MAGA and the Fragmentation of Europe

Some Geo-Strategic Implications of US Tariffs

Today is the day that Donald Trump imposes across-the-board tariffs on top of previous politically targeted tariffs on particular countries. It is only recently that much of the world has taken this seriously. Believing in the narrative of Trump as the deal-maker, the assumption was that something could be done to avert tariffs by indicating willingness to deal. What this triumph of optimism over reality failed to understand was that Trump’s interest in tariffs goes back some four decades and that he has a reasonably cogent neo-mercantilist economic position (MAGA) that has no significant opposition within his administration. Yes, there is room for deal-making but only within this MAGA framework although we might expect that there may be some adjustment if the effects of tariffs result in serious political difficulties at mid-term. Until then, it looks as if this is what we have to deal with as a fact on the ground.

The Context

The problem is that no one has any idea of what the consequences will actually be to Americans, in regard to relationships with allies, on global trade patterns or on the economic prospects for rivals like China and its associated BRICS network. This seems to be a complete unravelling of assumptions about global trade established as ‘truth’ in the wake of the Second World War. We have to step back and recall the meaning of that settlement at the time. It was a response to a widespread and reasonable belief that tariff regimes had contributed not only to the worsening of the Great Depression but to the rise of fascism in response. Open global trade was part of a total package of measures by which the majority ‘liberal democratic’ part of the total system asserted its victory over nationalism and to a lesser degree (given social democracy in Europe and the survival of communism in the Soviet Union and China) socialism, certainly national socialism.

The expansion of free trade ideology was progressive and continuous, absorbing many of the states that emerged out of decolonisation (a process actively pursued by both Americans and Communists for rival ideological reasons). It created the conditions for the eventual collapse of Soviet communism (and latterly European social democracy) and for the extension of an American informal imperium backed by exceptional military force to contain (militarily but not economically) China. On top of this were sanctions-based containment of theocracies amd the last bastions of nationalism and socialism. Along the way, after the fall of the Soviet Union, some regimes were destroyed by military action and became chaotic or were overthrown in engineered coups or as a result of the equally imperial withdrawal of communism. These latter became absorbed into the total system and prospered. The dependence of this system on the US is why it has now become so vulnerable to change.

The overall result of liberal victory was imperial over-extension. This is an issue that afflicts all empires formal and informal at some stage. Although global corporations did well out of it, they arguably did so at the expense of American workers and so of American social cohesion. The military did well out of it with huge expenditures on a network of bases and small wars that were more expensive than were needed by a power with huge nuclear capacity deliverable intercontinentally. The trade-based system was suceeded by a financially-based neo-liberal structure with a totally free flow of capital and an effective if often illegal free-flow of labour. Despite policing and regulatory efforts, organised crime capital accumulation grew, illegal mass migration became normal (in which business was complicit because it lowered wages) and capital movements (although this did not affect the US) could crush a nation state in minutes under adverse conditions (such as ‘excessive’ social democracy).

While the US debt ballooned to levels that might become unmanageable at some stage, social cohesion (already weak from the individualist nature of American society) threatened to collapse. Ideological divisions emerged in which liberal internationalism and universalism threatened to overwhelm the sense of a nation. In other words, since any form of ‘socialism’ within the US was not a practical solution culturally, except as federal hand-outs without cohesion or planning, only the idea of the nation stood against a perception of decline and ‘chaos’. Similar developments were emerging amongst allies expressed as ‘national populisms’. And, externally, financialisation (neo-liberalism) was hiding the increasing trade imbalances that were perceived, rightly or wrongly, to be at the root of internal social crisis and increased debt. The emergence of China as the main rival world power and of the BRICS sealed the fate of American allegiance to a totally free trading system.

The Assumptions of MAGA

From this perspective, for all the apparent ‘irrationality’ of a set of policies that risk (in the eyes of many) major disruption to the American and world economies, MAGA tariffs have their logic if the following assumptions are made – something had to be done to reverse American decline and the risk of a massive debt overhang, the costs of transition to the American people would be real but transitory and the reality of American economic and military power was sufficient to force allies and the emerging world to change their behaviours in the imperial interest. This latter was now the interest of the American people (’populism’) rather than that of the American corporatist State. Republicans have been pointing out that Reagan’s radical neo-liberal reforms which transformed the US economy in the 1980s actually took up to two years of pain in order to be successfully effected. A similar story could be told of the first years of the Thatcherite experiment in the UK. Transitions are always painful. No doubt a socialist transition would not be possible without similar levels of pain.

We can leave aside the first and second assumptions as American political matters in which non-Americans have no say. Americans themselves are divided but a relatively slight majority has chosen MAGA. This gives them (de minimis) executive power for four years with legislative power for two years and a clear programme of resistance coming from the liberal judiciary and a rather wobbly legacy media. The vulnerabilities in their situation (as well as the American national character) suggest that MAGA will be promoted aggressively with little desire for compromise at any level – economic, political and geostrategic. The logic of MAGA is so centred on ‘delivering for the American people’ that ‘allies’ are going to have to consider themselves lucky to get what they can out of the Americans or will have to start the painful business of building an alternative prosperity and security model without them. Political divisions amongst allies may come down to gambles on the return or otherwise of the old order in four years’ time. They can choose to undertake their own transition (meaning pain and possible irreversibility) or try and sit it out in the hope of reversibility. That choice alone could be divisive and existential, dividing wings of the liberal consensus.

It is the third assumption that should concern us – that American allies will need to change behaviours in order to retain the American strategic umbrella and gain access to the American market which is where tariffs come in. The strong implication is that access to the American market will be contingent on three things – access on American terms to allied markets (including capital markets), geo-political conformity with American strategic purposes and commitment to the ideological values of MAGA which, as with their liberal rivals, extend across transnational barriers but with this difference: whereas liberal internationalist sought to impose liberal values universally, MAGA libertarians simply make their values a condition of receiving American benefits (nuclear strategic and military support or trade access). A good ally is one who recognises the price to be paid for the benefits it receives. This transactional approach is uncomfortable for idealists and free-riders alike.

Once we understand this, everything starts to fall into place as the US Administration makes often symbolic demands in order to establish firmly whether an ally is an ally or is not. There will be calculations going on about the balance of interest in favour of America, how far allies can be pushed, whether allies actually have any value to America in the first place. Greenland is such a symbolic operation with threats being used to see how Europe reacts to the bullying of one of its most liberal members. The freedom of speech issue is being used to test how far the UK can be pushed (a long way it would seem) or whether Germany will comply with the ultimate intention which is to divert substantial national assets into NATO defence. Tariffs are the latest aspect of this strategy of testing, humiliation and pressure. How will the targets of the strategy react? What are their priorities? Are their priorities going to be the same priorities as those of Washington?

Effects on European Politics

This is why the bulk of the moaning and whining in the liberal financial media about presumed consequences of tariffs is a waste of time because what we should really be looking at are the responses and options of the targets, the internal politics of those targets and their room for manouevre. At this point in history, the shattering of the old order in ways clearly not fully anticipated by European allies has revealed them to have only been united in acceptance of the old liberal internationalist order guaranteed by the US. By removing itself from that order, the US has faced the Europeans in particular with their own fragmentation and differences of interest as national cultures and states – and they have an enemy within made up of discontented populations turning to ideologies closer to that of MAGA but adapted to local conditions. Both nationalism and socialism (the real thing, not the fake American liberal version) have revived (the second much less so) on the back of the MAGA revolution.

This very fragmentation makes it hard to analyse the whole because a great deal of performative rhetoric hides the underlying reality. This is one where a form of proto-civil war is emerging within the system in which resistance to the obvious solutions to the situation creates its own negative dynamic. The theory would have Europeans cohering to create a federal super-state capable of building its own integral military-industrial capacity, reintegrating the UK into a new federal model and creating MEGA (Make Europe Great Again). Such a theoretical entity would replace NATO with a European Treaty Organisation and European Army and create its own strategic positioning in relation to the BRICS economically and the US as well as a defence posture against (or with) Russia and in the Mediterranean and Africa. The theory is very far from the practice because of the sheer scale of resistance to it and the fact that every move against it strengthens that resistance.

What we have is a four-way play between an increasingly authoritarian and militaristic but largely performative Euro-federalism, more serious rival nation state militarisms and liberal authoritarianisms, increasingly discontented populations who think the existing system provides neither prosperity nor security and emergent and increasingly angry national populisms. Things are getting out of hand because everything is connected. The judicial attack on Marine Le Pen for example is seen through the prism in the US of judicial attacks on Trump’s programme and of lawfare attacks on himself during the Biden Administration. This in turn results in a similar national populist reflection on the treatment of the winning nationalist candidate in Romania, Euro-German attacks on Orban in Hungary, European liberal attempts to overthrow regimes in Slovakia and Georgia and talk of banning the now significant AfD in Germany as well as an increasingly ridiculous use of the police to control speech in the UK.

The financial resources of States are deployed on propaganda and psychological operations but these are unravelled on alternative and social media with counter-material flowing from the US. The Russians have their propaganda operations but these are miniscule compared to the flow of critique and outrage flowing through MAGA-sympathetic alternative media networks. And yet to act decisively against such networks would not only be self-evidently illiberal but would increase resistance as more and more people resent authoritarian attempts to control speech or behaviour. This too feeds into militarisation where different cultures have different attitudes to such methods as conscription. In some countries, the young will float into conscription with ease as a cultural norm but in others we can expect protests and mass resistance that could reproduce what upended society in the late 1960s.

Again, tariffs emerge as an issue here because Europeans have to work out several things simultaneously. Are tariffs mission-critical to the degree that concessions must be made? If the main concession is militarisation what political costs will ensue especially from a significant minority of the younger generations and families as well as those ideologically resistant to increased taxation or debt? If MAGA freedoms are part of the concession what will be the effect of this on the ability of liberals and centrists to hold power within key states and so within Europe? Can Europeans hold out until a more amenable US Administration emerges and will that Administration actually appear? Dare European liberals and centrists offer support and succour to American Democrats in anticipation of ‘regime change’ or will such actions trigger an even stronger MAGA reaction? What illiberalisms are feasible in order to build an alternative Europe? Will there have to be a turn to China and what will be the price of that?

Meanwhile, those committed to the old post-1945 order (as amended after 1989) are confused and depressed with no clear pathway forward. Some predict disaster to the global economy but that is irrelevant if there is no disaster in the American economy. Worse, if MAGA works, it (or the Chinese variant) will become the template for other massive trading blocs. Europe can barely agree on Ukrainian policy let alone all the changes needed to create a true Federal Republic. A new European Constitution faces huge barriers from internal resistance. In the past, such issues have generally only been resolved through some violent confrontation or split. And if there is a disaster in the American economy, then that is no solution either because such a disaster would ripple around the world like a magnified 1929. It is not to be wished for. So, let’s see what happens and keep an open mind.