United States
Republican Senators and Congressmen must be terrified of losing their jobs. And if they do go, they can only blame the man who helped put them in office— Donald Trump.
Before the economic meltdown, the Republican legislators were facing town hall meetings filled with constituents angry about Elon Musk’s chain saw approach to government, cuts in foreign aid, deportations of students and attacks on the constitution and the courts.
Almost to a man (or woman) they faced the crowds with a Trumpian smile that tried to reassure the voters that the president knew what he was doing and that he was going to “Make America Great Again”.
They had to say that because Trump and his billionaire acolyte Elon Musk held the campaign purse strings. The president has even managed to install his daughter-in-law, Lara Trump, as chairman of the Republican National Committee which vets candidates and channels party funds.
If a Republican candidate failed to pay obeisance to the MAGA leader and his policies then the next time they came up for re-election, Musk or another one of Trump’s billionaire friends, would finance their opponent in the primary elections for the nomination. In American politics, money talks.
Or does it? Elon Musk spent a record $25 million backing the Republican candidate in the race for a seat on the Wisconsin State Supreme Court. The Democrat candidate, Susan Crawford, won it by ten points. The electorate balked at being told what to do by an American oligarch who was working with Donald Trump to destroy the American government and its constitution.
What happened in Wisconsin could easily be a harbinger of political battles across America, especially now that economic chaos has set in. Inflation is rising despite Trump’s promises to bring it down. Most people don’t believe his promise to protect Medicaid and Medicare. Their pensions are sliding along with the stock market. And they don’t like the rest of the world hating them.
They voted for change. But not for the ill-planned unbridled change wrought by Donald Trump and his Republican sycophants in Congress and the cabinet.
There is an excellent chance of the Democrats winning both houses in the mid-term elections. They may even win a two-thirds majority in the Senate which will give them enough seats to impeach—and convict—Donald Trump for abuse of power.
But the mid-terms are two years away and Donald Trump has proven that he can wreak untold damage on America—and the world—in under 100 days.
Some Republican congressmen have spoken out against the president. Not enough. Many more have whispered their opposition in private but backed him when the cameras turned on them. If they can be persuaded by their town halls that their futures are damaged by association with Trump and assured by opposition to him than perhaps—just perhaps—Congress can grow a backbone.
Iran
The Iranians must be terrified of Trump. That can be the only reason they have agreed to meet in Oman this weekend to discuss swapping potential nuclear weapons for peace.
The reasons are clear. Tehran’s proxies in Lebanon and Gaza have been decimated. They have lost their string of bases in Syria and the Iranian-backed Houthis are suffering.
But most important of all, success has set Benjamin Netanyahu’s war-driven pulse racing. Destroying Hamas and Hezbollah is not enough for the Israeli prime minister. He wants to go after what he calls “the head of the snake”—Iran.
President Biden worked hard to keep a tight rein on Netanyahu’s blood lust, both in Gaza and Lebanon and towards Iran.
Trump appears willing to unleash him, maybe even with American help. He has proposed taking over Gaza, moving out the Palestinians and turning the area into a Middle Eastern Riviera. And as Netanyahu has increased his attacks in Gaza and the West Bank Trump has said nothing other than though to tell Hamas that “all Hell will break loose” if Hamas fails to release remaining Israeli hostages.
In the midst of all this turmoil Trump wrote a letter to the Iranian leadership proposing a deal to prevent Iranian nuclear weapons production in return for an agreement that neither Israel nor the US would attack Iran. The Iranians jumped at the chance.
But we are long way from the hurrahs. Negotiators need to work out a definition of what constitutes an end to Iran’s nuclear ambitions.
Iran has rejected the idea of total dismantlement of their nuclear programme. They want to retain their nuclear power plants for “peaceful purposes. “The Americans, for their part, seem divided (as usual) on the correct approach. Steve Witkoff, Trump’s Middle East negotiator who will be leading the US delegation to Oman, said that a failsafe verification process was needed.
Mike Waltz, the National Security Adviser, said that all Iranian nuclear installations must be dismantled. Netanyahu is more specific: “They go in. They blow up the installations, dismantle all of the equipment, under American supervision and carried out by Americans.
Trump said: “It will be a very bad day for Iran” if this weekend’s talks are unsuccessful.
Donald Trump
The Trump Administration suffers badly from lack of joined up thinking or what I call the hip, thigh bone theory of the world The latter phrase relates to my belief that the world is interconnected in much the same way as the human body, and no matter how hard we try to organise it otherwise, it always will be so.
There are lots of specific examples of how Donald Trump has not grasped this basic theory of international politics, but I am just going to focus on two: defense and tariffs.
The current occupant of the White House has repeatedly called on allies to shoulder more of the financial burden of defense. In his first term he said that other members of NATO should be paying two percent of GDP on defense. In his second term he has upped it to five percent. He also suggested that America would refuse to defend a NATO ally that did not pay their fair share.
Defense is, of course, a government expenditure. Governments derive their revenues from taxes and the revenues from those taxes go up or down according to the state of a country’s economy.
Trump’s tariffs will be a big hit on the already fragile markets of the EU and UK. They will almost certainly go into recession. As a result the tax base will shrink; government revenues will drop and it will be much, much harder for NATO allies to increase their defense spending.
But even harder hit will be the developing countries. Lesotho, for example, has been threatened with a 50 percent tariff. This is because the tariff rates are not based on reciprocity but on the size of a country’s trade deficit with the US. Lesotho’s trade deficit in 2024 was $234.5 million.
The reason for the trade deficit was because Lesotho produces diamonds. There are no diamond mines in the US. It doesn’t buy much from the US simply because Lesothans don’t have the money. The country’s per capita income is $2,500. In fact, Lesotho was heavily dependent on $362.5m in US aid to run its water treatment plants and healthcare systems. That went with the 80 percent cut in US aid. Now Lesotho has neither trade nor aid. But then, as Trump said: “Nobody has heard of Lesotho.”
United Kingdom
The UK got off light on the tariff front—except potentially Northern Ireland, and this could have an impact on peace in the troubled province.
Trump has imposed a ten percent tariff on the UK—effective in just over 90 days—and a 20 percent tariff on the EU. That does not include cars, aluminium and steel which face a 25 percent tariff.
The Irish Republic, or Eire, is part of the EU and thus subject to the 20 percent tariff. And, thanks to the Windsor Framework, Northern Ireland is in the EU’s single market trading area. That means there is an open border between Eire and Northern Ireland and goods can travel tariff-free between the two halves of the island.
Businesses in the south can therefore simply drive their goods to Northern Irish ports and ship them to America, saving themselves ten percent in tariff costs.
In fact, there is very little to stop a French or German company from shipping their products to Eire; loading them onto the back of a lorry; driving them to a Northern Irish port; shipping them to America and saving ten percent on the tariff.
Northern Ireland could become rich as an offshore transhipment centre—in and yet not part of the EU.
This, of course, delights the Irish nationalists who enthusiastically welcome any moves that tie the UK province closer to the Republic of Ireland. Conversely it infuriates and alienates the Ulster Unionists who violently oppose any developments that weaken economic links with mainland Britain.
The province is this weekend celebrating the 1998 Good Friday Agreement that ended the Troubles that plagued the province for over 30 years. But it has always been a fragile peace with the Unionists left feeling particularly aggrieved.
* Tom Arms is foreign editor of Liberal Democrat Voice and author of “The Encyclopaedia of the Cold War” and “America Made in Britain".
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11 Comments
Amidst all of Trump’s chaos , the Democrats are polling at a record low. You’d of thought they’d be riding high , or at least leading. Too many have aligned themselves to the protests across some universities & Tesla dealerships. It might get support from a section of the party , but many American voters are turned off by that.
American politics has been corrupted for decades by the infiuence of big money and corporate lobbyists in Washington. Trump has taken the corruption to a new level whereby he seeks to determine through political patronage which companies, states, Universities, cultural institutions and individuals will receive the benefit of federal and/or campaign funding.
On the International stage he appears to be in pursuit of a policy that will see America dominate the Westerm hemisphere and Middle East leaving East Asia (including Taiwan) as a sphere of influence for China and Europe (including Ukraine) as a sphere of influence for Russia while attempting to draw Russia away from China and closer to the US.
In International trade he seeks not fair trade but tribute Trump advisor reveals tariff strategy: Force countries to pay tribute to maintain US empire. The Trump administration is arguing that foreign countries must help “bear the costs” of running the US empire by bearing the costs of their own defence and paying a premium for both access to US markets and maintaining the dollar and Treasury securities as the main reserve asset in the international financial system.
Lesotho has been hit with a reciprocal Tariff of 50% and is sendig a trade delegation to Washington to ‘do a deal’ with Trump How jeans and diamonds pushed Lesotho to the top of Trump’s tariffs list. That should be a fairly easy deal to do with payment of $50m to $100m in diamonds to the Trump family or associates in exchange for Tariff free trade into the USA.
Since Wednesday’s climbdown, the EU is operating on the same base rate as the UK, namely 10%, so there’s no longer any tariff differential between the Republic and the North. As for the NI Protocol, the sole aim of the Irish government during the Brexit negotiations was to avoid a hard land border – the preferred means of achieving that goal would have been for the whole UK to remain in the Customs Union, but as both the Tories and Labour rejected that proposal, that meant a bespoke arrangement had to be agreed for the island of Ireland.
“The Trump administration is arguing that foreign countries must help “bear the costs” of running the US empire ”
The proposed “Mar-a-Lago accords” key provision is that countries swap their US treasury bonds for “century” treasury bonds, paying no interest, redeemable in 100 years time. Effectively this would be the USA defaulting on its entire foreign debt.
Tom, you write: ‘success has set Benjamin Netanyahu’s war-driven pulse racing. Destroying Hamas and Hezbollah is not enough for the Israeli prime minister. He wants to go after what he calls “the head of the snake”—Iran.’ I agree with you.
I have written about Iran since 1962. I have a close Iranian friend in the Bahamas who returns annually to Iran and warns that ‘the snake will bite back’.
In March 20, Israel indicated its willingness to launch its own attack on Tehran’s nuclear facilities, which are deliberately dispersed across the country and hidden where possible in bunkers and mountains.
But it remains the case that the success of such an operation would need America to take part, not least because it alone possesses some of the weaponry – such as the most advanced bunker-busting bombs – needed to penetrate Iranian defences.
On March 28, Iran said it is seeking to maintain diplomacy alongside a military threat. The chief of staff of Iran’s armed forces, Major-General Mohammad Bagheri, claimed his forces could unleash a “capability that is 10 times greater than the one deployed during Operation True Promise II” – when Tehran fired 200 ballistic missiles at Israel last October during the first open exchange of fire between the long-time adversaries.
Iranian defence experts identified missiles with ranges of up to 1,500 miles capable of reaching every location in Israel.
Why would the nationalists in Northern Ireland be delighted at the prospect of the province becoming a transhipment centre (assuming Trump does put higher tariffs on the EU again)? That would bind Northern Ireland to the UK, not to the Irish Republic – because any transhipment industry would be totally dependent on Northern Ireland remaining in the UK and therefore having lower tariffs than the EU. (Although in practice it would be such an obvious loophole in US tariffs that I’d expect the US to close it quite quickly).
@ Tom,
We shouldn’t really use the term “Éire” for the Republic of Ireland. Unless, perhaps, we are speaking or writing in Irish Gaelic of course!
Just as we wouldn’t normally use the words ‘Deutschland’ for Germany, or ‘Cymru’ for Wales.
The logic is the same when you think about it.
Besides this, it’s generally considered outdated and can be seen as condescending, especially when used by non-Irish speakers. It’s a throwback to a time when the Irish Free State was still closely tied to the British Empire
Tax loopholes can last quite a while before they get closed down, The “Double Irish” was a corporate tax avoidance strategy that was used by many large multinational companies, especially American tech firms like Google, Apple, and Facebook, to t worked:
Company A woukd be Irish-registered but tax-resident in a tax haven and hold the intellectual property (IP) rights, like software patents or technology licenses.
While incorporated in Ireland it was managed from somewhere like Bermuda or the Cayman Islands where corporate tax is zero and It pays no tax in Ireland.
Company B is Irish-registered and tax-resident in Ireland so paid Irish corporation tax at 12.5%. This company operates the actual business.
Company B licenses the IP from Company A and pays royalties for the right to use it. reducing Company B’s taxable income often to nesar zero.
The royalty payments go to Company A (in the tax haven), where they are not taxed,
This scheme allowed companies to shift profits from high-tax countries to low- or no-tax jurisdictions and drastically reduce their global effective tax rate, sometimes to single-digit percentages or lower.
Due to international pressure, especially from the EU and US, Ireland began phasing it out in 2015, with a full ban effective by 2020.
“Single Malt” and “Green Jersey” schemes were variations or successors to the Double Irish. The BEPS (Base Erosion and Profit Shifting) project by the OECD aims to prevent these kinds of loopholes globally.
I’m glad to see Peter bring up Tom’s use of ‘Éire’, with or without a fada or acute accent.
Historically, the confusion arose because when Ireland adopted its present constitution in 1937, the English version of the preamble translated muintir na h’Éireann as ‘people of Éire’, not as ‘people of Ireland’, and the British government took advantage of this to avoid referring to the 26-county state as ‘Ireland’. (The word ‘republic’ doesn’t appear once in the Constitution, and The Republic of Ireland Act only states that that is the description of the State, not its title.)
Thankfully, the use of ‘Eireann’ as an adjective, usually by Unionist politicians in Stormont, died out along ago.
On the other hand, ‘Irish Gaelic’ isn’t used in Ireland, or even that much in Britain, certainly not in Scotland, where the language historically known as ‘Erse’ is known simply as ‘Gaelic’. Contrary to what some conservatives in Britain claim, the use of ‘Irish’ as the name of the language in English isn’t a post-independence affectation, it dates from at least the 18th century, when an Irish-English dictionary was published.
Aargh, forgot to put a closing – could we please join the 21st century and add options for bold and italic without making people have to write their own HTML code?
That means there is an open border between Eire and Northern Ireland and goods can travel tariff-free between the two halves of the island.
With the Trade and Cooperation Agreement (the UK-EU Free Trade Agreement) goods which originate in the EU can travel tariff free to anywhere in the UK (and vice versa.)
Businesses in the south can therefore simply drive their goods to Northern Irish ports and ship them to America, saving themselves ten percent in tariff costs.
Tariffs are levied based on where goods originate, not from where they are shipped. Forging a Certificate of Origin or falsifying customs documentation is a serious criminal offence.
There are already different tariffs applied to goods exported from Northern Ireland compared to the EU. For example, Jameson Irish Whiskey from County Cork (even if shipped by container from Belfast) is subject to a 5% tariff when exported to Australia, while Bushmills Irish Whiskey, distilled in County Antrim, is tariff free as a result of the UK-Australia Free Trade Agreement.
Agreeing Rules of Origin are one of the complexities of trade deals, particularly where goods, such as cars, are made of components from many sources. In the UK-Australia FTA, Australia agreed to treat whiskeys blended in Northern Ireland containing Irish whiskey distilled in the south as originating in the UK – a concession for which the Irish Whiskey Association thanked the UK negotiating team.