Philosopher Jogy Wolfmeyer explains why tariffs against China will never work and how the USA is ruining itself.
Perhaps we should go back in time a bit to understand what is currently happening in the world.
As I am already of a somewhat older generation, I have lived through the political developments that have actually shocked me immensely and made me think.
In my imagination, politicians were not narcissistic showmen, at least not to the extent that is the case today. In Austria, for example, since the Schüssel government, the foundations were laid that qualifications for an office no longer matter, and populism has been pushed to the forefront. The ÖVP, which always described itself as the party of the economy, probably lost the first spark of its illusion through Wolfgang Schüssel that it could ever be associated with the economy. Rather, politics has degenerated into a kind of student fraternity, where one joins only to gain personal profit from it. The members have not the slightest idea about political or economic contexts but love to hear themselves speak.
With Sebastian Kurz, the ÖVP probably had its most visible puppet, who is perfectly comparable to Trump. Kurz, who knows neither economics, nor politics, let alone foreign policy, is still invited by tabloids, presumably because he pays for his appearances there as a promotional contract for himself, and these media are happy about the extra cash. If Kurz is as good a businessman as Trump, then he still has his numerous bankruptcies as an entrepreneur ahead of him. In an interview, Kurz stated that Trump is not stupid and that his politics pursue a defined goal. I also believe that Kurz falls for such charlatans because, to me, he represents a farm boy with little education who would be better suited driving a tractor in a field, where he would likely follow his true calling, rather than pretending to be a great businessman, which he is not.
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Kurz’s successor is probably more of an inherited memory from the people who cheered for Kurz without any qualifications and likely born from Schüssel’s womb: Nehammer Karli with his Ignarus expert team Brunner and Kocher, who may have once read a book with the word „economy“ in it but have not understood the complexity of an international economy. With record debts, they, together with the Green Party’s economics graduate Werner „Spritzwein“ Kogler, have driven the country to near ruin. Unfortunately, the Green Party’s policies, with their extreme activism, do not fit into a party landscape but rather belong in the private sphere as an activist group, like Global 2000, Greenpeace, or Amnesty, where the Greens originally came from. The test run of the Greens in politics has shown that they are not suited as a political force and would be better off returning to being an activist group.
But now back to Trump: Trump as a Private Failure
A clear indication of Donald Trump’s incompetence should have been that he ran every company he owned into the ground. Also, in choosing advisors, he seems to have relied more on esotericism or voodoo than on experts who understand economics.
The choice of Peter Navarro was certainly no coincidence, and it’s not surprising that he invented an alter ego as an expert to confirm his barroom economic ramblings.
The biggest sticking point with tariffs is the fact that one must be in a strong position. The USA, as the largest importer of goods, is clearly not in a position to win a trade war, and the Chinese know this too, probably laughing themselves silly behind closed doors at Trump and his advisors.
No one would tear down their house while building a new one and sleep outdoors in the meantime. The idea of the Americans that they can produce all traded goods themselves in a short time is more fiction than reality, as the higher costs in the USA will drive more companies out of the country than attract them to it. If I were an American or European company, I would probably look to Colombia, Brazil, or Argentina to position my operations for the American market.
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How Trump can proclaim that companies have already pledged billions to invest in the USA is probably more of a wishful thinking than reality, just like everyone now wanting a deal in the tariff war. I suspect rather that the millionaires are the ones currently kissing the president’s ass in the USA, and less so the countries that have been hit with Trump’s tariffs. If I were a country targeted by Trump’s tariffs, I would respond with tough counter-tariffs and stricter regulations for importing US goods rather than groveling, because in a tariff war, allies usually suffer more than those who distance themselves from the ones who started the war.
If the EU or other countries kowtow to Trump here, they will emerge as the biggest losers from this trade war.
The only thing the EU should do immediately is impose a 10% tariff on all American products, even if the USA suspends its tariffs. Constantly backing down and letting Trump lead them around by the nose makes the EU look very weak and not to be taken seriously.
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Trade War with China: Unsolvable Escalation
The fallacy of free-trade countries is that they mistakenly assume China is an equal opponent in a trade war, which is, of course, a delusional misjudgment. Whether we talk about Russia, North Korea, or China, these countries are not democracies but are equipped with a budget that they don’t need to consult their population on how to use.Trump, Zollkrieg, China, EU, Zoll, Tariffs. USA, US, Navarro, Sebastian Kurz, Wolfgang Schüssel, Karl Nehammer, Ursula Von der Leyen, 10% Zoll, Tax, Steuern, Handel, Trade, War,
No matter what economic losses a company in China incurs, the Chinese government will cover the losses and provide financial compensation without involving the population. For America, it’s a cat-and-mouse game that would plunge the American economy into a deep recession, while the People’s Republic would rejoice that its goods would become cheaper for other countries due to the trade war.
While the US dollar turns into a junk currency in this conflict, the Euro would become the new world currency due to its stability, knocking the dollar out of the race. The stock exchange would likely relocate from New York to the EU, making the USA the big loser in the trade war in the end.
Also, during this trade war, certain countries would drive fossil fuel prices into the basement, and America would no longer be able to regulate these shifts in its budget, forcing the dollar into negative FED interest rates, which they would have to do anyway if this trade war continues.
All in all, countries should lean back calmly and watch as the USA dismantles itself through Trump.