Trump is now gloating about imposing 100% tariffs on China and India for buying Iranian oil in a bill to be passed, a sanction that had already been used against China and India for buying Russian oil and trying to add Iran into the picture. Have we gone through that already?
I was not wrong to say that any measures taken is all to target China, while India is also affected. But India needs US$ as its rupee is not widely in demand by others for doing trade. Its rate of depreciating makes it toxic to hold. Even close allies, like Russia, does not want to sell its oil in rupees, preferring the Chinese Yuan or ruble, which is an affront to the Indians. How much rupees Russia still holds selling oil to India in the past is not known.
As I always say, Trump and his administration can increase those tariffs to 1,000% and it will not make any major difference if China just continue to cut its exports to the USA, making de-dollarization even more beneficial for China and BRICS. If there is little trade between China and USA, what is the point of a 100% tariff? Impose more secondary 100% tariffs on countries trading with China? Go ahead.
China can just sell more to the Global South at the same price, make the same profit, keep the same factories humming, increase its trade surplus without any economic consequences.
Who suffers? The USA consumers of course, which goes without saying. Sure, they could source for alternatives from elsewhere, but at what price and quantity that only China can produce. For me, I am clapping that USA goes ahead with secondary sanctions on China that is getting less and less detrimental, just like the primary sanctions over the decades. Imagine exporting to the Global South and using the Yuan as the intermediary, without the need for US$. Honestly, the USA is cutting its nose to spite its face. But it is in desperate straits, so anything goes.
Anonymous
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Trump can appoint whoever he thinks will carry out his dictate, but the reality just cannot be bent towards fulfilling an imaginary target. If Jerone Powell could do it, he would have done so without Trump putting him under all the pressure over the years and eventual removal.
I think Jerone Powell must have felt vindicated over his refusal to cut interest rates, and his removal must be a blessing in disguise, leaving the problem to Walsh. I think Walsh will not even last working under the pressure exerted by the childish President that do not understand the problem and refused to see the reality.
Raising interest rate is going to cause inflation to spike further, increase housing mortgage cost, increase borrowing cost for business maintenance and expansion, reduce consumer spending and tighten the job market further with business closures. Increasing interest rate is an invitation to a problem that feeds on itself.
But, as always, they can continue to boost job creation with fictitious claims before November, then revise the fabricated figures downwards later by hundreds of thousands. It has already been done before, so expect more of the same.
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