The triumphs of the commercial war can still accumulate the economy
Washington – Economists have some advice for Americans who have been concerned about the commercial war of President Donald Trump, potentially, the economy of the United States: continues to worry.
While the stock markets fired on Wednesday after Trump announced on social networks that he was stopping his so-called “reciprocal” tariffs, few noticed in the euphoria of the moment when the remaining import taxes were higher than taxes for the 1930 Smoot-Hawley act, which caused the great depression almost a century ago.
The short -term effect of Trump rates will be a tax increase of $ 2.4 billion on US importers for 10 years, resulting in an increase of $ 4,400 per home in prices, according to an analysis of the budget laboratory program at Yale University.
“The recession risks are still substantial. Uncertainty remains high,” said Justin Wolfers, economist at Michigan University. “Even during this pause, the United States is still the most argued industrialized nation in the world, and is not even close.”
Much of the renewed pessimism has resulted from an understanding that, although Trump worn new and higher tariffs in imports of dozens of countries and, on the other hand, is implementing only one 10% tax in at least July, its rate of rates in China, the third commercial partner of the United States, is now 145%. This results in an general average tariff rate close to 25 percent, which in turn means price increases in consumer goods in retailers of the United States.
“If China remains above 100%, they are similar in magnitude to what was announced on the ‘Day of Liberation,” said Jason Furman, a former economic advisor to Barack Obama’s White House.
That reality seemed to have sunk on Thursday, since the stock market resumed its downward trend that began in February and hastened after the announcement of the “Liberation Day” of Trump of its Rate Regime on April 2.
When the day closed for the day, the S&P 500 index dropped 3.5%.
Even more worrying for economists was that US Treasury Bonds. In the long term, which are normally considered the safer investments due to the size and stability of the country, they have been offering greater returns than normal, which means that investors both here and around the world are losing confidence in the economy of the United States.
“Half of yesterday’s hope has disappeared,” Wolfers said.
Brendan Smialowski / News through Getty Images
Trump’s White House officials did not respond to News themezone’s consultations. However, Trump and his main assistants continued to publicly make optimistic statements about their strategy.
“We had a great day yesterday,” Trump said during a cabinet meeting on Thursday, with the increase in the stock market that took place immediately after his ad on Wednesday. “In history, it was the biggest day in history, the markets.”
When asked about the subsequent fall on Thursday in those same markets, Trump claimed not to know. “I have not seen it because I have been here,” he said, referring to the cabinet room.
The Secretary of Commerce, Howard Lutnick, who has repeatedly affirmed that the best period in the history of the United States was in the late 1890s because tariff fees were so high, he said that nations around the world are aligned to sign commercial agreements with the United States. “We have many countries to talk to. It’s amazing. We are receiving respect we deserve now,” he said.
Foreign leaders and investors, meanwhile, have continued listening to Trump’s observations that reveal their failure or lack of will to understand how international trade works. During an opportunity to take photos at the Oval office on Wednesday, Trump once again said that China was paying and had paid tariffs he had imposed.
“I received hundreds of billions of dollars in tariffs and taxes from China in my first mandate,” he said.
That is false. American tariffs are paid to US customs by US importers, as wholesalers and manufacturers, which then transmit those expenses as higher prices for consumers.
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Similarly, while Trump and his assistants continue to call their tariffs now delayed in the rest of the world “reciprocal” rates, they are not reciprocal. Instead, they are a measure of the commercial surplus of a country with the United States. The more a country is sold to the USA. In goods compared to how much matters of the United States, the higher Trump wants to tax imports from that country.
The formula mainly harms poor countries, whose citizens largely cannot afford to buy expensive American products.