Moneycontrol Pro Weekender | Trump’s Trade Rhetoric Fuels Market Hopes Amid Geopolitical Uncertainty

 What should we make of Donald Trump’s recent claims—such as India allegedly offering zero tariffs on US imports to fast-track a trade agreement, or his assertion that he brokered peace between India and Pakistan by threatening to sever trade ties with both? India has dismissed these statements, raising the question: Is Trump simply boasting, or is there a calculated strategy behind his provocations?

Trump’s flip-flopping on tariffs with China paints a picture of a self-styled master negotiator, but the deep-rooted US-China rivalry is far from resolution. This week, Beijing protested the US-UK trade pact, claiming its clauses—particularly those scrutinizing supply chains and ownership structures under national security pretenses—are designed to sideline China. China referred to these clauses as a “poison pill.” Meanwhile, the US further tightened curbs on Huawei chips, extending its crackdown globally.

These developments reflect a broader US strategy: using economic leverage—especially tariffs—to coerce allies and competitors alike into aligning with its stance on China. There’s no mistaking Washington’s intent to retain its position as the global hegemon.

However, history tells us that hegemonic dominance doesn’t last forever. Italian economist and sociologist Giovanni Arrighi theorized that capitalism progresses through cycles of accumulation, each dominated by a hegemonic power. These cycles begin with a phase of material expansion, where capital is poured into production and territorial control—think of 19th-century Britain. But over time, profits from production dwindle, and the system shifts toward financial expansion—characterized by speculative investments and signs of declining dominance.

As the US maneuvers to sustain its hegemony, Trump's statements—whether strategic or rhetorical—serve as reminders of the chaotic dynamics that often accompany power transitions in global capitalism.