What does NRC think | Trumps Handelschok is harmful to America and the world

It was a nice sign that Donald Trump held up this week on Wednesday when he announced a drastic increase in American import duties. But the figures on it didn’t make sense. Economists only had to break their heads for a short time about the question of where the import duties that the US president announced came from. It soon turned out to be a rough, amateurish calculation that, based on the trading surplus of each country with the US, had to demonstrate which taxes and restrictions were apparently released on American goods to be introduced. And there were now, on the board, ‘reciprocal’ figures, to be implemented by the US, opposite.

The result: towering levies for goods from China of 34 percent, on top of what was already in force, Vietnam (46 percent), Thailand (36 percent), the EU (20 percent) or Japan (24 percent). Russia was not mentioned. A largely uninhabited island group at Australia where mainly penguins are staying.

The state of affairs would be laughable, if there were not such hefty consequences: more expensive goods ensure high inflation, especially in the US. If other countries with their own taxes strike, they also increase import prices in their own area. The economy will lead under the measures, the interest rate will be higher than foreseen and a worldwide recession is no longer unthinkable.

US shares lost a total of 5.1 percent in value on Thursday. That equals 2,800 billion dollars, or more than 2,500 billion euros – about one and a half times the Dutch pension assets. The losses were also extensive in the rest of the world. On Friday the stock markets remained in a minor. Not only tech companies sink. Also, and more dangerous, the banks and insurers.

Nothing appears to have actually been investigated by the Trump government. The most common diagnosis for the American trade deficit – the country spends more than saving – has been put aside in favor of a conceived victimization of cheating through abroad. There is hardly any room for fast negotiations: the American authorities simply do not have the capacity for this on this scale. Unless the measures, again without an eye for detail, are again as easily withdrawn as they have been implemented.

What remains is the impression of an almost malignant frivolity with which the US, under Trump in a few months, cancel the international economic order that they themselves created after the Second World War. The recklessness also concerns the international political and Militai+ relationships. And inland is also in full swing the demolition of the legal order in America.

What must and can be, the answer of the rest of the world to that? Making a trade -off between collecting, knocking back and searching for alternatives. Ignoring would be the wisest solution economically. According to many economists, countries that succeed in maintaining their trade outside the US will best be finished.

All that everything appears to be too much to ask for many affected countries. On Friday, China announced that it would answer the American criminal tax of 34 percent with exactly the same rate for American products. Canada did the same on Thursday: American imports are taxed by 25 percent extra. Europe and many other countries are still considering countermeasures. Economically perhaps not the most sensible route, which can be understood from a negotiation perspective.

Completely ignoring is also impossible: since the Second World War, the US, and in particular their currency, the dollar, have become the epicenter of the world. But it also had risks: the American global dominance – which also became diplomatic and soldier through the dollar – was too easy to grant as a matter of course and even desirable. That seems like a misconception. The world has leaned too long on the idea that the US would show itself a reliable partner at all times. Warnings that global payment transactions were too dependent on the US were ignored, as is now also the global dependence on American tech companies (from Meta to Microsoft) hardly possible.

It is a hard lesson that Trump now enforces with his egoolitics, but perhaps one that yields a more balanced world in the longer term. Too much power in the hands of one party is always wrong. The political situation within the US shows that daily, but it also applies to the role that the US played in the world. A friend can always become an enemy. The price that is now paid for this naivety is high.

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