First published in Spanish at CEDES. Translation by LINKS International Journal of Socialist Renewal. Read Part I here.
Just prior to an appeal court ruling invalidating a large chunk of his tariffs, United States President Donald Trump had an epiphany and posted this on Truth Social on August 31, 2025: “If a Radical Left Court is allowed to terminate these Tariffs … we would become a Third World Nation, with no hope of GREATNESS again.” Read as a confession about the US’s status within the world capitalist economy, for Trump this is not so much a matter of maintaining greatness but of returning to it, with tariffs being the quintessence of the process. Certain questions therefore flow from this: does Trumpism mean the US is returning to mercantilism to avoid becoming a Third World nation? Or, recalling Andre Gunder Frank’s seminal thesis, is Trumpism seeking to prevent the US transitioning from development to underdevelopment?
When Trump outlines his fear that his country will fall down the rankings in the international division of labour, he is only stating a truism. Immanuel Wallerstein points out: “To argue that economic nationalism is the state policy of the weaker against the stronger and of competitors against each other is merely to accept an orthodoxy.” The US intelligentsia, however, has consistently chosen to see the speck in the eye of others, attacking the US’s competitors and, of course, negatively labelling them as “mercantilists.” For example, Walter Russell Mead wrote in 2018: “America must do substantially more to counter an increasingly authoritarian, mercantilist and aggressive China.” Seven years later, “authoritarian,” “mercantilist,” and “aggressive” seem excellent descriptions for the US under Trump 2.0.
Against Mead, let us introduce some conceptual precision to the discussion. To do this, I will turn to the concept of mercantilism, as expressed by Max Weber in his essential book, General Economic History:
Mercantilism means the transfer of the capitalist profit motive to politics. The state proceeds as if it were solely and exclusively made up of capitalist entrepreneurs; economic policy abroad rests on the principle of outpacing the adversary, buying from him as cheaply as possible and selling to him as dearly as possible. The highest purpose is to strengthen the power of the state externally. Mercantilism therefore implies powers formed in the modern way: directly through the increase of the public treasury; indirectly by an increase in the tax capacity of the population ... In the theoretical order, this system was based on the theory of the balance of trade, which pointed out that the impoverishment of a country occurs as soon as the value of imports exceeds that of its exports.
To validate the adequacy of the Trump 2.0 administration’s discourse and practice to Weber's conceptualisation of mercantilism, it is enough to turn to the discourse surrounding Trump’s so-called “Liberation Day” (February 4) executive order. Obviously, we are not proposing an anachronism here; the Trump 2.0 administration is neo-mercantilist. Economic nationalism as a weapon against unbridled competition was reliably demonstrated in the Trump 2.0 administration’s neomercantilist concern about manufacturing. An excerpt from the “Liberation Day” executive order helps make this point:
Both my first Administration in 2017, and the Biden Administration in 2022, recognized that increasing domestic manufacturing is critical to U.S. national security. According to 2023 United Nations data, U.S. manufacturing output as a share of global manufacturing output was 17.4 percent, down from a peak in 2001 of 28.4 percent... Increased reliance on foreign producers for goods also has compromised U.S. economic security by rendering U.S. supply chains vulnerable to geopolitical disruption and supply shocks... The decline of U.S. manufacturing capacity threatens the U.S. economy in other ways, including through the loss of manufacturing jobs. From 1997 to 2024, the United States lost around 5 million manufacturing jobs and experienced one of the largest drops in manufacturing employment in history.
To understand this neomercantilist zeal as a weapon of the “weak” against the “strong”, we need to turn to a periodisation of the US hegemonic cycle in the world capitalist economy. As is known, the US hegemonic cycle emerged from the dispute against Germany in the collapse/transition phase of the British hegemonic cycle (1914-1945). It then had its boom phase from the post-war period to the stagflation crisis (1945-1973/1982). The following period from the monetarist Counterrevolution to the Great Recession can be seen as both a second golden age of US capitalism as well as a slow but progressive decline amid financialisation. Finally, the outcome of the War on Terror and the effects of the Great Recession opened the door to the crisis/dispute phase of the US hegemonic cycle. Historical experience reveals that in phases of hegemonic rise, agro-industrial productive superiority gives rise to preeminence in commercial distribution, which in turn favours financial superiority. On the other hand, phases of hegemonic decline follow the same sequence: first agro-industrial productive superiority is lost, then commercial superiority, with finance being the last bastion of the hegemonic power. In the current hegemonic cycle, China surpassed the US in terms of share of global manufacturing output in 2010 and in share of world trade in 2013.
On the other hand, a common mistake made by critics of imperialism in general, and of the US in particular, is to consider the decline as due to the hegemonic power’s integral weakness. On the contrary, in Wallerstein’s words: “This period of decline is not one in which the previous hegemonic power is weak. Quite the contrary. It remains for a long while the most powerful country in the world, politically and militarily (but no longer economically)...” The neo-mercantilism that serves as the structure of Trump 2.0’s Hamiltonian Jacksonian foreign policy seeks to reduce the disjunction between the US’ political-military power and the productive, technological and financial bases that support it. In short, the heart of the matter with both old and new mercantilism is the same: “the increase of overall efficiency in the sphere of production” as the basis of wealth, power and prestige in a system of competing states.
However, in phases of decline, hegemonic powers face a paradox to which the US was exposed, from the Ronald Reagan administration to the Joe Biden administration: restricting the strengthening of allies while using allies to stop enemies. But the balance-of-power phases of hegemonic cycles, or crisis/dispute phases, are characterised by the emergence of new configurations of power on a global scale. In these phases, all Great Powers seek to ensure alliances that impact on the appropriation of wealth, which serves as the basis for military power. Consequently, the phases of crisis/dispute are usually times of “imperialist” revival, where the logic of territorial expansion and the logic of capital accumulation are knotted even more closely together to redirect supply chains at the service of industrial production.
Trump’s 2.0 neo-mercantilism has been accompanied by its respective dose of territorialism, which seeks to ensure that natural resources and supply chains, at least in the Western Hemisphere, are at the disposal of US wealth and power. It is self-evident that with Trump’s neo-mercantilism, the Monroe Doctrine — which was born as a British policy to guarantee the balance of power between European powers after the Napoleonic Wars, and which, with the Roosevelt Corollary, became the guide of territorialism at the service of capitalism in Latin America during the crisis/dispute phase of the British hegemonic cycle — is undergoing an update, dusting off the little-known Olney Corollary to seek to expel China and other Great Powers from accessing Latin America’s raw materials.
In a classic text, Joan Robinson argued: “The characteristic feature of the new mercantilism is that every nation wants to earn a surplus from the rest.” For commodity exporting countries, this means either a drastic drop in revenue captured from state property or the total loss of ownership, unless they are able to create defence mechanisms against territorialism.
A new “hot” Cold War in Latin America?
The periods of balance of power of hegemonic cycles make peremptory the maxim according to which “hegemonic powers had never allowed ideology to interfere in their interests.” In other words, they are periods dominated by political realism. In the boom phases of the hegemonic cycle, ideology plays a central role in building both the legitimising façade of the regime of accumulation and domination, as well as that of the enemy and network of alliances. In the phases of crisis/dispute, amid the accelerated disintegration of the world order, interests prevail over ideology as new configurations of power emerge. In nuce, in the phases of crisis/dispute and collapse/transition, realism becomes the nourishment of the strong and ideology the consolation of the weak.
The US had already emerged to become the great champion of capitalism in the crisis/dispute phase of the British hegemonic cycle. That status was built on the fact that, prior to World War I, the US industrial boom was unparalleled, surpassing even Wilhelmine Germany. Victory over the Axis powers in World War II, the pacted interstate system agreed upon at Yalta with the Soviet Union, and the vassalage of Japan and the Federal Republic of Germany in the post-war period, had repercussions on US self-confidence as the home of capitalism. However, the boom phase of the US hegemonic cycle was not built on the basis of the international New Deal of Franklin D Roosevelt, but the Truman Doctrine, George F. Kennan's musings about security, and the invention of the Cold War.
The Soviet Union’s containment during the “First Cold War” continued to be fuelled with the ideological substratum of US capitalism as non plus ultra. The arrival of Reagan to the presidency together with the “Second Cold War” revived capitalist ideology. However, the 1970s stagflation crisis and the 1980s Japanese miracle set off some alarm bells in the “house of being”. The end of the Cold War seemed to put things back in place, until the dot-com crisis and the events of September 11, 2001 served as a preamble to the irreversible break in the identity between the US and capitalism in 2008. Either way, US citizens born between the postwar period and the 2008 financial crisis grew up in a national culture with an ethnocentric awareness of capitalism.
However, the untold story of capitalism’s epic against Communism, culminating in Reagan’s Star Wars, is far more somber and terrifying. For example, in Latin America, the Truman Doctrine, which was preceded by the Monroe Doctrine, the infamous Olney Corollary, and the pragmatic Roosevelt Corollary, quickly leveraged repression. For Kennan, the Communists of the New World were simply traitors. At the end of the “First Cold War”, the balance sheet for the US seemed favourable on the surface: triumphs ranged from the coup d'état against Jacobo Arbenz in Guatemala in 1954, through to support for the military coup in Brazil in 1964 and the second invasion of the Dominican Republic in 1965, to the overthrow of Salvador Allende in Chile in 1973. The Cuban Revolution knew how to resist, but the US contained its capacity to spread externally and annihilated its capacity for internal socioeconomic transformation. In the 1980s, the main theatre of operations of Washington’s intervention in Latin America shifted from the South American regimes of terror to the Central American civil wars. The US invasion of Panama in 1989 closed an era. US historian John Coatsworth made an assessment of the Cold War in Latin America that should make us rethink the usual metaphysical considerations about the “right side of history”:
Between the onset of the global Cold War in 1948 and its conclusion in 1990, the US government secured the overthrow of at least twenty-four governments in Latin America, four by direct use of US military forces, three by means of CIA-managed revolts or assassination, and seventeen by encouraging local military and political forces to intervene without direct US participation, usually through military coups d’état..
The human cost of this effort was immense. Between 1960, by which time the Soviets had dismantled Stalin’s gulags, and the Soviet collapse in 1990, the numbers of political prisoners, torture victims, and executions of nonviolent political dissenters in Latin America vastly exceeded those in the Soviet Union and its East European satellites. In other words, from 1960 to 1990, the Soviet bloc as a whole was less repressive, measured in terms of human victims, than many individual Latin American countries.
The hot Cold War in Central America produced an unprecedented humanitarian catastrophe. Between 1975 and 1991, the death toll alone stood at nearly 300,000 in a population of less than 30 million. More than 1 million refugees fled from the region — most to the United States. The economic costs have never been calculated, but were huge. In the 1980s, these costs did not affect US policy because the burden on the United States was negligible.
It is not surprising that, in the face of such a tragedy, the US moderated its direct interventions in Latin America at the end of the Cold War, prioritising covert operations instead. Many analysts consider the current Sino-American rivalry as a “New Cold War”. I do not agree with that thesis. However, the effects on Latin America of the crisis/dispute phase of the US hegemonic cycle may be as tragic as the effects of the previous “hot” Cold War.
On the three forms of regime change
“Regime change” is once again on the order of the day. After being widely discredited in the arc of events from the War on Terror, through to the “First Libyan Civil War”, to the astonishing return of the Taliban, regime change has re-entered the Trump 2.0 administration’s geopolitical conversations regarding Iran and Venezuela. However, being faithful to criticisms made of the foreign policy of neoconservatism and the Obama administration, while also being careful to maintain the support of his isolationist electoral base, Trump has preferred to be cautious about publicly confessing his objectives against the Nicolás Maduro government. At most, in the interview for 60 Minutes, when asked: “Are Maduro’s days as president numbered?” Trump dared to say: “I would say yeah. I think so, yeah.” Mead cuts straight to the chase in his November 3 column in The Wall Street Journal, simplifying things as such:
With a carrier strike group joining eight warships already in the region, a squadron of F-35s in Puerto Rico, and assorted elite military units in the area, the Trump administration has ramped up its standoff with Venezuela. Regime change is clearly the goal; the timetable and means are unspecified.
Trump’s talk of regime change in Venezuela is not new. After the disputed May 2018 presidential elections, Trump 1.0 applied in 2019 what in my book Venezuela’s Long Depression I called a comprehensive sanctions regime against Venezuela and a strategy of collapse, in addition to supporting the opposition led by Juan Guaidó in a politics of dual power. According to the canonical definition that the term regime change acquired from US interventionism after the end of the Cold War — that is, the overthrow of the government — the Trump 1.0 administration’s policy towards Venezuela failed.
However, as Perry Anderson has recently highlighted, before its current meaning, regime change enjoyed a much more structural and subtle meaning, one based on coercion. Anderson explains that, in the 1970s, the term meant “not the sudden transformation of a nation-state by external violence, but the gradual installation of a new international order in peacetime.” A decade later, with the rise of the monetarist counterrevolution, financialisation and neoliberal globalisation, the term underwent a new mutation, acquiring a tinge of capitalist realism:
What had replaced the world instituted at Bretton Woods was a set of system-wide constraints affecting all governments, no matter their complexion, consisting of macro-policy packages of monetary and financial regulation that fixed the parameters of possible labour market, industrial and social policies…
Such was the original meaning of the formula ‘regime change’, today all but forgotten, erased by the wave of military interventionism that confiscated the term at the turn of the century... Yet the relevance of its original meaning remains. Neoliberalism has not gone away.
Today, it may be worth reactivating the triple meaning of the term regime change: first, an attempt to establish an international or regional regime by a Great Power; second, structural transformations in the regimes of regulation and accumulation in semi-peripheral and peripheral countries at the service of Great Powers; and, third, a euphemism for overthrowing foreign governments.
In this sense, as I explained in Venezuela’s Long Depression, the financial weapons of mass destruction or comprehensive sanctions regime imposed on Venezuela during the Trump 1.0 administration did not end in failure. Although they did not achieve a “regime change from above” they did contribute to a “regime change from below”. In other words, although they did not achieve regime change in the sense of a violent overthrow of the government, they did achieve it in the sense of transforming the regime of accumulation and regulation in favour of capitalist realism. Combined with an orthodox-monetarist economic program and the pursuit of a “progressive” crony capitalism, the comprehensive sanctions regime achieved a regime change in Venezuela’s political economy. The US government has a high share of responsibility in the gestation of patrimonialism with neoliberal characteristics that has developed in Venezuela since 2018. Today, the strategy of collapse has changed modality, from the comprehensive sanctions regime to the military siege. However, the question arises: would this change of modality have been possible without the success of the previous “regime change”; that is, without the transition towards a neoliberalism with patrimonialist characteristics?
