Introduction
This article reviews the study titled A User’s Guide to Restructuring the Global Trading System by Stephen Miran, published in November 2024. Miran, an experienced economic strategist and former U.S. Treasury advisor, presents an analytical framework for understanding how the United States might reshape its global trade relations. His study examines the forces behind current economic imbalances, especially those tied to the U.S. dollar’s reserve status, and offers a detailed review of the policy tools available to address them. By exploring tariffs, currency strategies, and their market implications, the study provides policymakers with a roadmap to recalibrate America’s position within the international economic system.
Economic Foundations of the Current Imbalance
At the core of the imbalance is the U.S. dollar’s status as the world’s primary reserve currency. While this status provides significant geopolitical and financial leverage, it imposes costs on the domestic economy, particularly the manufacturing sector. The “Triffin dilemma,” named after economist Robert Triffin, explains how reserve currency issuers must run persistent current account deficits to supply the world with reserve assets. These deficits, over time, lead to a structurally overvalued currency, making U.S. exports less competitive and imports cheaper.
This pattern has contributed to substantial job losses in manufacturing-heavy regions, hollowing out local economies and weakening national industrial capacity. The shift has also increased the vulnerability of supply chains critical to national security, prompting concerns that extend beyond economics into the realm of defense and strategic autonomy. Importantly, the study points out that while the U.S. dollar’s global role has long been considered an asset, it has become a double-edged sword, delivering international clout but eroding domestic manufacturing resilience.
Miran notes that the persistent use of U.S. Treasury securities as global reserve assets leads to capital inflows that bid up the dollar’s value, creating a systematic disadvantage for American exporters. As global demand for these safe assets grows, the United States is pressured to maintain fiscal and current account deficits, further intensifying the disconnect between financial markets and the real economy.
Tariffs as a Policy Tool
Tariffs are one of the primary tools the study discusses for addressing these imbalances. They serve several functions:
- Revenue Generation: Tariffs raise government revenue without necessarily increasing inflation, especially if currency adjustments (i.e., depreciation of the exporting country’s currency) offset price increases.
- Trade Flow Adjustment: Higher tariffs can discourage imports, encourage domestic production, and create leverage to negotiate better trade terms.
- National Security Alignment: Tariffs can be selectively applied to protect industries deemed essential for national security, such as steel, semiconductors, and pharmaceuticals.
The study emphasizes that tariffs, when combined with currency offset, can effectively shift the burden to the exporting nation, reducing its purchasing power while providing the U.S. Treasury with additional resources. However, tariffs carry risks, particularly when applied without coordination or gradual implementation, potentially triggering market volatility. Miran stresses that tariff strategies should not be seen as blunt instruments but as targeted tools to rebalance trade, secure critical industries, and generate fiscal capacity without imposing undue harm on American consumers.
Another important aspect raised is the historical context of U.S. tariff policy. In the past, low tariffs were part of a post–World War II strategy to rebuild allies and strengthen international alliances. Today, however, many of those arrangements persist despite dramatic changes in the global economic landscape, making it necessary to rethink the fairness and reciprocity of these trade terms.
Currency Policy Options
Beyond tariffs, currency policy plays a central role in adjusting the terms of trade. The U.S. has historically relied on multilateral mechanisms to address currency misalignments, but unilateral options exist:
- Multilateral Approaches: Coordinating currency adjustments with allies can reduce volatility but requires diplomatic effort and mutual agreement.
- Unilateral Approaches: The U.S. can intervene in currency markets, accumulate reserves, or use legal tools like the International Emergency Economic Powers Act (IEEPA) to influence currency values directly.
These strategies aim to correct undervaluation in key trading partners’ currencies, which exacerbates U.S. trade deficits. However, unilateral moves carry higher risks of retaliation and destabilization. Miran’s analysis also suggests that, while many observers believe the United States has limited tools to force currency realignments, there are underexplored avenues available if the government is prepared to bear the risks. He outlines scenarios where the United States could accumulate foreign reserves or impose direct measures to pressure trading partners into currency adjustments, though these come with geopolitical costs.
The study emphasizes that a currency strategy is not just an economic choice but also a diplomatic and security decision, given the interconnectedness of financial flows, alliances, and global influence.
Market and Volatility Considerations
The study carefully assesses the financial market consequences of these interventions. While tariffs with currency offset might have minimal inflationary impact, they can trigger financial market turbulence, particularly in highly leveraged global markets. For example, sudden devaluations of major currencies like the Chinese renminbi can unleash capital outflows, strain debt-laden economies, and amplify international market volatility.
Additionally, the sequencing of policies matters. Gradual, well-communicated implementations are seen as more market-friendly, while abrupt shocks can have outsized ripple effects. The administration’s ability to manage both the economic and psychological dimensions of these shifts will be important in determining success or failure.
Miran warns that the interaction between financial markets and trade policy is often underestimated. A sharp change in tariffs or a major currency realignment can cause rapid portfolio shifts, impacting equities, bonds, and commodity prices worldwide. Thus, policymakers must be prepared to engage with the Federal Reserve and international partners to avoid creating destabilizing market reactions that could backfire on domestic objectives.
Designing Tariff Implementation Strategies
The guide outlines several approaches to tariff implementation:
- Graduated Rollout: Instead of imposing sweeping tariffs overnight, a phased schedule can reduce shock, give trading partners time to respond, and allow domestic industries to adjust.
- Tiered Systems: Different tariff rates can be applied depending on the behavior of trading partners — for instance, whether they meet currency or defense commitments, respect intellectual property, or align with U.S. strategic goals.
- Negotiation Leverage: Tariffs can serve as bargaining chips to secure market access, enforce previous trade commitments, or incentivize allies to join broader trade coalitions against adversarial economies.
These methods aim to tie economic burden-sharing directly to security partnerships, reflecting an integrated view of trade and defense policy. Miran suggests that the success of such approaches will depend heavily on clear communication, credible commitments, and institutional coordination across U.S. government agencies. A well-designed tariff escalation framework can also offer flexibility to adjust policies based on real-time economic and geopolitical developments.
Additionally, the study discusses the concept of “graduated scales” where tariff rates are adjusted based on the specific actions or policies of partner countries. This approach not only strengthens U.S. bargaining power but also incentivizes constructive international behavior.
Addressing Broader Competitiveness
Beyond external tools like tariffs and currency policy, the study highlights the role of domestic reforms in enhancing competitiveness. For example, maintaining low corporate and labor tax rates can make the U.S. more attractive for investment and manufacturing. Deregulation, targeted tax incentives, and investment in critical infrastructure also play roles in offsetting external disadvantages created by currency overvaluation.
Moreover, the study warns against excessive reliance on raising domestic tax rates, which can erode job creation and industrial activity. Instead, shifting some of the fiscal burden toward foreign contributions via tariffs or trade adjustments can relieve domestic pressure.
Importantly, Miran points to the need for a comprehensive national industrial strategy that integrates tax, regulatory, trade, and security considerations. Reshoring key industries, strengthening domestic supply chains, and investing in workforce development are all part of building a more resilient and competitive economy. Without addressing these internal factors, external measures like tariffs or currency moves will have limited long-term impact.
Risks and Tradeoffs
Every policy tool carries risks. Tariffs without currency offset can fuel inflation, hurting consumers. Currency interventions can lead to tit-for-tat retaliations, destabilizing global markets. Multilateral coordination reduces volatility but limits policy flexibility. The study argues that success lies in carefully balancing these tools, recognizing that any attempt to restructure the global system will encounter resistance and unintended consequences.
It also stresses that the geopolitical environment has changed. As new threats emerge from strategic rivals like China and Russia, the integration of economic and defense strategies becomes not just a choice but a necessity. The economic tools deployed must therefore be evaluated not only for their financial effects but also for their broader implications on U.S. global standing and security commitments.
Additionally, the study underscores the importance of sequencing and timing. Implementing multiple measures simultaneously without proper coordination can magnify risks, while a staggered approach, carefully tested and monitored, can yield better outcomes. Policymakers must weigh not just the immediate effects but the second- and third-order impacts on the broader economic system, international alliances, and domestic political stability.
Summary
The study A User’s Guide to Restructuring the Global Trading System by Stephen Miran presents a detailed examination of how the United States can reshape its position within the international economic order. It identifies the overvaluation of the dollar, driven by its reserve currency status, as a central driver of trade imbalances and manufacturing decline. The guide presents tariffs, currency policies, and domestic competitiveness measures as tools to recalibrate the system.
It outlines both the potential benefits — such as increased revenue, improved trade balance, and greater security leverage — and the significant risks, including inflation, market volatility, and international retaliation. Importantly, it emphasizes the need for thoughtful implementation, balancing unilateral assertiveness with multilateral diplomacy, and integrating economic strategy with national security concerns.
By understanding the underlying economic mechanics and carefully deploying a mix of tools, policymakers may navigate the narrow path toward reshaping the global trade system in ways that strengthen U.S. industry without triggering harmful side effects. Whether the current administration will succeed in this complex balancing act remains to be seen, but the study provides a detailed roadmap of the available options and their likely consequences.
For reference, the full study can be accessed online: A User’s Guide to Restructuring the Global Trading System.
Appendix: Industry Perspectives on Stephen Miran’s A User’s Guide to Restructuring the Global Trading System
Stephen Miran’s A User’s Guide to Restructuring the Global Trading System has sparked lively debate across industries, think tanks, policy circles, and global markets. His call for tariffs, currency adjustments, and a recalibration of the U.S. role in global trade has drawn praise from some corners and sharp criticism from others. This appendix expands on the range of reactions, providing additional detail and highlighting why this study has become such a focal point in international economic discussions.
Industry Reactions
Defense, Infrastructure, and National Security Sectors
Defense contractors and infrastructure providers have responded positively, seeing the study’s emphasis on restoring domestic industrial capacity as aligned with national security needs. Many in these industries argue that global supply chain vulnerabilities — especially exposed during the COVID-19 pandemic — made it clear the U.S. must reshore certain defense-critical production, such as microelectronics, rare earth processing, and aerospace components. These companies welcome the study’s perspective that trade and security are inseparable and view potential policy shifts as opening new federal contracts and long-term investment in domestic capabilities.
Manufacturing and Labor Advocacy Groups
Manufacturing trade associations and several labor unions have also voiced support for the broad direction of the study. They highlight the decades-long erosion of U.S. manufacturing jobs, particularly in regions hit by import competition, as evidence that prior trade arrangements failed to protect American workers. Groups representing steel, aluminum, automotive, and semiconductor sectors have praised the study’s proposals, particularly the idea of using tariff revenue to offset domestic tax burdens or reinvest in advanced manufacturing. They argue that stabilizing and expanding domestic production could lead to more resilient supply chains and stronger regional economies.
Critical Industry Reactions
Financial Sector and Institutional Investors
Financial institutions — particularly large investment funds, banks, and hedge funds — are among the most skeptical audiences. Many in this space worry that aggressive tariff and currency moves could destabilize currency markets, provoke capital flight, or increase global economic uncertainty. Several investors have flagged that sharp disruptions to foreign exchange markets, especially involving China’s renminbi, could ripple across portfolios heavy in emerging market debt or global equities. Others worry that inconsistent or poorly communicated policy shifts could harm U.S. asset prices, particularly if they trigger retaliatory measures or hurt the U.S. dollar’s reserve status, a pillar of American financial strength.
Multinational Corporations and Retail Supply Chains
Major multinational firms — especially in retail, electronics, automotive, and consumer goods — have raised concerns about the feasibility of the proposals. Many argue that modern supply chains are tightly integrated across borders, and sudden tariff hikes or currency interventions would cause widespread cost increases, supply bottlenecks, and product shortages. Executives from companies sourcing from China, Southeast Asia, and Latin America have noted that while some reshoring is feasible over years, the pace and scale suggested by the study could result in immediate shocks, potentially raising prices for U.S. consumers and hurting corporate profitability.
Mixed Reactions
Energy Sector Perspectives
Energy companies, particularly in the oil, gas, and renewable sectors, offer a mixed assessment. Some firms welcome the possibility that trade policies could reduce import competition or lower dollar-denominated energy costs. Others, particularly those operating globally, worry that destabilizing trade relations with major economies like China or Europe could reduce energy demand, strain international partnerships, or complicate cross-border infrastructure investments, such as LNG terminals or grid interconnections. Several executives have also expressed concern that volatile currency and commodity markets could increase hedging costs and operational risk.
Technology and Semiconductor Industries
The technology sector’s response has been divided. Semiconductor companies — often at the center of U.S.-China tensions — are wary of further disruptions to the intricate supply chains they depend on. At the same time, some firms see opportunity in policy shifts that might provide incentives to expand domestic fabrication capacity or reduce dependence on Chinese manufacturers. Software firms, cloud providers, and digital services companies, on the other hand, are more skeptical, warning that aggressive trade actions could trigger retaliatory restrictions on data flows, cloud services, or intellectual property rights, complicating their international operations.
Academic and Policy Analyst Critiques
Academic economists, international relations scholars, and policy think tanks have engaged deeply with the study. Some analysts highlight that the study provides a fresh take on the long-standing Triffin dilemma, where the global demand for U.S. dollars as a reserve currency imposes structural trade deficits on the U.S. They praise the document for putting currency dynamics at the center of the trade debate, something often overlooked in conventional policy discourse.
However, critics have flagged several concerns. One line of criticism points out that the proposed unilateral measures may provoke trade wars, creating more harm than benefit. Others worry that focusing so heavily on currency interventions risks politicizing exchange rates, undermining confidence in the dollar, or breaching international agreements under institutions like the World Trade Organization (WTO) or International Monetary Fund (IMF). There is also skepticism about whether the proposed policies can be implemented without triggering complex side effects, such as domestic inflation or international backlash.
Closing Note
Stephen Miran’s study has not just added another voice to the policy debate — it has catalyzed a multifaceted conversation spanning industries, academics, and governments. The reactions highlight both the opportunities and risks of fundamentally rethinking the U.S. approach to global trade. Whether these proposals translate into durable policy remains to be seen, but the study has ensured that trade, currency, and industrial strategy will remain at the forefront of U.S. economic discussions for the foreseeable future.
