China holds a lot more cards than Trump may think . . . Tariffs
Tariffs . . . are a marvelous distraction while Trump hides what he really wants to do. Everybody is looking in the wrong direction, mesmerized by the shiny coin as Trump calls off tariffs for now. Trump does not care about America. He cares about himself and stuffing away $billions. Time to buy on the “Dow Jones” as he rolled back the tariffs. Don’t get mesmerized by the shiny coin.
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The Conversation
Donald Trump’s decision to pause his tariff hike on all but China took much of the world by surprise. The U.S. president had insisted until the morning of April 9 everything was going to plan and that the massive falls in share prices were just “medicine” much needed if he were to make America great again. So, when he announced his decision at lunchtime the same day that he would hold to 10% tariffs across the board it was something of a bombshell.
Of course there was one conspicuous exception. Because China had “disrespected the market” Trump decided to ramp up his tariffs on their exports to the U.S. to a startling 125%. This is likely to spark a trade war between the world’s two largest economies. Tom Harper at the University of East London believes Trump may be under estimating China’s economic resilience as well as its sense of history. Trump left the Chinese people determined not to bow to western pressure.
Why roll back on the tariffs on the rest of the world? James Giesecke and Robert Waschik from the University of Victoria believe the answer is simple: the harm this would do to the U.S. economy. Their modelling suggests that “the U.S. would have faced steep and immediate losses in employment, investment, growth and, most importantly, real consumption. Consumption is the best measure of household living standards.” In any case, writes James Scott of King’s College London, tariffs or not, there’s unlikely to be a manufacturing rebirth in the US.
This weekend sees the start of talks between the U.S. and Iran aimed at coming up with a new deal to replace the nuclear agreement struck in 2015, which the Trump administration pulled out of three years later. Middle East expert, Ali Bilgic, of the University of Loughborough, writes there’s a gulf of mistrust that the two sides will have to overcome if they are to agree on anything substantive.
Meanwhile voters head to the polls in Gabon at the weekend for the first time since the country’s interim president, Brice Oligui Nguema, took power after the ousting of former leader Ali Bongo. The result will test the country’s democratic transition, but Douglas Yates – an Africa specialist at the American Graduate School in Paris – reports the likelihood is the new government is likely to contain many of the same people as the former one.
Also this week: as the Trump administration puts pressure on U.S. universities to toe the government line over DEI policies. Universities in Nazi Germany and the Soviet Union thought caving in to dictators would save their independence. There is also the strange lack of a climate focus in the Australian election campaign.