This Oren Cass column deals with the some of the same issues as the previous post below. It also contains some foreign policy thoughts current in the Trump White House you need to see. Hat tip to Power Line for the link.
In it Stephen Miran, chair of Trump’s Council of Economic Advisors, quotes Scott Bessent, the new Treasury Secretary, as proposing the following.
Putting countries into different groups based on their currency policies, the terms of bilateral trade agreements and security agreements, their values and more. … These buckets can bear different tariff rates, and the government can lay out what actions a trade partner would need to undertake to move between the buckets.
More clearly segmenting the international economy into zones based on common security and economic systems would help … highlight the persistence of imbalances and introduce more friction points to deal with them.
To which Miran adds:
Countries that want to be inside the defense umbrella must also be inside the fair trade umbrella.
Cass describes the dilemma facing other nations thus.
Doing so will be in their interest, as compared to the alternatives of falling into the Chinese sphere or being excluded from both ours and theirs. Only while the United States offers the alternative of “take advantage of us and gain all the benefits of our alliance anyway” does the option of complying with U.S. demands seem strange.
What they're proposing would essentially reestablish the Cold War "us vs. them" duopoly, with China replacing the USSR as our designated foe and some third group of "non-aligned" nations, typified by Indonesia and a few others in the first Cold War.
"Second verse, same as the first." History doesn't repeat itself but it often rhymes.
