A User's Guide to Restructuring the Global Trading System
November 2024
Executive Summary
A)
The desire to reform the global trading system and put American industry on fairer ground vis-à-vis the rest of the world has been a consistent theme for President Trump for decades. We may be on the cusp of generational change in the international trade and financial systems.
The root of economic imbalances lies in persistent dollar overvaluation, which prevents the balancing of international trade. This overvaluation is driven by inelastic demand for reserve assets. As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defence umbrella, as the manufacturing and tradeable sectors bear the brunt of the costs.
B)
In this essay, I attempt to catalogue some of the available tools for reshaping these systems, the trade-offs that accompany their use, and policy options for minimising side effects. This is not policy advocacy, but an attempt to understand the financial market consequences of potential significant changes in trade or financial policy.
Tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects, consistent with the experience in 2018-2019. While currency offset can inhibit adjustments to trade flows, it suggests that tariffs are ultimately financed by the nation that is taxed, whose real purchasing power and wealth decline, and that the revenue raised improves burden sharing for reserve asset provision. Tariffs will likely be implemented in a manner deeply intertwined with national security concerns, and I discuss various possible implementation schemes. I also discuss optimal tariff rates in the context of the rest of the U.S. taxation system.
C)
A currency policy aimed at correcting the undervaluation of other nations’ currencies brings an entirely different set of trade-offs and potential implications. Historically, the United States has pursued multilateral approaches to currency adjustments. While many analysts believe there are no tools available to unilaterally address currency misvaluation, that is not true. I describe some potential avenues for both multilateral and unilateral currency adjustment strategies, as well as ways to mitigate unwanted side effects.
Finally, I discuss the various financial market consequences of these policy tools and possible sequencing.
D)
Stephen Miran, Former Hudson Bay Senior Strategist
Stephen Miran was Senior Strategist at Hudson Bay Capital. He currently serves as Chairman of the Council of Economic Advisers.
Previously, Dr. Miran served as senior advisor for economic policy at the U.S. Department of the Treasury, where he assisted with fiscal policy during the pandemic recession. Before Treasury, Dr. Miran worked for a decade as an investment professional. Dr. Miran is also an economics fellow at the Manhattan Institute for Policy Research. He received a Ph.D. in economics from Harvard University and a B.A. from Boston University.
A User’s Guide to Restructuring the Global Trading System
Countries around the world face Trump's strategy of using a customs union
https://www.youtube.com/watch?v=Zmk2rr7p1sI&t=847s
4.19 All the popular WH pages explained
https://www.youtube.com/watch?v=VfpI5LBgrkA&t=315s
Add info No1)
Restoring American Maritime Dominance
https://www.whitehouse.gov/presidential-actions/2025/04/restoring-americas-maritime-dominance/
Sec. 7. Engage Allies and Partners to Align Trade Policies. Within 90 days of the date of this order, the USTR, in consultation with the Secretary of State and the Secretary of Commerce, shall engage treaty allies, partners, and other like-minded countries around the world with respect to their potential imposition of any actions taken pursuant to sections 5 and 6 of this order. The USTR shall deliver an engagement plan and progress report on these engagements to the President.
Sec. 8. Reduce Dependence on Adversaries through Allies and Partners. Within 90 days of the date of this order, the Secretary of Commerce, in consultation with the Assistant to the President for Economic Policy, shall recommend to the APNSA and the OMB Director for inclusion in the MAP all available incentives to help shipbuilders domiciled in allied nations partner to undertake capital investment in the United States to help strengthen the shipbuilding capacity of the United States.
Add info No2)
LAB LEAK
https://www.whitehouse.gov/lab-leak-true-origins-of-covid-19/
“The Proximal Origin of SARS-CoV-2” publication — which was used repeatedly by public health officials and the media to discredit the lab leak theory — was prompted by Dr. Fauci to push the preferred narrative that COVID-19 originated naturally.
1.
The virus possesses a biological characteristic that is not found in nature.
2.
Data shows that all COVID-19 cases stem from a single introduction into humans. This runs contrary to previous pandemics where there were multiple spillover events.
3.
Wuhan is home to China’s foremost SARS research lab, which has a history of conducting gain-of-function research (gene altering and organism supercharging) at inadequate biosafety levels.
4.
Wuhan Institute of Virology (WIV) researchers were sick with COVID-like symptoms in the fall of 2019, months before COVID-19 was discovered at the wet market.
5.
By nearly all measures of science, if there was evidence of a natural origin it would have already surfaced. But it hasn’t.
WORLD HEALTH ORGANIZATION (WHO):
The WHO’s response to the COVID-19 pandemic was an abject failure because it caved to pressure from the Chinese Communist Party and placed China’s political interests ahead of its international duties. Further, the WHO’s newest effort to solve the problems exacerbated by the COVID-19 pandemic — via a “Pandemic Treaty” — may harm the United States.
SOCIAL DISTANCING:
The “6 feet apart” social distancing recommendation — which shut down schools and small business across the country — was arbitrary and not based on science. During closed door testimony, Dr. Fauci testified that the guidance “sort of just appeared.”
MASK MANDATES:
There was no conclusive evidence that masks effectively protected Americans from COVID-19. Public health officials flipped-flopped on the efficacy of masks without providing Americans scientific data — causing a massive uptick in public distrust.
LOCKDOWNS:
Prolonged lockdowns caused immeasurable harm to not only the American economy, but also to the mental and physical health of Americans, with a particularly negative effect on younger citizens. Rather than prioritizing the protection of the most vulnerable populations, federal and state government policies forced millions of Americans to forgo crucial elements of a healthy and financially sound life.
COVID-19 MISINFORMATION:
Public health officials often mislead the American people through conflicting messaging, knee-jerk reactions, and a lack of transparency. Most egregiously, the federal government demonized alternative treatments and disfavored narratives, such as the lab leak theory,
in a shameful effort to coerce and control the American people’s health decisions.
When those efforts failed, the Biden Administration resorted to “outright censorship—coercing and colluding with the world’s largest social media companies to censor all COVID-19-related dissent.”
