Karen Karniol-Tambour of the investment management company Bridgewater offers advice  https://www.nytimes.com/2025/03/10/opinion/tariffs-europe-trade-war.html?smid=nytcore-ios-share&referringSource=articleShare), not only to her high net-worth clients but to all of Europe:  

Europe has lagged behind the United States thanks to its fractious and duplicative regulatory system, particularly in the tech sector, and rigid labor markets that make it hard for companies to hire and fire workers.…The continent’s security crisis may finally be galvanizing action. Germany has taken a essential step and forgone self-imposed constraints on fiscal policy to make meaningful investments in defense. The question is whether Europe will take this opportunity to more broadly transform its economy — and whether its leaders will realize they have no other good choices.

Why?

Because,

For decades, the rest of the world, especially China and countries in Europe, have produced much more than they have consumed, selling goods to America in exchange for an ever-growing pile of U.S. dollars. This could happen because the United States consumes much more than it produces, gobbling up the difference in the form of persistent trade deficits, and financing those deficits with debt, which Chinese and European investors are happy to buy.

But economics is not like plumbing. There is no simple common sense, and in any case the experts are not the financiers who seek to simply extract value from economies and spit out the husk. As Bourdieu said, On dit is not good advice for all it is simply the publicity material put out by the powerful ; capitalists can only prescribe for their own self interest, they are no disinterested advisors to all humanity.

For a start, she doesn’t know the history. The dollar became the global currency because the Bretton Woods accords brokered and enforced by the United States towards the end of the Second World War set out a gold backed international trading regime that replaced the pound sterling frozen because Britain was in the process of defaulting on its wartime debt. But a few decades after Britain’s informal default on its wartime obligations, as the US had by then printed so much to finance its endless wars abroad, President Nixon announced on August 15th 1971 that America would no longer abide by its own rule, and so defaulted on that obligation too.

 Then under President Reagan in the US and under Mrs Thatcher in the UK both countries embarked upon long term trade deficits, paying for imports in dollars unbacked by any bullion meaning that only their dollars (sterling being proxy for dollars too by now by virtue of Britain’s role as America’s money-launderer) could pay for dollars, an extraordinary perversion of traditional trade, what Giscard d’Estaing termed  privilège exorbitant. These persistent deficits would be financed purely by capital account surpluses, foreign inflows into their banks which undertook to be safe havens for concealed capital from all over the world when they passed specific enactments altering their own know your customer requirements to assure anonymity to foreign investors, putting out welcoming mats for those homeless trillions, encouraging crime for profit, including but not confined to tax evasion, all over the planet.

Yet such capital inflows meant that their own currencies would be persistently overvalued and render all of their own exports and manufacturing uncompetitive, since even input costs of intermediate goods would be too high to sustain production. America and the UK would therefore both be consciously transformed into consumption economies of pure finance, leaving IOUs everywhere which they never had any intention of repaying, Ponzi scheme economies in essence. The sole exception to the general destruction of manufacturing of course was the highly state-subsidised armaments industry ---which at the same time trapped countries around the world as stupid as India and Pakistan into arms races with their own neighbours everywhere – and in the US, corrupted Congressmen in every district, who now looked to the merchants of death to provide employment to their constituents. But these were fringe benefits. The most important purpose of course was that the arms industry enforced the intimidatory regime upon which the US has depended to enforce the hegemony of the dollar. 

Mr Trump, says Bridgewater’s thought leader, is unwilling to allow countries to continue to take advantage of the United States, & wants to get America to work again, he is

“unwilling to accept this state of affairs. His administration has accelerated a shift to what my colleagues and I at the investment management firm Bridgewater Associates call modern mercantilism: the view that trade deficits are a threat to national wealth and strength.

Mr. Trump and many of his supporters believe that persistent trade deficits have made America dangerously dependent on other economies, put national security at risk and undermined stable middle-class work. That’s the primary reason he is imposing tariffs and adopting other policies that are in the headlines today.

While modern mercantilist policies are meant to counter all American competitors, they pose a particularly severe threat to Europe’s economic engine. If the United States is unwilling to continue to run big trade deficits, it means that the “pie” available to everyone else to produce more than they consume is shrinking.”

But such deficits are not simply the outcome of Chinese subsidies but of conscious US policy not to produce but to buy from the rest of the world without payment.

 And to put an end to fractious labour at home.  Inevitably this decision to shut down domestic industry had a catastrophic effect on the UK and US working classes, and understandably as what pass for Left parties in those countries (liberal pro market policies that seek above all to appease the bankers who can never be appeased) have failed them, they have turned in despair to the new fascisms emerging today everywhere.

 We see the rich and powerful plan for the future so they may well have intended this all along.

“But this challenge could finally push the region toward urgently needed change and economic revitalization. After Mr. Trump’s recent actions and comments on Ukraine, Europe has abruptly realized that it can no longer rely on the United States for security; the region needs to acknowledge that it can’t rely on the U.S. for economic stability, either.

The United States has the upper hand in this trade conflict precisely because it currently runs large trade deficits. It has more imports to tariff than exports, and it has more to gain should American companies respond by increasing domestic investment and bringing supply chains back home.”

Economic revitalisation does not take place thus.

It is true that one and an half centuries of American technological innovation played a critical role in the dollar gradually becoming the globally dominant currency.

But so did the genocidal depopulation of the American aborigine (mirroring that enforced by other English-speaking peoples in the Antipodes) that repurposed land to industrial agriculture in which carbohydrates have been manufactured on the altered environment to produce meat on a scale that by now has altered not only American taste but by virtue of America’s vast agricultural subsidies to behemoths such as Cargill global consumption, precipitating global warming and hastening the planet to its end.

Today, Trump’s bullying works in the short term in terms of shock. But tariffs may cause pain but they can only protect industries that exist. All of us will treat a suicide bomber with immense respect, since at that moment he holds the cards and can call the shots. But to threaten to kill us all is not a long term strategy.

There is no US steel industry so that cannot be revived nor can the still surviving and closely connected automobile industry. An industry cannot be turned on and off like a switch, something people in the world of finance simply cannot comprehend. So today Trump forcing China Canada India France Germany to lower tariffs cannot create American automobile industry innovation or a steel industry out of thin air. For in many areas America has simply stopped manufacturing and that cannot be revived (just as his ridiculous promises to revive coal which he won over embittered mining country labour mean nothing because coal is not only environmentally disastrous it is costlier to produce than abundantly available natural gas).

 Moreover, the automobile industry depends upon technological innovation and there has been no investment in technology in any serious sense in the US commercial aviation automobile steel railway industries for many decades. Long before the extraordinary Chinese domination of electric vehicle technology, there was a global glut an over supply of automobile manufacturing plant all over the world. Punitive barriers to trade alone do not produce innovation as Bridgewater’s spokeswoman seems to believe. It is actual investment in technology over the long term.

I recall that when I was reading Citibank balance sheets of the 1980s in 1992 to understand the Third World Debt Crisis it struck me how Citi had charged country risk premium for lending to Argentina Chile Mexico so those countries paid on average about 200 basis points is my recollection over market rate ie the LIBOR London InterBank Borrowing Rate in order to protect itself from the risk of their defaulting by building sufficient reserves—but then moved those vast funds raised NOT to build a buffer BUT simply distributed that to its shareholders ; decades of corrupt practice mean that Boeing has become a joke so Airbus will really now face increasing threat from the Chinese aviation manufacturing sector and also Embraer ; and the recent fiasco of the US market being enormously dominated by AI companies all of which are inferior to Chinese AI in their technology shows that the funds that American AI firms raise are not employed for AI research but distributed as profits. This seeming pathological irrationalism is the rationality of the billionaires who are now in charge.

Indeed it is not just in the US that such contradictory impulses are evident, but everywhere that finance is allowed to dictate economic policy to democracy.

Britain still had a railway network when I was at school and at university there ; when I came back to work as a research fellow in 1991, it had become a joke. The Kings Cross to Canterbury train in 1991 was slower than a century ago. Obama’s favourite capitalist, Richard Branson of Virgin Atlantic began surge pricing on train tickets on the railway lines he now controlled, so suddenly buying a last minute ticket for an hundred mile journey could multiply the price to absurd levels.

 Mrs Thatcher had handed over the « family silver » in Macmillan’s phrase to the City of London, seduced by the claims that the public sector was « crowding out investment » ; left to themselves why should the capitalists spend money on technology when in fact gambling on mathematical models that predict variations with sufficient reliability to be banned from Las Vegas was far more lucrative ?

The position is especially comical and sad in France which is led by Macron, careerist investment banker & slave of the financiers. The very dismantling of the public sector in France-- built up at immense cost and sacrifice, technological innovation created in a climate of autarky – that he proposes in order to distribute the proceeds of the garage sale to the superrich who want to do to France what has been done to the UK and the US is precisely what will make it impossible for France to compete worldwide.

In other words, worldwide, there is no way that finance and industry and labour can all be kept happy at the same time. The real issue is actually just firms such as Bridgewater. I know nothing about this firm but I use it to describe the hegemony of finance, in which market returns bear no relationship to long term value inhibit such investment, because it does not make economic sense for an individual businessman to be virtuous and earn a sub market rate of return for so doing.

The real problem today is the gradual corruption of democratic politics by the rich has led to a state in which the rich have been able to exploit the very despair they have themselves created, offering to save the people from-- well themselves ! Capturing states worldwide, billionaires seek to protect themselves from the consequences of their own actions by ever more accumulation, which precipitates ever more rapid global warming.

We need a resurgence of true democracy, to inform people of the truth rather than the lies promoted by anti science irrationalists in service to billionaires. Just as the policies of the super-rich have led to a decline in consumption by many impoverished by the triumph of this order, we can envisage other policies which can through redistributive effect create fresh consumers not just in the United States, but in the more impoverished Americas, all over the African continent as well as the vast ocean of South Asian humanity. Such consumers when they have some income can become the future motor of growth for the planet, planned carefully so that that it is not the present environmentally destructive path. For instance public transport rather than private electric vehicles, a limitation of airline travel, and a reliance on non-meat nutrition can be significant in such benevolent climate management.   

John Maynard Keynes addressing the chaos of the Great Depression was no radical. He sought to save capitalism from itself by saving Western democracies even imperialist ones, proposing modestly the euthanasia of the rentier. Today we can understand that to mean that democratic action by all of us should take back the state from the billionaires who have seized it, and enforce hegemony over the powerful to recreate the democracy we have lost-- to save all of us in this planet.