Quote:
Originally Posted by Itse
FFS. Current EU leadership completely surrendered to Trump.
15% tariffs on Europe to US trade, nothing the other way. Pathetic sacks of megacorporation interests.
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I dunno, the way I see it is Trump is putting a 15% tax on all foreign goods. If most other countries "cave" it essentially doesn't have an effect on anyone else. At best, the few things the US does make get purchased more domestically. At worst for us is we lose market share on stuff they do make(or have, ie natural resources), at least temporarily.
Here's where my amateur economist brain has some thoughts...
All foreign goods get more expensive in the US, which drives inflation. Trump hates inflation, but probably hates high interest rates even more. So when Powell is forced to raise them, Trump fires Powell, and puts in a patsy to lower rates. This of course drives more inflation and lowers the value of the US dollar. Interestingly these are all goals Trump has. Fire Powell, weaken the US dollar, encourage domestic manufacturing. He'll pretend inflation is imaginary, because he has no counter to it. But the extra tariff income will also give him another chance to slash taxes...for the rich.
Suddenly that 15% tariff or tax of foreign goods is more like a 30% one once the dollar drops and inflation rises. So for anything the US still needs and doesn't have a choice, they are hammering themselves in multiple ways, and the only thing the rest of the world loses is sales of whatever the US makes. But since their costs will have gone up so much, it may eventually be cheaper to buy the foreign thing with the tariff anyway.
This just seems like them shooting themselves in the face, and all we have to do is pay for the bullet. Seems fine.