Donald Trump just imposed a 25 percent tariff on virtually all goods produced by America’s two largest trading partners — Canada and Mexico. He simultaneously established a 20 percent across-the-board tariff on Chinese goods.
As a result, America’s average tariff level is now higher than at any time since the 1940s.
Meanwhile, China and Canada immediately retaliated against Trump’s duties, with the former imposing a 15 percent tariff on American agricultural products and the latter putting a 25 percent tariff on $30 billion of US goods. Mexico has vowed to mount retaliatory tariffs of its own.
This trade war could have far-reaching consequences. Trump’s tariffs have already triggered a stock market sell-off and cooling of manufacturing activity. And economists have estimated that the trade policy will cost the typical US household more than $1,200 a year, as the prices of myriad goods rise.
All this raises the question: Why has the US president chosen to upend trade relations on the North American continent? The stakes of this question are high, since it could determine how long Trump’s massive tariffs remain in effect. Unfortunately, the president himself does not seem to know the answer.
In recent weeks, Trump has provided five different — and contradictory — justifications for his tariffs on Mexico and Canada…
…more in the article.
Of course he doesn’t. He should be in elder care not in the White House.
I never liked that many seem to be of the idea that Trump is an absolute buffoon who doesn’t know what he is doing. He and his goons are not headless chickens. They are not stupid, and know incredibly well what they are doing and why.
You don’t get to win an election twice if you’re as much of an idiot as most make him out to be. If we keep underestimating our ‘opposition’, we will continue to be defeated.
See this article for more: https://unherd.com/2025/02/why-trumps-tariffs-are-a-masterplan/
TLDR:
In this article, Yanis Varoufakis analyzes Donald Trump’s economic strategy, arguing that it is more sophisticated than his critics assume. Trump’s focus on tariffs is part of a broader plan to reshape the global economic order, which Varoufakis describes as an “anti-Nixon Shock.” Trump believes the U.S. has been exploited due to the dollar’s role as the global reserve currency, which he sees as a burden rather than a privilege. He aims to weaken the dollar to boost U.S. manufacturing and reduce trade deficits, while maintaining its reserve status to fund U.S. deficits and military power.
Trump’s plan involves using tariffs to pressure foreign central banks to lower interest rates, thereby depreciating their currencies relative to the dollar. This would offset the price increases caused by tariffs on U.S. consumers. The second phase of his strategy involves bilateral negotiations with key countries, leveraging tariffs and security threats to force them to appreciate their currencies and make concessions, such as buying more U.S. goods or relocating manufacturing to the U.S.
Varoufakis acknowledges the risks, including potential domestic backlash from Wall Street and the possibility of foreign countries, particularly China, creating an alternative financial system. However, he argues that Trump’s plan is coherent and should not be underestimated, even if it diverges sharply from traditional economic thinking.
Dude that makes no sense at all. He wants to depreciate the dollar by putting on tariffs, an action you yourself admit depreciates all OTHER currencies, thereby increasing the value of the dollar?
Then after that he’ll “negotiate” to have the other countries to appreciate their currencies? By buying US goods and companies?? Both of those things appreciate the US dollar. China has been selling their goods to the US (something which should appreciate their currency) without appreciating their currency by buying property and companies in the US so they never have to use the US dollar to buy their own currency. This increases the value of the dollar while decreasing demands for the Chinese currency. This has been widely seen as unfair currency manipulation by China.
Things that increase demand for US dollars such as buying US goods and investing in the US APPRECIATE the value of of the US dollar. I haven’t read the article yet, but I hope your summary is incorrect, because Varoufakis is generally a very intelligent left wing thinker and I would be surprised to see this kind of gaffe in basic economics.
The thing is, I don’t doubt there is an actual reason why these plans have some more intelligent purpose behind them; I doubt that Trump is the one thinking of this. I’m of the belief that Trump has a bunch of yes men around him that are smart and able to coerce him to do these things through careful manipulation strategies and feeding into his ego.
The project 2025 people already had every executive order and move lined up ready for him. No understanding required .
I’m shocked that more people don’t consider a change in perspective on global economics. It’s been clear for a long time that the existing system is unsustainable.
The chaos is the point: make nothing normal, make nothing certain, and he can be free to do anything.
I know why he did it. Because that’s what his best best friend from Kremlin said and his two last working brain cells are in vacation playing golf.
He probably doesn’t understand that if US stops all trading, will become just a bigger North Korea with nukes.
Techbro led gvmt - move fast, break stuff. Chaos leads to opportunity to profit, by which I mean him and his class to profit.
I don’t think Trump knows very much about anything he’s doing, whether this or anything else.
(Incidentally, this also means I don’t think he’s doing most of the bad things he’s doing out of malice or dictatorial ambitions. He just has no idea about anything he’s doing.)
Am I the only one surprised at how low the cost per household could be? I keep thinking it should be quite a bit higher.
It’s part of their plan to eliminate the IRS and federal taxation, to be replaced by a universal sales tax. However, trump doesn’t have the authority to do that. But he can tariff. And a tariff is a little bit like a sales tax.
Therefore, we get tariffs.
Now, the other problem is that the tariff revenue is going to be like 1/10 that of the IRS tax revenue, which will require a 90% reduction in federal spending. Including defense, research, healthcare, and social security. Can’t collect social security tax if the IRS doesn’t exist either, so social security is getting axed.
It will of course make 56 million seniors homeless, but thats a small price to pay for a 15% pay bump for me!
This is just disingenuous.
Lookup trade balance with each one of these. EU, china, Canada and Mexico and all of these are majorly disbalanced
It looks imbalanced until you understand that you guys are the only ones manufacturing dollars
The big corps can weather the storm, smalls will have to sell, consolidate and monopolize is the plan as I see it
Judging by what happened back in 2008 no, big corps just go under. They will not survive this.
Yeah, they have no savings because they plow all profits into stock buy backs. Hell, a lot of them have borrowed money to do buy backs.
Either that or Trump is following orders.
I mean, it’s getting harder and harder each day to argue against him deliberately destroying the west.
He’s following orders but he forgot what they were, too.
It’s deeper than that. Putin conditioned the dementia into him, so once the orders are carried out, he forgets
Like a Manchurian Canadiate?
But backwards. A Candidate Manchurian
But backwards again, the nairuhcnaM etadidnaC.
Sure, but instead of individual targets it’s the USA
Yeah that’s the conclusion isn’t it
Trump’s ‘beautiful’ tariffs are just ugly taxes on consumers and businesses alike.
🐱
Market manipulation. He is also a TV show host, so he is a showman. He likes creating drama.
He is famous for bad management, causing his casinos to go bankrupt. His management style is going to bankrupt US and somehow make him richer.
Actually in his previous presidency he managed to lose personal wealth rather than increase it. He is so incompetent he can’t even enrich himself with 4 years of being president lol.
Why can’t we make him unalive? He wouldn’t be able to play with WWIII that way…
Or just watch him bankrupt USA just like his casino, I think US need to go through that pain to realize why they should not vote for a showman, TV show host again.
Sun Tzu: “Never interrupt your opponent while he is in the middle of making a mistake.”
Sun Tzu I should read/listen to him much much more …
Just my opinion as a layman: the tariffs give his corporate backers all the excuse they need to jack up prices even higher.
And when he takes the tariffs off, the prices never go back to the original starting point.
That, plus it seems very likely that he and friends are just manipulating the market to trade on the predictable moves he’s causing. Ya know, the kinda stuff that earned Musk some mild hand slaps and theatrical pearl clutching (in addition to giant financial benefits) in recent years.
It’s basically how Musk got rich. Intelligent market manipulation.
That’s a weird way to write inheritance.
Musk didn’t inherit billions.
How much was his dads gemstone mining business worth?
Less than a billion dollars.
Do you actually know how much it was worth though?
Agree, inflation can theoretically increase not only prices, but wages to compensate the increased cost of living, therefore appear as a boomed GDP, bringing the debt to GDP ratio lower without actually reducing debt. Eu, china, Russia all have much lower debt to GDP. Of course in reality inflation is hard to manage once it gets out of hand, and the levels of interest rates don’t give enough space for corrections, and the problem of inflation being the reduced consumption leading to a lesser increase of GDP.
GDP is always calculated in nominal and real (inflation adjusted) GDP.
Inflation does not reduce debt to GDP by increasing the perceived GDP, but by devalueing the debt owned, as it is a fixed sum with usually interest rates fixed for a certain time
yup, it forces everyone to raise prices, including competitors.
Putin said: “go forth and break shit” and here we are.
Also Putin, " say I’m not a bad person"
yup. it’s successfully costing america its allies.
It’s not inappropriate though. I’ve been saying for years Canada should not be so closely allied with such a fickle country.
