Regarding the tariffs, I have taken to saying “It’s not the end of the world, and it’s not even the end of world trade.” In the modern world, every decade sees a few global economic upheavals, and in my opinion that’s all this is. It is a strong player within the world trade system (China and the EU being the other strong players), deciding to do things differently. Among other things, it’s an attempt to do something about America’s trade deficits, and to make the country into a net producer rather than a net consumer. Those are huge changes but now that they are being attempted, I don’t see any going back. The old situation was tolerated because it was too hard to do anything about it, and the upper class was still living comfortably. I think a reasonable prediction is that world trade avoiding the US will increase, US national income may not grow as fast, but the US will re-industrialize (and de-financialize). Possibly there’s some interaction with the US dollar’s status as reserve currency too, but I don’t know what that would be.
Regarding the tariffs, I have taken to saying “It’s not the end of the world, and it’s not even the end of world trade.” In the modern world, every decade sees a few global economic upheavals, and in my opinion that’s all this is. It is a strong player within the world trade system (China and the EU being the other strong players), deciding to do things differently. Among other things, it’s an attempt to do something about America’s trade deficits, and to make the country into a net producer rather than a net consumer. Those are huge changes but now that they are being attempted, I don’t see any going back. The old situation was tolerated because it was too hard to do anything about it, and the upper class was still living comfortably. I think a reasonable prediction is that world trade avoiding the US will increase, US national income may not grow as fast, but the US will re-industrialize (and de-financialize). Possibly there’s some interaction with the US dollar’s status as reserve currency too, but I don’t know what that would be.