A stock ticker shows exchanges in a securities company in Beijing on April 9.
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The scanning of President Trump “Release day“The prices have upset the world economy, sending stock markets to troubles.
“It is, without a doubt, the biggest commercial political shock, I think, in history”, Zanny Minton Beddoes, editor -in -chief of chief The Economist, said.
Last week, Trump ordered a minimum 10% tax on almost everything that the United States bought other countries. He also ordered much higher samples from things that the country buys from China, Japan and the European Union. However, many of these prices are in force, because almost every day, the president has increased certain prices or interrupt others.
“The presidents of Reagan to the president Biden increased the prices on individual goods or the individual sectors, but nothing like it. It is therefore outside the graphics in terms of scale, … speed and uncertainty”, explains Minton Beddoes, who is a former economist of the International Monetary Fund.
Although the motivation behind the prices is not clear, she says that the Trump administration could seek to “radically redo the rules of world security, geopolitics, the economy”.
Minton Bedoes says that the president seems to believe that the United States is getting a bad deal in the world economy and that prices will be used as a tool to renegotiate trade agreements: “It could be exactly what President Trump loves. The art of agreement On steroids, “she said.
But, adds Minton Beddoes, the economic disorders caused by prices create “a lot of uncertainty and a lot of pain for consumers because prices are taxes on consumers. People who pay this at the end, the cost of prices, are people who pay more for the things they buy.”
“I think we went through a kind of rubicon in the last week about the last week, and we are not going to return to the world as before,” she said. “People, I think, look more and more the United States not like the brilliant city on the hill, a place where we all sucked and certainly held in very high esteem, but more and more, it is a kind of country of intimidation, boastful, selfish and transactional.”
Strengths of the interview
On if the prices must reindustrialize America, or if they are a negotiation tool
(Trump) has two views, and it is not quite clear which predominant. But an opinion is that if you watch the United States in the past 30 years, he thinks that the American manufacturing base has been dug. And the United States has suffered due to unfair commercial practices from other countries and that you need prices to reindustrialize the United States and that it would permanently mean that behind a price wall, you would encourage companies to invest in the United States to create American jobs and that, therefore, the United States would be fundamentally better if it had high prices. It is a kind of potential view.
The other point of view is that he really considers these prices as negotiation tools, to obtain better agreements with other countries, and that by threatening, you then negotiate a better agreement with other countries. There could be real for both, but it is not clear what really pushes President Trump, if he mainly wants to have a sort of view of the 19th century, where the United States, in his opinion, prospered behind a high price wall. … it is a kind of radical displacement at a time when the United States was much less rich and successful than it is now.
On the idea that prices will bring manufacturing in the United States
The logic of the administration is that we want more things to be built and produced in the United States. We want manufacturing to come back so that we can create the type of jobs that existed in the middle of the 20th century. And so we are going to have high prices, which will encourage companies to come and invest and produce in America. And another way of encouraging (companies) to do so is that we will offer lower taxes. And for American consumers, we will get more income from prices so that we can reduce other types of taxes. This is what you hear from administration officials. …
The question for American consumers, and for the American economy, is to say: has the American economy been really injured by the current system? My answer would be no, this is not the case. It is the richest and most successful economy in the world. American consumers have an extraordinary range of choices. They are better from the competitive environment which comes from a low price economy.
If prices are increased, consumers pay more. US companies have higher costs. This is why you see this incredible torment on the stock market at the moment. I don’t think you end up with a system where the United States is better. No one wins from a pricing war. And the other part of this is that countries will retaliate. We have already seen China announce reprisals. I think the others will also retaliate. And so you end up with a situation that is really losing. And the goal is the one who, I think, is not only inaccessible, is not really advised. We are in 2025, the United States forces are in high technology, the United States forces are in the services, the United States forces do not amount to making clothes, in sewing sneakers. This is not what the American economy is, and try to force it to come back through prices, I think it is a very damaging and dangerous direction to enter.
On what a pricing war could look like with China
The impact of all this is that the prices on Chinese goods entering the United States will be, I think, somewhere in the north of 100%. The training effect of this, now China depends more on the United States for its exports than Vice Versa, so it will suffer more, but it can fight back. … If we really enter a kind of economic war, then, for example, Apple produces many of its phones in China, which will now be affected by these prices, but China could bring all kinds of restrictions to Apple, China could bring restrictions to all kinds of other types of critical minerals it exports. You can enter a very nasty economic battle from which no one wins. And it becomes quite difficult to go out because there is a kind of political pride and national pride. … and it is therefore a very, very dangerous dynamic.
On an opportunity opening for China
The United States, by imposing prices on everyone, friends and enemies, sat, I think, one of the main aspects of its strength, which is its alliance system and the fact that it has very strong relations with a large number of countries. And it has a reputation for being the country that has set up and has confirmed this system of world trade and security rules. While now he seems to turn his back on this. And it is a geopolitically opportunity for China.
Monique Nazareth and Anna Bauman produced and published this interview for Broadcast. Bridget Bentz and Molly Seavy-Nesper adapted it for the web.
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