Top economist Shankar Singham has dissected Donald Trump’s tariff strategy into a ‘three-strand’ framework that raises eyebrows. In a discussion on GB News, he described the components as revenue-generating tariffs, early-stage tariffs addressing non-trade issues, and unfair trade reciprocal tariffs, coinciding with Trump’s recent executive order on a 10% minimum baseline tariff across imports.
The revenue-generating tariffs, Singham indicated, stem from the administration’s belief in their necessity. The early-stage tariffs, however, focus on pressing issues such as fentanyl from Canada and Mexico, often either temporary or unimplemented. The final component, unfair trade reciprocal tariffs, reflects reactions to how other nations treat US trade. Singham stressed the importance of analysing these strands independently for a comprehensive understanding of Trump’s approach.
Singham pointed out Trump’s distrust of long-standing trade agreements, asserting, “He will say, ‘I don’t believe you. For 30 years we signed deals and nothing happened.'” The president’s negotiations are expected to demand tangible actions prior to discussions, insisting on some form of commitment before proceeding. This stance reveals a strategic shift in Trump’s dealings with entities like China, the EU, and Vietnam, with varying tariff rates that go as high as 49%.
Moreover, while the executive order allows concrete tariff exemptions for critical goods, including steel and pharmaceuticals, critics express concern over the economic repercussions of these tariffs. Gary Clyde Hufbauer has warned that the strategy may inflate costs for American consumers and jeopardise economic stability, with a potential decline in global growth by more than 1%.
Economist Shankar Singham analysed Trump’s tariff strategy, highlighting three components: revenue-generating tariffs, early-stage tariffs addressing non-trade issues, and unfair trade reciprocal tariffs. Following Trump’s recent order for a 10% minimum baseline tariff, concerns arise regarding the potential economic ramifications, like increased costs for consumers and disruption of global trade.
In summary, Trump’s three-strand tariff strategy merges revenue generation with politically motivated tariffs, aimed ultimately at repositioning the US in global trade. As outlined by economist Shankar Singham, the president’s approach hinges on scepticism towards traditional agreements and a demanding stance for genuine concessions prior to negotiations. Critics caution that these measures may lead to a precarious economic landscape for consumers and the broader global market.
Original Source: www.gbnews.com
