"Even if the United States rescinds its tariffs and ends its trade war, it has already shown it’s a rogue state that cannot be trusted. It’s lashing out at its allies, reneging on its obligations to international institutions like the World Health Organization, not to mention the Ukrainian people, and there’s no guarantee that will change in four or eight years. The United States has spent the past century meddling in countries around the world, overthrowing their governments, financing forces that served its own interests, and enforcing punitive measures like it has on Cuba for sixty years.

That should have never been acceptable. But now, as it starts throwing its closest friends under the bus, it’s long past time to embrace — and even hasten — the end of American hegemony and the horrors it’s brought on the world. If countries that have long claimed to believe in an international rules-based order truly believe in human rights and international law, it’s time for them to break with the United States, reject their ongoing subordination to its tech dominance, find new friends and allies, and build a better tech infrastructure that enables a better world for everyone."

https://www.disconnect.blog/p/the-united-states-has-gone-rogue

#USA #Trump #Musk #DOGE #Imperialism #TradeWar #Tariffs #Protectionism

"This is what his critics do not understand. They mistakenly think that he thinks that his tariffs will reduce America’s trade deficit on their own. He knows they will not. Their utility comes from their capacity to shock foreign central bankers into reducing domestic interest rates. Consequently, the euro, the yen and the renminbi will soften relative to the dollar. This will cancel out the price hikes of goods imported into the US, and leave the prices American consumers pay unaffected. The tariffed countries will be in effect paying for Trump’s tariffs.

But tariffs are only the first phase of his masterplan. With high tariffs as the new default, and with foreign money accumulating in the Treasury, Trump can bide his time as friends and foes in Europe and Asia clamour to talk. That’s when the second phase of Trump’s plan kicks in: the grand negotiation.

Unlike his predecessors, from Carter to Biden, Trump disdains multilateral meetings and crowded negotiations. He is a one-on-one man."

https://unherd.com/2025/02/why-trumps-tariffs-are-a-masterplan/

#USA #Trump #Tariffs #TradeWar #PoliticalEconomy #Protectionism

"Most important of all, if and when a massive tariff barrier goes up along the US-Canadian border tomorrow — in the time it’s taken me to start and finish writing this, Trump has already announced a one month pause on the tariffs against Mexico — the official organs of American business will be apoplectic and the pain will be felt by US consumers almost immediately. (To digress from the main point here for just a moment, I think it’s worth registering that no one really knows what’s going to happen tomorrow or how economically disruptive the impact of a suddenly-imposed massive trade barrier between Canada and the US will actually be.)

Little, and perhaps nothing, in the behaviour of Trumpism to date has suggested it has either the ideological coherence or political discipline to weather such a storm. True enough, Trump is happy to foster chaos and cause radical disruption — look no further than his current assault on key institutions of the US federal government. But such disruptions have tended to have the support of corporate America or, at any rate, not flown directly in the face of its interests.

In such a volatile atmosphere, it’s anyone’s guess what exactly will happen in the coming days and weeks. When the dust settles, perhaps selective tariffs will remain in place for strategically-chosen industries (or something in that vein). But my instinct is that Trump will initiate some sort of climbdown in fairly short order, likely proclaiming — regardless of what actually occurs — that his objectives have been achieved (I wouldn’t even discount the possibility of Trump pausing the tariffs he’s threatened to impose on Canada before day’s end). The effect of his tariffs on the import-dependent US economy will be profound, and compounded by the impact of retaliatory tariffs planned by Canada, China, and in due course possibly Mexico and Europe as well."

https://www.lukewsavage.com/p/trumps-trade-war-will-be-maga-economics

#USA #Trump #Tariffs #TradeWar #Protectionism #Mexico #Canada

"Still, this move is a big deal, much bigger than in 2018. In his first term, Trump put some strategic tariffs on China, charging roughly 20-30% tariffs across a host of goods, but with a bunch of exemptions. Apple’s iPhone never got tariffed, for instance, and a lot of medical supplies went untouched. There’s a lot of hot air about tariffs increase consumer prices, but that’s not always true. The first round of Trump tariffs mostly didn’t increase consumer prices, but came out of corporate profits, so they didn’t generate inflation.

Why is that? Well it’s important to recognize that tariffs don’t apply to the retail price of a good, but to its wholesale price when imported. So a Nike shoe might cost $150 retail to an end consumer at a store but that’s before markup; Nike is paying $20 for it from a Chinese supplier. The $130 difference between what the Chinese supplier charges and the end American consumer pays is a mark-up, and it goes to Nike for branding, distribution, profit, etc. The tariff is charged on the $20. So even a very large 50% tariff will be just $10, which means Nike will still have a giant cushion, and can choose whether to pass the tariff along or reduce its profit, or both. Or it can negotiate some of the cost with its Chinese supplier.

This time, because the tariffs are hitting every sector, consumer prices are likely to change, though it will differ industry-by-industry. There are plenty of companies who have to raise prices to cover costs. But another reason for price hikes could be “seller’s inflation,” aka there’s market power throughout the economy, and corporations with such power have an excuse to charge higher prices, as they did during Covid. They can just blame Trump, and collect more profit. On the other hand, companies are scared of the new administration."

https://www.thebignewsletter.com/p/monopoly-round-up-what-did-trump

#USA #Trump #TradeWar #China #Tariffs #Protectionism

"There is a fourth, more realistic conception of tariffs that has been effective in some key instances. Advocates of this perspective view tariffs as a shield behind which other, mainly domestic policies can work more effectively. Traditionally, trade laws have allowed countries to use tariffs to protect vulnerable sectors or regions under specific conditions, effectively supplementing domestic social policy.

An even more significant example is infant-industry protection, which has worked best when it exists alongside other instruments to incentivize domestic firms to innovate and upgrade. Some notable cases include the late-nineteenth-century United States, post-1960s South Korea and Taiwan, and post-1990s China. In each of these cases, industrial policies went far beyond trade protection, and it is unlikely that tariff barriers on their own would have produced the gains each of these economies experienced.

Similarly, green policies often require some trade barriers to make them economically and politically viable, as in the case of the European Union’s carbon tariffs and the local-content requirements of the US Inflation Reduction Act. In all these cases, tariffs play a supporting role for other policies that serve a broader purpose, and can be a small price to pay for the larger benefit.

Unfortunately, Trump has not offered a domestic agenda of renewal and economic reconstruction in any of these areas, and his tariffs will likely stand – and fail – on their own."

https://www.project-syndicate.org/commentary/trump-has-wrong-concept-of-tariffs-by-dani-rodrik-2025-01

#USA #Trump #Protectionism #TradeWars #Tariffs #PoliticalEconomy

"In 2023, the International Monetary Fund (IMF) sum­marised a number of studies that estimated the costs of geoeco­nomic fragmentation (GEF). These ranged from 0.9 per cent of global GDP under mild assumptions to as high as 8.5 per cent of global GDP under severe assumptions. There are no exact estimates to be had. These estimates should be contrasted with its biannual global economic forecast, the World Economic Outlook (WEO). The latest edition, of October 2024, penned global growth in 2025 at 3.2 per cent, unchanged from the 2024 estimate and a sliver less than the 3.3 per cent estimate in 2023. With latest economic data from the UK showing no growth and Germany faring equally badly, it is not surprising that global economic output has stagnated. Even if one were to filter out cyclical factors behind such fluctuations in output, the geoeconomic factors loom large in this story. In Britain’s case, growth has nosedived ever since Brexit and Germany’s economic travails are largely due to exorbitant costs of en­ergy. The later phase of Germany’s Wirtschaftswunder was as much about sound economic management as it was about cheap energy, most of it from Russia. Once those taps shut, the German economy caught a chill.

Among the bright spots in this bleak scenario are China and India with estimated growth rates of 4.5 per cent and 6.5 per cent respectively in 2025. There are other economies with faster growth but they do not matter for global output as their share of output in the world economy is very small."

https://openthemagazine.com/cover-stories/a-fragmenting-world/

#Globalization #Protectionism #TradeWars #PoliticalEconomy #GeoEconomicFragmentation

SPOT ON!!! You really to have to understand political economy, monetary economics, and economic history to tackle the current historical macro-scenario -

👉 "The next question is whether the protectionist policies espoused by Mr. Trump can save the people who are asking for his help. Unfortunately, the trade wars of the 1930s suggest the answer is probably “No.”

In the 1930s, the global economy was thrown into turmoil by the sharp increases in US import duties implemented in 1930 under the Smoot-Hawley Tariff Act and the retaliatory tariffs by other nations that followed. The value of global trade plunged 66% from the peak, and economies around the world suffered heavily.

The resulting economic turmoil eventually led to World War II. The US, which got through the greatest tragedy in human history by mobilizing its military capabilities, decided the world must never repeat this mistake. To that end, it introduced the system of free trade symbolized by the 1947 GATT (General Agreement on Tariffs and Trade).

This US-led free trade system produced unprecedented prosperity for humanity, but cracks began to appear when the nature of the currency market changed after the developed nations began liberalizing capital flows in 1980.

Today, just as in the 1930s, free trade is facing a potential crisis in the form of a sharp increase in US tariffs. If the authorities seriously wish to avoid this outcome, I think the nations of the world must come together and carry out an exchange rate adjustment similar to the Plaza Accord." 👈

https://www.ineteconomics.org/perspectives/blog/trump-tariffs-and-exchange-rates-the-message-of-elections-in-the-us-and-japan

#USA #Trump #Protectionism #FreeTrade #USTariffs #TradeWar #PoliticalEconomy #MonetaryPolicy #EconomicHistory
https://www.ineteconomics.org/perspectives/blog/trump-tariffs-and-exchange-rates-the-message-of-elections-in-the-us-and-japan