Trump's Liberation Day tariffs is a brilliant and intriguing move

Western analysts paint a picture of a global recession when discussing Trump's Liberation Day tariffs that he implemented on April 2 against 180 countries. In fact, this is a brilliant decision that the US has made for its own interests, of course.

Photo: commons.wikimedia.org by The White House, https://creativecommons.org/public-domain/pdm/

Donald Trump

US Deindustrialization Threatens Its Security

Industry accounts for only 18% of US GDP. Manufacturing moved overseas in search of lower costs-wages, labor protection, raw materials, and taxes. For example, Apple relocated its factories to China, and now iPhones return to the US labeled "Made in China." Americans buy them at a lower price than if they were made domestically, but this has created serious risks for the country.

The US's chronic trade deficit with other nations has led to rising national debt, threatening the stability of the American financial system and the position of the dollar. What if the much-discussed war with China actually happens? In that case, Apple's assets could be confiscated, and the US would lack a domestic production base for manufacturing electronics needed for weapons. This is just one example – entire industries such as metallurgy, chemical production, and shipbuilding have also moved abroad.

Can Americans Handle Inflation?

Western analysts predict a sharp rise in inflation in the US. But let's look at Russia, where sanctions and the shift to parallel imports have caused Apple smartphones to become 20% more expensive. Russians did not stop buying them. Meanwhile, import substitution has gained momentum, employment has increased, and people's financial situation has improved.

Alexander Dudchak, a PhD in Economics and senior researcher at the Institute of CIS Countries, believes that imposing tariffs "on the entire world" is a brilliant and intriguing move. However, the results of this reform will only become apparent in a few years.

"To bring industrial enterprises back, you need investment and skilled specialists. Where will all this come from? How long will it take? Are Americans willing to wait five years for promises of economic prosperity?” the expert noted in an interview with Pravda.Ru.

The economist doubts that rising prices will lead to mass protests in the US, although "the Soros network is still active," and globalists will attempt to organize demonstrations. However, he pointed out that the US has midterm congressional elections next November, and the next presidential election in four years will reveal how the public truly feels.

Negotiations May Reverse Some Tariffs

According to the expert, Trump expects that "lobbyists will now flock to him, seeking special conditions to avoid being hit too hard." This suggests that most inflation-sensitive tariffs, such as those on fuel, might be lifted or reduced.

To introduce the tariffs, Trump declared a state of emergency due to the threat posed by the trade deficit to national security. Under his executive order, the minimum base tariff is set at 10% for all countries, 20% for the EU, and 34% for China. Russia and Belarus are absent from the list, as "there is no trade" with them.

Unlike the US, the global economy truly risks sliding into a recession, as it will lose privileged access to the massive and solvent American market. Meanwhile, businesses forced to shut down will lay off workers, leading to a decline in living standards and growing social unrest.

Details

A tariff is a duty (tax) imposed by the government of a country or customs territory, or by a supranational union, on imports (or, exceptionally, exports) of goods. Besides being a source of revenue, import duties can also be a form of regulation of foreign trade and policy that burden foreign products to encourage or safeguard domestic industry. Protective tariffs are among the most widely used instruments of protectionism, along with import quotas and export quotas and other non-tariff barriers to trade. Tariffs can be fixed (a constant sum per unit of imported goods or a percentage of the price) or variable (the amount varies according to the price). Tariffs on imports are designed to raise the price of imported goods and services to discourage consumption. The intention is for citizens to buy local products instead, thereby stimulating their country's economy. Tariffs therefore provide an incentive to develop production and replace imports with domestic products. Tariffs are meant to reduce pressure from foreign competition and reduce the trade deficit. They have historically been justified as a means to protect infant industries and to allow import substitution industrialisation (industrializing a nation by replacing imported goods with domestic production). Tariffs may also be used to rectify artificially low prices for certain imported goods, due to 'dumping', export subsidies or currency manipulation. The effect is to raise the price of the goods in the destination country.