The economic landscape under President Trump’s revised Make America Great Again policies appears grim, casting shadows over the hopes of raising American living standards. Recent volatility in the stock market has seen over $4 trillion vanish, predominantly affecting wealthier supporters of these policies. Predictions from the OECD now forecast diminished economic growth in key global economies, spurred by heightened trade barriers and the uncertainty surrounding their effects.
The current trade narrative suggests that Americans aren’t suffering from exploitation by nations boasting trade surpluses; rather, the U.S. enjoys a higher quality of life by importing more than it exports. While it’s true that persistent trade deficits could lead to financial issues for less stable nations, the U.S. has the unique advantage of wielding the primary international currency, allowing it to sustain ongoing deficits without dire consequences.
Trump points to the auto industry’s trade imbalance with the EU and laments the lack of American car imports. However, anecdotal evidence shows that many Americans favour foreign vehicles, prized for their reliability and efficiency. Consequently, this preference, reflecting consumer choice, explains why European buyers opt for nearby production rather than incurring shipping costs for U.S. cars, which may not fit regional preferences.
While the revival of U.S. manufacturing to create jobs holds some merit, it shouldn’t rely on inefficient production shielded by tariffs. Pricing consumers out of markets for potentially lesser products does not serve them well. Embracing market dynamics through AI and robotic efficiencies can better establish competitive production within the U.S., ultimately benefiting American consumers.
Trump’s use of tariffs as political leverage complicates matters further. If trade partners address the alleged grievances, one reasonable outcome might be the withdrawal of these tariffs, undermining investment stability in the U.S. The trade discord, viewed as a detrimental cycle, requires resolution for any party to emerge victorious.
This article critiques the US trade policy under President Trump’s Make America Great Again initiative, highlighting its potential drawbacks, including stock market volatility and misguided assumptions about trade balances. It argues that higher tariffs may hurt consumers rather than help, advocating for efficient production and market-driven solutions instead of political bargaining using tariffs.
In summary, Donald Trump’s trade policies are creating a complex web of economic challenges that do not seem to enhance American living standards. The volatility in stock markets, a misguided focus on trade balances, and a misunderstanding of consumer preferences all suggest that a shift in approach is necessary. Encouraging efficient production through market forces, rather than tariffs, may provide a path forward that ultimately benefits both consumers and the economy.
Original Source: www.chinadaily.com.cn
