By imposing duties that have not been seen in over a 100 years, the American administration has made certain that its actions look thoughtful and professional. Announcing the Day of Liberation – most likely from abroad goods – president Trump presented tables with precisely calculated tariffs imposed on made in USA products by another jurisdictions. A smaller font indicates that the figures besides include costs associated with national currency manipulation and trade barriers. The second include, for example, the required production conditions and quality standards.
The conversion of the impact of the exchange rate and non-tariff trade barriers on the overall level of duties charged to US exporters – and for almost all economical areas in the planet – would require monstrous calculations and analyses. It would take years, so the Americans decided to take a shortcut. They divided the US trade deficit with each of the countries affected by the fresh duties by the value of their exports to the US and presented it in percentages. They then divided it by 2 and thus determined the rate of work for each economy.
Poor countries get ricocheted
In another words, the Americans felt that the US trade deficit was due solely to protectionism the full planet and unjust practices that affect the hurt producers of the Potomac. In fact, there are many factors affecting the lower tendency of consumers from different countries to buy American goods. The primary are advanced prices – the USA is 1 of the richest countries in the world, so Bangladesh's people cannot afford the goods produced there. But little wealthy Americans are willing to buy clothing from American brands produced in the Gulf of Bengal. frequently under terrible conditions, specified as the collapse of a mill in the Rana Plaza complex, under which over a 1000 people died.
Meanwhile, Washington applied 1 of Dhace's highest tariffs – 37 percent. Even higher tariffs are provided for many very mediocre countries where products from the United States are seen only in the hands of American tourists. These imposed on Cambodia are 49 percent, and on Sri Lanka and Myanmar (old Burma) 44%. A immense problem will have a richer Vietnam (46%), for which exports to the US are highly crucial – in 2022 its value exceeded $100 billion. Thailand has besides been treated severely, which is visited by mass vacationers from the States, which was well pictured in the 3rd period White Lotus. The goods produced by the Thais were charged 36 percent.
Burdening states so mediocre and exploited – including by Americans – with prohibitive trade tariffs is simply inhumane and should not be handled by commentators, but by the global Criminal Court. However, the principles of humanitarianism do not concern the heads of current White home residents. The mediocre countries will be ricocheted and the real goal A trade war launched by Washington are the world's largest economies. Cambodia or Sri Lanka were on the list to be "fair" – like everyone else, that's all.
How did they number it?
Already in early March, the US imposed 25% tariffs on its main trade opponents Canada and Mexico, so Trump spared them the reciprocal tariffs announced on Liberation Day, which will apply until 9 April. The European Union has been treated comparatively mildly – it will be subject to "only" 20% duties. According to the European Commission, so far, it has been on average around 1% on both sides of trade with the US. So we're talking about a twenty-fold increase in tariffs in trade between the 2 world's largest economies, whose full value in 2024 was close to a trillion dollars. In terms of US exports, the EU is the largest counterparty. They are besides the second largest direction of imports, after China.
The biggest Asian automotive and electronics exporters will besides last the shock. South Korea and Japan were charged with duties of 25 and 24 percent respectively. nipponese Prime Minister Shigeru Ishiba announced ‘National crisis’, and Chief Secretary of Yoshimas Hayashi's Cabinet called customs ‘deplorable to regret’. Only a fewer days earlier, U.S. Secretary of defence Pete Hegseth had hosted Japan, which assured that the alliance between the 2 countries was stronger than always before, and the nipponese and Americans were “connecting the warrior ethos”. He besides announced the construction of a fresh American military base in Japan.
Washington is simply a key safety guarantor for Seoul's very hard neighborhood. But how can we trust these guarantees erstwhile an ally takes hostile action in economical relations? Furthermore, 17% of customs duties were besides paid to Israel, which itself does not apply any tariffs on goods from the United States.
The short-term nonsubjective of Trump's administration in the area of trade is to fill holes' customs gross after planned taxation cuts and to reduce public debt. Long-term reconstruction of American industry. Producers from all over the planet are to decision factories to the US not only broken by customs, but besides tempted by low taxes. "The message is that duties are taxation reductions, duties are jobs, duties are national security" – stated Trump's chief trade advisor, Peter Navarro. According to Navarro, fresh tariffs will bring US budget $700 billion a year, or 7 trillion in 10 years. The car itself is expected to affect Washington's cash registry 100 billion a year. Navarro likely multiplied the average rate of fresh duties, estimated at 25-30 percent, by the full value of US imports, which in 2024 amounted to $3.3 trillion. The problem is that specified barrage customs rates will rapidly reduce American imports, so these estimates can brutally run over reality.
Who's gonna pay for this?
‘Trump stated that the fresh tariffs would yet reduce prices for consumers. However, the key word here is “finally”. Regardless of the circumstances, the immediate burden will be on American households that are already facing advanced debt and rising surviving costs. The consumer goods market, due to its dependence on global trade integration, has so far provided deflationary relief to consumers who have faced rapidly rising prices in educational and wellness services and in goods specified as housing and food in restaurants. If the Trump administration keeps its word on “liberation”, it will all be over. For example, the cumulative burden on Chinese tariffs is expected to be 54 percent. (including 20% of already imposed tariffs and a fresh rate of 34%). This would rise the average iPhone price by up to $220, assuming an Apple import price of $500’ – noted Dominik A. Leusder in “Jacobin”.
Among the victims were Poles. By Analysis PIE, although the USA is only Poland's eighth trading partner, is liable for 23 billion dollars of Polish added value. 57% of this amount goes to the US through another countries for which we are subcontractors – mainly Germany. In the worst script of an acute EU trade war with the US, Polish GDP could fall by little than half a percent. On paper, we owe small to a diversified economy. The most affected will be the automotive industry, whose exports could fall by 1.5%. However, in Poland it is only 1 of many industries – for the automotive industry-based Slovakia and Hungary, this blow can be very severe.
The analysis of the pastry takes into account only the effects of restrictions on exports to the US, and it is almost certain that the EU will introduce akin retaliatory duties, which will be much more painful for Poland. As a consequence of the sanctions imposed on Russia, the United States is 1 of the main suppliers of liquefied gas, and we are now buying weapons from Russia. If EU retaliatory duties besides included energy resources and military equipment, Polish energy and military spending would increase drastically. And military equipment is likely to include as the EU seeks to increase the participation of European producers in associate States' arms purchases.
The fall of the dollar hegemony is coming?
The rescue could be a dollar drop, which according to text The Foorohar wounds of The Financial Times are 1 of the main aims of US trade policy. According to Trump, the dollar is besides costly for another planet currencies, which is to be the consequence of the unfair manipulation of American trade rivals. At the beginning of the year, PLN 4.16 had to be paid for the dollar, and on 4 April already 3.86.
The planned depreciation of the dollar aims to lower the prices of American products for abroad consumers and boost exports. To compensate for this, the dollar would gotta stand by at least 30% and cost 60 cents (now 91). The question is whether this will lead to the de-dollarisation of the global economy. Central banks will not want to hold reserves in a currency whose value will shortly shrink by a third. There will besides be no reason to carry out global transactions in the currency of a country that intends to escape global trade. The dollar presently accounts for around 60% of global reserves and more than half of global payments.
The fall of the dollar hegemony will be highly painful for Americans. The national Reserve will gotta rise interest rates, preventing American households from surviving on credit, which is simply a permanent practice overseas. It will besides increase public debt handling, which presently amounts to over 120 percent of GDP in the US. In the EU, only Greece and Italy are higher.
Thus, it will most likely turn out that by the time the factories return to the States, and the American working class regaining dignity, Americans will be hit by the damaging effects of Trump's demagogue policy. They'll spill all over the world. Trump himself and his household will most likely fall back on their feet and put their assets in cryptocurrency, and the fresh Mar’a’Lago will be found on 1 of the Caribbean islands.
