Can't Do Money
Apr. 4th, 2025 08:31 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
smokingbootI'm trying to sort out my feelings re President Trump's tariffs. With US friends who voted for Trump, and US friends who voted against him, I'm not interested in being partisan. But I am trying to unravel exactly what is going on, because I am not economically adept and don't understand.
The first thing occurring to me is the effects of the sanctions on Cambodia. China is buying up land and influence in Cambodia, and it's also flexing its muscles re damming the Mekong. US economic sanctions may well chase Cambodia into the arms of its big neighbour because this is a poor country and they have nowhere else to go.
With power over Cambodia, China, having already attempted illegal drilling off Vietnam's shores, begins to pincer that country which, free from such pressure, could be an invaluable ally in the defence of Taiwan, assuming Taiwan still matters to the States. Cambodia as China's vassal state would bring a huge threat to the border of Thailand, a close ally. I do not see how this can do anything other than strengthen China's manifest power, so if that's a concern for the President, this particular application of tariffs could be very counterproductive quite apart from its effects on ordinary Cambodians.
An aside: Speaking of Cambodia, I remember gentle Mr T telling us of his experiences re Chernobyl.
'The wind from Chernobyl blew across our land,' he said, 'and many were sick. I was a child, and my skin became covered with sores from head to foot. But they bathed me in the [...Essence? Oil?] of the tamarind tree, and I became well, see me now!' See him now, no trace of illness or skin complaint, though the story makes me hurt in more ways than one. Leaving my feelings behind (I have lots of these, but they are no use here) important to remember that the wind does blow, and where big beautiful oceans stop, it does not.
Back again more generally, to tariffs and trying to understand them in this case. What is the US govt trying to achieve? I read this comment in the Times and thought it worth a moment's consideration:
Their theory is that by raising tariffs - people will buy American rather than foreign, which will boost jobs, raise tax income and make the country wealthier. Which is fine…but utterly flawed because the vast majority of the globe relies on free movement of trade.
Is the point then to make the US its own trade ecology, not needing trade with other countries to sustain it? Is the idea not to need to export or import at all? Fuzzy on this.
That trade centres around the infrastructure in the countries that support it. The chips that go in phones, microwaves, computers, cars are made in Asia. The parts for those chips comes from South America, Africa, Australia, I could go on but essentially the US needs imports to make and do stuff - they can’t just turn round and do it all themselves overnight.
OK, but if not overnight, is the aim to make it happen in the long run? Is that the end goal?
The US does not have the infrastructure in place to suddenly start not only making but supplying all the parts that go into all of these things or meet with the demand of over 200 million Americans.
Just over 340 million Americans, I understand. Emphasis on the suddenly. Maybe it's about pain now for profit tomorrow... or the day after. Or the day after that. But he said he'd bring down inflation now, right? Wasn't that the promise? Have I missed something?
So, a load of new jobs are not going to be created overnight - but then look what happens. Cars, food, wine, chips, materials all now have tariffs - which will force the suppliers to raise the price, meaning the companies relying on those supplies, the consumers buying those products end up paying more or can’t afford them, which may mean car manufactures cannot make as many cars, computer manufacturers cant make as many computers - so they then have to lay off staff - so then you have more unemployed, more people spending less money and the downward cycle continues.
If this is true, it's a puzzle to me because I thought control of inflation was a major issue for those voting for Mr Trump. This is going to send inflation up, right? But I don't know how long it would last, how deep it would be, and how it will impact the average American. My understanding is that high inflation saws the legs out from any regime. But what do I know?
That's as much as I can handle this morning. Can't do money.
The first thing occurring to me is the effects of the sanctions on Cambodia. China is buying up land and influence in Cambodia, and it's also flexing its muscles re damming the Mekong. US economic sanctions may well chase Cambodia into the arms of its big neighbour because this is a poor country and they have nowhere else to go.
With power over Cambodia, China, having already attempted illegal drilling off Vietnam's shores, begins to pincer that country which, free from such pressure, could be an invaluable ally in the defence of Taiwan, assuming Taiwan still matters to the States. Cambodia as China's vassal state would bring a huge threat to the border of Thailand, a close ally. I do not see how this can do anything other than strengthen China's manifest power, so if that's a concern for the President, this particular application of tariffs could be very counterproductive quite apart from its effects on ordinary Cambodians.
An aside: Speaking of Cambodia, I remember gentle Mr T telling us of his experiences re Chernobyl.
'The wind from Chernobyl blew across our land,' he said, 'and many were sick. I was a child, and my skin became covered with sores from head to foot. But they bathed me in the [...Essence? Oil?] of the tamarind tree, and I became well, see me now!' See him now, no trace of illness or skin complaint, though the story makes me hurt in more ways than one. Leaving my feelings behind (I have lots of these, but they are no use here) important to remember that the wind does blow, and where big beautiful oceans stop, it does not.
Back again more generally, to tariffs and trying to understand them in this case. What is the US govt trying to achieve? I read this comment in the Times and thought it worth a moment's consideration:
Their theory is that by raising tariffs - people will buy American rather than foreign, which will boost jobs, raise tax income and make the country wealthier. Which is fine…but utterly flawed because the vast majority of the globe relies on free movement of trade.
Is the point then to make the US its own trade ecology, not needing trade with other countries to sustain it? Is the idea not to need to export or import at all? Fuzzy on this.
That trade centres around the infrastructure in the countries that support it. The chips that go in phones, microwaves, computers, cars are made in Asia. The parts for those chips comes from South America, Africa, Australia, I could go on but essentially the US needs imports to make and do stuff - they can’t just turn round and do it all themselves overnight.
OK, but if not overnight, is the aim to make it happen in the long run? Is that the end goal?
The US does not have the infrastructure in place to suddenly start not only making but supplying all the parts that go into all of these things or meet with the demand of over 200 million Americans.
Just over 340 million Americans, I understand. Emphasis on the suddenly. Maybe it's about pain now for profit tomorrow... or the day after. Or the day after that. But he said he'd bring down inflation now, right? Wasn't that the promise? Have I missed something?
So, a load of new jobs are not going to be created overnight - but then look what happens. Cars, food, wine, chips, materials all now have tariffs - which will force the suppliers to raise the price, meaning the companies relying on those supplies, the consumers buying those products end up paying more or can’t afford them, which may mean car manufactures cannot make as many cars, computer manufacturers cant make as many computers - so they then have to lay off staff - so then you have more unemployed, more people spending less money and the downward cycle continues.
If this is true, it's a puzzle to me because I thought control of inflation was a major issue for those voting for Mr Trump. This is going to send inflation up, right? But I don't know how long it would last, how deep it would be, and how it will impact the average American. My understanding is that high inflation saws the legs out from any regime. But what do I know?
That's as much as I can handle this morning. Can't do money.
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no subject
Date: 2025-04-04 12:38 pm (UTC)(1) The tariffs are intended to raise the money for Trump's income tax cuts, which were a campaign promise. It is thought that if Trump gives the average American taxpayer $500 or so in tax savings, they will overlook the $2,000 or so per year the tariffs are going to cost the average American taxpayer.
(2) Long-term, yes, the tariffs are intended to bring back American manufacturing jobs. But this will never happen. Because in the future, American factories will be almost entirely automated & run by robot labor.
The UK, though, is well-positioned. Trump only slapped a 10% tariff on goods from the UK—which sets the UK up as a distribution center for EU goods (since the EU tariffs are so much higher.) The UK should see a mini-economic boom.
no subject
Date: 2025-04-05 06:38 am (UTC)Re the UK, there's a tightrope to be walked. Yes, the UK could benefit from this situation, but the govt needs to be very careful not to be seen as a vassal to the US. That won't work with voters here, and it will alienate our other allies. Besides Mr Trump is famously mercurial and even supposing there are no disputes at all with him, we have no idea what comes after. So good trade relations with the US and with the EU must be maintained, we have to create stronger links with Europe and beyond.
no subject
Date: 2025-04-04 03:52 pm (UTC)All this could be explained by the idea that Trump is a fiscal illiterate and no one who knows better will tell him so.
no subject
Date: 2025-04-05 06:17 am (UTC)no subject
Date: 2025-04-05 03:23 pm (UTC)In a word: penguins. The prosecution rests.
no subject
Date: 2025-04-05 09:09 pm (UTC)no subject
Date: 2025-04-06 12:37 pm (UTC)no subject
Date: 2025-04-06 03:22 pm (UTC)I'm afraid that's only too true. But what is everyone around him thinking?
no subject
Date: 2025-04-07 05:02 am (UTC)