broken EVERY SINGLE trade agreement which was in place between the US and other countries, before him or which he, himself, signed, including USMCA which was "maybe the greatest deal ever done."
Donald Trump has, for decades, been a fan of tariffs. He ran on it. He put tariffs
on allies. He put tariffs on Australia, which has zero tariffs on the US and with which the US runs a trade surplus. He demands tariff cuts from Japan which runs lower average tariffs on US goods than the US used to run on its imports. He put tariffs on penguins.
Just getting around to the USTR Section 301 hearings on the Proposed Action in Section 301 Investigation of China's Targeting of the Maritime, Logistics, and Shipbuilding Sectors for Dominance.
Like the USTR report released in Jan, it is something of a disaster. 500+ pgs of it.
There are people who support (politicians, labour unions, ports, dockworkers, steel companies, etc).
They almost all use the same talking points from the USTR report which were... wrong. They were factually incorrect in the USTR report and they were the same, or worse in the
hearings. The common trope is that shipbuilding 50 years ago was such that the US was the dominant global shipbuilder, and shipbuilders once employed X number of people. This was destroyed by CCP policies to achieve dominance in shipbuilding, and those policies started in 2006.
because people trade using a dollar denominated price. It is based on where the end profit is allocated to as savings.
If a European company buys 1mm bbl of oil from Aramco, first EUCo uses Euro to buy USD. Gives to Aramco who gives it to Shipper (who EUCo has also paid USD)
And a couple weeks later, EUCo takes delivery in, say, Hamburg. They pay euros to unload it, spend euros to operate their refinery, spend euros to transport diesel to a factory using a backup diesel generator. That company buys the diesel in euros, then burns it, making power
@BlankBl23041510 @Citrini7 1) I don't think the market believes they will last as set. 2) There are many paths. 3) One path is simply a LOT lower consumption. 4) Over even a medium-term, if the system put in place has permanence of intention, it leads to capital controls (i.e. lower real yields)
@BlankBl23041510 @Citrini7 but basically, if you have partial or full capital controls and lower real yields, that's simply financial repression by the state - financed by low returns on capital and less choice.
To get from A to B, there are a finite number of outlets and offsets.
@Citrini7 Americans consume less (because they save more). They produce more to consume what they cut off from the outside world. Jobs which were related to consumption become jobs related to production. All fine. The savings finance the part of the govt deficit no longer financed by
@Citrini7 Ask yourself what you think a reserve currency is.
Is it the fact of a stock of financial assets in a currency?
Or is it a propensity to have a flow?
If the trade deficit (flow) immediately goes to zero, the stock remains unchanged.
Other flows shift. Americans net save.
@Citrini7 Americans consume less (because they save more). They produce more to consume what they cut off from the outside world. Jobs which were related to consumption become jobs related to production. All fine. The savings finance the part of the govt deficit no longer financed by
@Citrini7 foreign flows, but until the budget deficit falls to the level of the current trade deficit, there’s an excess which has to be funded by someone (as a flow). If that is funded by foreigners, you still have the same ‘reserve currency’ ownership of stock AND new inflows ‘problem.’