Author: Zhou Ziheng

"Tariffs are the most beautiful word in the dictionary." This iconic declaration by Donald Trump is setting off a storm that reshapes the global economic order.

President Donald Trump after addressing the National Farm Bureau Federation's 100th convention in New Orleans on Jan. 14, 2019.Carlos Barria / Reuters

This president, known for his volatility, seems chaotic—from launching a trade war to imposing tariffs on traditional allies, and even causing market turmoil. But an in-depth analysis of the strategic context of its new economic team can reveal that behind this is a disruptive global order reconstruction plan.

Treasury Secretary Scott Benson and economic adviser Steven Milan are deeply concerned about the current situation of deindustrialization in the United States. Data shows that the proportion of added value in the US manufacturing industry has plummeted from 28% in the 1950s to 10% at present. This trend not only threatens Trump's basic base, the voter's support from the US industrial belt, but also weakens the United States' industrial strength compared with its competitors at a strategic level. This sense of double crisis has become the internal driving force for the construction of a new order. Historically, the global economic order dominated by the United States has undergone two major changes: the establishment of the Bretton Woods system in 1944, and the rise of the Reagan-Thatcher neoliberal order in the 1980s. The former built a post-war Western economic order through a monetary system that is linked to the US dollar and gold, and combined with the security structure dominated by the United States; the latter promoted the in-depth development of globalization based on market-oriented reforms, free trade and floating exchange rates. Now, the Trump team is trying to start the third change, and its "Make America Great Again" (MAGA) plan consists of three progressive stages:

Step 1: The strategic tariff offensive creates bargaining chips through indiscriminately imposing high tariffs. Bescent made it clear: "Tariffs are the most powerful chips on our negotiating table. "This seemingly chaotic tariff actually creates bargaining space for subsequent negotiations. Myron emphasized that short-term market volatility is the price that must be borne for long-term strategic goals.

Step 2: After establishing sufficient negotiation advantages, the peer-to-peer tariff system will turn to a tariff system based on the principle of reciprocity. The Trump team believes that this will reshape the international trade incentive mechanism and make the system more conducive to innovation-driven economies. Given the unique attractiveness of the US dollar and the US market, they expect major trading partners will eventually have to accept new rules of the game.

Step 3: The ultimate goal in the new Mar-a-Lago Manor system is to establish the Mar-a-Lago Manor Agreement, a monetary coordination mechanism that allows the moderate depreciation of the US dollar, while requiring the currencies of participating countries to remain pegged to the US dollar. Unlike the Bretton Woods system, the new system will clearly require allies to share the security costs and form an international environment that is more conducive to the revival of the US manufacturing industry.

The Mar-ago Manor Agreement" to reorganize US debt has attracted attention from Wall Street

Part of Trump's agenda is to reshape global trade through tariffs, weaken the US dollar, and ultimately reduce borrowing costs

However, this ambitious plan faces serious challenges. Trump's past unilateral breach of contracts has seriously damaged the credibility of the United States and may weaken the willingness of countries to participate in the new system. The deeper contradiction is that if it cannot attract enough participation, the United States will be in a dilemma - either to give up its privileged position in the US dollar or continue to bear the pressure of manufacturing outflows.

This global trade revolution triggered by tariffs is at a critical turning point. It is not only about the reshaping of the U.S. economic structure, but also redefining the international community in the 21st century Economic pattern. As the response strategies of major economies gradually become clear, a game of far-reaching new order has begun.

Stephen Miran during a Senate Banking, Housing, and Urban Affairs Committee confirmation hearing in Washington, DC, on Feb. 27.