Liberation Day has come and gone. If Trump’s War on Foreign Goods (WOFG) is genius, we’ll take idiocy. It’s a stitched-together concatenation based on meretricious metrics, a Son of Smoot-Hawley that will ensure Trump a place in the presidential pantheon right next to Herbert Hoover. Like Hoover, Trump has a business background; like Hoover he never shuts up, and like Hoover he will preside over a disastrous tariff regime.
Start with the metrics the Trump team used to calculate the tariffs for each country. How did they determine a trading partner’s tariff on U.S. exports to that country? They didn’t take the country’s actual tariff rate, then perhaps add in a guesstimate percentage for non-tariff trade barriers and go from there. Rather, they took the U.S. trade deficit with that country and divided it by that country’s exports to the U.S. Thus China, which levies an average 7.3 percent tariff on U.S. goods, and Europe, where the average tariff is 5.2 percent, have 67 and 39 percent tariffs on U.S. exports according to Trump. If they had no actual tariffs or trade barriers at all, they would still have close to those percentages. (Zero tariffs would probably lower their trade surpluses a bit.)
There are too many varying opinions. Here is another article that gives us a background and reason to believe that what is happening is a good thing. Trump’s Tariffs Tackle Clinton’s China Carnage – Discern Report
Or, maybe Trump will succeed. The Hoover analogy is incomplete. Hoover had a strong dollar, we now have a fiat dollar. Therein lies the difference. The current situation has been untenable and the crash inevitable. Maybe we just got pulled out of the fire, albeit with pain.
Trump, billionaire, businessman, tactical thinker who has weathered manufactured malicious attacks that were from a unified political and media team. The arguments against tariffs, I get. But the people against tariffs are Still in support of corporate taxes. The same burden on the consumer exists. So? Pick a side. The difference between taxes and tariffs? Tariffs, increasing the cost of Imports actually motivate Manufacturers to produce In America. Taxes tend to drive production out. We’ve watched manufacturers leave. Already corporations are preparing to bring manufacturing to America.
I’m not saying I am perfectly comfortable with this, but I’m sure willing to give Trump the benefit of the doubt. If it doesn’t work out like he wants, at least he’s not Actively Working to screw America.
Robert Gore has never been right about jack shit. Here’s how the tariffs will work. As simple as I can make it. And it’s already happening. U.S. consumers are responsible for 85% of non discretionary spending. Meaning we buy other countries crap. Other countries don’t buy crap, because the have no money. Other countries, like China, needs food. Real Bad. Same with India, Vietnam, Laos, etc, etc. Those three countries have already caved. US manufactures that have off shore the production to these countries are re shoring as fast as they can. Trump will win this before Congress can write the bill limiting his tariff power.
Edit, discretionary spending.
Essentially Trump’s tariffs stop their cash flow.
Mr. Gore has been correct enough to be financially independent.