Trump adviser gives nations list to correct 'unfair' global system

Trump economic advisor Stephen Miran called on nations to take greater responsibility in providing global stability

Stephen Miran, chair of the council of economic advisers under President Donald Trump, has outlined a controversial vision for global trade and security, calling for other nations to take on a greater share of costs that he claims the United States has unfairly shouldered. Speaking at the Hudson Institute on Monday night (IST), Miran argued that America’s role in providing global stability – military and financially – has placed an ‘undue burden’ on US workers and industries.

 

“President Trump has made it clear that he will no longer stand for other nations free-riding on our blood, sweat, and tears, whether in national security or trade,” he said. He argued that trade deficits have been allowed to persist due to structural imbalances, not natural market forces. “The long run is here, and the models are wrong,” he declared, dismissing conventional economic theories that predict automatic trade rebalancing. 

 

To correct what he described as an ‘unfair system’, Miran proposed several measures that he believes should be adopted by other nations:

 

Tariff acceptance: Countries should allow the US to impose tariffs on their exports without retaliation, helping to fund American public goods.

 

Market access: Foreign governments should open their markets and purchase more US products.

 

Defence spending: Allies should increase their defence budgets and buy more US-made military equipment.

 

Domestic investment: Companies should establish factories in the US to avoid trade penalties.

 

Direct contributions: Foreign governments could make financial contributions to the US Treasury to offset security and economic costs.

 

US a primary provider for global public goods

Miran framed the United States as the primary provider of what economists refer to as “global public goods”. He stated, “The United States provides a security umbrella which has created the greatest era of peace mankind has ever known.” He also emphasised the role of the US dollar and Treasury securities as global reserve assets that facilitate international trade. However, he asserted that these responsibilities come at a high cost.  ALSO READ | What is the US trying to achieve through reciprocal tariffs? Explained

 

According to Miran, this economic structure has contributed to persistent trade deficits and harmed American manufacturing. He linked the decline of the US industrial sector to what he called “unfair barriers to trade” imposed by other nations. He suggested that foreign reliance on the US dollar has kept the borrowing rates low while distorting currency markets.

 

“If we don’t rebuild our manufacturing sector, we will be strained in providing the security we need for our safety and to underpin our financial markets,” Miran warned.

 

Tariff revenue used to cut tax on Americans: Miran

Miran dismissed concerns about tariffs harming economic growth, arguing instead that they serve as a tool for shifting trade imbalances in favour of the US. He claimed that tariffs imposed on China, in 2018-19, “were paid for by China” through currency depreciation and a weaker economy. He also suggested that revenue from such tariffs could be used to fund tax cuts and deficit reduction.

 

“The tariff revenue, paid for by China, was used to finance President Trump’s tax cuts for American workers and firms. This time around, tariffs will help pay for both tax cuts and deficit reduction," Miran said.

 

Marin argued that Trumps’ tax reforms will significantly reduce taxes for Americans, with a portion of the funding sourced from foreign revenues. This strategy is set to spark an era of economic growth, innovation, and opportunity in ‘President Trump’s new Golden Age’.  

 

“Deficit reduction will help lower Treasury rates, and with them mortgage rates and consumer credit card rates, stimulating an economic boom,” Marin said.  ALSO READ | How a false Trump tariff pause headline moved $2.4 trillion on Wall Street

 

Economists warn against protectionist policies

Amid widespread criticism, US President Donald Trump signed an executive order on April 2 establishing ‘reciprocal tariffs’. The new measures impose a 10 per cent ‘minimum baseline tariff’ and higher rates on certain trading partners, aligning with Trump’s ‘America First’ agenda. A 26 per cent tariff has been imposed on India.

 

Miran’s speech contrasts many economists who have warned against the potential consequences of protectionist policies. Many experts argue that tariffs often lead to retaliatory measures, harming both consumers and businesses. Moreover, the idea that foreign nations would willingly contribute financially to US security spending has been met with widespread doubt.

 

These policies have historically deepened recessions and led to economic stagnation. Examples include Smoot-Hawley tariffs during the Great Depression and President Richard Nixon’s import surcharges in the 1970s, which backfired and exacerbated economic troubles in the US.

The broader implications of Miran’s proposals suggest a significant shift in US economic and foreign policy.

 

“The President’s reciprocal tariffs are designed to address tariff and non-tariff barriers and other forms of cheating like currency manipulation, dumping, and subsidies to gain unfair advantage," Miran continued, adding that revenue was “nice side effect”.

 

“Burden sharing can allow the United States to continue leading the free world for many decades,” Miran concluded.