Trump, what’s behind the threat of 50% duties to the EU: the race to make cash (and his real Achilles heel)

Last night Donald Trump hosted the main « investors » in his memecoin to the White House. This digital pseudomoneta, launched in the days of its return to power, is only one of the ways that the president has invented to monetize his official charge while exercising it. Only the announcement of the auction for yesterday’s dinner generated $ 150 million In purchase volumes on the Trumpian cryptocurrency (in addition to four billion losses for hundreds of thousands of people who believed it). But before sitting at the table with the lucky winners of the lottery, the president had – in order – he expelled tens of thousands of foreigners from Harvard and then « recommended » a increase in duties of 600 billion dollars of European productsup to levels higher than twenty times compared to three months ago. A few hours earlier the same Trump Instead, he had managed to pass the representatives of the representatives a cut of taxes largely in favor of the richest who adds five thousand billion debt to the United States, but taxes the remittances of immigrants and establishes an additional withdrawal of up to 20% on the earnings on investments made in American shares or bonds by savers who live abroad. Italians included.

Dollar down 2%

The president’s agenda is so dense that it is difficult to understand what exactly what is under everyone’s eyes should be: the dollar is falling in the fastest way from the days of the « liberation day » storm. During the week he lost almost two percent on the main coins of the international system. Large masses of money are returning to move away from America, as if their masters were looking for a little security. What kind of symptom can this be? It is obvious that the main suspect is Trump’s last round of waltz on duties. A month and a half ago the president had suspended his « mutual » rates at 20% against Europe, halving them in order to give time until 9 July to arrive at a compromise. Yesterday we were just in the middle of the truce, the negotiations were just sketched, when the announcement of new barriers beyond the double most punitive than those of the « liberation day » arrived. In Washington and Brussels a dialogue of the absurd must have been staged in recent weeks. The emissaries of the two sides must have spoken in different languages ​​of different topics, deluding themselves to talk about the same things.

Opposite negotiating styles

The Europeans are specialized officials, sat down at the disarmed table and operate with a software dating back to the 90s; For them, a trading on exchanges is a highly technical, legal process until the last paragraph, always with the aim of reaching a free trade agreement. Trump’s emissaries Instead they are their opposite anthropological. They are personal delegates of the president and for them the negotiation is a proof of strength, the gun always on the table of the oval study; They want to dismantle taxes on the big tech such as the one in force also in Italy, defuse Brussels’ rules on digital, to snatch a commitment from large European countries to cut Chinese products out. They do not aim for a free trade agreement, but a political step back from Europe.
It was inevitable that the negotiation ended up in the shallows. Yet the dollar is behaving abnormally However, because in these cases losing ground should be the coin of the system that is penalized by duties. Instead yesterday the euro was soaked on the green ticket.

Deficits never seen after the war

The other motivation of Trump in reopening the commercial war helps to understand why. In June and July the president must make the Senate pass his package of tax cuts and already knows it will not be easy. The measure guarantees that for the next four years the United States will travel with public deficits never seen after the war, at least not so long and not outside the recessions. The American treasure must collect two thousand billion more loans every year, almost half of the new savings that is created in the world. It is therefore likely that Trump announced yesterday’s duties just to be able to say that part of the money will come from there. For now it is not working, because the extra tax revenues thanks to the rates already in force are proving to be minimal if not non -existent. Trump doesn’t care, he cares about finding topics to convince the senators to vote for his cuts at taxes. But the entire operation reveals in transparency the true vulnerability of its entire political project. It is certainly not only this president who has opened the United States’ budget chasm, but he made his contribution in 2017-2021 and now he continues to dig. The rest of the world is telling him that there is a limit, even for America: the dollar descends and the returns of American titles continue to rise abnormally too, because foreign investors hesitate more than before buying them.

Humiliated institutions

It would serve credibility, to navigate such a delicate passage. Instead at the White House there is a man who does not make any problems in using the charge to enrich himself; that humiliates institutions, saw the growth tree by attacking the best universities or drastically cutting the funds in research and development; which continues to threaten or raise walls on the rest of the world with total unpredictability. It is unlikely that in the long run it can end very well, beyond the wall that already looms on the horizon. But for America this time.