U.S.-led order meant three things for other nations:
This included generous aid through the Marshall Plan and access to the U.S. market, while they maintained some protectionist economy policies of their own.
The history of the Bretton Woods system is crucial because already here it seems like being a green country looked like a super good deal for these countries and not for the US. But America also gained significantly. The U.S. hoped to avoid another world war by building strong, prosperous allies in Europe and Asia, especially in the ideological battle against communism. American industries also benefited from new export markets, and the arrangement entrenched the dollar's dominance as the global reserve currency—a position French finance minister Valéry Giscard d'Estaing once called an "exorbitant privilege."
This privileged status allowed the U.S. to run persistent trade and budget deficits without triggering currency crises. However, the system's reliance on gold-backed dollars became unsustainable. As global demand for dollars grew, gold reserves couldn't keep pace. The U.S. faced a dilemma: print more dollars to fuel growth (undermining the gold standard) or limit dollar supply and stall the global economy.
In 1971, President Nixon ended dollar convertibility to gold, marking the collapse of the Bretton Woods system and ushering in a new, more flexible era.
Neoliberal Order (1980s–2016)
In the wake of Bretton Woods, Reagan and Thatcher championed a new model: the neoliberal world order. This system featured:
Unlike Bretton Woods, there was no formal agreement to use the U.S. dollar. Countries did so voluntarily, as it remained the most stable and widely accepted currency. As long as nations played by the World Trade Organization's rules, they gained access to the U.S. consumer market, dollar-based financial system, and U.S. naval protection for trade routes.
This globalized system encouraged developing countries to focus on exports—often to the U.S.—while suppressing imports. Ironically, despite America's rhetorical commitment to free trade, WTO rules allowed higher tariffs against U.S. goods in many cases, creating trade barriers that impacted US exports.
While the U.S. again benefited from its central role—especially through growing international demand for dollar-denominated assets—it paid a domestic price. A strong dollar, bolstered by its reserve status, made American goods more expensive abroad, accelerating the decline of U.S. manufacturing. The problem intensified when China joined the WTO in 2001, triggering the so-called "China Shock," which decimated American industrial jobs and widened economic inequality.
By 2016, these forces culminated in Trump's election. His first trade war targeted China with new tariffs, but China countered with its own. The result: China maintained higher average tariffs than the U.S., while continuing its industrial ascent. The US-China trade war had significant effects on tariffs and global trade dynamics, including the implementation of steel and aluminum tariffs.
President Biden took a different approach—massive subsidies to revive domestic manufacturing, mimicking China's strategy. This sparked new factory construction across the U.S., but ballooned the federal deficit.
According to Trump's team, it led to such rapid deindustrialization that it has now become a national security threat. Which brings us to the modern master plan for a new global order, a plan that is supposed to help re-industrialize the US while at the same time keeping the US dollar as the global reserve currency.
Step 1: Tariff Chaos
This is the step that we are in now. The administration's immediate phase aggressively applies tariffs globally to create negotiating leverage and demonstrate its seriousness. Both Bessent and Miran explicitly mention these tariffs as a strategic negotiating tool, not an economic end. The import tariffs impact is designed to shake up existing trade relationships and force new negotiations. The effects of tariffs on various industries and the South East Asia economy have been significant.
Step 2: Reciprocal Tariffs
In theory, reciprocal tariffs are meant to eliminate the tit-for-tat dynamic we saw during the U.S.–China trade standoff, where China responded to Trump's tariffs by continually raising its own. With true reciprocity, that escalation becomes less relevant. The message becomes: "You can keep increasing tariffs, but we'll always match you—so there's no advantage." This is the intended long-term outcome of reciprocal tariffs: a level playing field.
As Bessent puts it, tariffs are designed to correct systemic imbalances—pushing the global trading system to reward innovation, legal stability, and security rather than practices like wage suppression, currency manipulation, IP theft, non-tariff barriers, or heavy-handed regulation.
Critics, particularly economists, have called this approach overly optimistic. Historically, trade wars—like those of the 1930s—have backfired, hurting all parties and even contributing to global conflict. However, Miran argues the current scenario is different. Many countries depend heavily on access to U.S. consumers, and there's no equivalent alternative market. That gives the U.S. a unique position of strength in negotiations.
Trump's first trade war faltered partly because China rerouted exports through countries like Mexico and Vietnam, which then sold the goods to the U.S. anyway. To counter this, Miran notes, Trump extended tariffs more broadly. In his view, tariffs become a tool for negotiation—applying pressure to bring countries like China or the EU to the table.
The ultimate goal? A broader deal, potentially including currency agreements, in exchange for tariff relief. That's the strategy: use tariffs not just as punishment, but as leverage to reshape global trade dynamics.
This brings us to the final phase of the so-called mega master plan: Step Three – The Mar-a-Lago Accord.
Step 3: The Mar-a-Lago Accord
Yes, the idea is that such an agreement—named after Trump's Florida estate—could one day stand alongside historic economic milestones like the 1944 Bretton Woods Agreement or the 1985 Plaza Accord.
So how does this tie back to Bessent's framework of the green, yellow, and red country "buckets"?
Since joining the Trump administration, Miran has gone quiet on the specifics of the Mar-a-Lago Accord, likely because public speculation could jeopardize sensitive negotiations. Still, he's hinted that if the dollar could weaken to better balance trade, many of the issues tariffs aim to fix—like trade deficits and uncompetitive U.S. exports—might be resolved more organically. A weaker dollar would make American goods cheaper abroad, helping to level the playing field and potentially boosting economic growth.
It's likely that the Trump team is deliberately staying vague to avoid undermining future talks. But the underlying goal remains clear: weaken the dollar strategically while preserving its status as the global reserve currency.
Picture this: countries in the "green bucket" peg their currencies to the dollar. When the dollar becomes too strong, they agree to let their currencies rise to maintain balance. In exchange, they gain access to the world's largest consumer market, enhanced security guarantees, and continued integration into the U.S.-led financial system.
However, unlike Bretton Woods, the U.S. might now expect those countries to "pay tribute"—not just financially, but through strategic alignment—effectively turning them into economic vassals.
Yes, I admit this is speculative. But consider this line from a recent speech by Bessent: "The international trading system consists of a web of relationships—military, economic, political. One cannot take a single aspect in isolation."
This reflects how Trump sees the global order—not as a zero-sum game, but as an interconnected system that can be reorganized to serve American interests.
The Trump administration's proposed economic reset—the MAGA world order—presents a bold and theoretically compelling strategy. But translating that vision into reality requires more than just economic pressure or financial incentives. It requires trust.
Convincing other nations to tie their currencies to the dollar, to realign their trade priorities, and to pay for U.S. security guarantees demands a level of confidence in American leadership that can't be built overnight. And without that trust, the new system collapses under its own ambition.
If the U.S. can't convince other countries to join its new order, it faces a fundamental dilemma: Abandon or weaken the dollar's global reserve status, and with it, the privileges of cheap capital, geopolitical leverage, and financial dominance.
Or double down on the dollar's dominance, and accept continued reliance on manufacturing and supply chains from countries like Mexico, Japan, and the European Union.
This is the trade-off: global control through the dollar, or national self-sufficiency through a reengineered system that may never materialize.
Speculation or Strategy?
Much of this framework—especially the Mar-a-Lago Accord concept—remains speculative. But it's not baseless. It's grounded in a coherent worldview: that trade, currency, and security are deeply intertwined, and that American leverage can be used to reorder the global system in its favor.
Advisors like Bessent and Miran are not simply reactionary voices. They're strategic thinkers, drawing on historical precedents like Bretton Woods and the Plaza Accord to sketch out a vision where the U.S. regains control over its economic destiny—on its own terms.
Trump's administration clearly outlines its disruptive strategy aimed at reshaping global trade to America's advantage. Its success, however, hinges greatly on international cooperation and trust, significantly challenged by Trump's aggressive and unpredictable diplomatic methods.
As trade negotiations continue and trade policy uncertainty persists, the global economic landscape may see significant shifts. The success or failure of this bold economic strategy will likely have far-reaching implications for international trade dynamics and the future of the global economic order.
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