Donald Trump is right in one thing: everyone will remember the day he declared the World Trade War by imposing duties across the globe.
In the wake of duties, the CNN comments on his analysis that Donald Trump just did the greater political risk in American economy by any modern president.
The presidents usually try to do everything they can to avoid disruption of the country’s financial machinery and global stability – especially when unemployment is low and growth is at a constant level, such as when it took power by Joe Biden.
However with the impressive Announcement of new duties in almost all imports from 185 countries, Trump caused a unprecedented shock to the world economyagainst the recommendations of almost all economists and the lessons we have taken from some of the darkest times of history. For the story let’s say that Four countries, Russia, North Korea, Belarus and Cuba, were excluded from Trump’s reciprocal duties.
Trump was based on his old belief that if he made imported goods non -competitive, he would stimulate domestic production. Regardless of the fact that Commercial wars tend to end up badly and that duties are more characteristic of the 19th century than the 21st century.
In a surreal appearance in the White House Rhodes Garden on Wednesday, Trump was holding a huge poster that presented the new duty rates while waving in the wind.
People saw an unstoppable president, at the heart of the scene he so loved, risking the financial fate of billions of people with an extreme political bet.
By escalating his aggressive tariff policy, he announced duties 20% on imports from the European Union and then for the imports from the following countries: China (34%), India (26%), South Korea (25%), Japan (24%), United Kingdom (10%), Vietnam (46%), Switzerland (31%), Cambodia (49%), South Africa (30%), Indonesia (32%), Brazil (Brazil), Brazil (10%). For imports from Taiwan, duties will be 32%.
Real blow to Americans
The biggest political paradox is that Trump – promising to revive the financial prospects of US post -industrial areas – is about to cause real pain to the Americans themselves. He was elected five months ago in part because voters were tired of high prices on the basic goods after the inflationary pressure caused by the Pandemic and the costs of the Biden government.
The Democratic candidate, Kamala Harris, had few good answers on how to reduce the cost of living. Trump, on the other hand, reinforced his image near the simple world, baking potatoes to a McDonald’s in Pennsylvania.
And yet, he is now applying a policy that will do almost everything – From food to electronics, cars and houses – More expensive. The poorer and those living with fixed incomes will be more affected by Trump’s wealthy friends. And those who have retirement funds will not want to see the losses.
He told NBC on the weekend that “He doesn’t care” if the price of cars is launched. His new experiment with duties shows that he means it. This is a stunning political position by a billionaire president leading a cabinet filled with billionaires and millionaires.
Retaliation from abroad
No one can predict exactly How will this bet evolve.
If duties are fully applied and there are no last -minute exceptions – as has happened in the past with Trump – People are heading towards a total trade war.
Foreign leaders will receive enormous pressure to respond. Australian Prime Minister Anthony Albanesi He said: “This is not a friend’s energy.” The reaction could lead to escalation, and Trump – who always wants to have the last word – will not be left with arms crossed.
Trump did not explain why it makes sense to impose 49% duty on Cambodia Or because it is good to burden African countries.
The even more paradoxical? White house duties list includes Heard islands and McDonald in Antarctica – a place with more penguins rather than commercial flows.
Trump’s political risk
The another big risk is that Trump maybe not to see political benefits soon From this move.
Most analysts find the assumption that industries will return to the US. And even if that happens, it is unlikely to be done in his term – or even in the “second term” he hints, despite constitutional prohibitions.
Although duties will generate hundreds of billions of dollars to the state, it is doubtful whether citizens believe they will be compensated through tax relief. And everything shows that these reliefs will mainly favor the rich.
Huge political gift for democrats
There is no doubt about the boldness of Trump’s movement and the “Liberation Day” he proclaimed. For weeks he made threats to duties and left implied for withdrawals. His supporters in Congress said they were a “strategic” negotiation. But this time, it seems he won’t do it back.
“This will be a very important day. You will remember her for many years’, he said. “It may prove to be one of the most important in the history of our country.”
And it may be so, the American media notes in its analysis. Some economists predict that returning to global trade barriers can lead to recession, as happened in the 1930s.
But the economic environment is not simple. So far, the US had lower duties than other countries because they had the power of consumer and their economy. Now, all this is changing. And if prices and inflation rise, consumers may limit their expenditure, causing recession. This will give the Democrats A huge political gift. Chuck Sumer said: “This is a huge tax on American families, just to favor billionaires.”
Four Republican Senators were drawn up with the Democrats in a symbolic vote against duties in Canada. But either the country is heading for a recession or in a “new golden age” as Trump promises, everyone – his party and every American – will follow the course he has drawn.