Exchanges fly around the neck, speculative capital is thrown in search of “safe havens”, economists bode costly and recession, media scare and condemn the madness of protectionism by Donald Trump. Why did he dare to face global economical conflict?
Radicalism is awesome and the velocity of hitting the full planet by the White home host. It started with tariffs for Chinese production ‘for fentanyl’. Then they hit 25% of the tariffs on steel and aluminum and on cars. On April 2, there was a culmination – “The Day of Liberation”, as Trump described, from “unfair trade relations”. By them, America was "used and deceived by Europeans and globalists".
All right, but what is the real reason, what are the roots of these decisions?
Behind the crazy actions of Trump according to the media, lies the fundamental diagnosis of the weaknesses of the American economy and the courageous strategy of restoring its economical power. The US is rapidly losing its position in the real economy – from its 28 percent of global manufacture in 2001, their share fell to 17%. It is dangerous for Hegemon's planet position and his economical impact on allies and enemies. This world's strongest and richest economy focuses on the most profitable parts of business activity, specified as finance or fresh technologies (IT or pharmaceuticals). These "dirty" and little profitable ones are commissioned abroad, where it is simply cheaper. However, specified a structure creates problems. The manufacture may be little profitable than digital services, banks and stock speculation, but steel, aluminium or copper are inactive essential for the functioning of the country.
That is why the US imports so much, especially from China and Europe. Thus, an incredibly advanced global trade deficit. Last year, the U.S. brought more goods for over $1,200 billion than they exported. specified large numbers are hard to imagine, so I will explain – this is 150 percent of the size of the Polish economy. The states removed Poland from the global economical cycle (more than what they themselves offered) to meet their needs.
There is nothing for free to finance specified a trade deficit, you gotta borrow this amount from the world. And the constant deficit accumulates in the U.S. abroad debt, which is now nearly $28,000 billion (I know that doesn't mean anything, but let's imagine that the US is guilty of 35 Polish economies to the world). This debt grows at an extraordinary rate (last year – by US$2,000 billion) and is already equal to the size of the American economy.
The President's goal is to destruct the main economical weakness and avoid threatening America's bankruptcy. This is why tariffs were not calculated at the real work rates of competitors imposed on imports from the USA. Their trade surpluses were taken under scrutiny, the percent of full trade with the US and specified tariffs were calculated. Hence, the highest tariffs came to Vietnam (46%), Thailand (37%) and China (34%) – the production backdrop of American consumption. Europe got 20%. Those who have no surplus from the United States and the remainder of the planet have been assigned 10% duties. Just for whatever reason.
The U.S. President's strategy changes the world's trade order, hits the current model of global trade, where the US was the world's main importer. All who benefited from this are at risk. Hence opposition and a large cry in the media, and present it is the voice of global capital and global corporations, which are the biggest victims, even the victim of Trump's strategy. Their global production chains will should be rolled and returned to America. Even free-marketers, and behind them media titles, scare the spectrum of the large Depression of the 1930s. And they inform you, you are playing with fire.
Trump promises that there will be more industry, lower taxes, a balanced budget and lower credit costs erstwhile import tariffs are imposed and a full set of additional activities (tax reduction, simplification of bureaucratic handicaps, encouragement of investment in home and abroad capital). It is to become an industrial power and a production center of the world.
What does he base his calculations on? This in the next issue of Polish Thought.
Andrzej Szczęsniak
photo profile fb The White House
Think Poland, No. 15-16 (13-20.04.201025)
