The Breakdown Why the Trump Tariffs Aren't Actually Economic Policy
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Feb 4, 2025 Recent tariffs introduced by the Trump administration have left many confused about their purpose and impact. The discussion highlights that these moves are more about geostrategic realignment than economic policy. Focused on the effects on North American industries, particularly auto manufacturing, the conversation unveils challenges like rising car prices. Additionally, the tariffs are scrutinized as diplomatic tools related to national security, reflecting a shift in U.S. power dynamics in a multipolar world.
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Tariff Increase
- The U.S. average trade-weighted tariff is expected to rise to 10% from 2% due to new tariffs.
- This is comparable to the Smoot-Hawley tariffs from 1930.
Geopolitical Strategy
- Viewing Trump's tariffs solely as economic policy is a mistake.
- They represent a larger geopolitical strategy.
Stated Tariff Goals
- Trump's stated goal for the tariffs is to combat illegal immigration and drug trafficking, particularly fentanyl.
- This framing suggests the tariffs are not solely economic but serve broader strategic goals.