Will Donald Trump tame the Global Casino?

The FT notices that behind the scenes, his team are thinking about it...

With acknowledgement to Christina Pazzanese & Harvard Gazette

As my ever-so-patient readers know, I am writing a book, that if I had the rights, would be titled: Fight the Power of the Global Casino. My publisher demurs, and is consulting the marketing department. In the meantime the truly back-breaking graft of writing about economics in an intelligible way keeps me away from this site. But I had to write today, for fear of being left behind by Gillian Tett, a Financial Times opinion writer - and brilliant journalist, who today wrote an important piece on what is happening behind all the histrionics of the new Trump administration. .

For those with no access to the FT, the thrust of Ms Tett’s article is as follows: Just as Trump imposes tariffs on goods entering the United States, so he may soon impose tariffs on money flowing into the United States.

As y’all know, I am a long-time advocate of capital controls as a way of subordinating the Global Casino to the interests of society. Not that I think the word ‘control’ is right here. I prefer to phrase it this way: states should have the power to manage cross-border capital flows.

It is difficult to predict the outcome of Trump’s chaotic trade policies, but I have long believed the United States would lead the transformation of the international financial system away from its current state of disorder. In 2003 as editor of a book on globalization I wrote that the US:

“as well as being the world’s richest country, is also one least dependent on international trade, with exports accounting for only 10 per cent of GDP compared to 28 per cent in the Eurozone. In response to external crises, the United States may well batten down the hatches further, turning inwards and reducing its dependence on the global economy. As it well knows, the United States can produce almost everything it needs from within US borders, with the notable exception of oil…

The United States may actually prosper in such a situation. Of course, levels of consumption will fall, as US citizens no longer thrive on the fruits of other countries’ cheap assets and finance. But once the dollar starts to lose its shine…a ‘localisation’ scenario may start to look more favourable than any other….Employment may even increase, as US manufacturing industry, decimated by international competition, is reconstructed.” ^[i]

My reasoning in the early 2000s was not entirely sound, and some facts have changed. The energy situation has changed dramatically since then and US trade rose to 27% of US GDP in 2022 and fell back to about 25% of GDP in 2025. But my intuition was correct. Today, more than twenty years later, Donald Trump’s economic adviser notes that Americans’ opinion of how well the international trade and financial systems serve their interests deteriorated substantially over 2015-2025.

“Among voters if not among economists, the consensus underpinning the international trading system has frayed, and both major parties have taken policies that aim at boosting America’s position within it.” ^[ii]

American working-class voters will likely lose this round of the battle, just as the United States will lose the wider trade war fight, if it fails to manage cross-border capital flows, to tame the Global Casino.

Trump wants a Strong Dollar

He can only do so by addressing the issue of the country’s open capital account and the strong US dollar. Stephen Miran, the head of President Trump’s Council of Economic Affairs noted in a report published in November 2024 that the president was reluctant to tackle the strong dollar.

“Trump” he wrote “has praised the reserve status of the dollar and threatened to punish countries that stop using the dollar for reserve purposes.”^[iii]

As long as surplus countries like China, the world’s central banks, corporate, individual investors and speculators are free to re-invest earnings from exports and speculation into the US, by purchasing intangible financial assets (like US Treasury bonds, stocks and shares, derivatives) - so long will the dollar remain strong, and the US current account unbalanced. The simple reason being that unregulated inflows of capital into US financial institutions, strengthens the U.S. dollar.

And, as is well understood, a strong dollar makes U.S. exports more expensive, and imports cheaper.

Despite Trump’s apparent opposition to a weakened dollar, there are signs that change is possible. In 2019, US Democrat Senator Tammy Baldwin and Republican Josh Hawley, published a bill that called for taxes on capital inflows and for a weak dollar policy. ^[iv] Then in 2025, as Gillian Tett points out in her article, a conservative think tank – Compass (U.S.) – published a report: Implement a Market Access Charge (MAC). ^[v] The think-tank claims to be ‘developing a conservative economic agenda to supplant blind faith in free markets with a focus on workers, their families and communities, and the national interest’

Compass (U.S.A.) argued that foreigners were not trading their goods for US goods/products.

Instead they were trading products for US assets, including corporate equity, real estate and Treasury debt.

The think tank proposed a charge on “foreign purchases of dollar-denominated American financial assets, starting at a rate of 50 basis points, would increase by 50 basis points every year (or six months) until a trade balance or surplus is achieved. The charge would then decrease the year after a surplus is achieved. The MAC would be collected automatically and electronically on all foreign capital inflows by the computer systems already present in the U.S. banks that handle most of America’s cross-border financial transactions.

Compass proposed that rather than succumbing to a ‘blind faith in free markets’ the American state should manage cross-border capital flows.

For many on Wall Street and in mainstream university economics departments, the very idea of charges on flows of capital are a shocking deviation from the ideology of deregulated global markets in money. Yet those same critics would be astonished if U.S. capitalists like Tim Cook, the CEO of Apple Inc. refused to manage their global companies and instead left the ‘invisible hand’ to control the company’s investment, marketing, employment and output policies.

Far from being radical, decisions by nation states to manage their economies and their capital and current accounts are entirely reasonable and sensible. But are they realistic?

There will be ferocious resistance from Wall Street to the proposal for a Market Access Charge (MAC), and actors in foreign financial centres like the City of London, Frankfurt and Hong Kong, to the effective taxation of capital inflows.

Finally, will the tax on inflows be coupled with a tax on outflows? Both flows have to be ‘charged’ if the system is to be managed.

And there will be other constraints on the Trump administration as it tries to stabilise its current (trade) account..…but you will have to read the book to understand those better.

The Real Trade War as a Conflict between Wealth & the Majority

The story of taxes on flows of capital flows is not the real story. As I write in the new book:

Trade wars are often depicted as a conflict between countries. But as Klein and Pettis argue in their acute analysis of the global economy, a trade war is a conflict within a country, transposed, wrongly, as a conflict between countries. ^[i] In the process ordinary people like Americans that voted for President Trump, are led to believe that the Chinese, Europeans, Canadians, Mexicans amongst others, have undermined their living standards. That is patently not true. It is the deregulated international financial and economic system from which the wealthy richly benefit, that has led to job and income losses in the Rustbelt and elsewhere.

The United States’s trade war is a conflict between the interests of rich exporters, bankers and owners of financial assets on one side, and on the other, nearly 80% of Americans living from one pay-check to another. ^[ii]

Rich exporters are subsidised and protected by the state (think EXIM bank: “Keeping America Strong. Empowering US Business and Workers to Compete Globally”.) Producers for the domestic US market don’t get those subsidies and protections.

And if US firms and households can’t afford to pay for foreign imports, Wall Street has a loan for you. If you’re exporting into the United States, Wall Street is only too happy to facilitate your transactions. If you can’t afford to buy a home, that is probably because Wall Street has arranged the sale of all the property assets in your district to a foreign private equity firm, holding more U.S. dollars than they know what to do with…and seeking to make a quick speculative fortune.

The campaign to elect Trump was backed by billionaires. That might explain why the cost-of-living crisis, the rising costs of food and energy, the lack of affordable, decent housing, health and education was not blamed on the financial system and global markets, but on the people of China, Mexico, immigrants, and on ‘culture wars’. (As I have tried to show in earlier posts, the rising costs of food, energy and housing can be blamed on global markets in commodities, property and money.)

Despite the misleading propaganda of the campaign, simmering public resentment against the rich billionaires that joined the administration before and after the campaign, soon surfaced. Trump had scarcely begun his presidency before he faced rising public anger over the actions of his billionaire ally, Elon Musk. Millions set out to deliberately and successfully harm Musk’s business interests and sales of Tesla cars.

Yet a large proportion of the non-college educated working classes of the United States consciously elected a political leader that had promised to ‘make America great again’; to impose tariffs on China and Mexico, and to tame the ill-defined ‘elites’.

At least, that is what most Americans thought they had voted for.

Though they may not know it, their votes have launched a challenge to the existing global economic order - and the possibility of Market Access Charges on foreign capital.

As Gillian Tett points out in her FT column today.

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^[i] Matthew C. Klein and Michael Pettis, 2020, p. 221. Trade Wars are Class Wars.

^[ii] PR Newsire, 25 September, 2024. Survey Reveals Majority of Americans Still Living Paycheck to Paycheck. https://www.prnewswire.com/news-releases/survey-reveals-majority-of-americans-still-living-paycheck-to-paycheck-302257819.html

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^[i] Ann Pettifor and Romilly Greenhill, Chapter 25, Framework for Economic Justice and Sustainability in Ann Pettifor, editor, New Economics Foundation, 2003, p. 216. Real World Economic Outlook. The legacy of globalization: debt and deflation.

^[ii] Stephen Miran, Hudson Bay Capital, November 2024. A User’s Guide to Restructuring the Global Trading System. https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf

^[iii] Stephen Miran, as above.

^[iv] Senator Tammy Baldwin, 31 July 2019. The Competitive Dollar for Jobs and Prosperity Act. https://www.baldwin.senate.gov/news/press-releases/competitive-dollar-for-jobs-and-prosperity-act

^[v]Compass, 11 February, 2025. Implement a Market Access Charge. https://americancompass.org/wp-content/uploads/2025/02/MARKET-ACCESS-CHARGE.pdf