Using Cuba 1962 To Explain Trump's Brinkmanship

Tuesday, 27 May 2025, 6:19 pm
Opinion: Keith Rankin

People of a certain age will be aware that the 1962 Cuba Missile Crisis was, for the world as a whole, the most dangerous moment of the Cold War. The 1962 'Battle of Cuba' was a 'cold battle' in the same sense that the Cold War was a 'cold war'. (Only one actual shot was fired, by Cuba.) Nevertheless, it is appropriate to ask, "who won"?

In military events hot or cold – it is surprisingly difficult to answer such a question. But it's actually quite easy in this case.

The cold Battle of Cuba was about three countries, and three charismatic leaders: Nikita Khrushchev (Soviet Union), John F Kennedy (United States), and Fidel Castro (Cuba). Following the disastrous American invasion of Cuba in 1961, Cuba had taken on the role of a Soviet Union 'client state' – hence a military proxy – of the Soviet Union. (Prior to the Bay of Pigs assault, Cuba, while a revolutionary country, was not a communist country; though at least one prominent revolutionary, the Argentinian doctor Che Guevara, was certainly of the communist faith and took every opportunity to convert Cuba into a polity that followed the Book of Marx. The actions of the United States facilitated Castro's eventual conversion.)

The situation that Khrushchev faced in late 1961 was that NATO had an installation of American nuclear-armed missiles in Turkey (now Türkiye). While Turkey had a common border with the Soviet Union – Azerbaijan, Armenia and Georgia – the missiles were essentially facing north across the Black Sea, into Ukraine and Russia. This was a clear and open – though not widely publicised in 'the west' – security threat to the Soviet Union.

Taking advantage of the political fallout between Cuba and the United States, Khrushchev – in an act of bravado, indeed brinkmanship – negotiated with Castro to install nuclear-capable missiles in Cuba, one of the few genuine security threats that the United States has ever faced.

The world trembled at the prospect of imminent (and possibly all-out) nuclear war. Castro looked forward to a hot battle which he was sure Khrushchev and Castro would together win. But Castro was doomed to disappointment. Khrushchev dismantled his missiles in Cuba, and Kennedy dismantled his missiles in Turkey.

So, compare, say, October 1963 with October 1961. The only real difference was that in 1961 there were American missiles in Turkey pointing in the direction of Moscow, and in 1963 there were not. Game, set, and match to Khrushchev. (And of course, the whole world was the winner, in that not a nuclear missile was fired in anger. Though the Cubans did shoot down an American reconnaissance aircraft.)

That's not the narrative which the western world has taken on board though. In the West, it's interpreted as a Soviet Union backdown, in the face of relentless diplomatic pressure from the Kennedy brothers (with Robert Kennedy playing a key negotiating role). Certainly, the world was on tenterhooks; brinkmanship can go disastrously wrong.

There are some analogies with the current Ukraine crisis. Though the Ukraine War is certainly a hot war.

Brinkmanship failed in 2021 and 2022. Nevertheless, Volodymyr Zelenskyy does pose as a good analogue to Fidel Castro (though not as an incipient communist!).

Donald Trump's brinkmanship re China and the European Union

Trump's war is a 'trade war', Winston Peters' rejection of the 'war analogy' notwithstanding. This is a war that uses the language of war. Two longstanding mercantilist economic nations (China, European Union) and one mercantilist leader are slugging it out to see who can export more goods and services to the world; the prize being a mix of gold and virtual-gold, the proceeds of unbalanced trade.

(Historically the United States has also been a mercantilist nation, going right back to its origins as a 'victim' of British mercantilism in the eighteenth century. The United States has always been uneasy about its post World-War-Two role as global consumer-of-last-resort and its historical instincts towards mercantilism; an instinct that contributed substantially to the global Great Depression of 1930 to 1935. 'Mercantilism' is often confused by economists with 'protectionism', and indeed the American Smoot-Hawley tariffs of 1930 were a mix of both.)

My reading of Donald Trump is that he is a mercantilist, but not a protectionist; that he's not really a tariff-lover, just as Khrushchev was not really a missile lover. Instinctively, China and especially the European Union are protectionist as a way of supporting their ingrained mercantilism. But a country that is 'great again' – in this 'making money' context – can prevail in a trade war without tariffs. Indeed, that's exactly why the United Kingdom moved sharply towards tree trade in the 1840s and 1850s. England had not lost its mercantilist spots. But at the heart of an English Empire within a British Empire, London had the power to win a 'free trade' trade war. It was the other would-be powers – the new kids on the global block; the USA, Germany's Second Reich, and later Japan and Russia – which turned to tariff protection in order to stymie the United Kingdom.

Trump's super-tariffs against China and the European Union – trade weapons, economic 'missiles' – are designed to get those two economic nations to remove their various trade barriers that existed in 2024. Once they do that, then Trump may remove his tariff threats.

Trump is playing brinkmanship in the way of Khrushchev. Xi Jinping is Kennedy; so, in a way, is Ursula von der Leyen. Canada, in a sense, is Cuba. (Though Mark Carney may not like to think of himself as Castro!)

If Trump gets his way, the United States' economy in 2026 will be as free as it was in 2024. The Chinese and European Union economies will have significantly fewer tariff and non-tariff import barriers than in 2024. Significantly fewer 'trade weapons' poised to 'rip off' the United States! Canada will be much the same in 2026 as in 2024, albeit with a newfound sense of national identity.

Implications for the Wider World, and the Global Monetary System

The wider world will probably not be better off with a mercantilist war, albeit a free-trade war. When hippopotamuses start dancing …!

We already see how free trade in 'big guns' is creating military instability in Africa and South Asia. And we must expect to see the United States' special role as the fulcrum of the world's monetary system dissipate if the United States significantly reduces its trade deficits; requiring some other deficit countries to take up that challenge. Canada? Australia? India? United Kingdom? A new anti-mercantilist British Empire? I don't think so. Türkiye? Saudi Arabia? Brazil? Maybe not. Japan? Maybe. Russia? If the Ukraine war ends, Russia will struggle to import more than it exports; though I am sure that Donald Trump would like to see the United States exporting lots of stuff to Russia.

The International Monetary Fund? Maybe, but only if it changes some of its narratives. The challenge here will be for it to reform itself in line with John Maynard Keynes' proposals at and after Bretton Woods, the 1944 conference which set itself the task of establishing the post-war global monetary order. Keynes envisaged a World Reserve Bank; though he didn't envisage monetary policy – with New Zealand in 1989 acknowledged as the world's lead 'reformer' – falling into the hands of the 'monetarists' and their false narratives about inflation.

-------------

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

© Scoop Media

Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.

Contact Keith Rankin

• Website - Kieth Rankin