Barely three weeks into the second Donald Trump administration and the world around us is already heading deeper into permanent chaos. Edicts and executive orders are issued from the White House; Elon Musk and his cronies are let loose on the federal government; Trump himself maintains a near-continual stream of consciousness, alternating threats, flattery and fantasies of ethnically-cleansed beachside apartments in Gaza. Most dramatically, swingeing tariffs on imports were threatened and just as swiftly withdrawn against the US’ two nearest neighbours, Canada and Mexico.

It looks and feels like madness. This can be a comforting thought. If, as the US Democrats seem to believe, Trump is essentially an old man shouting at a cloud, all we need to do is wait for him to burn out. This is arguably what happened the first time around. That would be a profound mistake. Trump version two is a far more serious prospect.

Behind the bedlam of the past few weeks is a clear plan. Big tech’s lurch towards Maga, led by Musk, is only the most visible element of it – big finance and big energy are right behind Musk. The result is a serious effort to reassert US capital’s dominant position in a tumultuous world. The key figure in this realignment of US capitalism and the Trump administration is not Musk, but in fact Trump’s new treasury secretary, the billionaire hedge fund owner Scott Bessent.

Bessent is an outstanding representative of the Wall Street figures that have clustered around Trump. Unlike the first Trump administration, when a selection of chancers and grifters clawed their way into the White House, this crowd is serious. Bessent laid out plans for the new administration last summer, well ahead of his appointment, in an extended Q&A hosted by a conservative thinktank the Manhattan Institute for Policy Research. The interview is worth watching in full.

Billed as a critique of Bidenomics, it’s more like a lengthy pitch by Bessent for the job he now has. Bessent himself is a committed free marketeer, seeing Biden’s economic programme, somewhat absurdly, as “central planning”. His vision for Trump is that the US would now have a president who could credibly threaten economic retaliation against other powers, notably China.

Trump’s seeming craziness – his willingness to say the unsayable, and perhaps even do it – makes him an effective negotiator. If you threaten, impose and then withdraw tariffs on $1.4tn of trade with Canada and Mexico – two countries you have a longstanding free trade agreement with – it’s a clear sign that you might be willing to do something equally mad anywhere. The old rules of the game no longer exist. Fear of what an unchained America could do is what will bring the rest of the world to heel.

In this plan, Trump a kind of wrecking ball that can clear a path to a brighter future. Bessent has spoken of the “reshaping of the global economic order” – that out of the chaos of the world today, the US could impose a new settlement on the planet and so initiate what Bessent has called a “golden age”. After the initial chaos, Bessent’s plan would look a lot like neoliberalism 2.0. In other words, free trade, free movement of money around the world and, critically, America first – the US still the dominant economic and military power, preserving order in the rest of the system.

Politicking at the Plaza.

We can have some ideas of what this might look like. Bessent has floated the idea of a new “Plaza Accord” with China. This references the December 1985 agreement, signed at New York’s Plaza Hotel, between the US, Japan and their western European allies – the so-called G5 – in which Japan agreed to allow its currency, the yen, to rise in value. Japan’s boom over the preceding decades had seen it become a manufacturing powerhouse, exporting more manufactured goods, from Toyotas to Sony Walkmans, than any other country. This flood of Japanese imports, squeezing out US manufacturers, had resulted in a huge trade deficit between the two countries. The supposed economic “threat” of Japan became a cultural touchstone – Back to the Future 2 and Bladerunner, cinematic glimpses of the near-future, play up to fears of a world where Japan was now the world’s largest economy. A New York property developer, one Donald Trump, made his first foray into politics with demands for tariffs on Japan.

In place of US tariffs, the G5 economies agreed to a kind of controlled demolition of the currency system. The immediate result of the deal was a rapid, dramatic increase in the value of the yen – up 46% against the dollar by the end of 1986. That throttled Japan’s exports, which became far more expensive to the US and the rest of the world. And with Japan’s economy so dependent on those exports, that meant Japan entered a recession over the following year. Desperate measures to stimulate the economy by the Japanese government stoked up a property bubble, which burst in 1990 and opened up Japan’s so-called “Lost Decades” of low-to-zero growth.

The story could sound superficially similar to today, which is presumably why Bessent makes the comparison. Just as in the 1980s, playing up to fears of China has domestic political advantages. And Trump’s tariffs against Mexico and Canada of course also played up to – correct, as it happens – beliefs that free trade deals across North America had undermined US manufacturing jobs. Cementing Trump’s domestic coalition will be important to making the economic aggression abroad stick.

But there is no reason for China to accept anything remotely similar to Plaza. Japan was then, and remains, politically and militarily subordinate to the US. It houses 120 US bases, resident to 54,774 service personnel. There are no US bases in China. Whatever negotiation the Trump administration intends to open with China, it will enter in a weaker position than the Reagan administration approached Japan.

Nonetheless, that orientation – seeing the relationship with China as central to reordering the world – is what is likely to define the Trump administration’s real actions abroad. It extends to the Middle East, too: the normalisation of relations between Israel and Saudi Arabia is in significant part an attempt to undermine China’s growing influence in the region and stymie its growing relationship with Saudi.

As for Europe, which is currently trembling at the prospect of tariffs, the Trump regime believes it holds a unique advantage. To Trump, Europe is a hub of cheap energy (the real source of America’s recent economic growth), electric vehicles (crucial in a world of rising energy demand) and data centres. Already Trump has removed Biden’s moratorium on constructing liquified natural gas export terminals.

Whatever happens, we should expect Trump to be ruthlessly pragmatic when it comes to specific deals. His administration will be prepared to apply economic pressure to all and sundry – motivated not merely by the erratic beliefs of the president, or of his presumed base, but by a strategic orientation towards reshaping the world around US capital.