Trump’s tariff threats were a big mistake. Everybody agrees, it was the biggest, never a bigger mistake, they looked at that whole thing and went “Wow what a big mistake, we’ve never seen a mistake that big. Bigly. Yuge!” OK, enough of that.
It was a mistake for a lot of reasons. Sure, there’s the stock prices, exchange rates, diplomatic credibility, etc. etc. etc. The most interesting mistake is something else.
This is the sequence of events: Trump got up one morning, threated a trade war with the whole world, the markets blew up, and the uncertainty created conditions where he was forced to fold only a few hours later.
The only explanation I can come up with is that Trump massively overestimated US power.
The result of all this is that Trump allowed everyone to get a much better idea of how much power America really has. Less than expected. Much less.
The threat of tariffs wasn’t the assertion of toughness Trump probably thought it would be. It just revealed how much America would suffer by imposing those tariffs. Never mind China. Trump threatened the EU with tariffs. The EU came back saying it would reciprocate. And then Trump lost. To the French. The French. Trump lost to the French. Oh, the terrible shame.
If they’re not doing this already, it would be a very good idea for the British right to be distancing themselves from anything Trumpian. Perhaps even from America as a whole.
You know the tariff stuff is serious because it wasn’t totally forgotten after a few days, like so many other things which come and go in the news. We’re getting to Greenland, don’t worry.
Anyway, to be clear, America is not weak. But how strong is it? Trump’s biggest mistake in this whole tariff bungle is to make much clearer the shape and limits of American power. The better idea you have of something, the easier it is to deal with it. The best deals. Trump opened the door to this in a number of ways. Tariffs, defence spending, political criticisms, low-key threatening invasions. How about the whole idea of “America First” in the first place? You can agree or disagree about the validity of any of this but the point is that Trump 1) is rhetorically and materially pulling away from allies, 2) seems to want it, 3) is giving the excuse for separation, and 4) is presenting open opportunities for a new independence from America.
How about a test? How about a little harmless fun? How about Greenland? What was all that Greenland business with Trump? Want to find out?
With Greenland there’s a way to very easily put Trump on the back foot, suss him out, if you want to, to embarrass him. Tariffs were a flop. He’ll be looking for a distraction or some flashy way to move on. Scoop him before he can do it.
Put in a bid.
Someone, anyone. You don’t have to follow through. In finance you’d call it “putting it into play”. Offer to buy it too. You don’t expect the bid to be taken up. You do it because you want something else that bidding can get you e.g. putting pressure on someone, getting noticed, getting offered something else.
What price did Trump offer Denmark for Greenland? It’s all very vague. “We’ll pay you more than Denmark does”, according to one official. That’d be at least an annual payment of $600m. It’d be reasonable to assume at least a one-off payment to Denmark too. A benchmark is the $100m Truman offered for Greenland in 1946. Adjusted for inflation that’s about $1.6bn. Sounds cheap to me.
Does Trump give a per capita similar amount to his own citizens every year? No? America first? Hm.
Besides, Trump, are you going to be outdone by Truman? He failed to get a deal. Don’t you want a deal? I bet you can get a deal. I bet you can even beat everyone else to get that deal, no matter how high they push it. This totally isn’t a tar baby.
Greenland is attractive real estate for anyone. Anyone else might want it for the same reasons. Geopolitical positioning, natural resources, territorial expansion and pride, access to the Arctic, defence.
Consider this quote from Trump on Greenland: “So, I think we’ll go as far as we have to go. We need Greenland and the world needs us to have Greenland, including Denmark.” Set aside the interpretation of it as an invasion threat. Silly. Look at it instead as him saying America will pay any price. Isn’t that any interesting haggling tactic? The price just got ten feet higher!
Who’s going to call Trump’s bluff on this? Any of the Arctic countries, Canada, Russia, Norway? China? The countries of the Joint Expeditionary Force? The EU? What other joint bids could we see?
Whatever Trump bid, you bid 10% more. You don’t even have to know the number. Just post it on Twitter – “Hey, Denmark, whatever Trump offered you, we offer you 10% more”.
Prime Minister Carney, you’re an ex-banker. You know what this game is. Put Greenland into play. And don’t you want to push Trump’s buttons? You’ve just won a general election, now would be the time to have a go. What’s he going to do? Actually invade? No. That’d be way too naked.
What is Putin’s bid? What’s Xi’s? Trump effectively forced China to cash out of the Panama Canal. They’d got some spare capital. Go on Norway, have a go. People forget how much money their Sovereign Wealth Fund has. Keep it in the Scandi family?
Prime Minister Starmer. Go on. Be an international leader. Have a go with the JEF. In fact, Denmark is already a member. Why not bulk up Greenland with a great big JEF project? Keep Denmark on side while bolstering an international alliance whose members are unambiguously already friendly to America? What could Trump possibly say? I’m sorry, Mr President, but Greenland is vital to JEF strategic interests too. And Greenland is already the rightful territory of a JEF member, your ally, by the way. Whatever price you had in mind, go higher?
Maybe that wouldn’t be such a bad result. Europe starts taking its defence more seriously and beef itself up. Trump’s face-saving exit is that this is what he wanted all along, for Europe to pay its own way.
What’s the game here? One way or another, will he put up (at a humiliatingly high price) or shut up (just humiliating)?
Calling the Orange Man’s Greenland bluff
Trump’s tariff threats were a big mistake. Everybody agrees, it was the biggest, never a bigger mistake, they looked at that whole thing and went “Wow what a big mistake, we’ve never seen a mistake that big. Bigly. Yuge!” OK, enough of that.
It was a mistake for a lot of reasons. Sure, there’s the stock prices, exchange rates, diplomatic credibility, etc. etc. etc. The most interesting mistake is something else.
This is the sequence of events: Trump got up one morning, threated a trade war with the whole world, the markets blew up, and the uncertainty created conditions where he was forced to fold only a few hours later.
The only explanation I can come up with is that Trump massively overestimated US power.
The result of all this is that Trump allowed everyone to get a much better idea of how much power America really has. Less than expected. Much less.
The threat of tariffs wasn’t the assertion of toughness Trump probably thought it would be. It just revealed how much America would suffer by imposing those tariffs. Never mind China. Trump threatened the EU with tariffs. The EU came back saying it would reciprocate. And then Trump lost. To the French. The French. Trump lost to the French. Oh, the terrible shame.
If they’re not doing this already, it would be a very good idea for the British right to be distancing themselves from anything Trumpian. Perhaps even from America as a whole.
You know the tariff stuff is serious because it wasn’t totally forgotten after a few days, like so many other things which come and go in the news. We’re getting to Greenland, don’t worry.
Anyway, to be clear, America is not weak. But how strong is it? Trump’s biggest mistake in this whole tariff bungle is to make much clearer the shape and limits of American power. The better idea you have of something, the easier it is to deal with it. The best deals. Trump opened the door to this in a number of ways. Tariffs, defence spending, political criticisms, low-key threatening invasions. How about the whole idea of “America First” in the first place? You can agree or disagree about the validity of any of this but the point is that Trump 1) is rhetorically and materially pulling away from allies, 2) seems to want it, 3) is giving the excuse for separation, and 4) is presenting open opportunities for a new independence from America.
How about a test? How about a little harmless fun? How about Greenland? What was all that Greenland business with Trump? Want to find out?
With Greenland there’s a way to very easily put Trump on the back foot, suss him out, if you want to, to embarrass him. Tariffs were a flop. He’ll be looking for a distraction or some flashy way to move on. Scoop him before he can do it.
Put in a bid.
Someone, anyone. You don’t have to follow through. In finance you’d call it “putting it into play”. Offer to buy it too. You don’t expect the bid to be taken up. You do it because you want something else that bidding can get you e.g. putting pressure on someone, getting noticed, getting offered something else.
What price did Trump offer Denmark for Greenland? It’s all very vague. “We’ll pay you more than Denmark does”, according to one official. That’d be at least an annual payment of $600m. It’d be reasonable to assume at least a one-off payment to Denmark too. A benchmark is the $100m Truman offered for Greenland in 1946. Adjusted for inflation that’s about $1.6bn. Sounds cheap to me.
Does Trump give a per capita similar amount to his own citizens every year? No? America first? Hm.
Besides, Trump, are you going to be outdone by Truman? He failed to get a deal. Don’t you want a deal? I bet you can get a deal. I bet you can even beat everyone else to get that deal, no matter how high they push it. This totally isn’t a tar baby.
Greenland is attractive real estate for anyone. Anyone else might want it for the same reasons. Geopolitical positioning, natural resources, territorial expansion and pride, access to the Arctic, defence.
Consider this quote from Trump on Greenland: “So, I think we’ll go as far as we have to go. We need Greenland and the world needs us to have Greenland, including Denmark.” Set aside the interpretation of it as an invasion threat. Silly. Look at it instead as him saying America will pay any price. Isn’t that any interesting haggling tactic? The price just got ten feet higher!
Who’s going to call Trump’s bluff on this? Any of the Arctic countries, Canada, Russia, Norway? China? The countries of the Joint Expeditionary Force? The EU? What other joint bids could we see?
Whatever Trump bid, you bid 10% more. You don’t even have to know the number. Just post it on Twitter – “Hey, Denmark, whatever Trump offered you, we offer you 10% more”.
Prime Minister Carney, you’re an ex-banker. You know what this game is. Put Greenland into play. And don’t you want to push Trump’s buttons? You’ve just won a general election, now would be the time to have a go. What’s he going to do? Actually invade? No. That’d be way too naked.
What is Putin’s bid? What’s Xi’s? Trump effectively forced China to cash out of the Panama Canal. They’d got some spare capital. Go on Norway, have a go. People forget how much money their Sovereign Wealth Fund has. Keep it in the Scandi family?
Prime Minister Starmer. Go on. Be an international leader. Have a go with the JEF. In fact, Denmark is already a member. Why not bulk up Greenland with a great big JEF project? Keep Denmark on side while bolstering an international alliance whose members are unambiguously already friendly to America? What could Trump possibly say? I’m sorry, Mr President, but Greenland is vital to JEF strategic interests too. And Greenland is already the rightful territory of a JEF member, your ally, by the way. Whatever price you had in mind, go higher?
Maybe that wouldn’t be such a bad result. Europe starts taking its defence more seriously and beef itself up. Trump’s face-saving exit is that this is what he wanted all along, for Europe to pay its own way.
What’s the game here? One way or another, will he put up (at a humiliatingly high price) or shut up (just humiliating)?
Wouldn’t it be interesting to find out?
Photo Credit.