Geopolitical Economy Report Trump's tariffs make no sense, and will backfire hard on the US economy
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Apr 3, 2025 Donald Trump's heavy tariffs have stirred controversy, misleadingly justified as 'reciprocal.' Critics argue these measures will backfire, worsening inflation while failing to boost U.S. manufacturing. The episode dives into the flawed calculations behind trade deficits and the potential repercussions on the U.S. economy. With the looming risk of recession, they discuss the implications for the dollar's dominance and the increasing trade deficit. The analysis questions the effectiveness of these tariffs and their impact on everyday consumers.
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Trump's "Liberation Day"
- Trump declared April 2nd, 2025, as "Liberation Day", marking the rebirth of American industry.
- He believes "tariff" is the most beautiful word, surpassing even "love", and promises it will enrich America.
Tariff Impact
- Trump's second-term tariffs are significantly larger than his first-term tariffs, impacting global and US economies.
- Ironically, Trump won the 2024 election due to inflation, yet his tariffs will likely worsen it.
Misleading Tariff Calculations
- Trump's "reciprocal tariffs" are based on US trade deficits, not actual tariff rates from other countries.
- This arbitrary calculation, using the trade deficit divided by exports, is misleading.