No, America Was Winning—Mr. President: A Misguided (or self-interested?) War on Trade
Given the recent historic performance of the US Economy, I don't really get what it was that needed 'fixing' with the introduction of Trump's tariffs...?
Since 1990, America's per capita economic output has risen dramatically, passing almost every other major economy by a considerable distance. The U.S. produces today some 40% more per person than Western Europe and 60% more than Japan. Even with the G7 economies combined, accounting for 21% of global GDP, the U.S. alone lays claim to an astonishing 26%. Far from being a victim of unfair trade, America is outperforming its peers on nearly every major economic indicator.
From being one-time poster children for industrial strength, Germany's GDP has not grown since 2006. From being the feared manufacturing juggernaut of late 20th century, the economic star of Japan has faded with an aging population and low productivity growth. Even UK and France have suffered from lack of pace in innovation and output.
Trump's Misguided Tariffs...?
America was dominating. But Trump's bombast on a trade war painted a picture of breakdown and victimhood — that ran contrary to hard facts. Tariffs by his government on Chinese goods, steel, aluminium, and countless other imports may have been psychologically satisfying for some voters, but they were fiscally misguided.
Now there is a valid argument for not being too dependent on Chinese supply chains, especially in sectors such as pharmaceuticals, rare earth elements, and semiconductors. Rebalancing some of those trade relationships or diversifying sourcing approaches is a strategic imperative. But that is a long way from upsetting the whole system with across-the-board tariffs that increase U.S. consumer costs and incite retaliation against American exporters.
Protectionism can make short-term political sense—it appeals to nationalist sentiment and plays well in struggling industrial regions. But long-term, it’s a self-defeating strategy. America’s economic strength comes from its openness, innovation, and competitiveness. Blaming others while dismantling the very framework that facilitated decades of prosperity is not just unnecessary—it’s dangerous.
Final thoughts... all over now..? Or Not...?
What Trump's administration needs to remember is that The global economy isn’t a zero-sum game.
However, they are clearly smart enough to know that, probably what this recent tariff spat was all about is creating instability the firm could trade off and take an even bigger slice for themselves, there's no other rational explanation!
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Trump should import Chinese workers then.
Trump’s by far our stupidest President. We might have survived mere stupidity. But he’s also by far our most corrupt President. The two factors combined to produce this idiotic trade/tariff war.
I wouldn't look at per capita income. This can be skewed by high revenue corporations and high income individuals that don't necessarily translate to higher wages for everyone else.
If you look beyond the glitz, the US labor market (actual labor, not services) has been slowly gutted.
We also have to consider the effects of inflation and geographic arbitrage. Like Europe, we have an aging population, although less severe. And, outsourcing production to other nations reduces or altogether kills domestic production.
Not all the gap in wage growth is the result of outsourcing. Some of it is an overemphasized importance of college education, which doesn't always result in good jobs and most certainly burdens with large student loans. Many trades people I meet are making a good living without college education. They are able to translate skills into paychecks, whether self-employed or earning wages. But these jobs are considered beneath most graduates, who mostly lack the practical skills required.
The manufacturing jobs that there are do not pay much as they are competing with cheaper foreign production. I recently worked at an electric motor factory paying $11/hr. I can easily earn more than a week of wages, including overtime pay, by driving Uber part-time.
John Deere, a major farm equipment manufacturer, recently opened a plant in Mexico originally intending to move manufacturing there until Trump told them they would pay 200% tariffs on imports back into the USA. They are trying to figure out how to keep domestic production going.
I don't think tariffs will solve everything. Eventually, there will be smaller tariffs. They are a good bargaining chip for renegotiating. If Trump had asked nicely, he'd have been told to go smurf himself. By scaring the hell out of everyone, they know he's serious, making them more open to make a deal. We just have to wait and see. Don't forget Trump has only been in office a bit over 100 days. Things haven't played out yet. We have only seen opening moves.
Here's another chart for comparison. I couldn't find Median Personal Income in the UK to add.
This shows how GDP per capita may be high, but median personal income isn't keeping up. On a per capita basis, however, personal income is making a killing.
Here's a better illustration.
Possibly that skew in income is part of the problem? High earners are maybe less likely to keep their money in the country? Instead it just sits around as Vested capital not necessarily doing anyone any good!
https://www.reddit.com/r/Economics/comments/1kne5zm/no_america_was_winningmr_president_a_misguided_or/
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I'm no expert on economics, but I think the US will see some bad effects from Trump's crappy policies. People won't want to travel there and there could be a brain drain of scientists. Musk is already seeing people reject his cars. I think the US is an amazing place, but it has lots of issues. The hoarding of wealth by the 0.1% is one of those.
I saw he went after Springsteen. There's a man who has won the respect of millions, and not by being nasty.