Recently, U.S. President Trump has wielded the 'tariff big stick' to levy tariffs on many countries, equivalent to charging 'toll' style spatial monopoly rents to the global supply chain. Aiming for 'America First,' he uses tariffs to reshape the global trade landscape and revive American manufacturing, profoundly impacting the spatial pattern of global consumption markets and supply chains. What is the intrinsic logic behind Trump's tariff strategy? What impact will it have on our country and even the global supply chain system? What strategies should be adopted in response? These are pressing issues that need to be addressed.
New tariffs are a 'toll' levied on the global supply chain through spatial monopoly.
Currently, most goods, like the needle-making process described by Smith, have supply chains that do not originate from a single place. Each link in the process may optimize resources, factories, labor, capital, equipment, and other elements globally. From the perspective of spatial economic theory, tariffs are a typical spatial 'rent'; they are neither wages nor interest or profit, but a 'tax' levied on the entry of foreign space into domestic territory. Essentially, tariffs are a form of rent, a toll collected by exploiting spatial monopolies. In terms of their source, the return on resources is rent, and land rent is merely a common form of rent return on land resources. Additionally, tariffs levied on goods through the sovereign power of national borders also represent a form of rent.
The essence of modern social production is essentially circuitous production, with more and more intermediate links and finer divisions of labor. Just as the return on circuitous investment in time is interest or profit, the return on circuitous investment in space is various rents. In recent years, the interest-seeking group (temporal arbitrage capital) and the rent-seeking group (spatial monopoly capital) in the U.S. have been in contention, reflected in the alternating governance of the two parties. With social development changes, the core claims of the traditional Democratic and Republican parties have gradually converged, and the boundaries have blurred, significantly weakening their explanatory power. Therefore, it is necessary to interpret the U.S. global spatial economic policy from the perspective of spatial rent and time interest. Rent is essentially a form of spatial return, while interest is essentially a form of temporal return; the long-term game between the two influences the operational mode of Western-dominated capital logic and the direction of U.S. economic and political development.
The double-edged game of tariffs: How the U.S. uses 'time and space' to harvest the world.
To better understand the impact of spatial rent and time interest on the global spatial economic pattern, one can imagine the global economy as a giant toy factory, where countries play the role of assembly workshops in collaborative division of labor. However, the U.S. has started charging fees on the conveyor belts transporting parts, resulting in countries having to pay tolls at each link, which is a new way of imposing tariffs. It has become not merely about protecting domestic workers or industries, but rather a manipulation of the direction of global wealth flow, a 'spatial-temporal magic game.'
The basic logic is as follows: in terms of spatial returns, the U.S. controls key spatial layouts globally, labeling every location; some places are marked as 'prime location' and are protected. The U.S. hopes to maintain spatial hegemony. For instance, the U.S. wishes for a revival of domestic manufacturing, akin to a brand coffee shop paying high rents in a shopping mall, not because U.S. utilities or labor are cheaper, but because the White House has drawn a 'charging range' on the electronic map with tariffs. Other places wishing to supply goods to the U.S. must either pay more in 'toll' style tariffs or return to the designated 'manufacturing parks' to pay taxes or create jobs. In terms of temporal returns, the U.S. exploits the global supply chain crisis to establish temporal hegemony, turning it into a financial casino. Whenever the White House threatens to impose new tariffs, Wall Street reacts as if a new odds table has lit up at a casino, betting on the expansion speed of factories in Vietnam, predicting whether Mexican truck drivers will strike, analyzing the timeline of major geopolitical conflicts, and even betting on how long it will take China to develop alternative technologies—these can all become tools for profit. Wall Street financial giants also play another kind of temporal magic, first suggesting that parts from a certain country will rise in price, and as manufacturers scramble to relocate, they buy up these factories, fixed assets, or equipment at low prices and then 'rent' them back to these companies. Mexican factories may carry 'locally made' signs, while their workshops assemble semi-finished products or parts disassembled from various countries, akin to reheating pre-prepared meals and labeling them as 'stir-fried,' unnecessarily increasing costs for all countries.
This 'harvester' ultimately ends up harvesting itself. When companies engage in tariff arbitrage for rent-seeking, they must also contend with supply shortages, and ordinary Americans bear the costs of supply chain disruptions, causing commodity prices to rise; coupled with various new tariffs as 'tolls,' the final bill is paid by consumers. As economic geographer Harvey noted, capitalism has been able to escape multiple crises mainly due to its expansion and transfer within the global space. In fact, capital logic not only alleviates crisis through spatial transfer but also profits through cyclical fluctuations over time, thus sustaining and expanding itself.
The U.S. spatial hegemony and temporal manipulation have a profound impact on the global supply chain.
The dual hegemony of the U.S. based on spatial control and temporal manipulation is deeply reshaping the operational logic of the global supply chain. The current international supply chain system is at a critical juncture of paradigm shift, and its evolutionary direction will determine whether global economic governance returns to multilateral cooperation or falls into zero-sum games. Such crises echo the question posed by British economist Giddens in 'The Consequences of Modernity': 'To what extent can we, as a whole humanity, tame that beast?' The 'beast' Giddens refers to is essentially the modern society dominated by Western capital logic, which has detached from specific time and space and is governed by various abstract systems. Although this order has been operated under U.S. leadership for nearly half a century, the alternating harvesting between the rent-seeking and interest-seeking groups within it has already led to systemic loss of control.
The collapse of the U.S. real estate bubble in 2008 triggered the global financial crisis, and its structural shockwaves continue to reverberate through the world economic system. This crisis is essentially the systemic failure of the 'rent-seeking group' (real estate financial capital that profits from spatial monopolies) under a neoliberal model, but the 'interest-seeking group' (Wall Street financial institutions that rely on temporal arbitrage) that coexists with it also suffered severe blows. To rescue the 'interest-seeking group,' the U.S. implemented the Emergency Economic Stabilization Act of 2008, enacting massive rescue policies for financial institutions. While it alleviated the financial crisis to some extent, it planted the seeds of a larger debt crisis. Subsequently, the U.S. adopted continuous quantitative easing policies, transferring the debt crisis to the world. Conflicts in international geopolitical relations also arose alongside the game of spatial rent and time interest. Because this extraordinary rescue effectively 'zombified' Wall Street financial institutions from a temporal perspective, extending the asset-liability cycle infinitely through quantitative easing, it simultaneously built a debt iceberg that devoured the future from a spatial perspective. This spatial-temporal mismatch rescue plan ultimately evolved into a transmission mechanism for shifting the crisis globally: the dollar's tidal effects triggered cyclical shocks in emerging markets, and geopolitical conflicts escalated in a spiral as spatial rent competition and time interest games unfolded.
This geopolitical conflict is not an accidental occurrence; the U.S. attempts to control the rhythm and scope of geopolitical conflicts to dominate the international supply chain and achieve its economic hegemony. If the chaos in the international supply chain benefits 'America First,' it will not hesitate to provoke conflict to create that chaos; when such chaos threatens U.S. interests, it will spare no effort to quell the conflict. This behavior has already caused serious damage to the international supply chain, leading to frequent occurrences of 'black swan' and 'grey rhino' events.
The current 'tariff war' initiated by Trump's administration is akin to imposing 'tolls' on the global supply chain, without distinguishing between traditional allies and adversaries. On the surface, it aims to achieve the revival of domestic manufacturing, but in essence, it seeks to layout the international supply chain according to America's rhythm and scope, continually asserting dominance in the supply chain. Its policy core includes dual dimensions: on a spatial level, it forces supply chain nodes to contract towards the U.S. sphere of influence, while on a temporal level, it creates uncertainty to enhance financial arbitrage capabilities. This hegemonic logic leads the international supply chain into a state of 'controlled chaos,' where the U.S. needs moderate disorder to break existing industrial patterns while preventing a systemic collapse that threatens its own interests. This so-called clever dangerous game has temporarily maintained hegemonic returns but has led to frequent encounters with 'fault line shocks' in the global supply chain, with systemic risks exhibiting exponential growth. In recent years, the international spatial economic pattern has suffered greatly from the rotating 'dominance' of America's interest-seeking and rent-seeking groups, leading to ongoing turmoil and significant harm to the global economy; for example, the Red Sea crisis once caused a substantial rise in trade costs, indirectly harming U.S. interests.
Currently, the unilateral spatial restructuring strategy implemented by the Trump administration has led to chaos in the global supply chain system. Its frequent punitive tariffs and selective 'withdrawals' and other spatial cutting actions have not only impacted emerging economies but also triggered severe shocks in traditional ally systems, provoking strong opposition from its allies. German Chancellor Scholz stated that the EU will 'unite' to respond to the escalation of U.S. tariffs, and traditional allies like Canada and Australia have also taken countermeasures against the U.S. tariff war.
Promote the transition of global supply chains from 'spatial-temporal arbitrage and rent-seeking' to 'spatial-temporal integration and win-win cooperation.'
The essence of the current global supply chain restructuring is the fierce collision of different civilizational views of time and space. The U.S. continues to manipulate the world using the absolute view of time and space from Newtonian mechanics, while we are constructing a new development paradigm using quantum mechanics' perspective on time and space. From a spatial perspective, the U.S. maintains the center-periphery extraction system it has created, occupying the top of the industrial and value chains to extract global wealth. From a temporal perspective, the U.S. utilizes the hegemony of the dollar, leveraging periodic tidal fluctuations of the dollar to harvest global wealth. Regardless of how U.S. policies change or how political parties rotate, they consistently revolve around the rotation of rents and interests to exert extractive control over the global economy. Moreover, with technological advancement, these cycles of rotation have become more frequent, and domestic struggles in the U.S. have intensified.
However, it should be noted that when our intelligent factories can complete design, production, and transoceanic delivery based on real-time order data from New York within 72 hours, traditional tariff barriers are hard to impede this spatial-temporal penetration. Our supply chain is actively laying out, cross-border e-commerce is rising, and our companies going overseas is becoming a trend. It is evident that having a strong and complete supply chain is crucial for our efforts to maintain the international supply chain spatial layout. Previously, some Western countries followed the U.S. in adopting 'decoupling and severing chains' measures against us, but as the U.S. continues to impose spatial rents on traditional allies, these countries have gradually made some strategic changes, starting to cooperate with countries like China to collectively reduce global supply chain risks.
Moreover, the Trump administration not only intends to control the global supply chain through tariff wars and selective 'withdrawals' but also has made demands on key global spatial nodes, such as making Greenland a part of the U.S., making Canada the 51st state, and seizing control of the Panama Canal, all of which essentially aim to occupy key spatial nodes to strengthen U.S. spatial hegemony, marking a resurgence of the U.S. rent-seeking group four years later.
The so-called 'toll' tariffs imposed by the U.S. are essentially a form of 'spatial rent' charged on the global supply chain based on its spatial hegemony. This practice raises the costs of global supply chains and increases consumer costs, which is detrimental to the stable development of the global economy. Based on this judgment, we should unite all forces possible to maintain the stability of global supply chains and resolve the various supply chain crises created by the U.S.'s 'controllable supply chain chaos.' We must promote a shift in global supply chains from traditional 'spatial-temporal arbitrage and rent-seeking' to 'spatial-temporal integration and win-win cooperation.' This transformation will reshape a new form of human civilization in the 21st century.
The international community needs a safe and stable global supply chain spatial layout to meet the expanding demands of socialized mass production. Currently, the deepening of spatial circuitous production and temporal circuitous production, along with the rapid development of artificial intelligence and digital technology, requires a just, efficient, and secure supply chain spatial system to provide fundamental support for the international spatial economic layout.
