Donald Trump extensions

Suppose you are the president of the most powerful country in the world and you want to retrieve factory courses to your country. You want to rearrange the global trading system for this. You are also willing to have your economy pay a price. Because good jobs and higher wages for ordinary people are worth something. So you find it acceptable that prices are rising or the profits are falling. You are the president who stands up for Main Streetnot Wall Street. How would you do that?

You would clearly explain citizens, investors and entrepreneurs what exactly your plan was. You would not let the taxes start in the short term, but sketch a timeline so that everyone can prepare and cover themselves.

You would be worth credibility: you want to convince people that those taxes really come, that you don’t just drop them. After all, you want companies to move their factories to your country as quickly as possible. You want them to be able to calculate that it is to their advantage.

In short, you would not do what Donald Trump has been doing for months now. Enter high levies quickly, then temporarily reduce them again with the explicit threat to increase them again. With that he makes the pain high and the chance of success small. There is no business plan for a new factory for international companies. And for American companies, Trump offers no certainty about the expected pain. In fact, he turns them crazy. Because it is not the costs of the taxes that companies are taking, it is the uncertainty.

That is why what Trump does for economists is the case incomprehensible. Even an American economist like ears Cass, who has been arguing for import duties and American protectionism for years, thinks that Trump unnecessary damage causes. Even if the goal is to close better trading deals with other countries, the chance is greater if Trump makes allies clearer what he wants, writes Cass. « The US does not win anything by refusing to express a clear vision. »

Loyalty and intimidation

Each time the question is: why so? Why this unnecessary pain? Because Trump is not necessarily about the economy, this is about power. Or such as Kustaw Bessems in de Volkskrant writtenabout enforcing loyalty to the leader. Every country and every industry or multinational in the US has to visit Trump to beg: Can the taxes go down for me? Just as Trump also puts pressure on law firms, universities, judges and politicians and forces loyalty, or tries that. It is behavior that concentrates power and undermines democracy.

It fits with plan from his economic adviser Stephen Miran. Miran describes how Trump can intimidate other countries to finance the American national debt very cheaply: by threatening with high import duties and removing the safety paraplu.

Trump is not about maximum power for the American economy, but for the circle around the White House, said political scientist Abraham Newman this week in a podcast by the Financial Times. According to Newman, Trump wants to leave the world order based on rules and work together and based on a new order based on dominating and random use of power. In addition, he uses the economy as a weapon, on a larger scale than previous presidents.

The EU should not see a deal with Trump as the highest attainable, says Newman. Because concessions are only in danger of provoking more requirements. According to Newman, the EU must offer a different ‘model’ to the world in which cooperation, trade and a reliable rules are central to democracy.

Bullebak Temporarily invincible

Trump is powerful, but he does not have the best cards endlessly. In the long term, he undermines the power of the US in the world, says political economist Jakob de Haan. Trump alienates allies from America and drives countries in the arms of China, for example in Africa or Asia. « The sympathy that was still there for the US is reducing Trump. »

Moreover, he « damages the economy with his policy. He makes the US economic power smaller. » With two colleagues, De Haan recently Afplaated all the investigations into why jobs in the American industry disappeared. « Due to automation and new technology, secondary and highly skilled jobs were added. Due to competition from low -wage countries in Asia and Mexico, low -skilled jobs disappeared. » De Haan does not see those jobs coming back in large numbers. « Trumps taxes do not make those wage cost differences properly. »

Power loses a large country if the US does not in a symmetrical way, say three economists from Yale, Harvard and Columbia In a recent article. There is only a relatively small group of countries to drop out and the power of the US is declining sharply. Take American control over the international financial system.

Suppose the number of countries that use it is falling from 90 to 80 percent of the world. Then the US still seems very dominant. But that apparently small decrease would mean a much greater loss of power, the three write. Certainly if there is an alternative payment system from a different country block. It offers apostate countries an alternative, and that is why it becomes more difficult for the US to force countries. In this way, the euro could be an alternative reserve for the world rather than we think.

Bullebakken are therefore merely temporarily invincible. Plus: Europe only has a trade war with Trump, Trump has a trade war with almost the world. So in the end he has a bigger problem.

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