Thread by @anders_aslund

Trump's trade war probably qualifies as the greatest madness in economic policy in a developed country after WWII:
1. All decisions are made by one single person (Trump).
2. No principles are applied.
3. No economic rationale or theory.
4. All is based on Trump's emotions. /1

5. Many tariffs are very high, so the economic damage will be substantial.
6. There is no coordination of the tariffs so, for example, the US car industry may be decimated (@FT).
7. The only two countries Trump treat with respect are China & Russia, the purported enemies. /2

@FT 8. Trump's extraordinary rudeness to most democratic & friendly countries will have lasting anti-American consequences.
9. So far, the lesson appears to be: Either flatter Trump no end (EU & Pakistan), stand up against Trump (China) or pay him personally (Qatar). /3

@FT 10. Neither prior statements by Bessent or Lutnick or Trump himself serve as prediction. In April, they praised India and Taiwan.
11. Since no agreements are put on paper or being properly concluded, US trade policy will remain an enigma & unpredictable. /4

@FT 12. Because Trump's tariffs are so high, thousands of exemptions are inevitable to somewhat mitigate the damage to the US economy, further aggravating the uncertainty.
13. Few government acts are more likely to attract bribes than the exemption from tariffs. /5

@FT 14. Conclusions:
The damage to the US economy will be great & it is likely to grow over time.
Any serious business - American or foreign - had better avoid investment in US manufacturing.
The US can no longer maintain any friendship. /6