While Trump’s eventual return to the White House saved him from prosecution for trying to overturn the US government, Bolsonaro enjoys no such immunity. He is being tried for masterminding a failed coup d’etat by Alexandre de Moraes, a shaven-headed bruiser on the country’s supreme court, and will probably be sent to jail for a long time. And as if that were not destabilizing enough for Latin America’s biggest and most complicated country, Trump is now waging diplomatic and economic war against the government of President Lula.

The crisis started on 9 July, when Trump sent Lula an open letter announcing 50% tariffs on Brazilian products, among the highest he has applied. For all Trump’s talk of a level playing field, this has less to do with trade — the US runs a surplus with Brazil — than with taking down a titan of the global Left and aiding a fellow Right-winger in difficulty. Trump called Brazil’s treatment of Bolsonaro a “witch hunt”. That’s the very term he used to describe his own legal travails.

But if Trump expected Lula to scurry to Washington D.C. for a dressing down, he misread this grizzled opponent of the country’s former military dictatorship, who has himself seen the inside of a jail cell after being engulfed in a corruption scandal. Not for Lula the toadying of a Keir Starmer or an Ursula von der Leyen; in a televised address to the nation on 18 July, he denounced Trump’s “unacceptable blackmail” and “attack on national sovereignty”, adding in an interview with CNN, “if Trump was Brazilian… he too would be on trial”.

For his part, de Moraes, the kind of man who arranges the office furniture so as not to be surprised by a possible assailant, ordered Bolsonaro to wear an ankle tag to stop him absconding — as he did, to Florida, during the debacle of January 2023.

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From his position on one of the most powerful courts in the world, “Big Alex”, as he is known, has punished US tech companies and Bolsonaro supporters, who had fired off scurrilous posts from America, with fines and other restrictions. Last year, meanwhile, he blocked access to X in Brazil until the platform complied with his order that it ban accounts spreading the fallacy that the 2022 presidential election was rigged. From exile in Washington D.C., where even de Moraes cannot reach him, Eduardo Bolsonaro, the ex-president’s son and a deputy in the Brasília parliament, calls the judge a “psychopath out of control”.

It was lobbying by Eduardo that persuaded the US government, on 30 July, to impose sanctions on Big Alex — who promptly placed the elder Bolsonaro under house arrest and seized his mobile phone. On 6 August, Trump’s tariffs came into effect, albeit with exceptions that include Embraer aircraft, orange juice, iron ore, wood pulp and petroleum. Brazilian coffee producers have started panic selling while, as Elizabeth Johnson of TS Lombard, a veteran Brazil analyst, told me, “the mango farmers of northeastern Brazil will have no alternative but to bury their rotting fruit in the ground”.

Wary of fueling inflation — already running at 5.4% — by imposing reciprocal sanctions, and with his fellow Bric leaders absorbed in tariff negotiations of their own, Lula’s ability to retaliate either unilaterally or in concert is limited. According to the Sao Paulo newspaper Estadao, the government is steeling itself for additional tariffs later this year, when Bolsonaro’s trial may conclude in a judgment that is politically fatal to him and objectionable to Trump.

All this said, the size of Brazil’s internal market makes it reasonably well placed to weather external shocks. Last year, after all, exports accounted for less than a fifth of GDP, of which just 12% went to the US, compared to 28% to China. Furthermore, as Diego Sartorato, a former staffer in Lula’s office, told me, while agribusiness — Bolsonaro’s natural constituency — will suffer as a result of the new tariffs, “the effect on inflation has already been positive”. As Sartorato points out, the price of a 500g pack of coffee has fallen from over $9 to around $7 — “and Brazilians love their coffee”.

If this, then, is what a breakdown in relations between the two largest economies in the Americas looks like, it also shows how events might help a physically frail, 79-year-old, third-term president win back lost support in time for his re-election bid in 2026. “Trump is making Lula great again,” Johnson went on, alluding to a recent opinion poll showing Lula’s approval rating above 50% for the first time this year. “What could be better for an embattled politician than to have an external enemy and for his main rival to be the cause?”

It is certainly getting harder for Bolsonaro to square his slogan, “Brazil above everything!” with his embarrassing devotion to a foreign leader intent on crippling the Brazilian economy. And yet, at an estimated 37,000, the crowd of Bolsonaro supporters that converged on central Sao Paulo on 3 August to protest against their hero’s house arrest was three times the size of a similar gathering — this one with Bolsonaro himself in attendance — at the same location in June. In Rio, a demonstrating Bolsonarista told France 24 that she agreed “100%” with the US sanctions on de Moraes, adding that “since no solution was found here, it had to come from elsewhere”.

For all the dedication of Bolsonaro’s core supporters, however, the Lula government is riding a wave of patriotism, one lent additional power by a US investigation into a wildly popular Brazilian payment system on the grounds that it may discriminate against US alternatives.

As for Lula himself, his TV address last month showed him punchy and alert — useful for preempting comparisons with “sleepy” Joe Biden, his old friend from the gerontocracy of the Left. Meanwhile the political tyro Bia Lula — the President’s 30-year-old granddaughter — has been having fun at Bolsonaro’s expense. “He’s constantly putting his feet where his hands should be,” she chuckled in a recent video, “and now he’s at home with his ankle tag and without a phone… congratulations, champ!” Then, turning her attention to Eduardo: “you spent two billion reals [$363 million] on lobbying in the United States. And the result? Father arrested and assets blocked. Total success!”

Amid the knockabout, Bolsonaro’s trial grinds on, and the charges could hardly be graver. The former president is accused of trying to destroy Brazil’s democracy. He is also accused of plotting to assassinate Lula and de Moraes. On 28 July, one of his co-defendants accepted the authenticity of a “coup plan” envisaging the imprisonment of several supreme court judges. Bolsonaro himself has acknowledged that he took part in meetings to discuss “alternative ways” of staying in power, the options including the deployment of military forces and suspension of civil liberties — but stopping short of an actual coup. “A coup is something abominable,” he told de Moraes from the stand, “and such a hypothesis was never even considered.”

That Big Alex is presiding over the trial of a man accused of plotting to kill him is not the only peculiarity of a case whose proceedings are broadcast live, with much incriminating evidence deriving from plea bargains, and whose final judgement is the subject of opinion polls. The most recent, conducted in late July, found that 48% of Brazilians want Bolsonaro to be sentenced to prison for his role in the alleged coup; 46% do not. That such polls are even conducted illustrates how public opinion is both grit and lubricant in the machinery of Brazilian law.

His conviction and imprisonment seemingly preordained, and his social media accounts silenced by Big Alex, Bolsonaro is running out of road. And yet, whether he is succeeded as figurehead of the far-Right by Eduardo or another of his sons of varying flamboyance and dissipation; the more straightforwardly conservative governor of the state of Sao Paulo, Tarcisio de Freitas; or someone we haven’t heard of yet, the answer is probably no: Bolsonarismo isn’t going away. Through his rhetoric, his undermining of environmental regulations and his support for the mining, farming and gun lobbies, he has vitalized a body of opinion, anti-woke, pro-wealth and fervently evangelical, that will retain its potency for years to come.

And what of the man himself, with his infantile smile and fragile amour propre, his alliances with agribusiness and evangelists who hold their noses at his incoherent speeches stippled with obscenities intended to curry favor with the plebs, a favorite being porra, meaning “semen”; the man of the immortal line, uttered to a female political opponent, that she was too ugly to consider raping? While he was never — even as president — in charge of the movement that takes his name, the former paratrooper did more than most to bring into existence the Brazil of deforestation, expulsion of indigenous people and farms the size of Luxembourg, the Brazil of soaring gun ownership where 600,000 people were murdered over the course of a decade, and where, in the year ending July 2024, 83,988 cases of rape were reported.

Opposite the presumed felon stands the dinosaur Lula, who for all his ancientness and his tolerance of corruption represents the Brazil of affability, multilateralism and care for the poor — and now of wounded pride. And, everywhere, the mutual animosity of the bald judge and the foreign president, spreading like an oil slick over the waters of the western hemisphere.

Offering Kurilla a friendly handshake — and Dan Caine, America’s top military officer, an invite to his Pakistani homeland — Field Marshal Asim Munir is clearly at home in the Land of the Free. In June, for instance, he enjoyed a two-hour private lunch with Donald Trump, while Islamabad has also nominated the President for the Nobel Peace Prize, describing him as a “genuine peacemaker” who’d soon bring peace to Iran and Gaza alike. Never mind that Tehran is bloodied and Rafah a wasteland: such shameless toadying has long been central to Pakistani foreign policy. 

After all, there have to be some advantages to sharing your four land borders with the continent’s great powers of India and China, alongside the pariah states of Iran and Afghanistan. And if our new geopolitical era is to be defined by multilateral deal-making, atomic brinkmanship and vaulting duplicity, Pakistan would appear to be extraordinarily well positioned. There is, perhaps, no nation on Earth better at playing one set of interests off against another — especially when it’s the only Muslim nuclear power, and enjoys a robust tradition of self-interested military leaders keen to consolidate their own power.  

Munir has so far proved himself adept at negotiating these difficult waters. When he’s not glad-handing in America, he basks in the afterglow of what is seen (in Pakistan at least) as a “triumph” over India, after the two countries seemed poised to enter full-scale conflict over the disputed territory of Kashmir earlier this year. Not one to waste an opportunity, Munir had initially used the 12-day war between Iran and Israel to consolidate Pakistan’s growing influence in the region and present itself as a useful and, if needs be, servile partner to the US.

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Certainly, Munir himself is keen to oblige. During his lunch at the White House, he presented himself as a trusted source of information on Iran, discussing rare-earth minerals and bitcoin mining contracts — and apparently receiving a MAGA hat for his troubles. Pakistanis know Iran “better than most,” Trump told reporters following the meeting. 

Pakistani officials were also in Washington in July, dangling lucrative mining contracts in front of American firms; promising to buy American cotton and soy; and vowing to devote 2000MW of electricity (a coal-fired power station’s worth) to bitcoin mining, the latter a flattering imitation of the Trump family’s own grand crypto scheme. Islamabad has also co-signed a “letter of intent” with Trump’s pet syndicate, World Liberty Financial, vowing to cooperate on blockchain and stablecoin adoption. 

The general idea is clearly to discourage US tariffs — not least given Pakistani factories produce many of the cheap consumables so beloved of American voters. And, it must be said, Islamabad has lately managed to get its tariff down to 19%: not ideal, but better than the 29% previously threatened. Either way, Pakistan knows better than most how to be a client state. If all this results in American investment, Munir will congratulate himself on having played a storming innings on a tough wicket.

Promoted to Field Marshal in May following the “triumph” over India, Munir has managed to promote himself from the depths of unpopularity to become his country’s ruler in all but name. As his frequent transatlantic trips imply, even the White House has played along: he’s now the go-to interlocutor in Washington, with Pakistan’s hapless civilian politicians left twiddling their thumbs. 

All this is part of a broader strategic plan. For if rekindling animosity against India, helped Munir consolidate his power, the Trump-led ceasefire — Modi’s government vehemently denies the idea of US intervention — has further established Pakistan’s aspirations of parity with India. That there would be the need for global mediation contradicts Indian assertions that they are the subcontinent’s hegemon, and it undermines New Delhi’s insistence that all issues with Pakistan, including Kashmir, can only be discussed bilaterally. 

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In many ways, this year’s India-Pakistan crisis foreshadowed the Israel-Iran conflict. In both Kashmir and Palestine, there are Muslim populations under the occupation of non-Muslim militaries. In both Kashmir and Palestine, jihadi proxies of Pakistan and Iran have sought to liberate these Muslim populations with attacks on civilians. In turn, India and Israel have both targeted military infrastructure in Pakistan and Iran that they deem to be existential threats. 

And while Israel’s war specifically targeted Iran’s nuclear enrichment sites, prompting America’s involvement, it was similarly Pakistan’s possession of a nuclear arsenal that fast-tracked the American-negotiated ceasefire. To reiterate: Pakistan is the sole Muslim country with a nuclear arsenal — something its leaders have described explicitly as an “Islamic bomb”. For the past two months, Trump hasn’t failed to miss an opportunity to remind the world that he was the man who “stopped nuclear war”. 

Whether or not going nuclear was even remotely considered by Munir, the mere suggestion of escalation not only won Pakistan the ceasefire — but also focused American minds on Pakistan at a moment when it had progressively fallen under Chinese influence. 

China has invested heavily in Pakistani infrastructure in the past decades via its Belt and Road initiative, creating the $62 billion China-Pakistan Economic Corridor, which gives Beijing vital access to Pakistani ports. However, it has done so in the face of increased resentment and symbolic attacks on Chinese targets, including a 2018 attack on its consulate in Karachi. China, for its part, has responded by micromanaging Pakistan, transforming the country into a de facto colony. 

Still, it was ironically Pakistan’s successful use of Chinese military equipment, shooting down two Indian fighter planes, that prompted the US return to the aid of Islamabad; in recent years, America has counted on Indian military strength as a counterbalance to China. This is precisely the sort of complicated balance of power that Pakistan is now poised to exploit, by playing American and Chinese interests off against one another to get the best deals out of the two competing world powers.

No less important to the US is the influence that Pakistan wields to its north. Pakistan is now a key part of the Saudi Arabia-led military coalition of Sunni states, orchestrated by Riyadh, whose aim is to counter the influence of Iran and its Shia allies in the region. Indeed, Pakistan has allowed Salafi jihadi proxies funded by Saudi Arabia to flourish in the region for decades.

This is why, as Israel and Iran clashed, Pakistan joined a host of Muslim countries in condemning the Jewish state, even as it prepared for the downfall of the Shia one. Pakistan was careful to distance itself from Tehran’s wishful claim that Pakistan would lend it military support against Israel — and went so far as to close the border with Iran to prove the point.

Field Marshal Munir will now be bracing for the call of duty. Should the collapse of the Islamist regime in Tehran throw the country into chaos, or should the existing regime fail to follow through with the updated nuclear agreement, it seems likely that the eager Pakistan army would be called into service at the behest of the Americans. The US won’t want the Islamist in Tehran to obtain a nuclear bomb with the connivance of the Islamist regime in Islamabad that already has one.

If there are contradictions inherent in all of this, Pakistan has form. After all, Islamabad famously took money from America to fight the Taliban in Afghanistan, only to allow jihadist groups to run amok with its notorious “Good Taliban, Bad Taliban” strategy. This backfired, though, when the Afghan Taliban — the good one, as opposed to the bad one — was close to establishing official ties with Iran in the lead-up to the recent clashes. The Taliban regime in Kabul will now look to increase its own push for Trump’s recognition, offering to serve American interests in Iran. That, it goes without saying, would be a nightmare scenario for the Pakistani army.

Small wonder, then, that Pakistan is now attempting to position itself as a vital US partner in the region: a haven for crypto speculation, a mine of rare earth minerals, whatever the environmental or the human cost. But the West should be careful. For this is also a state that has harbored jihadis who launched attacks on American soil, has all but given up on democracy — and, a little over two months ago, brought the world to the brink of nuclear war. Even so, Pakistan’s attempts at flattery are working. If Trump does indeed win the Nobel Peace Prize, it would represent a significant victory for Pakistan, and a global recognition of the country’s triumph over India. It would also be the supreme vindication of Asim Munir’s playbook: why make peace when you can make deals?

In a similar vein, anyone even vaguely Trump-sympathetic outside the United States might now be asking themselves: “What did we think America First meant?” Having grown accustomed to leaders who make conservative noises while governing for the financier class, the Right probably expected Trump to be more of the same. But it would seem not: his tariff regime has already triggered the worst fall in the stock markets since 2008. It is a wholly avoidable disaster for global finance, and one that has left millions bewildered and furious. In short: considerably more than vibes and papers. And while the losers are legion, it’s not at all clear yet who the winners will be.

It’s reasonable to assume that Trump himself believes the answer to be: Americans. What indeed did we think “America First” meant? Vibes? Papers? Essays? For decades, the American policy was to pursue American interests within a wrapper of neutrality and universalism. Trump is now re-deploying all the power America accumulated within that wrapper to dismantle that system — to, he hopes, American benefit.

All of this means taking on Big Finance. For it has long been American economic policy to guard the dollar’s status as global reserve currency: a value that, since the abandonment of the gold standard, hasn’t been tied to anything material. This floating dollar, and the Federal Reserve’s power to print more money at will, have enabled the Land of the Free to run ballooning trade deficits for decades, to the immense benefit of Wall Street.

Meanwhile, there’s a longstanding tradition of opposing this settlement on the American Right. Ever since Roosevelt abandoned the gold standard in 1933, conservatives have argued for its restoration, from Murray Rothbard and Alan Greenspan in the Sixties to Steve Bannon today. Among this contemporary New Right a consensus has been growing for some time that this America of floating currency has interests structurally opposed to those of America the place and polity. The unique role of the Federal Reserve in the global economy, the argument goes, has allowed America to keep the value of the dollar artificially high, which is good news for finance but bad for people who make physical stuff and pay wages in dollars. In turn, the downstream effect of this has been, over the decades of dollar hegemony, the slow hollowing-out of Main Street in the interests of Wall Street.

In the New Right version of modern history, this financialization of everything has been shored up by a “rules-based international order” with American hard power as its ultimate backstop. This order is thus parasitic on American prosperity, and the sacrifice of American soldiers, even as its beneficiaries are drawn increasingly from a deracinated, international class that displays little more than contempt for ordinary American people. This is, in a nutshell, the MAGA grievance narrative. A core element in Trump’s electoral base comprises those who were dispossessed in that hollowing-out of American manufacturing and small-town prosperity, who watched their districts sink into opiate addiction and despair, even as coastal elites prospered and sneered.

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Voters in these bleak hinterlands may not have theorized this all the way through, but they elected Trump to rewire the system away from this version of normal and back toward their interests. In turn, Trumpian economic nationalists such as Bannon argue that in order to deliver this re-ordering, dollar hegemony must end. So, too, must the NATO-powered America-led international order that serves as its ultimate backstop. In other words: re-orienting “America First” to the home nation necessitates radical and possibly terminal surgery to America the empire.

It’s not unusual to hear Trumpists voice meme-versions of this ideological stance, such as “America is not an economic zone”. It’s less common, at least in public, to hear the meme followed all the way through to dismantling dollar hegemony and NATO, with all the shockwaves such a program would inevitably produce. And yet looking at recent headlines, either the Trump administration is completely fruitcake and spitting out edicts at random, or he’s actually trying to perform this radical surgery.

Seen in a Bannonist light, the tariff program looks like brutal shock therapy to the deficit-based global American empire of dollar hegemony, ultimately ordered to rebalancing American trade worldwide, such that more production can and does return to America. I’ve no idea whether it’ll work, but no doubt Main Street would be pleased if it did — even, or perhaps especially, if this came at the expense of Wall Street. Elsewhere, we are already seeing the pivot in foreign policy. Formerly, America was the purportedly neutral guarantor of global rules and supply chains; now it is a transactional actor in an anarchic system. Again, it is a pivot consistent with ending America’s obligation to uphold the rules-based order at the expense of her citizens. So, too, is the seeming attempt to subject American public spending to so brutal a DOGE-inflicted haircut. Someone pursuing the Bannonist program of ending dollar hegemony would, in the process, end America’s bottomless ability to borrow herself out of debt by simply printing more money — meaning Washington would suddenly need to balance the books.

Taken all together, then, it may turn out that the real “woke” political horseshoe was not culture wars, nor cancel culture, but decolonization. For the Bannonist program is, in effect, precisely such a program. It sets out to dismantle the global American empire that flew under the cover of “globalism”, including its (as Trump himself has put it) imperial rule over America herself, in favor of a return to American economic nationalism. And, as Sharif said, what did we think decolonization meant: vibes, papers, essays?

Reasonable people can (and already do) disagree on whether pursuing this program is wise, or even possible. But events thus far seem at least plausibly to suggest that Trump has decided to try. And whatever the eventual outcome, this will mean the unilateral dismantling of the vastly complex, interconnected set of systems that has comprised the settled order for decades. The dismantling will thus have global consequences, and global costs. As attested by the pandemonium across geopolitics and finance, the costs and consequences have already begun.

In this context, we are going to have to get used to some fundamental changes — not least the fact that there is nowhere to stand now that isn’t partisan. The “rules-based” global thing at least pretended it was possible to conduct a neutral public exchange between states or people with divergent interests. But if the world we live in now is one of anarchic geopolitics and national-interest economics, we can expect even sensible media discourse that once served as vehicles for that kind of purported neutrality — however partial it always was, in practice — to be now brazenly hijacked for propaganda of all shades.

This is the context in which we should read Trump’s recent claim that, for decades now, every other country on the planet has been maliciously taking advantage of America by selling her stuff, and not buying anything in return. I’m sorry: what? American experts have been vigorously defending dollar hegemony all this time, and now it’s everyone else’s fault that this has drawbacks? And yet the best way to take Trumpian assertions is seriously, but not literally. I’d bet good money that Trump and his advisers alike know perfectly well how egregious a distortion this is of the historical and economic record. But the grievance narrative plays well to a domestic audience, especially those hurt by decades of dollar hegemony. And if Trump really is going for radical surgery, it makes sense from his perspective to tell a story where the economic pain is every other country’s fault — not least because his decision to crash the stock market will inflict a fair amount of pain on at least some of his own voters.

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As for the rest of us: once the dust settles, everywhere outside America the nation will need urgently to re-learn how to think in terms of national interest, or else to form blocs capable of coordinating. Those on the Right who support the Trump project, but don’t live in America, will need to understand that Trump is only on their side in a very qualified way. “America First” means America first. The Trump regime will care about Right-wing movements overseas only where doing so aligns with American interests.

Once you step out of the world of vibes and papers, there are winners and losers. The decolonial Left grasped this some time ago; now, perhaps, the decolonial Right is joining them. It is anyone’s guess how this round of anti-globalist rewiring will work out, but I think we can expect pushback. Let us hope the disagreement escalates no further than policy and public debate.

But there are some economists who see things differently. A few of them have found their way into Trump’s orbit. Economists of this kind argue that tariffs can be effectively employed in a strategy to build a country’s industrial base. The classic examples of this are postwar Japan and then South Korea, each of which rebuilt their war-ravaged economies using a combination of state nurturing and protectionism. As a result, they became global manufacturing champions. (South Korea started practically from scratch.)

The origins of this approach might be unexpected. When Japanese bureaucrats first looked around for examples of such “infant industry models”, they found inspiration in 19th-century America’s industrialization. Contrary to its more recent policies, the US has some history of using protectionism to make itself great.

Neoliberal economists therefore stand accused of neglecting the examples of history. Another blind spot might be political. Neoliberal mathematical models anticipate the effects of tariffs, but they lack a theory of the state and of political economy. In their focus on the aggregate impacts of free trade, the neoliberals have too often neglected the differential impacts of opening western manufacturing to imports.

Yes, output and efficiency rose in America when it opened up to China in the Nineties. But the gains were largely captured by large owners of capital, whereas small businesses and workers didn’t do so well. There resulted what the economist Branko Milanović dubbed the “elephant curve” of income distribution, in which a global middle class of owners and professionals grew rich while workers in Western countries fell behind. In America, where Democratic elites once represented working-class interests, the neoliberal turn initiated by Bill Clinton left them largely abandoned, and they ended up turning to Donald Trump.

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Thus there is both an economic and political rationale for Trump to use tariffs to rebuild American manufacturing and restore the working class to its former glory. As Treasury Secretary Scott Bessent, “Wall Street’s done great… but this administration is about Main Street.”

The problem is that it’s hard to detect much evidence of strategy in the way Trump is going about it. First, he’s going after countries like Canada that aren’t the source of the US’s problem. The US runs a much bigger trade deficit with China than with Canada but has imposed the heavier tariffs on its neighbor. Worse, hefty tariffs on Canadian cars won’t actually benefit American carmakers. They’re highly integrated with Canadian firms, moving parts back and forth in cross-border supply chains. So American carmakers will pay the tariffs, making their products more expensive than imported models from elsewhere.

Trump’s tariffs also lack precision. The Koreans and the Japanese ensured that their tariffs supported the development of strategic industries while enabling imports in industries in which their countries were not competitive. Trump, in contrast, is slapping on tariffs indiscriminately. It’s hard to see what advantage the US would gain from raising prices on Colombian coffee, for instance, because the US has no capacity to build its own coffee industry.

Note the apparent incoherence of the tariffs on Canada. Trump has variously said that his tariffs are intended to protect American jobs, stop fentanyl trafficking, improve border security and make Canada the 51st state. Which of these, if any, is his actual goal is anybody’s guess. When asked how he’d describe the “psychodrama” of Trump’s on-again-off-again tariff announcements, the Prime Minister of Canada, Justin Trudeau, sighed and said wearily: “Thursday”.

Worst of all, Trump fiddles with the tariffs constantly, imposing then suspending them, or announcing carve-outs. His recent pivot to reciprocal tariffs goes even further, essentially outsourcing the US’s trade policy to other countries. Rather than set an economic plan and stick to it, he’s entrenched a reactive policy in which the US will play tariff whack-a-mole with trading partners.

If Trump’s idea of generalship is to tell his troops to advance, retreat, turn right then left all in a matter of hours, sooner or later they’ll give up from exhaustion. That’s already begun. Rather than respond to his tariffs by altering their production plans, businesses are starting to stand back, waiting for the fog of war to lift so they can plan better for the future. They’re postponing investment and holding off on new purchases, with the recent survey from the Institute for Supply Management revealing orders to be dropping so sharply the sector will soon be contracting. One recent business survey estimated that the manufacturing sector in the first quarter may therefore contract by as much as 3%.

This reveals another apparent flaw in Trump’s approach to this war. Like many declining empires, America is both overestimating its strength and underestimating that of its opponents. The American exceptionalism of recent years, in which its economy has grown strongly while other developed countries have stagnated, was always something of a debt-fueled illusion. American borrowing has grown at twice the pace of GDP over the last few years. If the US had lived within its means, its economy would be as moribund as its G7 peers.

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The evident limits to a debt-fueled model started becoming apparent last year, when bond investors started driving up interest rates and thereby crimping demand. Trump took office at a time when the US economy was soaring high above its peers and its stock market was sucking capital in from all over the world, but the tide had already begun to turn. The economy was weakening, and money had begun quietly leaving the US. As America turned inward, foreign investors began to return home to Europe and Asia. Since the start of the year, the US stock market has gone negative, whereas those in Europe and Asia have been rising. Not surprisingly, Friday’s jobs report revealed an employment market that is losing steam.

And where America has been profligate, its trading partners have often been prudent. This has left many of them with ample fiscal firepower to respond to Trump’s provocations. Germany, China and the EU have all announced major increases in spending to stimulate their economies. This will help soften the impact of tariffs and further encourage investors to return home and chase the higher returns on offer. Three years ago, Liz Truss’s attempt at fiscal largesse provoked major ructions in bond markets, but no such turmoil has occurred in this new era of tariffs. It seems that investors are happy to continue lending to what have been comparatively tight-fisted money-managers.

Europe’s sudden largesse also poses a potential threat to one of the key pillars of the US’s postwar global dominance: the dollar’s role as the world’s reserve currency. Contrary to what conventional economic theory would predict, US tariffs have been accompanied by a weakening of the dollar in favor of other currencies and gold.

The dollar has on its side the depth, liquidity and openness of America’s capital markets, as well as the dependability of its regime. No currency has ever come close to rivaling the dollar as a reserve currency. But Europe’s bond market is likely to expand substantially, just as the US has started to look less safe for foreign investors. (Trump has even hinted that the government could default on some debt.) As a result, the impossible is becoming at least conceivable.

One storyline currently doing the rounds in Trumpland is that this is all part of a plan — that Trump is deliberately engineering a downturn to squeeze excesses out of the economy before teeing up a strong rebound once his tax cuts and deregulation kick off. It would be a pugnacious approach to economic revitalization, especially since he didn’t ask for a mandate from voters to do this. But it is at least plausible, since that’s essentially what Margaret Thatcher and Ronald Reagan once did. Still, it’s hard to square this fine-tuned strategy with the volatility of Trumpian policy-making. Besides, the tax cuts being proposed are largely baked in, being not new but an extension of the 2017 tax cuts. It’s not clear how much added stimulus they’d bring.

One can make a case that a trade war would be a just one. But Donald Trump isn’t fighting that war. In fact, other than the approval of his followers, it’s hard to tell what he’s fighting for.