Some time ago, we offered our view here that the best way to understand the real global power struggle that goes on behind the scenes is to think in terms of a power struggle between globalists and nationalists rather than between political parties (like Democrat vs. Republican). Over time as things have evolved, the political parties have somewhat aligned themselves on these two sides with the Democrat party more aligned with the globalist view and the Trump led Republican party aligned with the nationalist view.
Now that a full scale trade war has broken out with the announcement by President Trump of a tariff regime across the world, we believe the best way to get the proper context for this fight is still to think in terms of a globalist vs. nationalist power struggle.
The existing global financial system since World War II has been mostly run on the globalist model. In regards to trade, the globalist model views the world as one big economic entity. In theory the idea is that free trade is best for everyone because it increases competition and lowers prices for consumers. A trade off for this benefit is that it also increases the supply of cheaper labor globally that large companies can tap into. You make your product where you can get the lowest cost of labor etc. The globalists will say that this model has created great global wealth and benefitted the world more than it has hurt wage earners.
The nationalist counter argument is that this global free trade model was not genuine because nations used their political power to "game the system". Nations erected all kinds of trade barriers and regulations making it cost way more for their citizens to buy US made products creating an advantage for their goods in the global marketplace (hurting US companies and workers). They will say we did not truly have "free trade" and definitely not fair trade because the game was rigged. Their answer to this is to try and fully disrupt the globalist system that has mostly prevailed for a long time and replace it with a pro nationalist model for trade and economic growth with each nation putting it's own interests first.
The goal here is not to try and tell people which view is right or wrong. The goal here is to try and help people understand what is actually happening. The truth is that the powerful interests aligned on each side of this global power struggle are primarily interested in achieving political power to implement their view and model of how things should be run. Both sides are quite willing to accept the fact that their policies will create winners and losers. Neither side is going to let the fact that some will be losers prevent them from moving forward as much as they can with their agenda. The look only at "the big picture". Not how any particular individuals may be impacted.
Currently, the nationalists have managed to acquire more political power than at any previous time in my life span. It is crystal clear that they are going to move forward with their agenda as hard and fast as possible and are willing to accept any market turmoil and chaos that arises from it as just part of the transition process from a pro globalist system to a pro nationalist system. Sort of a "we have to go through the pain to get the eventual gain" idea.
The tariffs and trade war are just the current very prominent event that makes this aspect of the power struggle very clear. It's open warfare the public can see and feel directly. We can expect that the chaos and turmoil is more likely to increase rather than decrease short term. The Nationalists obviously see this as their opportunity to make long term structural changes to the system and I'm sure expected the market turmoil we see right now as just part of the deal. They expect to prevail long term and cement political power after the initial transition shock wears off (before the next election cycle).
So, how does all this end? I have no idea. How this is resolved will depend upon the decisions made by the most powerful interests on both sides of the power struggle (the people who make the rules). It's reasonable to assume they will be motivated first and foremost by whatever they think will best push their agenda forward. We should not ever assume that what happens to regular people will be the primary factor for these powerful forces vying for political power. In this situation, the best plan for regular folks like us is to understand what is really going on and do our best not to be collateral damage in the financial war. We think that is the proper context in which to view the current trade war.
Added note: Here is a blog article that explores a view I see out there that all this turmoil and disruption is not only expected, but part of the plan (to accept short term pain for long term gain). It is worth a read and one plausible theory.
