Donald Trump has imposed tariffs on imported goods as a “panacea” for all US economic problems. He said the term he loves most is 'tariff. To him, this is the “most beautiful word.” Of course, whatever he does, he describes it as the most beautiful, the most fantastic, the most unique in history. A narcissistic person does not see anything bad or imperfect in him or her. Unfortunately, instead of his denial, ordinary US citizens are now feeling the bite of the tariffs meant to hurt only exporting countries. They pay more for imported goods or commodities because of the tariffs imposed on them.

The main reason Trump has imposed tariffs is the tremendously empty state treasury. The US government is overburdened with foreign debt. Total national debt is around 38 trillion dollars, an unimaginable figure! And their foreign debt is nearly $ 10 trillion. Among the 10 most developed countries, the U.S. tops the list for the GDP-to-debt ratio. If all the foreign creditors want to get back their money, the U.S. economy will collapse.

The U.S. government is in a huge shortage of money.  Donald Trump has taken refuge in tariffs to fill this gap. He wants to have some breathing space. But there is a limit to it. The U.S. must find logical ways to decrease its national debt and keep it under control. The U.S. government buys arms and ammunition worth billions of dollars from arms industries to carry out unjustified wars in different parts of the world. It spends an enormous amount of money supporting its puppets and satellite states. They can save trillions of dollars by abandoning their imperialistic and militaristic policies and activities.

By rationalizing their tax policies, which hugely favor the super-rich at the expense of ordinary Americans, the government can raise revenue and spend it on social welfare programs. They can just look at European countries or even at their next-door neighbor, Canada.

US producers and manufacturers are less competitive. Their cost of production is much higher. They must bring about structural changes. Mid- and higher-level employees earn sky-high incomes compared to those at the same level in countries like China and India. It is a dilemma. If they reduce employees' salaries or remuneration, their standard of living will be lower. The per capita income will decrease. The USA cannot have both these advantages simultaneously. Tariffs cannot permanently change this fact.

In a sense, tariffs are a source of income for governments, but at the same time, they are definitely a tax on ordinary people. It is not the exporting countries, but the U.S. consumers who ultimately pay the price. Unfortunately, most people do not understand it.

Donald Trump never accepts mistakes. Instead of regretting a mistake, he always tries to defend it with unacceptable reasoning. One cannot double down on a mistake. On the other hand, if anything goes wrong, he blames others, particularly his predecessors in the Democratic Party. He is arrogant.

A real problem with Trump is that he thinks he understands everything and nobody understands better than him. He thinks he can manage monetary policy better than the Federal Reserve's governor. Donald Trump considers himself a legal expert and believes he understands constitutional law better than the Supreme Court´s judges.

The responsibility lies, to an extent, with the people, too.  If people elect an ignorant, arrogant, narcissistic, and despot-like person as their leader, they must pay the price. We may not like Joseph de Maistre because of his conservative political philosophy. But he rightly said, “Every nation gets the government it deserves.”

Apparently, tariffs will, to some extent, ease the liquidity problem of the US Treasury temporarily. But the burden of foreign debt will not decrease considerably until structural changes in the economy are made and other measures are taken.  The huge amount of US foreign debt is not good for the creditor countries either. No one can rely on insolvent or weak partners. Besides, countries that have political differences with Washington are taking cautious measures. We have seen how the USA and other Western countries have frozen foreign assets and reserves available to them. Iran is an example. China has become alarmed. Therefore, they are shrinking their share in the US bond markets, treasury papers, etc. Only a few years ago, the PRC was the biggest creditor country. The US debt to China was around $ 1.3 trillion. In the meantime, China has sold a significant quantity of bonds and other assets bought from the US. They now rank 3rd after Japan and the UK. Who knows what will happen to US-Japan or US-UK relations in the future? Under Trump, the US-Western Europe relations are not going as well as before. So, the US must reduce borrowing from abroad and rely on a sound, balanced economy that does not overpatronize the war industry and the extreme rich.

 

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