Before I turn to the analysis of the second Trump presidency and the main topics of this article, I’d like to point out that on 22 March, I put out a new call to action in support of the Just Security campaign at NYU law school to get the International Court of Justice (ICJ) to issue an updated provisional measures in view of the fact that Israel has officially opened a department for deportation. A template was supplied for prospective letters following the points outlined by Just Security.

Thank you for the huge response to the original call to action on 25 January over the Sebutinge dissenting opinion. I believe you made a difference. Early presidential elections for the post of president were held and human rights lawyer Judge Iwasawa Yugi was elected to lead the ICJ from hereon in.

Going to the situation in Gaza, new meetings were held in Riyadh between the main members of the 22 February meeting (Egypt, Jordan, Saudi Arabia, Qatar, UAE) and Steve Witkoff, this time on 12 March. If you remember the 22 February meeting planned the 4 March Arab League summit at which all Arab states officially endorsed Egypt’s plan for Gaza. The meeting was marred by the fact that Tebboune of Algeria was annoyed at not being invited at the planning stage, and that Mohamed bin Salman (MbS) of Saudi Arabia was annoyed at Egypt’s Sisi agreeing to Mohamed Dahlan, a controversial ex-Fatah stooge in the pay of the UAE, being given the role of chief executive of the new Gaza civil authority. The overfed boss of the Palestinian Authority (PA), Mahmoud Abbas, issued a “pardon” to Dahlan, who had been fired from Fatah, in order that the PA could be shoed in as the civil authority.

Everybody knew that there would be tensions between Saudi Arabia, Qatar and the UAE because of the recent Saudi-Qatari alliance that is now backing the Sudanese government against the UAE backed Rapid Support Forces (RSF) led by ex-Janjaweed leader Hemedti, who is plundering Sudan for its gold and other resources. However, all hell broke loose when on 5 March, Sudan sent a demand to the ICJ for provisional measures against the RSF and the UAE, on the grounds that genocide was being perpetrated particularly against the non-Arab Masalit people of Darfur. Nevertheless, the UAE attended the 12 March meeting with Witkoff, which ended with two sets of statements: an agreement between all parties on new proceedings in regards to Gaza and an agreement excluding Witkoff that said there had to be a Palestinian state.

As far as the future of Gaza is concerned, it looks like what Witkoff is doing is trying to reach a middle solution that keeps Netanyahu in power. This is what the Trump administration, which I am going to analyse shortly, has as its goal. The direction of travel proposed at the moment is that the armed resistance moves south of the Netzarim corridor, for Northern Gaza to then be “secured” as it were by Israel, while the civil authority is turned over to the PA. A semi-voluntary scheme will be provided for individual decisions as to migration. As I will explain, the Israeli army is in no shape to go in full blast and move the Gazans who, of themselves, are simply not going anywhere. When Smotrich asked the Egyptian army to take on the task, the generals said no.

Where we may end up is with a redistribution of what I would like to call the GAZAN REALM. At the moment this is very roughly a 700,000 Gazan diaspora and 2,150,000 local population. This may end up in a 50-50 distribution and may seem a hugely disappointing outcome. In my view, however, this will make Gaza stronger for the future fight for Palestinian rights. There has to be a concerted effort to shift momentum within the Arab countries. Netanyahu, as we saw with his 18 March decision to restart the war to escape the looming shadow of yet another corruption case brought against him by Shin Bet chief Ronen Bar, is all about the short term, as is Trump. They are like PTSD patients, totally unable to formulate coherent long term plans. Physically incapable of it. So we need to counter this by thinking about the long term.

Although the restart of the war has cast a pall over the 12 March meeting, now that Ben Gvir has returned to Netanyahu’s cabinet, everything will turn on what Witkoff can trade to keep him in. Removing the population of Gaza is not physically doable. Ben Gvir’s GREATER ISRAEL is a phantasm of the mind. Israel doesn’t have human resources on the ground to make it happen and the Israeli army is spent. Yes the air force has in excess of 300 fighter jets. These can destroy targets but they cannot make things happen. To survive, the Netanyahu cabinet itself is going to have to compromise with the reality in Gaza at some stage.

This is especially the case given that a considerable challenge presents itself regionally in the rumbling volcano that is Lebanon and the actually erupting volcano that is Syria. Both of these I will come to shortly.    

ANALYSING THE TRUMP PRESIDENCY

In America, Zionism is a uniform you put on, when to do politics. But it comes in different cuts and colours. Trump 2.0, for instance, is different to Trump 1.0. Trump 1.0 was about Evangelical Christian Zionism. In the White House, every Wednesday, a man called Ralph Drollinger, supposedly a Christian pastor, would hold Bible Study groups. Mike Pence, Mike Pompeo, Betsy DeVos and many others were involved. Alarmingly this also included the NASA Chief, Jim Bridenstine. Drollinger and Pompeo, the active leader of this group in the White House, hated Islam with a vengeance. I don’t know about the others. Pompeo had a lot to do with the Muslim ban at the beginning of Trump 1.0. But all of this wasn’t the real Trump, which is why none of those people are back. They did bring him to power in the first place. But, if you remember, Mike Pence struggled with his conscience before accepting the invitation to become Vice-President. Pence’s wife certainly saw Trump as an overdeveloped form of pond life.

The three layers of Trumpism: Trump 2.0 is the Zionism of the New York slum landlord. The slum landlord made good, retired to Florida like they all do. Analysing the Trump phenomenon, however, requires breaking it down into three chunks or three layers, like in a cake, where the Zionism is in the top, not in the layers below.

The first layer: At the bottom, you find the original slum landlord, Fred Trump starting out in the borough of Queens, gradually making it into developing detached houses there. Then you have the pampered son who goes on to conquer big time Mid-Town real estate, navigating the corruption of local politics, and mentored by Roy Cohen, a sleazy and unhinged lawyer who, in the 1950s, had been Joseph McCarthy’s Chief Counsel in the anti-communist trials. That was the Trump of the Art of the Deal in which he inveighs against the decline of America and the economic dominance of Japan.

However, Trump benefits from America in decline. This is especially the case when New York City almost went bankrupt in October 1975, only to be saved when the teacher’s union, not the banks or the Federal government, decided to put a downpayment from its pension fund on a turnaround plan. Real estates prices were on the floor at that time and it would only become a one way upward climb from there, as America deregulated and neoliberalised in the course of the 1970s. You couldn’t go wrong in New York real estate then.

The second layer: The second or middle layer of the cake represents the stage at which Trumpian politics becomes something that is possible. This really starts in 2008 with the creation of the Tea Party, the precursor to the MAGA movement. Trump is usually portrayed as the politician of the working man betrayed by the neoliberal politicians who enabled NAFTA and China’s access to the American market. By passing the legislation that sent jobs abroad, domestic industry and jobs were undermined. But that is a red herring. It isn’t what Trump is about. As the 2022 article by Melinda Cooper in Dissent Magazine argued, Trump’s real base is among small and medium-sized private businesses mostly connected to real estate.

The story here does start with the neoliberal politicians just mentioned, that is, Bill Clinton and the New Democrats. But the relevant story from here goes in a different direction to the usual narrative. The real story starts with Clinton’s reaction to the New Right’s demands (under Newt Gingrich) for cuts in welfare. This was about both cutting entitlements in Clinton’s 1996 “Welfare to Work” Bill and finding backdoor ways with the Bureau of Labor Statistics (BLS) of redefining inflation. This would help to dodge the inflation adjustment terms of the Social Security Act and save money. It was also agreed with the BLS that the long-term unemployed (unemployed for more than six-months) be removed from their records so that the government always looked good when it came to unemployment figures.

Then the story goes on to the financialization of America. Neoliberalism started before Clinton. But it became turbocharged when the NAFTA and China deals that he and Robert Rubin made, led them to feel that perhaps they needed to counter the negative impact of welfare cuts. So they expanded credit. From 1995 onwards financialization exploded as bank merger after merger was waved through. However, the condition for any merger was that the new merged bank should abide by the 1977 Community Reinvestment Act (CRA). This meant that banks were obligated to finance poor people as well as rich people. But it didn’t work out the way they thought.

Instead of poor people getting easier terms than rich people, what happened was that banks and the government-sponsored mortgage providers ended up giving rich people the same easy terms as the poor. The mortgage markets consequently exploded to stratospheric levels within a few years. But then there followed the collapse of 2007, which was inevitably given the unsustainable levels of debt. Meantime, a vast ecology of developers, constructors, real estate brokers, financial advisers, mortgage brokers and real estate investors, all small and medium-sized private businesses, had been created in the course of the boom. Then in 2008 they all faced bankruptcy.

This is the Trump base. This is why he is pro-finance and wants to eliminate all taxes for earnings below $150,000 a year.

The whole macroeconomic thinking about bringing industrial jobs home and cutting the trade deficit is secondary. This is merely something written into his brief by advisers. He personally is about cutting government expenditure, because smaller government and lesser regulation is what small businesses want and believe in. To the extent that these cuts cause a drop in imports, it might lead to a reduction of the trade deficit, but it isn’t at the forefront of his mind.

Tariffs as such are not at the core his thinking, which is why he vacillates about them. Under Trump 1.0, Biden and Trump 2.0, tariffs are part of a panoply of measures that include export controls in virtue of which United States is turning into a mercantilist economy. And this is happening in reaction to the changes that are being brought about in the world economy by China’s mercantilism. This is also why tariffs in one form or another – along with export controls – are here to stay. So the American establishment is in fact gradually inching its way into a multipolar world being shaped by China.

Marco Rubio told us as much in his 30 January interview with Megyn Kelly. We live in a multipolar world now. Neoliberalism, which is the economics of unipolarity, is necrotic – it is rotting. I come back to that in the final section.

The Third layer: We come to the third layer of Trumpism. We had the father at the bottom, then the real estate crash in the middle, now at the top we get the Zionism.

The key transfer of power that came with the 2008 crash is that it created a lot of homelessness and an entirely new class of renters. Obama, meanwhile, agreed with the Fed to open the Quantitative Easing (QE) spigot. Tons of money went straight into the pocket of millionaires with hedge funds or asset management companies who were able to access the cheap funding. They became overnight billionaires. They were able to buy up the rental blocks where the new class of renters needed to live.

A large proportion of these billionaires were Jewish; many of them emerging from amongst the clans of the so-called “Holocaust builders,” who had been the earliest arrivals to enter the real estate market after WWII. We can place Trump at the heart of this environment.

The Kushner clan was one of the most prominent of these clans. The second generation clan leader, Charles Kushner, who was a lawyer by training, was disbarred and sentenced to two years jail in 2005 for fraud, illegal use of funds and witness tampering. These irregularities were actually discovered when government officials sat in randomly to follow a court case, as they often do, which involved Murray Kushner, Charles’ brother. Murray was suing his brother Charles for money he said he owed him. When Ivanka Trump married Jared, Charles’ son, in 2009, Trump essentially became part of this clan. This clan significantly also counted Netanyahu as their family friend from his days as a furniture salesman. Trump pardoned Charles in 2020.

Besides the clan loyalty element, there is an strong Israeli supremacist character to Trump’s acquired Zionism. This differs from evangelical Zionism, and has more to do with Israel’s reputation as a tech powerhouse specialising in security.

The new owner class of rental blocs in the post-2008 QE era deployed so-called “Proptech” or property technology, which was developed by Israeli security firms, during the First and Second Intifadas, to control Palestinian protesters. These firms have, since 2013, marketed products in the US which use a combination of facial and voice recognition systems to identify people—and to register their emotional state, either to deny them access to buildings or summon the police—if necessary. The systems are sold to make more “efficient” and profitable, the processes of landlordism and rent extraction.

The vocal protests against the use of this specifically Israeli technology has ranged the new tenant class alongside Palestine protesters against the big landlords. Now that the Gaza genocide is unfolding and Palestine protests have exploded across American university campuses, the Jewish billionaire class, led by people like Barry Sternlicht and Bill Ackman are trying to control the protests and free speech in universities. They able to do this with Trump’s help. Trump is actively defunding universities that he sees as implicated in the Palestinian cause, and arresting and deporting protest organisers without due process.

This is how Trump’s Zionism is the Zionism of landlordism, which was clearly evident in his plan to remake Gaza into a beach resort – for Israelis.

THE STRATEGIC SETTING FOR THE EMPIRE AND ISRAEL

It is interesting in this context that Trump is now using the term “Palestinian” as a slur to describe Chuck Schumer. He does so to his face in Congress.

Schumer is the most senior elected Jewish politician in the United States. He campaigned vigorously last year for early elections in Israel to remove Netanyahu from power. Clearly, Netanyahu as a person is central to Trumpian Zionism in which clan loyalty plays a big part. Chuck Schumer on the other hand, is a representative of the American establishment, whose relationship to Zionism is more functional and dates back to Lyndon Johnson in 1967. That was the year in which Israel attacked the USS Liberty, killing American sailors. But it was subsequently admitted into the inner sanctum of the military-industrial complex, because of its rapid victories at the time over the armies of three Arab states. The sacrifice of the Liberty, a signals and intelligence gathering vessel, and its sailors, was forgiven by envious American admirals and generals in light of Israeli successes. It was seen as an effort in a time of war that was necessary to prevent potential leaks of information on Israel’s 1967 war plans.

The functional approach to Zionism by an American establishment pursuing “imperial” interests was more-or-less the approach from Johnson, to Carter, even to Reagan despite his espousal of the Christian Right, down to Clinton. A weak-minded George W. Bush, on the other hand, would be manoeuvred by a Jewish neoconservative cabal into pursuing Israeli interests by declaring war on Iraq. That and the war in Afghanistan rebounded on the establishment as incredibly expensive and embarrassing disasters. This means that it is almost institutionalised now that large numbers of ground forces intended for the invasion of any country will never be again authorised in the case of wars of choice.

When the establishment military-industrial complex sought to acquire Russian resources on the cheap to stem the yawning neoliberal deficits caused by Iraq and Afghanistan, as well as to encircle China, Biden specifically said that any ‘boots on the ground’ would be out of the question. The war would be fought ‘to the last Ukrainian.’ Obama stuck to the imperial playbook of backing Israel, and keeping the Palestinian territories separate as if they were a US protectorate. Then the neoconservative cabal took over decision-making again under Biden and backed the genocide in Gaza. This has deeply angered establishment figures like Bill Burns and Chuck Schumer.

The real test of strength between establishment or “imperial” Zionism and unhinged Trumpian Zionism will come over the question of the war with Iran that everybody is talking about. Strangely, it may well be Netanyahu who is the person who will ultimately see sense on this question, as opposed to the gaggle of idiots at the White House waging virtual wars on the Signal app. Keep in mind in this discussion also that, crucially, Putin always keeps an open line to Netanyahu. I will come back to that.

To understand where things are going, look at Israel’s situation.

Apart from the fact that the economy is in tatters, Israel’s army is a spent force. The air force isn’t an army. To move the Gazan population, you need an army. Meanwhile, Hamas has regrouped. It is not only able to cause as much damage to Israeli troops as it did on the first day of the war, but it is firing rockets at Tel Aviv.

The army along with armed settlers are terrorising West Bankers, but this is self-defeating and creating exponentially more trouble.

Netanyahu may want some kind of win to be able stay in power. But Witkoff has been telling him, since the 12 March meeting, that the Saudis aren’t going to give him or Trump anything if they don’t get a win on Palestine. They have time on their side. They are not fighting a war, Israel is.

Actually all the Arab leaders are behind this. They are only too aware of how Abul-Malik al-Houthi’s sermons are reaching the tribesmen in every wadi and the inhabitants in every settlement big and small across the Arabian Peninsula. Hour-long speeches describe the atrocities being committed against Arab women and children in Gaza in detail as if the listener didn’t have a TV set and needs the gory facts delivered alongside lines from the Qur’an. Al-Houthi’s credibility is reinforced by the fact that he has effectively shut down Ben Gurion airport and that he is regularly attacking the once fearsome US fleet comprising aircraft carriers and their battle groups. These are things also weighing on Netanyahu, as he listens to the warning sirens in Tel Aviv.

There are also two strategic problems facing Israel in the north.

Firstly, in Lebanon.

The Israeli air force is constantly strafing Lebanese targets in breach of the 26 November 2024 ceasefire agreement in order to put the Lebanese government under pressure to make political concessions of one kind and another that are not part of the cease fire agreement and are not in the government’s power to give without consent from Hezbollah and Amal. These two elements of the resistance, meanwhile, are sticking religiously to the cease fire agreement.

This is happening while the Lebanese foreign minister, Jo Rajjeh, a member of the extremist pro-Israeli Lebanese Forces, tries the patience of the political middle ground in Lebanon with astonishingly aggressive rants against Hezbollah. The fact of the matter is that the United States got the people they wanted in the current government in Lebanon. But in virtue of the US not allowing them to proceed with their mandate of reconstruction, and by not forcing Israel to abide by the ceasefire, the US is fast delegitimising its own creation. Soon the political middle ground in Lebanon and the army will loose patience and turn to the resistance for help as they have done before.

Secondly, in Syria and Turkey.

Having descended upon Syria with his ex-al-Qaeda fighting groups, Erdoğan is now in serious trouble. His initial goals are fast being compromised. The Turkish leader sought to put pressure on the Kurds in Syria to give up on the violence of the Kurdistan Worker’s Party (PKK) and endorse instead the People’s Equality and Democracy Party in Turkey (DEM). The DEM would be offered inducements to back one of two possible moves that would shoe him into a third term as president. Getting a new term was whole purpose of Erdoğan’s Syria gambit.

But Erdoğan hadn’t expected Assad to fall so quickly and become a guest of Putin in Moscow. As a result the leader of the ex-al-Qaeda group known as Hay’at Tahrir al-Sham (HTS) was suddenly installed in Damascus under Turkish tutelage as President of Syria. This has enabled Erdoğan not only to fast track the disbandment of the PKK, when he released its leader Abdullah Öcalan from prison, but also to get its sister organisation in Syria, the SDF, to sign an agreement with Damascus to integrate its forces into the national Syrian army.

This goes against what Israel wants. Netanyahu has in mind to divide Turkey in three between the Turks, the Kurds and Israel. He doesn’t want a central government in Damascus that will in future seek to reunite the country.

But things are now getting even more complicated than that.

HTS, being made up of fighting forces that are Salafist, unsurprisingly ended up massacring Alawite communities on the coast near Latakia. This has caused an uproar amongst the Alawites in Turkey. They are known as the Alevi community.

This discontent has spread quickly to masses of Kurds who are not happy with forming an alliance with Erdoğan’s Justice and Development Party (AKP) in the Turkish Parliament just to give him another lease of political life. If so Erdoğan will not get the seats he wants in the next elections. To stem the situation, he arrested Istanbul Mayor and potential opposition leader Ekrem Imamoglu, who is attracting the Alevi and Kurdish vote, on corruption charges.

What is worse is that Erdoğan’s traditional Islamic base is also extremely unhappy with his hypocritical stance on Israel and is likely to form a coalition with the opposition. Turkey is now in full riot mode.

If Netanyahu follows his declared goals, he will want to unravel the decisions made by the PKK and the SDF in order to maintain an independent Kurdish entity in the East. If nothing changes, Erdoğan, already under pressure internally will most likely decide on an emergency government and then military action in Syria. Just like Israel, Turkey will be driven into outward aggression by its internal contradictions. Two parts of the American empire in the Middle East will then be colliding in Syria.  

THE EMPIRE’S WAR ON IRAN

Then comes Iran.

Obama’s 2015 JCPOA nuclear deal didn’t bring Iran into the Western camp as much as neoconservative Israel firsters had hoped. Mike Pompeo pushed Trump into pulling out of the deal in 2018. Then the peace agreement between Iran and Saudi Arabia, coming in 2023 during a Biden administration at war in Ukraine, totally undermined the Sunni-Shi’a divide that the empire had so assiduously crafted with Israel as a foundation for Middle East rule.

Neoconservative policy was always to take down Iran as well as Iraq. If you remember, Iran had adopted a cooperative pro-Western foreign policy in the closing years of the Clinton administration, even as Iraq was being sanctioned after the First Gulf War and a no-fly zone was instituted over Kurdish areas in northern Iraq. But its government was blindsided by Geore W. Bush’s State of the Union speech in 2002, when Iran was described as a core member of the Axis of Evil.

Trump 2.0  launched with a Maximum Pressure Campaign on Iran from the start on 4 February, to cheers among Trump’s entourage, who are, above all, Israel firsters and Iran haters. The UAE was tasked with delivering a written ultimatum to Iranian leader Ali Khamenei with a two month deadline for capitulation.

Trump’s original argument for pulling out of the JCPOA was the fact that he wanted Iran not only to give up its peaceful nuclear capability but its missile systems as well. Mike Pompeo had originally convinced Trump that Iran didn’t need nuclear weapons to wipe out Israel, and that it could do so with its missiles. Since 2018, there has been a turn for the worse from that perspective. Iran has surprised everyone with its hypersonic capability and, following several Israeli provocations, retaliated with strikes, the first of which was really a symbolic gesture (True Promise I) but the second of which (True Promise II) wiped out Israeli air bases including F-35s fighter jets in service which couldn’t fly out to avoid the strike. 

When Khamenei openly spurned Trump written ultimatum in a speech on 12 March, Trump launched a full-scale air assault on Yemen on 15 March, three days before Netanyahu’s restart of the Gaza War. Charging Yemen to be an Iranian proxy when he did so, meant that this bombing of innocent civilians was supposed to be a warning to Iran. Ansar Allah hadn’t done anything at that stage. They had stopped their action against Israel when the Gaza ceasefire was announced on 11 January. Then they subsequently declared an intention to restart their campaign to block the Red Sea within two weeks, if the block on humanitarian aid to Gaza, started on 2 March, wasn’t lifted. Trump pre-empted Yemeni action with his attack. At the same time the Pentagon leaked plans to attack Iran with nuclear weapons.

Knowing that the Iranians are not going to submit to the terms of Trump’s letter of ultimatum, the Gulf states are doing everything possible to dissuade the US from attacking Iran. Given that they have been foolish enough to allow multiple US military bases and naval yards on their territory, their countries would be devastated in a war with Iran. Iranian retaliation with missile systems launched from miles upon miles of underground bunkers along the Gulf Coast would be catastrophic.

Qatari PM Mohammed bin Abdulrahman al-Thani has gone to great lengths to explain in press conferences how damaging it would be if Iran’s Bushehr nuclear power plant was hit, rendering waters from the Gulf unusable by human beings. Not only Qatar, but the UAE are particularly vulnerable. UAE Security chief, Tahnoun bin Zayed, flew to Washington to promise Trump $1.5 trillion in investments in America over the next ten years, if only the UAE were allowed to survive. He remembers well how American air defence systems didn’t do much to protect Israel from True Promise II, or indeed Saudi oil fields from Houthi missile attacks in 2019.  

It is not conceivably in the American interest to attack Iran, risking such retaliation and such consequences. Stock markets would collapse. Oil and gas price would rise to stratospheric levels. The political backlash around the world would be enormous. It is important to remember that escalating to a ground invasion is off the table. As noted earlier, American boots on the ground anywhere in the world, when it comes to a war of choice, rather than a war is necessity, is taboo.

That leaves the use of air power, which is why the leaked plans for a nuclear attack on Iran involved using B-52’s dropping bombs from a great height, from which only nuclear bombs would have the necessary force to have any impact on Iranian facilities deep underground. Even then, success is unlikely. Nuclear bombs are a blind beast from a bygone age that cause more damage than deliver actual results. Any air raid on Iran, even a nuclear raid, would not be more than a pinprick in a vast landscape. The retaliation, on the other hand, on America’s surface bases around the Middle East would come from over 500 different underground bases ranging across 1.5 million km².

That Iran does actually pose an existential threat to Israel in theory and that this devalues Israel illegal nuclear deterrent continues to fuel the fears that Netanyahu will ignite a war into which America’s Israel firsters would drag the United States. However, in the course of 2024 every time that Netanyahu provoked Iran into retaliation, we found that the US would mediate a resolution, either by contacting Iran through their Omani mediators in Muscat to go soft on Israel with an easily deflected attack (in the case of True Promise I) or by defending Israel along its NATO partners (in the case of True Promise II). By all accounts, both attacks were costly and exhausting in terms of materiel and personnel for the battle groups involved.

However, the watershed in the military standoff between Israel and Iran wasn’t 1 October 2024, the date of True Promise II.

The watershed was October 26, when some 100 F-35s flew towards Iran to bomb targets all over the west and north of the country and then had to fly back without launching their missiles, leaving to some drones the task of attacking an old half-empty base at Parchin. The Israeli press feted this as a devastating blow to Iran’s military infrastructure. The facts of the matter are that the F-35s turned back because, unexpectedly, an unknown anti-aircraft radar system locked onto them. It seemed that Iran possessed radar which could detect stealth aircraft and that the Israeli air force would suffer substantial losses in the air had an attack on Iran gone ahead.

This is not something Israel had so far had to face. It came in the wake of months of talks between Russia and Iran over a strategic agreement which included technology transfer, while Iranian leaders displayed an unusual degree of unity and unflappability during this period of maximum pressure from Trump. One has to ask why.

Iran has historically always represented the soft underbelly to Russia’s southern republics. It dominates all central Asian trading routes. It is a country therefore that Russia would always seek to defend. The talks between the United States and Russia on Ukraine are ongoing but are essentially not leading anywhere. None of what Putin calls ‘dealing with the roots of the problem’ are being addressed by the United States. It has seemed to the Russians that America is simply presenting temporary solutions to the Ukraine problem that are thinly veiled attempts to peel Russia away from its alliance with China (what has been called a ‘reverse Nixon’), or from its vigilance over the approaches from the Persian Gulf to its southern borders.

Putin’s withdrawal from Syria may have been a betrayal of the Axis in the narrow context of the Syrian sphere. But on 25 February Russian FM, Sergei Lavrov, went to Tehran to explain to the Iranian leadership why they had no choice (Secretary of the Russian Security Council Sergei Shoigu went to Beijing on 28 February to do the same). They emphasised that they had rescued Assad from a fate that would have resembled that of Libyan leader Muammar Ghaddafi and that Russia real aim is to seek to work in Syria to reunite the country.

It is clear, however, that the Russia-Iran strategic pact of 17 January is founded on secret technology transfer protocols rather than on any kind of mutual defence pact (N.B. Iran is clearly scientifically advanced enough to also transfer technologies also back to Russia). In the channels that remain open between Putin and Netanyahu, Putin would be warning Netanyahu, not that an attack on Iran would cause regional devastation (as discussed above), but that it would simply not meet its intended goal in the first place.

[Added note 28 March: Since posting this article, there has been a surprising development in that the Trump White House has published the 2025 Annual Threat Assessment which, for the first time, states that neither China, nor Russia, nor Iran are deemed to have a aggressive posture towards the United States. It is difficult to know what to make of that, except to say that on balance, it underlines the view that, a US attack on Iran is unlikely, and all the hullabaloo could just be pressure being applied on the Arab leaders of the Gulf to dig deeper into their pockets for Uncle Sam. After all, in the past eight years, the United States has watched as they shifted their trading relationships substantially towards China and the BRICS.]

Iran thus remains a formidable opponent of Israel in the Middle East, which could be vulnerable to internal dissent but not to external attack. However, while Israel and America may dwell on the possibility of destabilising Iran, America as “empire” should rather concern itself about its own dissolution in the Middle East as the situation in Syria worsens, promising conflict between Turkey and Israel, and its Arab allies in both the Levant and the Persian Gulf turn increasingly hostile to differing degrees, but as they become unanimous in their rejection of the situation in Israel as it stands.

NEOLIBERAL NECROSIS

Shifting gears from geopolitics to geoeconomics in this last section I want to fill in some blanks in the discussion above about Trump’s tariffs and the multi-polar world we are entering.

Politicians and bureaucrats in the United States running the country need to look hard at how the world that is increasingly being shaped by Chinese choices, because this influence will only increase.

China has been massively influential throughout the past decades.

Where neoliberalism is a régime of inequality, creating a strata of rich monopolists and rentiers, China raised 700 million people out of poverty. This, ironically, was the single greatest driver of growth of the neoliberal era.

China’s $600bn stimulus in 2009 in the wake of the Great Financial Crash was, in the context of the Obama administration’s inaction, the only positive action which allowed the world to get away with a recession rather than another Great Depression in the 2010s.

But all this took it toll on China. It has had to endure financial turmoil since then and has had to apply itself to the task of deleveraging local government balance sheets, whilst shifting away from real estate as the major source of local government revenues, in a complex and huge administrative environment. This inevitably took time.

China under Xi Jinping: The definancialization at the core of Xi Jinping thought seeks growth without excessive rent-seeking by financial intermediaries, thus leaving profits where they should be within the productive system. This has been difficult to achieve. Similarly difficult has been instituting the drive to so-called “high quality production” and to “deepening reform.” These two goals are all about across-the-board technological upgrades in production, required concomitant upgrades in consumption habits, and making sure that consumer education of the masses goes hand in hand with the producer education associated with technological advance.

All this is only now starting to bear fruit.

The drive to greater domestic consumption which was not only about definancialised growth, but growth also that would be robustly independent from the American consumer in relative global terms, is only now beginning to look to be possible. Only after the latest “Two Sessions” of the National People’s Congress (NPC) and of the National Committee of the Chinese People’s Political Consultative Conference (NCCPCC) that ended on 11 March, has a definitive text about the long awaited domestic consumption drive been announced. But typically, no financial stimulus is involved.

What the Chinese government intends is to finance a freecycling system through local governments in order to drive consumers to upgrade to higher technology products across the more affluent sectors of the Chinese population through education, whilst actively downcycling older secondhand products to the less affluent.

Only when Chinese industry and high tech reach high levels of reliance on the domestic consumer market, will the Chinese government feel secure enough to free the Chinese currency as an international currency.

We have to remember the initial basis of the legitimacy of the Chinese Communist Party (CCP) and why it won over the Chinese masses to its cause during the 1930s and 40s, even before it formed the People’s Republic (PRC) in 1949. The basis of its legitimacy was the successful management of its currency and the avoidance of inflation. The CCP did this by consciously developing a trade surplus in the areas under its control, accumulating stocks of essential commodities, and trading them for its own paper currency, thus marginalising the competing currencies used by the Nationalist government and the Japanese.

The more recent and unusual growth of the Chinese economy through exports, however, has led to a reluctance on the part of the CCP to internationalise the Renminbi. This is only considered to become possible when the vast majority of the consumption it depends on will come primarily from the domestic market, and when secondly the greater part which is not domestic becomes based in large part on its Asian periphery, leaving trade with the West as a tertiary circle.

The United States under Trump: Trump’s Treasury Secretary, Scott Bessent, devised a plan to use sharp increases in across the board tariffs to blackmail nations across the world, especially China, into revaluing their currencies. This was intended to make US imports more expensive and US exports cheaper, thereby reducing the trade deficit and by thus increasing the prospects for domestic production, increasing available high quality jobs, thus answering the urgent demands of today’s populist pressures, out of which the Tea Party and then the MAGA movements emerged. At least that is the theory.

But as explained above in the analysis of Trumpism, this abstract economics is not really relevant to Trump’s own politics. It is an economic collage stuck together for him by third parties. Trump will pursue policies like massive tax cuts that will negate what Scott Bessent says he is trying to do.

Furthermore the ‘reshoring’ scenario of this abstract theory suffers from the reality that bringing home production of high tech items brings few jobs with it, that changing industrial strategies takes a very long time to implement, and that the world has changed since 2008, such that the majority of trade is now done outside the ambit of the United States and its allies in the West.

It is therefore much harder to blackmail foreign nations with tariffs than it used to be.

When Trump, on Scott Bessent’s advice slapped tariffs on Canada and Mexico on 4 March, suddenly and without a single meeting of the parties, Warren Buffett described them as not part of an economic strategy, but as a declaration of war. It is a reminder, in fact of the beginnings of neoliberalism in 1971, when Nixon closed the gold window.

In 1969, Richard Nixon, faced with unresolved trade and balance of payments crises, demanded answers on why there was a trade deficit. The liberal economists reported that inflation was causing a sharp rise in imports and a slowdown in exports. The Commerce Department saw the declining competitiveness of American industry, which was unable to compete with higher quality Japanese and German manufactures, as the main long term cause. The labour unions saw foreign investment and technology transfer abroad by American capital that refused to upgrade domestic manufacturing, as the cause of the trouble. Labour, in fact, asked for protection and capital controls.

Business on the other hand, sought to escape the New Deal compact with labour. It simply ignored all these interrelated structural factors that had a national reference point, and simply laid the blame at the door of ‘unfair competition’ by foreign powers. Business then demanded free trade and the backing of government in a foreign investment drive to ‘confront’ the foreigner on his own turf. This was the behaviour that labour complained about as the cause of the crisis in the first place.

The then Treasury Secretary John Connally backed the business position, but this would require freeing the government from having to convert dollars into gold.

Scott Bessent today is exhibiting Connally’s exact same behaviour, but in different circumstances. He is ignoring all the hard choices that need to be made through domestic structural reform, which involves bringing America’s corporations to account. There are two aspects to this.

The first relates to corporations as transnational operators. In the current neoliberal context, American corporations are creating enormous profits based on high prices at home and cheap labour abroad. These profits are not repatriated unless it is necessary to buy back stock (to put their stock options in the money, and reap vast personal executive income), doing so in ways that minimise the payment of tax to the Federal government.

The second relates to corporations as members of the corporate welfare system that is the military industrial complex, what has been called here Pentagon Capitalism. This type of capitalism is a sort of socialism for the rich and involves a bloated and inefficient defence budget that crowds out investment in education, environmental protection and infrastructure. It thus reduces long-term productivity, living standards and even life expectancy.   

Bessent will not attack the corporations on either count. Like Connally in 1971 he wants all adjustments to be done abroad, on the basis that America’s trade deficit is someone else’s fault.

Connally’s advice to the president in 1971 was to close the gold window, and throw adjustment onto foreigners, leaving them with inconvertible US dollars that kept falling in value causing high inflation and panic everywhere.

It wasn’t until 1982 when Paul Volcker put a hard squeeze on the money supply that things turned around. The squeeze was so hard that it caused the long term unemployment and marginalisation of whole communities that has lasted to this day, hidden by the practices of the Bureau of Labor Statistics discussed above.

So the United States sacrificed its population on the altar of a hard currency that kept American trading partners and allies on board and allowed American élites to continue making money by running deficits. The dollar empire was created in such a way that foreigners began to accept simply accumulating dollars and reinvesting them in the United States.

The international trading community, narrower as it was at that time than it is now, was left with no choice but to come to this collective resolution. But that was only because they had no other option. If China does begin to feel confident that its trading configuration permits an internationalisation of the Renminbi, this will change overnight.

Meanwhile, as pointed out earlier, the theoretical picture painted by Bessent about tariffs is a red herring. Tariffs are here to stay in one or other form in an increasingly mercantilist multipolar world into which the United States is sleepwalking.

[Ref: Prt 16 Post-Script 36; info@globalshiffft.com; © 2025]