September 13, 2025 – Translation by OlIver Blackwell
Why is the globalization process turning into protectionism and deglobalization?
Tomasz Konicz
Olaf Scholz was moved to tears. The taz published a glowing review. Netflix has made it into a movie. We are talking about Hillbilly Elegy, by the incumbent Vice President of the United States, JD Vance.[1] The autobiographical book describes the social disintegration suffered by many peripheral regions of the United States in the course of the waves of deindustrialization of recent decades from a socially conservative and culturalist perspective: drug addiction in the family, family violence, release for adoption, as well as the luck of getting an expensive law degree as a hillbilly kid, formed the stages of the vice president’s career.
JD Vance was therefore incredibly lucky, as the social hurdles for rising from the lower class in the US are similarly high as in Germany. After this, the usual reflexes of demarcation set in, with which upstarts from the lower class often try to distinguish themselves from their class of origin. Cultural deficits of the hillbillies, a lack of work ethic and abuse of the welfare state were listed by Vance in the Hillbilly Elegy in order to ideologically process the capitalist crisis process that has deindustrialized large regions of the USA since the 1980s – and it was precisely this right-wing perspective that probably made the book a bestseller in late neoliberalism, which was acclaimed from the FAZ to the taz.
But the social disruption in the crisis regions of the US, which Vance described and which shaped him, has solidified and created veritable ghost towns in the southern United States. In the meantime, an entire YouTube genre has emerged in which Youtubers popularize the morbid charm of decaying settlements. Whether in Georgia,[2] South Carolina,[3] Oklahoma[4] or Arkansas[5] – the decay is visible everywhere.
The vice president’s social background from the lower class, which is largely left to its own devices in these crisis regions, comes to the fore time and again. His impulsive public reproach of Ukrainian President Zelensky, when he pointed out that he never thanked Trump, can only be understood against the backdrop of the improbable rise of an authoritarian character who overcame all social barriers, in the course of which the future vice president has certainly had to thank Trump countless times for the mercy of not having to sink into misery. In moments such as the public exchange of blows between Trump and Zelensky in the Oval Office, the authoritarian reflex breaks out openly – Zelensky is supposed to be just as compliant as Vance had to be.
Jackson, Kentucky, the town where JD Vance grew up, is still lucky with a poverty rate of 20%, while in many regions mass poverty and depopulation have long since become the norm.[6] Many settlements and small towns evoke memories of the famous post-Soviet wastelands – with the difference that in the US it is hardly possible to view the ruins undisturbed, as is the case in Russia, because even in state of decay, they are still considered “private property” and jealously watched over.[7]
US Deindustrialization and the Inner Barrier of Capital
The cause of the pervasive decline that has gone unnoticed for decades is currently haunting the right-wing US administration of which JD Vance is a member. For more than 40 years,[8] employment in the industrial sector in the United States has been declining, from nearly 20 million industrial workers in 1978 to about 13 million in 2023.[9] Between 2002 and 2022, the number of industrial establishments in the United States fell by 45,000, a decline of about 14% within two decades.
In the 1980s and 1990s, the US industrial workforce shrank only slowly, interrupted by periods of stagnating employment. However, much of the job losses in the US industrial sector occurred in the 21st century. The bursting of the stock market bubble in the US high-tech sector in 2000 marked the first massive job losses, with the number of industrial workers shrinking from more than 17 million to around 14 million in 2003. The deflation of the great transatlantic real estate bubble together with the subsequent recession triggered the second massive wave of layoffs from 2009, as a result of which the industrial workforce shrank to 11.5 million, only to rise to just under 13 million in the following years in the wake of economic stimulus measures, where it has stagnated ever since.[10]
The crisis process of capital has thus been leaving behind a clear empirical trace for decades, which has so far been ignored by public opinion. This is the manifestation of the inner barrier of capital (Robert Kurz), which, in a fetishistic crisis process, gets rid of its substance, the labor that creates value in commodity production, due to competition-mediated surges of rationalization.[11] This inner, moving contradiction of capital, which outwardly appears as an “overproduction crisis,”[12] forms the decisive, central contradiction of the capitalist mode of production.[13] Capital must therefore move, fleeing from its internal contradiction into ever new markets and branches of production in which masses of wage labor are valorized, which bourgeois economics perceives as industrial structural change.
The social disruption of the United States, the rust belts, ghost towns and social hotspots in which JD Vance grew up are an expression of the failure of this “industrial structural change” due to the tremendous rationalization surge in industrial production triggered by the IT revolution. The rise of the IT industry also created jobs, but at the same time every new branch of industry interacts with the economy as a whole, and the effect of the computer and telecommunications industry was a huge surge in rationalization that led to a massive reduction in wage labor in the production of commodities – and thus undermined the foundations of the capitalist labor society. This is also clear from the employment figures quoted above.
The inner barrier of capital is more than just an “overproduction crisis” that could be overcome by the “creative destruction” (Schumpeter) of overcapacity. Capital has become too productive for its own good, so to speak; due to the high level of global productivity, no new markets or labor-intensive fields of exploitation are emerging, meaning that there can no longer be any “adjustment crises” – and it is this inner contradictory development of capital that is leaving socially and ecologically scorched earth in its wake. It is this crisis process that propelled Trump into the White House and helped him to a second presidency after the US Democrats failed to find an answer[14] to the pauperization and deindustrialization of the US.[15] Supporters of Trump’s protectionism like to refer to economists such as David Autor, whose calculations show that around 2.5 million American industrial jobs were lost to China between 1999 and 2013.[16]
However, the relationship between job losses in the industrial sector and the actual output of industry makes it clear that it was not only the relocation of industrial jobs abroad that led to the deindustrialization of the US. Between 1980 and 2000, during the same period in which the industrial workforce in the United States fell from just under 19 million to 17 million,[17] US industrial production roughly doubled (according Fed data, in inflation-adjusted prices from 2017).[18] Rising industrial production with declining employment in the industrial sector is therefore an expression of the rationalization push in the production of goods in the course of the IT revolution from the 1980s onwards; this is the empirically verifiable consequence of the aforementioned inner barrier of capital. Even in the 21st century, when the US industrial workforce shrank massively (from 17 to just under 13 million), the output of this shrinking industrial workforce stagnated without a corresponding decline (the crisis-related slumps in industrial output in 2009 and 2020 were quickly reversed).[19]
According to the National Association of Manufacturers (NAM), value added in the United States amounted to around $2.93 trillionin 2024 (adjusted for inflation in 2017 prices, it was 2.4 trillion), with the United States paradoxically growing primarily in foreign trade.[20] Manufacturing exports have more than doubled over the last two decades, from $622.3 billion in 2002 to $1.63 trillion in 2024. What is Trump and his entourage upset about? Well, in the same period – the heyday of globalization – the volume of world trade has more than tripled: from $4.9 trillion in 2000, to $9.8 trillion in 2010, to $15.7 trillion in 2023. The American share of world trade has thus fallen – to 7.9% in 2023.
In addition, the economic weight of industry has rapidly diminished in the age of neoliberal globalization, which has been accompanied by the financialization of capitalism and the formation of a credit-driven financial bubble economy in the US. The share of industry in the gross domestic product of the United States fell from 15% in 2000 to just over 10% in 2021.[21]
These opposing trends in the capitalist production of goods – job losses with rising output – were also noticed and addressed by US monetary policy. As early as 2014, the US Federal Reserve noted that industrial production in the United States was continuing to grow (with the exception of short-term slumps caused by the crisis), while employment was not, meaning that “industrial growth is not synonymous with industrial job growth.”[22] The Fed offered “productivity growth” and a shift in sectoral focus towards “computers and electronics” as explanations.
Scientific and technological progress continues to create new industries, such as the renewable energy sector, but these new industries can no longer absorb the redundant workforce from obsolete industries due to the general level of productivity achieved.[23] The precarization of working life, the emergence of miserable jobs in the service sector, the erosion of the middle class, the emergence of a US prison industry for the purpose of repressive crisis management, the socioeconomic decoupling of entire regions of the US mentioned at the beginning – they are the result of the manifest inner barrier of capital, which is reaching the limits of its development both socially and ecologically.
Trump’s Protectionist Response to the Crisis
And it is this crisis, latent for decades and ignored or normalized by the dominant neoliberal mainstream for decades, that the Trump administration needs to somehow alleviate or overcome—precisely because it has crossed the Rubicon toward fascism. In many policy areas, the White House is already operating beyond the rule of law to consolidate authoritarian structures and reinforce new methods of repression – such as the unlawful deportation of people to maximum security prisons in Central America. The same applies to corruption charges and possible internal deals in the chaotic disputes surrounding US customs and trade policy.[24] In a sense, a large part of the Trump administration can no longer afford to be voted out of office, as they would find themselves in court very quickly after losing power due to the massive violations of the law.
In order to consolidate the post-democratic path already taken and establish a stable authoritarian regime, the US right must somehow confront the crisis that flushed Trump into the White House in the first place. Historically, all fascist regimes have only been able to consolidate their power by finding repressive or expansionist responses to the crises of capital that washed them into power without touching the foundations of the system – this also applies to the Nazis with their Reich Labor Service and the armaments policy that inevitably led to the Second World War.
In all likelihood, presidential elections will still be held in the United States four years from now, and despite all the possibilities of manipulation, the post-democratic, authoritarian right in the US must enjoy a certain level of support in order to win even rigged elections and complete the fascization of the US. In other words, the Trump administration must provide social relief to its voter base to avoid ending up in jail in four years. Trump could be spared such a fate due to a Supreme Court ruling that effectively guaranteed the president immunity from prosecution in office. But members of the government like JD Vance cannot count on this.
For the majority of the profiteers, racketeers, and networks of influence operating in the shadows of the US government apparatus, there is no turning back.[25] They must try to realize the authoritarian – ultimately fascist – option, to finish the authoritarian path they have taken – and this is precisely what makes the situation in the US so dangerous. Since a policy of redistribution, as preached by Bernie Sanders, is out of the question for the post-democratic US right for the time being, the only remaining option is trade war and protectionism.[26]
And, from a narrow-minded national perspective, the connections are clear: the deindustrialization of the United States goes hand in hand with the creation of massive trade deficits with China and German Europe in the age of globalization. Last year, the United States posted a new record trade deficit in goods of $1,211 billion (the aggregate deficit in goods and services was $918.4 billion),[27] which is well above the highs during the US housing bubble in 2006 ($786 billion) and the post-Covid era in 2022 ($971 billion).[28] Last year, the US recorded a deficit of $295 billion with the People’s Republic of China alone,[29] while the figure for the EU was $235 billion, of which Germany accounted for $84 billion.[30] The large US deficit with Mexico is in turn the result of Washington’s nearshoring strategy under Biden, in which the US’s southern neighbor was turned into an extended industrial workbench in order to reduce dependence on China.[31]
Trade surpluses are used to export deindustrialization and debt, which also formed the core of the German beggar-thy-neighbor economic model in the heyday of globalization.[32] This connection is also manifested in the share of industrial production in total GDP,[33] which in 2023 was around 26% in China, 18.5% in Germany and only around 10% in the US (in the 1970s it was still just under 25%).[34]
From the narrow-minded national perspective of the American right, which cannot perceive the crisis process outlined above due to its ideological blindness, it appears to be a simple fraud – China, as well as the alleged “partners” in Western Europe, is expanding its industries at the expense of the US. The sheer hatred towards the EU that JD Vance expressed during his scandalous appearance at the Munich Security Conference,[35] and the open hostility towards Europeans that became evident in the leaked Signal discussions by the Trump administration, with its amateurish communication, can be easily explained – a glance at the trade balance between the EU and the US is enough.[36] The misery, the social neglect that Vance experienced in his youth can be projected onto an imaginary enemy – and it is precisely this socialization in the lower class that makes him forget all diplomatic manners in his attacks against the European “trade cheats.”
The efforts of the economic locations to rehabilitate their own industry in the crisis by means of trade surpluses at the expense of their competitors is only logical – as long as no systemic alternative emerges, this is actually inevitable within the logic of the crisis. It is the logic of last man standing.[37] The simple economic fact that trade surpluses must lead to deindustrialization and deficit formation in the deficit countries has been invoked for years against Germany, the world champion of trade surpluses – for example by the Obama administration or by France, which criticized Germany’s export surpluses during the euro crisis. Back then, in 2017, the then Economics Minister Zypries forbade any criticism: there was no need to “apologize” for the fact that the German economy was “one of the strongest in the world.”[38]
Now that Trump wants to put an end to Germany’s longstanding beggar-thy-neighbor policy with the mallet of sheer protectionism, people in Berlin have suddenly become meek. Europe has the short end of the stick, headlined the Frankfurter Allgemeine Zeitung (FAZ) in reaction to Trump’s “tariff orgy” at the beginning of April. A tariff conflict is not arm wrestling and the Europeans would do well not to instinctively react to Washington’s new trade barriers with counter-tariffs.[39] The difference between this and Berlin’s stance in the euro crisis, for example, toward deficit countries such as Greece, is almost laughable – what a difference a few thousand nuclear warheads can make. However, top German journalism, as cultivated by the FAZ, is characterized by the fact that it does not even mention Germany’s trade surpluses, even if they are the basis of the upcoming trade conflict. This is precisely why Trump actually has the upper hand – because in the course of a trade war, the trade balances will tend to even out, which would reduce Germany’s surpluses and America’s deficits.
But why did it take so long to escalate? The deindustrialization that is now being lamented took place over decades—even during Trump’s first term, his protectionist impulse could be contained—but this time it will not be the case. Protectionism and tariffs are here to stay. And, most importantly, why does Trump keep backtracking, why does he seem to back down only to impose new tariffs a few weeks later?
Nonstop zigzagging! What’s the point? Although there is a tendency to erect ever higher trade barriers, this is happening in the context of seemingly chaotic disputes that are simply the result of the underlying systemic contradictions.
The Era of Neoliberal Crisis Postponement
And it was precisely the financialization of capitalism, together with the corresponding globalization process, that was able to prolong this internal contradiction of capital in the neoliberal age and enabled the late capitalist world system to run on credit, so to speak. Until well into the 21st century, the prevailing view in the core was that an industrial society was an obsolete relic of the 20th century, that capitalism had now evolved into a service or financial services society, or even an information society. These discourses, which have been thoroughly disgraced in the wake of the crises of recent years, were based on the deficit conjunctures of the neoliberal era.
Since the implementation of neoliberalism, global debt has risen faster than global economic output, mainly as a result of increasing financial bubbles. The figures are clear: In the 1970s, global debt amounted to around 110% of global economic output. At the end of the neoliberal era, when the great liquidity bubble burst after the outbreak of the pandemic in 2020, the global debt burden amounted to 258% of global economic output.[40]
In addition to a number of regional speculative manias and financial crashes, the globalized, financial market-driven capitalism of the neoliberal era gave rise to three major bubbles: the dotcom bubble that burst at the turn of the millennium, in which the hope of a new regime of accumulation (“information society”) led to feverish speculation in high-tech stocks; the great transatlantic real estate bubble in Europe and the US,[41] which ran out of speculative steam between 2007 and 2008; and the gigantic liquidity bubble of the central banks,[42] which was only brought to an end by the pandemic along with the inflationary surge of 2020.[43]
As long as the dotcom bubble was on the rise, as long as the United States was caught up in real estate fever, the erosion processes in industry hardly seemed to be noticed – after all, the economy was doing well, the construction sector was booming, cheap money was flooding the financial sphere, and the great financial flood was lifting all boats. Thus, declining industrial regions and marginalized and precarious wage earners could be easily ignored and hidden from public view in core societies. The repressive crisis administration did the rest.
The US was at the center of this globalized financial bubble economy – the inflated financial market of the United States produced the aforementioned bubble-driven deficit economies, while at the same time Washington’s trade deficits reached ever new record levels: from $77 billion in 1990, to $381 billion in 2000, to $740 billion in the crisis year 2008, to a peak of $951 billion in 2022. Last year, in 2024, the US trade deficit amounted to $918 billion dollars (figures for goods and services).[44] So-called deficit cycles emerged: export-fixated industrialized countries such as China, Japan or the FRG exported their surpluses to the US, while a ghostly flow of American securities and debt instruments to Beijing or Tokyo moved in the opposite direction.[45] Japan and China, which run large surpluses vis-à-vis the US, are consequently also the largest creditors of the United States.
Globalization is in fact based on these global deficit cycles.[46] Export-oriented economic areas thus maintain sales markets, while the USA experiences deficit cycles. (Incidentally, a similar deficit cycle developed in Europe after the introduction of the euro, where the Federal Republic was able to sell its export surpluses until this European debt bubble burst).[47] The dollar, in its function as the world’s reserve currency, enabled Washington to borrow de facto without restrictions at very low cost, which is why consumer spending accounts for a large part of the United States’ GDP (in 2023 it was 68% of GDP!).[48]
The figures here are also clear, as illustrated by the long-term development of interest rates on ten-year US bonds: The interest rate on these Treasuries fell from around 8% at the beginning of the 1990s, to over 5% at the turn of the millennium, to sometimes less than 2% in the second decade of the 21st century.[49] In the crisis year 2020, extensive central bank purchases were even able to push the interest rate on these government securities into the per mille range for a short time. To visualize the success of this financial bubble economy, it is sufficient to contrast it with the national debt of the US, which rose from $3.5 trillion (1990) to $5.6 trillion (2002) and $23 trillion (2020) to $36.2 trillion in the fourth quarter of 2024.[50]
The apparent magic of the global financial bubble economy running on credit becomes glaringly apparent here: Washington’s credit conditions became ever more favorable, while the mountains of debt could be driven ever higher. The United States as the world’s financial center thus still resembles a black hole in the global economy, which absorbs a large part of global surplus production through trade deficits – and thus has a stabilizing effect on a global economy suffering from structural overproduction.
This financial bubble economy, which was growing in size and instability, thus gave rise to the aforementioned deficit booms, which also simply created sales opportunities for the commodity-producing industry through credit-generated demand. However, as soon as a speculative bubble burst, the states had to stabilize the system through interventions and economic stimulus packages, which encouraged further deficit formation and the development of new deficit booms and financial bubbles. The economic policy measures that served to alleviate the consequences of the crisis also gave rise to new speculation – the speculative fire was extinguished with gasoline.
The Liquidity Bubble and The Impending Shift to Protectionism
The costs of stabilizing this gigantic financial sphere continued to increase as each bubble burst.[51] And this is precisely the cause of the end of this global financial bubble economy. The bursting of the last bubble during the pandemic-induced crisis forced crisis policymakers to turn off the money tap for the global deficit economy.
In 2000, when the dotcom bubble burst, the brief recession was quickly overcome by a phase of very low key interest rates – which in turn made mortgages attractive and provided the initial spark for the real estate bubble.[52] With the crisis surge in 2008, when the major real estate bubbles in Europe and America burst and the US plunged into the worst recession in post-war history, zero interest rates were no longer enough. Monetary policy switched to buying up all the junk securities that had sent the financial sphere into a state of shock following the collapse of Lehman Brothers. This emergency measure, which was used to buy up the infamous mortgage securitizations, developed into a permanent monetary policy that ultimately amounted to sheer money printing.[53]
The central banks bought up securities in order to inject further liquidity into the financial sphere and stabilize it. This absurd central bank financial capitalism was able to maintain the liquidity bubble over a period of around a decade.[54] This can be clearly seen in the balance sheets of central banks, especially the Fed.[55] In 2007 – on the eve of the housing crisis – the Fed held securities worth less than $880 billion. Just two years later, in 2009, it held $2.2 trillion, which swelled to $4.4 trillion by 2014. This high level was maintained – maturing securities were replaced by new purchases – only to almost double the balance sheet total to almost $9 trillion after the outbreak of the pandemic through extreme money printing.
And this money printing did not trigger a surge in inflation, mainly because the liquidity it generated remained in the financial superstructure – the prices of financial market goods shot up to ever greater heights as part of the liquidity bubble that formed a veritable everything bubble, in the final phase of which even speculative excesses with meme stocks such as Gamestop became common.[56]
Low bond yields, low key interest rates, swelling central bank balance sheets and a global mountain of debt that seemed to be able to grow faster than global economic output forever – the 2020 crisis put an end to this financial market-driven central bank capitalism.[57] The surge in inflation that followed in the wake of the pandemic forced central banks to make a drastic U-turn and the expansionary monetary policy had to be discontinued: Key interest rates skyrocketed (from almost 0 to more than 5%), bond-buying programs were discontinued or drastically reduced, with the result that central banks’ balance sheets are now shrinking again (from just under $9 trillion in 2022 to $6.7 trillion at the beginning of 2025 in the case of the Fed).[58]
The price of this turnaround, which at least curbed double-digit inflation: the stagflation period of the 1970s has effectively returned at an even higher level of crisis – precisely because it is fueled not only by the unfolding of economic contradictions, but also by the ecological crisis of capital, the climate crisis and the increasing destruction of the ecological foundations of the process of civilization.[59] Monetary policy can hardly combat this inflation fueled by the capitalist climate crisis.[60][61]
Skyrocketing interest rates also put the US bond market – practically the foundation of the global financial house of cards – in a difficult position.[62] The decades-long trend of increasingly low interest rates, which enabled debt bubbles in the United States, was reversed starting in 2021, as already mentioned.[63] Bond interest rates have risen to more than four percent – and they have since remained at the relatively high level that makes debt service the largest budget item in the US.[64] The United States has thus already partially lost its strategic financing advantage resulting from dollar hegemony, and its interest rate level corresponds to that at the beginning of the 21st century – with the difference that debt is now much higher. Washington’s extraordinary privilege now only applies to a limited extent.
This major turnaround in monetary policy by the central banks, which they were forced into by inflation, effectively led to an end to the global deficit economy. According to figures from the International Monetary Fund, global debt in relation to economic output has been falling for three years. After peaking at 258% of global GDP in the pandemic year 2020, when gigantic economic stimulus measures had to be initiated, the debt burden had fallen to 237% in 2023.[65] This phasing out of the deficit economy is reflected in the corresponding economic slowdown in many economic areas – especially in the export-dependent FRG.[66][67]
And it is precisely the end of the global deficit economy – which is increasing faster than global economic output – that must lead to protectionist reflexes, as this increases the tensions and contradictions within the global deficit cycles to an intolerable level, simply making them politically untenable due to their social fallout. The economic slowdown in many regions and economic areas is intensifying the efforts of the capitalist functional elites to rely more heavily on exports. This is why the trade deficits of the United States are constantly reaching new highs in a crisis phase in which Washington’s interest burden is increasing and the deficit economy of the US can hardly be maintained due to the skyrocketing costs of servicing the debt.
The global constellation is therefore quite comparable to the euro crisis – until the European debt bubbles burst, Europe saw itself as one big happy family, only to fall over each other after the crisis broke out, with Germany’s Finance Minister Schäuble in particular standing out with his uninhibited austerity sadism towards southern Europe – which made him one of Germany’s most popular politicians.[68]
Trump & Vance as Blind Executors of the Crisis
Viewed from the narrow-minded nationalist perspective of the full and semi-fascists in the White House,[69] the protectionist U-turn – coupled with the brutal austerity program that Musk tried to implement in order to reduce the deficit – therefore seems to make perfect sense.[70] Washington’s objectives are clear: deindustrialization is being halted and reversed, the tariffs are generating revenue, the social situation of its own electorate is being stabilized and the US military machine is ensuring that the transition from hegemony to empire, which in fact wants to demand tribute by means of tariffs, is not accompanied by a serious loss of power.[71]
In fact, Trump no longer wants to pay the rising costs of US hegemony. The hegemonic position of the United States in the post-war period was based on the Fordist boom, on the post-war prosperity that brought good economic development to all core countries. From the 1980s onwards, when neoliberalism prevailed in response to the stagflation period of the 1970s, the hegemony of the US was based on global deficit cycles. China, Japan and German Europe accepted US hegemony because they were also able to derive economic benefits from it – specifically in the form of the trade surpluses they achieved vis-à-vis the US.[72] Against the backdrop of the global crisis of capital outlined above, Washington’s hegemonic costs must therefore also include the deindustrialization of the once leading industrial country.
Only now can JD Vance, who criticized Trump for his protectionist tendencies as recently as 2016, be understood: The Vice President actually seems to believe that he can use protectionism to improve the situation of the economically disadvantaged sections of the population in which he experienced his early socialization. In response to the temporary court ban on a number of troop tariffs at the end of May 2025, the Vice President reiterated the nationalist line of argumentation that the White House was responding to a socio-economic emergency in large parts of the US with its tariff policy.[73] Even on cursory forays through the socio-economic crisis regions of the US – including Minnesota,[74] Iowa,[75] or North Dakota[76] – this description of the situation cannot simply be dismissed out of hand. In contrast to the southern euro states – where there are similar social wastelands – the US has the means to counter the internal crisis with external aggression.
The American vice president sometimes says quite openly that maintaining the US dollar’s position as the world’s reserve currency is no longer a political priority for Washington.[77] Vance wants a weak dollar in particular, as this should promote exports and the reindustrialization of the US. The export-focused economic models of China, Japan and Germany clearly serve as role models in such arguments. Germany’s past successes on non-European sales markets can be explained precisely by the fact that the euro is structurally undervalued in relation to Germany’s economic output.
The advantages of the greenback as the world’s reserve currency are melting away with rising bond interest rates and Washington’s exorbitantly high debt service, which has now outstripped military spending in the US budget. At the same time, trade deficits are reaching new highs after the pandemic – precisely because global borrowing beyond the US is slowing down.[78] Washington’s hegemonic position is slowly turning into a bad deal in the eyes of the dealmakers in the White House. To American nationalism – which is just as blind to the crisis as all other varieties of late bourgeois ideology – this worsening of the crisis must appear to be a betrayal of America by malicious foreign countries. The post-democratic right in the US provides little more than the ideology for the new phase of the crisis, in which the era of globalization gives way to deglobalization and protectionism.[79]
The White House responded to the legal setbacks experienced by Trump’s tariff regime – which was effectively enforced as emergency legislation – at the end of May 2025 by searching for new legal loopholes in sometimes decades-old laws in order to gain further options for erecting trade barriers.[80] In addition, Trump raised the US steel tariffs to 50%.[81] The clashes between free trade and protectionism are thus already forming a new front in the internal capitalist crisis management, similar to the eternal, dull shadow boxing between demand-oriented Keynesians and neoliberal austerity fetishists.
Trump & Vance are therefore actually hoping to use protectionism to attract more industrial production back to the US – in effect, they want a bigger slice of the cake again. This is the actual motive behind the new protectionism made in the USA. And this is precisely the manifestation of their miscalculation resulting from crisis ignorance – the global production value pie is not static, it is not a fixed quantity. It was the deficit economy of the last few neoliberal decades that managed to inflate the global industrial production value “pie” so much, to continue with the image. Protectionism will only accelerate the end of this deficit economy, which could lead to a crisis of unprecedented intensity. The white nationalists in the White House are, in fact, only tearing down what is already falling.
The socio-economic emergency in which he grew up and to which JD Vance refers is a consequence of the world crisis of capital, whose inner barrier is now becoming manifest, as the era of financial market-driven neoliberal crisis postponement is breaking down due to its contradictions. However, this socio-economic emergency resulting from the systemic crisis could only be overcome within the framework of an emancipatory transformation of the system.[82] The nationalist protectionism on which Washington relies, on the other hand, acts as a promoter of the crisis.
In fact, Trump is only executing the crisis dynamics. And the maneuvering of the White House with regard to trade policy, the permanent protectionist advances and retreats – they are due to the open contradictions of the current final phase of globalization outlined above: The extreme trade deficit, the far advanced deindustrialization, they effectively compel the nationalists in Washington to protectionism; at the same time, protectionist measures are out of the question due to the turmoil on the bond markets, where interest rates on government bonds shoot up after every round of Trump’s tariffs – which is, after all, also a consequence of the unwinding of US hegemony, as countries and economic areas such as China, Japan or the EU hardly see any economic advantages in accepting the role of the US dollar as the world’s reserve currency.[83]
Simply dumping the government bonds that have been acquired in exchange for trade surpluses in recent years – that is the economic nuclear option, the threat of mutual economic destruction, as is currently being openly expressed in the protectionist disputes. Japan, the largest creditor of the United States, has already threatened to sell Treasuries en masse.[84] This would plunge Washington into a full-blown financial crisis, the US would turn into a weaponized and nuclear-armed Greece – and at the same time the exporting countries that currently still export their surpluses to the US would also sink into severe economic crises, which would only be the prelude to further geopolitical, military conflicts. The protectionist, fascist 1930s would virtually return under the crisis conditions of the 21st century.
The era of financial market-driven globalization is inevitably coming to an end. Transformation is inevitable. What comes next is an open question and the subject of a transformative struggle.[85]
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[1] https://en.wikipedia.org/wiki/Hillbilly_Elegy
[2] https://www.youtube.com/watch?v=OfhPAHTOkJE
[3] https://www.youtube.com/watch?v=wiCNLVy7aKw&t=1s
[4] https://www.youtube.com/watch?v=5XQUmVjjrZw
[5] https://www.youtube.com/watch?v=J5pU6M8yrpw
[6] https://www.youtube.com/watch?v=5hoq6gNVrAo&t=1s
[7] https://www.youtube.com/watch?v=2i3aS6T6Nng
[8] https://www.bls.gov/opub/btn/volume-9/forty-years-of-falling-manufacturing-employment.htm
[9] https://www.visualcapitalist.com/the-decline-of-u-s-manufacturing-by-sector/
[10] https://www.konicz.info/2006/11/30/keine-weiche-landung/
[11] https://www.konicz.info/2022/10/02/die-subjektlose-herrschaft-des-kapitals-2/
[12] https://www.nd-aktuell.de/artikel/1190139.welthandel-worum-es-in-trumps-zollkrieg-geht.html
[13] The distribution struggles fetishized as class struggle by old Marxism and left opportunism alike, on the other hand, represent only an internal capitalist surface phenomenon in which the variable capital (proletariat) fights for its share of the valorization process.
[14] https://exitinenglish.com/2025/02/26/a-country-for-old-men/
[15] Around 68% of US citizens stated in around 2024 that they would no longer be able to build up reserves and would have to scrape by from paycheck to paycheck. See: https://www.cnbc.com/2024/04/09/most-of-americans-are-living-paycheck-to-paycheck-heres-why.html
[16] https://www.faz.net/aktuell/wirtschaft/wie-donald-trump-den-handel-gefaehrdet-110414669.html
[17] https://fred.stlouisfed.org/series/MANEMP
[18] https://fred.stlouisfed.org/series/IPMAN
[19] https://fred.stlouisfed.org/series/OUTMS
[20] https://nam.org/mfgdata/facts-about-manufacturing-expanded/
[21] https://www.macrotrends.net/global-metrics/countries/USA/united-states/manufacturing-output
[22] https://fredblog.stlouisfed.org/2014/12/manufacturing-is-growing-even-when-manufacturing-jobs-are-not/
[23] https://www.konicz.info/2011/07/05/die-okologischen-grenzen-des-kapitals/
[24] https://www.theguardian.com/us-news/2025/apr/10/donald-trump-ignites-insider-trading-accusations-after-global-tariffs-u-turn
[25]
[26] This does not mean that Sander’s social democratic policy prescriptions could overcome the systemic crisis, but they could possibly have established a new dynamic that would have enabled an emancipatory course of the inevitable systemic transformation.
[27] https://www.bea.gov/news/2025/us-international-trade-goods-and-services-december-and-annual-2024, https://www.fool.com/research/us-trade-balance/
[28] https://www.macrotrends.net/global-metrics/countries/USA/united-states/trade-balance-deficit
[29] https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china
[30] https://www.fool.com/research/us-trade-balance/
[31] https://www.konicz.info/2023/11/20/neue-kapitalistische-naehe-2-0/
[32] https://www.konicz.info/2012/12/21/der-exportuberschussweltmeister/
[33] https://ourworldindata.org/grapher/manufacturing-value-added-to-gdp
[34] https://fred.stlouisfed.org/series/USAPEFANA
[35] https://www.youtube.com/watch?v=urXXIQMzUoY
[36] https://www.bbc.com/news/articles/c204vl27n2qo
[37] https://www.konicz.info/2011/11/20/gerangel-auf-der-titanic/
[38] https://www.diepresse.com/5203733/deutsche-handelsueberschuesse-muessen-uns-nicht-entschuldigen
[39] https://www.faz.net/aktuell/wirtschaft/eu-reaktion-auf-trumps-zoelle-am-kuerzeren-hebel-110398208.html
[40] https://www.imf.org/en/Blogs/Articles/2023/09/13/global-debt-is-returning-to-its-rising-trend
[41] https://www.konicz.info/2006/11/30/keine-weiche-landung/
[42] https://lowerclassmag.com/2021/04/13/oekonomie-im-zuckerrausch-weltfinanzsystem-in-einer-gigantischen-liquiditaetsblase/
[43]https://exitinenglish.com/2024/04/29/crisis-beyond-the-bubble/, https://exitinenglish.com/2024/02/29/schizophrenic-monetary-policy/
[44] https://www.macrotrends.net/global-metrics/countries/USA/united-states/trade-balance-deficit, https://www.bea.gov/news/2025/us-international-trade-goods-and-services-december-and-annual-2024
[45] https://www.konicz.info/2010/09/18/zerbricht-chimerica/
[46] https://exitinenglish.com/2022/08/12/a-new-quality-of-crisis/
[47] https://www.konicz.info/2015/10/05/aufstieg-und-zerfall-des-deutschen-europa-2/
[48] https://fred.stlouisfed.org/series/DPCERE1Q156NBEA/
[49] https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart
[50] https://fred.stlouisfed.org/series/GFDEBTN/
[51] https://www.konicz.info/2020/10/27/vergleich-der-krisen-2020-vs-2008/
[52] https://www.konicz.info/2007/03/05/vor-dem-tsunami/
[53] https://exitinenglish.com/2023/05/25/keynesianism-in-crisis/
[54] https://www.konicz.info/2022/12/09/geldpolitik-vor-dem-bankrott/
[55] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
[56] https://lowerclassmag.com/2021/01/30/hedge-fonds-gamestop-und-reddit-kleinanleger-die-grosse-blackrock-bonanza/
[57] https://fred.stlouisfed.org/series/fedfunds
[58] https://fred.stlouisfed.org/series/fedfunds
[59] https://www.konicz.info/2021/11/16/zurueck-zur-stagflation/
[60] https://www.konicz.info/2022/01/14/die-klimakrise-und-die-aeusseren-grenzen-des-kapitals/
[61] https://www.konicz.info/2021/08/08/dreierlei-inflation/
[62] https://exitinenglish.com/2022/08/12/mountains-of-debt-on-the-move/
[63] https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart
[64] https://budget.house.gov/press-release/interest-costs-surpass-national-defense-and-medicare-spending
[65] https://www.imf.org/en/Blogs/Articles/2024/12/02/persistent-fall-in-private-borrowing-brings-global-debt-down
[66] https://exitinenglish.com/2022/08/12/no-more-trade-surplus/
[67] https://jungle.world/artikel/2025/14/autoland-ist-abgebrannt
[68] https://www.buecher.de/artikel/buch/aufstieg-und-zerfall-des-deutschen-europa/42973311/
[69] https://www.konicz.info/2017/08/07/politische-oekonomie-des-krisennationalismus/
[70] https://exitinenglish.com/2025/02/26/a-country-for-old-men/
[71] https://medium.com/@ascentreact/everything-must-burn-862b983914a6
[72] https://unrast-verlag.de/produkt/aufstieg-und-zerfall-des-deutschen-europa/
[73] https://conservativejournalreview.com/vice-president-jd-vance-says-america-facing-emergency-requiring-trump-tariffs/
[74] https://www.youtube.com/watch?v=qdl1S_Da_hU
[75] https://www.youtube.com/watch?v=L883pwCPOwE
[76] https://www.youtube.com/watch?v=59hzueQkmok
[77] https://nymag.com/intelligencer/article/why-jd-vance-wants-a-weak-dollar-is-that-a-good-idea.html
[78] https://www.bea.gov/news/2025/us-international-trade-goods-and-services-december-and-annual-2024
[79] https://www.konicz.info/2017/08/09/zur-wiederkehr-der-nationalistischen-ideologie/
[80] https://www.msn.com/en-us/politics/government/two-laws-that-trump-could-use-to-re-impose-his-tariffs-and-why-he-might-do-them-both/ar-AA1FIX6r
[81] https://www.youtube.com/watch?v=IpKiZOS6ADU
[82] https://www.untergrund-blättle.ch/politik/theorie/emanzipation-in-der-krise-7306.html
[83] https://www.faz.net/aktuell/wirtschaft/trumps-kurswechsel-bei-zoellen-was-war-der-knackpunkt-110410883.html
[84] https://www.msn.com/en-us/money/markets/japan-threatens-to-offload-its-1-trillion-us-treasury-holdings-if-trump-trade-talks-don-t-go-well/ar-AA1E2Wkn
[85] https://arranca.org/ausgaben/nichts-zu-verlieren/den-transformationskampf-aufnehmen
Originally published on konicz.info on 06/01/2025