Some economists think tariffs never make sense. Others, think that with strategy, thinking carefully about where to apply them, to which countries, on which items, what the different impacts will be, and informing and working with your allies…then tariffs could be a net good despite the costs. That’s not what we got from Trump.
With Trump, we got hectic tariffs that require a daily chart to manage them all. It doesn’t make sense to build a factory based on a short-term tariff that could change at any moment due to a variety of reasons.
Putting tariffs on every country cuts your leverage over any particular one country.
If the goal is to get specific industries back in the US, then you want highly targeted tariffs.
Liberation day tariffs were based on a simple formula and they were absurd on their face. The administration just didn’t do their homework when coming up with tariffs.
Trump ignored free trade agreements that the US had made with countries.
Trump enacts tariffs for a variety of personal reasons that don’t make sense, like tariffing Canada for fentanyl, even though US fentanyl mostly comes through Mexico. If I’m another country watching erratic tariffs, I don’t really know what to do to avoid tariffs, and I’m going to start planning with other countries how to counter this erratic country called the Untied States of America.
Argentina raising their emphasis on the Falkland islands is caused primarily by two things: domestic politics where Melei wants to look tough compared to his political opponents, and Trump indicating that he may more support Argentina’s claim compared to America’s previous position. Trump makes such statements, seemingly not realizing the real world consequences they may have.
Egypt is allowing China to test their planes against Western fighters. This makes China better able to defeat Western countries in war. Egypt is not a good friend to the United States even though the US gives $1.4 to $2 billion in foreign assistance to Egypt each year.
Before becoming president, Trump regularly said the US should have taken Iraq’s oil, ignoring the sovereignty of Iraq and proposing that the US just take other countries’ national resources by force.
It would have been wrong to dismiss comments like this by taking Trump seriously not literally. Trump literally meant that, and as president he has implemented similar policies by using military force to remove Venezuela’s former leader and actively trying to take a percentage of Venezuela’s oil for the US.
Getting Venezuela’s oil production up and running will take a tremendous amount of investment, and its unlikely that right-minded investors will invest in such a thing because it is too much money and risk if political winds change in the US or Venezuela. This means, it will likely require taxpayer money or the president strong-arming US companies.
The US strategy in Iran is one of economic warfare through sanctions and blockade forcing: Iran to give in or a revolution in Iran. There doesn’t appear to be the forces necessary in Iran to create a successful revolution, but it’s not impossible.
The war isn’t the US economy VS Iran’s economy, it’s Iran’s economy and a regime willing to let its people take extreme suffering VS something breaking in the international economy that forces the US to give up.
The war against Iran has made the supply of oil low, and if something else happens like a natural disaster to decrease it further…things will be much worse.