Chartbook 403 Trump as a Gulliver ... with no clothes.

It is hard to make sense of Trump’s understanding of international trade and tariffs according to any conventional rationale. Or to place it on any known intellectual map.

Case, Arthur E. (1945). "The Geography and Chronology of Gulliver's Travels". Four Essays on Gulliver's Travels. Princeton: Princeton University Press.

The economics aren’t really strategic. They reduce to incoherent mercantilist ramblings about “foreigners paying”.

Nor do his tariff demands follow an obvious geopolitical map. As Cameron Abadi and I discuss in the podcast this week, if you were thinking geopolitically, why would you impose such a heavy tariff on India of all countries? Doesn’t Trump know that India is America’s big balancing act in the Indo-Pacific struggle with China?

As Menaka Doshi of Bloomberg suggests, this could be a “scene out of The Apprentice, but with a new catchphrase: “You’re tariffed!” In this real-life episode, Indian Prime Minister Narendra Modi has 21 days to win back US President Donald Trump’s favor. Failing which, Indian exports — hobbled by a doubling of the tariff to 50% — will effectively be locked out of the world’s largest consumer market.”

Source: Bloomberg

But beyond Trump’s background on the Apprentice, what about the underlying view of the world which motivates a TruthSocial post like this?

“BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA,”

The underlying world view is that for many years the United States has allowed itself to be taken advantage of and mocked. Trump now promises to redress the balance and to ensure that “billions of dollars” flow back.

This isn’t a view of great powers facing each other as equals.

It isn’t a vision of a strategic hegemon underwriting a rules based order at some cost to itself.

It is something more like a fairytale or fable. In particular one is reminded of a nursery school version of Jonathan Swift’s Gulliver’s Travels and his encounter with Lilliput?

Setting aside any complicated exegesis of Swift, in this Truth Social version of the 18th-century satire, the United States is the sleeping giant, lulled into sleep by its self-serving, conceited, liberal elites. During his slumbers, the giant has become the object of the scheming by smaller countries. Trump’s mission is to rouse the once-great nation from its slumber, not to destroy the world, or to annihilate the little people, but to restore the proper balance. In the Trumpian trade view - there are other Trumpian world views - the rest of the world is both exploitative and petty. The vast majority of other countries have no real power of their own. India actually has a “dead economy”. Others may invoke liberal trade rules etc. But they actually understand that they have been bluffing and “laughing all the way (to the bank?)”. Once the sleeping giant rouses himself and gives notice that he is now awake, the other countries will realize that their game is up and come running to strike a deal. Gulliver will enjoy a tonic of tariff revenue and inward investment to restore his god-given, natural, all-American vitality. The world will be restored to its proper balance. The problem is easily fixed because it is not based on any structural analysis of an asymmetrical world economy, but on the fairytale of the sleeping giant and the cunning Lilliputians.

NB: Later on in Swift’s satirical fantasy there is also the bit about the Lilliputians sentencing Trump/Gulliver to be blinded for urinating on a royal palace. You could make something of both parts of that story, but that isn’t for the storybook version.

I don’t want to force the similarities too far.

My point is simply that we may understand Trump-world better if we think in terms of weird fairytales rather than in terms of conventional economic or geopolitical analysis.

Furthermore, we should concede the point, that in certain respects the “real world” actually does conform to Trump’s fairytale vision. This is most clearly true with regard to US relations with Europe. The recent trade talks with von der Leyen could be read as an enactment of the Gulliver myth.

America roused itself and Europe promptly accepted a 15 percent unilateral tariff and made promises to invest $600 billion and buy $750 billion in American fossil energy. “Told you so”, the President gets to boast. Meanwhile, European commentators confirm his view by flagellating the Commission for its humbling concessions. Europe really is tiny. Marc de Vos commenting in a much-read FT column, described 2025 as Europe’s “summer of humiliation”. He reminds us of the Belgian socialist Paul-Henri Spaak, who once remarked that: “there are only two types of states in Europe: small states, and small states that have not yet realised that they are small”.

But what if the Europeans are not just weak, as they clearly are, but cunning. What if the Europeans have read the fairytale collection too? What if they realize that Trump thinks he is Gulliver. That he likes to pretend that world politics is the Apprentice writ large. But that both ideas are, in fact, childish fantasies that bear as much relation to reality as “WRESTLING” does the actual Olympic discipline. So the situation is one in which Trump is a Gulliver but one who is actually wearing no clothes.

If that seems farcical, remind yourself that this is a President who likes to publicly celebrate his “wins” in rigged golf games, at his own resorts. Constantly walking the line between reality and make believe is at the heart of Trump’s politics.

With a man like this you have two options.

You can call his bluff. But in that case you will actually have to enter into a trial of strength. And who would want to do that with a delusional, lumbering old man who isn’t wearing any clothes?

Or you could figure out what Donald’s sweet spots are. Right now his preferred kind of deals seems to consist of three things: a tariff number, a lump sum investment and a promise to buy some of America’s few remaining charismatic mega-commodities, things like oil, gas, weapons, chips.

If you want a quiet life without embarrassing trials of strength - and right now the EU desperately needs not to blow up its relations with the US on account of Ukraine - you offer him all three, ideally whilst he holds forth in the ballroom of one his golf resorts.

The deal may make no sense. The EU has no means of directing $600 billion in investment to anywhere. Brussels does not run European energy imports and there is no conceivable future in which Europe will buy $750 billion in fossil fuels from the United States. I’m very much in line with Paul Krugman on this. It makes no sense.

But does this mean that the Europeans actually cheated Trump, as Krugman suggests? Doesn’t that presume that Trump takes these talks seriously? He may. He may not. Who knows? It seems to stretch credulity to imagine that the aim here is really to make rational economic policy. The more obvious interpretation is that the first priority is to play out the fairytale. To keep the show on the road.

Does this mean that this deal is not for keeps? Could this go wrong? Could there be a new blowup in future? Of course. But no deal with a man like Trump can guarantee against that. Presumably the Europeans and the rest area all just hope that his attention span is short and it will soon wander elsewhere. After all there are an awful lot of little countries to bully and so much golf to catch up on.

Right now the only possible tactic is to take things one day at a time. There is a naked giant on the loose who thinks the rest of the world is waiting for him to dish out their just deserts. It is time to face some stark choices!

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