America’s national security held hostage by Trump’s trade deals: Ivo Vegter

Key topics:Trump accused of unconstitutional power grabs in trade and tariffsUS companies face alleged extortion over China AI chip salesCrackdown on dissent, science, and civil liberties intensifies.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up for the BizNews channel here..By Ivo Vegter*.Export restrictions once deemed necessary to protect US interests are now used to extort protection money from US companies.It’s a challenge to keep up with the rising dictatorship of Trump 2.0.He has fired and insulted the competence of a federal official who dared to present him with unfavourable economic data, because he doesn’t understand how initial estimates can be revised downwards, and assumes it must be evidence that the numbers were rigged to make him, personally, look bad.He has cut funding and threatened to confiscate the patents of universities that refuse his order to restrict free speech.He has illegally fired thousands of federal workers, without making any noticeable dent in federal spending.He has slashed federal funding for the sciences, with catastrophic effects on research, data retention and American competitive advantage.He has threatened to withhold federal spending authorised by Congress if it doesn’t legislate as he dictates, violating the separation of powers that gives Congress the power to appropriate funding.He has deployed masked gunmen to abduct people off the street for merely appearing to be an immigrant, who then hold the victim without charges and without access to legal representation or due process, or simply send them to foreign gulags whence there is no return.He has ordered gerrymandering in states to flip Democratic seats to the Republicans to avoid a defeat in the 2026 mid-term elections.He has unleashed the military against the homeless who sully his vista on the drive between the White House and his favourite golf course, while claiming that falling crime rates in Washington DC are actually “totally out of control”.Low-hanging fruitThere’s just so much low-hanging fruit it’s hard to pick just one. His latest stunt, however, really cements Don Trump as a mafia boss. He’d be like Tony Soprano, if Soprano lacked self-awareness, humility and a moral compass.His popularity has much in common with the idolisation of Hollywood anti-heroes like Soprano, or Don Vito Corleone, or Walter White. His base (and Trump himself) sees him as bold, decisive, strong, effective and even heroic; not as a dangerous, unethical, authoritarian felon.Trump has been using import tariffs (and even the threat of invasion) as “leverage” to extort concessions out of other countries.That is harmful to the interests of ordinary Americans, since individuals and companies rely heavily on imports and tariffs are taxes on US citizens. It is also unpalatable and unwise as a foreign policy tactic. Nobody likes to negotiate with a gun held to their head, and Trump is willing to do that not only to America’s adversaries, but even to its supposed allies..Read more:.FT: Peter Navarro – Why Trump’s tariff plan will fix the broken system of international trade.He has sacrificed all of America’s soft power in favour of hard power, and pretends that the world is a better place for it.ExtortionNow, he’s turning the extortion gambit around on American companies.He has “done a deal” to confiscate 15% of the revenue from Chinese sales by US semiconductor firms AMD and Nvidia, in return for lifting export restrictions on certain artificial intelligence chips.You’ll recall that these export restrictions were imposed in mid-April, in order to keep advanced silicon out of the hands of China, which is formally listed as a US adversary because of concerns over national security and its military use of advanced technologies. It is therefore subject to various embargoes and export restrictions.Until recently, advanced artificial intelligence chips could be found on the export restriction list, for fear that the Chinese military would use them in a super-computer that could be deployed against America in case of a war.Export restrictionsWhen these restrictions were announced, I explained why they were probably futile and would only incentivise China to accelerate its own advanced silicon production.Export restrictions have the opposite effect of import tariffs, so if import tariffs stimulate domestic manufacturing, then export tariffs or restrictions should serve to stimulate the manufacturing sector of the foreign target.Logic isn’t Trump’s strong suit, but it turned out not to be about national security after all.All it took was a promise by the two companies to give Trump a 15% cut of their Chinese sales of H20 and MI308 chips, respectively, in order to secure export licences.This is naked extortion. It is unprecedented. It amounts to expropriation without compensation. It is a bribe to be permitted to do business. It is a disgrace in any free market that respects private property. And it is unconstitutional in the US.ConstitutionHaving to bribe the government to do business is not only ipso facto abhorrent in a free market, especially when said government will announce the revenue as a “win” for its trade policies (as it has done with tariff revenues).It is also unconstitutional. The US Constitution (in Article I, Section 10, Clause 2) requires the consent of Congress (and not the President)for any import or export duties. It also denies Congress the right to impose any duties that are not “absolutely necessary” to pay for its inspection laws. That is, it may charge a fee for its customs inspections function, but it may not impose any further tariffs on imports or exports.There are certain exceptional circumstances under which either Congress or the president is entitled to impose tariffs, but those are few and far between.One such law fails to define “national security threat”, which has enabled the Trump administration to declare national security threats at the drop of a hat, whenever they want to impose tariffs. Everyone in the world is now a national security threat!EmergenciesAnother law the administration has relied upon is the International Emergency Economic Powers Act (IEEPA). It is about sanctions and embargoes, and never even mentions tariffs. It has never in its 48-year history been used to impose tariffs.It does not grant the executive branch the power to impose tariffs, and yet it has been used by Trump to circumvent America’s existing body of trade legislation simply by declaring “emergencies”.This, his administration claims, gives Trump the power to impose both country-specific tariffs and so-called “reciprocal tariffs”. Based on a formula that calculates trade deficits, not tariff barriers, these supposed reciprocal tariffs are levied on all imports, even those from America’s allies, and even those from countries with which the US actually runs a trade surplus.The US Court of International Trade has ruled unanimously that Trump exceeded his powers under the IEEPA, but Trump – furious that a court had the temerity to contradict him – filed an appeal. That appeal has yet to be decided.If Trump is right, then what is the point of US trade law, if all it takes is declaring an emergency to circumvent it?Trump’s Justice Department has said that the president’s tariff power is not unlimited, but it has also argued that the power to declare a national emergency that triggers the tariff powers under the IEEPA is not reviewable by the courts, which does make his tariff power unlimited.If the Federal Court of Appeals upholds Trump’s appeal, it will give Trump unlimited power to declare “emergencies” or “threats to national security” under which he can usurp the power of Congress to conduct trade negotiations and set tariffs. This would flatly contradict the constitutional provision that reserves very restricted tariff powers to Congress.Mob bossTrump is a law unto himself, now. He is usurping the powers of the legislature, and is disdainful of the powers of the judiciary.He has claimed unprecedented trade regulation powers that are likely unconstitutional, and is using the threat to wield those powers to extort billions from America’s private companies, both importers and exporters.He’s running a protection racket. The beneficiary is the US government fiscus, which Trump routinely mislabels as “America”. The victims are American citizens and companies, as well as their foreign trading partners.He truly deserves to be called Don Trump. All those years dealing with the mob and the unions in the New York construction industry have prepared him well. He’s a gangster, and operates just like a mafia boss..*Ivo Vegter is a freelance journalist, columnist and speaker who loves debunking myths and misconceptions, and addresses topics from the perspective of individual liberty and free markets..This article was first published by Daily Friend and is republished with permission

America’s national security held hostage by Trump’s trade deals: Ivo Vegter

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