Bigworld, There's some logic to a tariff strategy, but they should have done it after the deficit reductions of the 'first 100 days'. Trying to do everything at once is too chaotic and disruptive, the financial markets freak out, corporations put their plans on hold, etc.
The deficit reduction is the policy that needed to be done quickly, before poilitical opposition could get organized. The immigration stuff could also be underway during the first 100 days. But trying to also do the tariffs at 'warp speed' is just too much chaos at once, and will produce a recession for sure.
Besides the timing, they should have done the tariffs one country at a time. Establish the 'template' with the first country, get that deal done, and then the rest of the countries know what is expected. The US' stated goal would be tariff 'reciprocity', with the requirement that the other country will reduce or eliminate their exisitng tariffs, and the US does the same. Doing it this way would avoid the chaotic aspects that have sent the economy / financial markets into a dangerous tailspin.
But it appears Trump sees tariffs as a permanent funding mechanism for the US, and as a way to bring manufacturing back to the US (ala Robert Lighthizer). But the amount of 'funding' will be negligible compared to the lost trillions from the economic chaos produced. On the manufacturiing side, the cost of labor in the US is much higher than in most of the world, so the tariffs would have to be high enough to overcome that differential, or it makes no financial sense for companies to put their manufacturing here. So permanent high tariffs would be needed to 'level the playing field', at the cost of much higher prices for the goods produced.
Also, the combined disruptions from all this turmoil could lead to another global financial crisis -- the pin that pops the balloon. Trump
is basically throwing a big wrench into the gears of a Swiss watch. The drive is on to reverse globalization and dependency upon the rest of the world, but a change this big and complex are bound to have unintended consequences.
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