How will things be for the US if China and the rest of the world reduce tariffs for each other?
Trade will be less centered around the US and US products and services will take on less importance.
Yes, other countries will be hurt. Some will be hurt more. Seems like the US will come out worse than the average country.
Am I seeing this right?
Yes, probably US consumers will bear the strongest impact in terms of inflation etc. So far, stock market impact is global.
OTOH the policy is intended to isolate the US economy, and looks like it will achieve that goal. Will be interesting to see how this plays out in the long run, maybe it will be better for the average Joe. It certainly is a break with decades of US economic policy and business as usual.
Absolutely. Large scale tarifs are bad for everybody. US could win a trade war against any single country.
But Trump and his cronies thought they can win a trade war against the world war, or at least use it as a threat. China did not blink. Now EU will 100% follow that and slap retaliatory tariffs on US and Trump will have to make a choice: to cave or to send US economy into the abyss. Given the man's ego, I would rather bet on the second option.
As to your question, the rest of the world doesn't need to do anything - in reality tariffs are already mostly low (not even remotely close to what Trump showed). Everybody will be hurt, but US will be hurt MUCH more than any single other country.
For some reason US thinks it's the only game in town, but it's not. This isn't 1945... EU economy is on par with US. China's too.
Trump tries to bully everybody, but results are pretty poor so far. The drama in the White House with Zelensky seems ages ago, but what was the result ? Zelensky stand there with his head held high, and despite the show, in the following weeks US restored the aid to Ukraine, without them agreeing to anything at all. Trump thinks he can project strentgh, but so far it's pretty much the opposite.
Spot on with EU following China's lead; so now the rest of the world is seeing China as a leader ... not quite what was intended?
Vietnam and Cambodia moving even more into China's influence is one outcome, undermining the China containment strategy that many conservatives say they want.
What was even the goal here? Does anyone in the US want to work in a sweatshop making Nikes?
Trump repeatedly says that a trade deficit is a subsidy that America is paying the country.
No one really understands why he'd say that. And no one has succeeded in talking him out of it. So we're now seeing global trade policy collapse based on this weird invention of his.
> What was even the goal here?
Like many of us*, Trump has one tool in his chest. For Trump, that tool is extortion. Extortion has worked for him a lot, so why not apply that to all facets of his life?
I don't like the fact that I'm glibly summarizing someone like that, but I think it's pretty close to the truth.
When your one tool is a hammer (extortion), you think everyone else is a nail.
See, for example ...
- Columbia University, etc.
- Law firms that investigated him
- every single country that just got hit with tariffs.
* I think many of us have our own "one tool" that we like. Extortion, however, is a malevolent tool.
The EU is likely to be more measured, and start with tariffs aimed at Trump-supporting regions. It would be slightly surprising if it jumps straight to blanket tariffs (though it may if it's believed that the shock-and-awe approach will cause Trump to back down).
Remember the markets are still pricing in some hopeium that Trump will blink or the congress or courts will block the tariffs or that Trump will be impeached if the tariffs do too much damage. As the tariffs remain the markets will continue down.
Trump is everything you don't want in this situation -- ideologically attached to tariffs, not educated in basic economics, cognitively inflexible, tunnel visioned on trade imbalances, possesses a zero sum worldview his whole life, stubborn, shameless, and surrounded by sycophants. It's bad.
I can see congress starting to build the will to block. Sentiment already swung left in special elections merely 3 months into the presidency. In one case Elon contributed 25 percent of all money in what should have been a close election and lost by 10 points.
"China's Trade War Continues"