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Trump's MAGA Master Plans: Competing Visions for a New Global Order

Executive Summary

Donald Trump’s tariff policies, including 67% on China met with retaliatory 125% tariffs, and a 90-day pause for non-retaliators, have economists predicting recessions amid chaos. Contrary to a single “MAGA master plan,” updates show multiple competing visions from advisors, divided by journalist Tanner Greer into four factions: Industrialists (e.g., VP JD Vance for state-led reindustrialization), Techno-nationalists (high-tech security focus), Dynamists (tariffs on key sectors, anti-full war), and Trade Warriors (e.g., Navarro, Lutnick for aggressive tariffs and minimal government). Trump functions as a pragmatist kingmaker, allowing advisor rivalry to refine ideas, selecting based on bond market stability, political dynamics, and execution quality. Bessent and Miran’s sophisticated approach (green/yellow/red buckets, MARa-Lago Accord) competes with Navarro’s crude formulas, explaining “penguin tariffs.” Bond market fears drove tariff pauses, prioritizing debt sustainability. The outcome blends plans: tariffs for leverage, potential accords for currency control and reindustrialization, shifting from neoliberalism to a U.S.-centric order.

Understanding the MAGA Mindset: Deindustrialization and National Security

Trump’s campaign slogan “Make America Great Again” revolves around reclaiming U.S. manufacturing supremacy, addressing a decline that has devastated the industrial heartland. In the 1950s, manufacturing accounted for 28% of U.S. GDP, employing millions. By 2025, it has dropped to 10%, costing countless jobs, particularly in Rust Belt states that voted overwhelmingly for Trump. Advisors Scott Bessent and Steven Miran argue this is not just an economic issue but a national security threat, as industrial capabilities are crucial for wartime production. Bessent, a Yale-educated hedge fund manager who co-cracked the Bank of England with Soros in 1992, serves as Treasury Secretary. Miran, a Harvard-educated strategist, authored “A User’s Guide to Restructuring the Global Trading System,” detailing reindustrialization strategies.

This urgency stems from China’s dominance: One state-owned Chinese firm produced more commercial ships in 2024 than the entire U.S. output since World War II’s end. Vice President JD Vance has echoed these concerns, noting the disparity threatens U.S. naval power in a Taiwan conflict. The plan aims to reindustrializeAmerica, restoring jobs and productivity, with Trump’s first trade war achieving limited success but failing to reverse trends.

Historical Context: From Bretton Woods to Neoliberalism

To grasp Trump’s plan, it helps to examine how the U.S. has shaped global order:

  • Bretton Woods (1944-1973): Post-WWII system fixed currencies to the dollar and gold. Allies received U.S. market access, military protection, and Marshall Plan aid, while the U.S. gained dollar dominance as a reserve currency.
  • Neoliberal Era (1980s-2016): Marked by free trade, flexible exchange rates, and open markets. The U.S. offered access to its consumers and navy protection, maintaining exorbitant dollar privileges. But this led to a strong dollar, industrial outmigration, and inequality, fueling Trump’s 2016 victory.

Trump’s first trade war targeted China but failed to stem deindustrialization. Now, with Biden’s subsidies increasing deficits, Bessent and Miran seek to dismantle the neoliberal system.

MAGA Factions and Trump’s Decision-Making Model

Journalist Tanner Greer identifies four key factions vying for influence in Trump’s administration:

  • Industrialists: Led by figures like VP JD Vance, advocating broad state-led reindustrialization using tariffs, subsidies, and industrial policy tools inspired by China’s growth. Focus on restoring manufacturing jobs and national capabilities.

  • Techno-Nationalists: Associated with firms like Palantir and Anduril, emphasizing high-tech manufacturing for security. They prefer targeted investments over full-scale economic shifts.

  • Dynamists: Including Vivek Ramaswamy, support tariffs on strategic sectors but oppose full trade wars. They favor small government and free-market principles with selective protections.

  • Trade Warriors: Commerce Secretary Lutnick and adviser Navarro push aggressive tariffs and minimal bureaucracy for industrial revival and limited state intervention.

Trump acts as a pragmatist kingmaker, pitting advisors against each other to generate competing plans, upending groupthink. He selects winning elements based on personal preferences, bond market stability (fears of unsustainable debt from tariff-induced borrowing needs), political calculations, and execution practicality. This explains tariff pauses and rapid reversals—designed to keep opponents off-balance and extract better deals.

The crude formula (trade deficit in goods divided by U.S. imports, then halved) likely originated from Trade Warriors like Navarro, not Bessent/Miran, resulting in anomalies like tariffs on uninhabited islands. Execution flaws (e.g., “penguin tariffs”) are a minor critique; they don’t invalidate the strategy but highlight poor implementation.

The Revised MAGA Master Plans Model

At the heart of Trump’s strategy is a new framework for international relations, dividing countries into “green,” “yellow,” and “red” buckets based on their strategic value and compliance with U.S. interests. Green countries—trusted allies—receive low tariffs, U.S. military protection, and preferential access to the U.S. dollar financial system and consumer market, akin to benefits under Bretton Woods. Yellow countries face medium tariffs and negotiate terms, while red countries endure high tariffs and fend for themselves with limited U.S. support. This system, as articulated by Bessent, aims to make trade alliances transparent and reward adherence to U.S. priorities.

The plan unfolds in phases:

Step 1: Tariff Chaos (Current Phase)

The administration applies broad, high tariffs to allies and adversaries alike, regardless of market disruptions or stock market volatility. This creates negotiating leverage, as Bessent explains tariffs provide a “negotiating two” or “third leg” to talks, positioning the U.S. to extract concessions. Trump’s rhetoric about allies “taking” U.S. wealth reinforces this phase as a shock to break old habits.

Step 2: Reciprocal Tariffs

Transitioning from punitive chaos, tariffs become reciprocal—balanced and mutual. Countries face tariffs equivalent to those imposed on U.S. goods, rewarding those that address wage suppression, currency manipulation, intellectual property theft, and non-tariff barriers. Red countries maintain high barriers; yellow see reductions with compromises; green enjoy lowered or zero tariffs, fostering a system that “rewards ingenuity, security, rule of law, and stability,” as Bessent states.

Step 3: Mar-a-Lago Accord

The pinnacle is a historical accord, echoing Bretton Woods and the Plaza Agreement, establishing a new currency regime. Green countries peg their currencies to the dollar, appreciating them collectively to weaken its value for U.S. export competitiveness. In exchange, they gain privileged market access, dollar-system benefits, and U.S. Navy protection—effectively becoming vassal states that pay tribute for security. Miran’s papers propose radical ideas like charging reserve currency users fees, but the accord likely focuses on coordinated currency pacts to sustain dollar hegemony while enabling reindustrialization without inflating deficits.

Feasibility and Challenges

The plan assumes the U.S.’s unique position makes tariffs more burdensome for others, forcing concessions. Historical precedents like the Plaza Accord show collective currency management works. However, economists fear it could worsen global trade wars if countries resist joining.

Critics argue Trump’s unpredictability erodes trust—tearing up NAFTA or threatening NATO allies creates suspicion. Without broad buy-in, the U.S. might lose dollar dominance or remain dependent on foreign manufacturing.

Yet, if successful, it could mirror past U.S.-led orders, securing American strength amid China’s rise.

Six Months In: Evaluating Trump’s Tariff Implementation

Six months into Trump’s presidency, economists warn of recession risks from tariffs, yet inflation remains subdued. U.S. stock markets have rebounded above pre-tariff highs, despite initial collapses over $6 trillion in lost value. The dollar has depreciated slightly but not dramatically from pre-tariff levels. Tariffs have contributed $189 billion in government revenue but fall short of offsetting $3 trillion in projected deficits from tax cuts.

Effects on U.S. Economy

  • Inflation: No spike; continued decline from 3.1% to 2.7%. Reasons: Pre-tariff import stockpiles kept prices stable, companies absorbed costs (price freezes), and foreigners bore 53% of tariff burdens, lowering effective rates.

  • GDP Growth: Projections dropped from 2.4% to 1.5-1.7% for 2025, with tariffs denoting uncertainty deterring investments. Fixed investments plunged to pandemic lows post-July “Liberation Day,” despite claims of $12 trillion in commitments (likely inflated by pre-existing plans).

  • Dollar Value: Fell 3-5% against major currencies, contrasting with strengthening in Trump’s 2018-2019 trade war. Financial outflows (investors fleeing U.S. volatility) outweighed trade deficits’ upward pressure, harming exports.

Impacts on Trading Partners

  • European Union: Stocks outperformed U.S. markets; tariffs spurred defense spending hikes. Domestic barriers targeted for reduction, advancing single-market completion.

  • Canada: Liberals won elections despite Conservatism-Trump alignment; pushes for energy infrastructure independence. Internal provincial barriers (equivalent to 21% tariffs) reconsidered.

  • Mexico: Benefits if free-trade deal preserved; higher U.S. tariffs on others make Mexico’s zero-tariff access more valuable as manufacturing hub.

  • China: Negotiated stronger deal, bolstering global image. Retaliatory 125% tariffs countered U.S. hikes, signaling resilience.

  • Japan: Tariff pressures may erode outdated import restrictions (e.g., 233% rice barriers), aiding shortages.

Globally, uncertainty slows investments, fostering multipolarity with tariffs becoming common.

Reindustrialization Outlook

Evidence is mixed; manufacturing jobs haven’t surged. Uncertainty halts factories in U.S. and abroad, as revocations like the June halving of Chinese tariffs undermine planning. Reindustrialization remains aspirational, contingent on stable policies.

Conclusion

Trump’s tariffs are more than rhetoric; they’re a calculated chaos aimed at reorienting global economics. By dividing nations into buckets and enforcing reciprocal trade, the MAGA plan seeks sustainable U.S. power. Whether it succeeds depends on diplomatic skill, as the world watches the shift from neoliberalism to a protectionist, U.S.-centric order.

For deeper dives, check Bessent’s Economist essay and papers by ex-Biden advisors on alternative paths. Subscribe to The Economist for 20% off at economist.com/MoneyMacro.

Based on transcripts from: https://www.youtube.com/watch?v=1ts5wJ6OfzA, https://www.youtube.com/watch?v=QgE8Hp9hs4M, and https://www.youtube.com/watch?v=nBXwqN5-1n4.