Trump never did change his gangster behavior. During his first term, he started the trade war, by increasing tariffs on Chinese goods and warned China not to retaliate. Who in his right mind would tolerate being slapped and then turning the other cheek to be slapped again? China retaliated and the USA's agricultural sector bore the brunt of the retaliation. The USA government was forced to subsidize farmers to keep them alive. I do not know how long they did the subsidizing, but it surely is not a one-off action.
Now, to attract investments into the USA, Biden and now Trump had to give massive subsidies to lure those semiconductor manufacturers to build factories in the USA. What other subsidies to lure other manufacturers of consumer products to the USA is to be expected. This is obviously needed and will these businesses be lured to set up factories in USA just looking at the short-term subsidies and betting against the long-term losses. They obviously can never compete outside the USA and what are they going to do?
I would dare say that investors of manufacturing being forced to build factories in USA are between the devil and the deep blue sea. For USA companies like John Deere, not moving back to the USA is choosing punishment by Trump, while moving back to the USA is equally fatal by being uncompetitive. Being uncompetitive means facing bankruptcy like many of the ICE Vehicles manufacturers making EVs that cannot compete with BYD and other Chinese automakers.
Suffice to say, Trump is isolating the USA even in relationships with close allies and he will get what he wants, but at unimaginable cost.
Anonymous
1 comment:
The USA is relentlessly printing toilet papers to prop up its economy, particularly propping up Wall Street, the bellwether of the USA's economic situation. Professor Richard Wolff said that printing more money to grow the economy is all rubbish, as nothing is produced in exchange for goods made by others. The USA is discreetly exporting its inflation to the rest of the world through its US$ hegemony, but that is not going to be sustainable.
But the USA desperately needs to do it in order to give the impression that it is growing so fast that China cannot ever catch up. Many people are astonished by the trillions added to the USA's GDP every year, despite its growth averaging 2.5% over the years. How is that possible?
Why is Trump so desperate to lure manufacturing back to the USA if its economy is doing so well, just by printing toilet papers? Why not just continue with it, simple and convenient way of growing a country's GDP?
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