Cnn
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President Donald Trump should play the success of his second term, the economy and the personal finances of millions of Americans this week on his longtime conviction that the prices can recreate a golden age of American wealth and independence.
Or is it? This is Trump’s capricious leadership that nothing is certain until it happens. And categorical orders – in particular on trade – are Often reversed as soon as They are given.
But Trump promises that Wednesday April 2 will be “Release day– When it imposes reciprocal prices for the dollar for countries on nations that take office on American goods.
Its most robust decision to transform the global trade system still could end up affecting each American, which increases prices at a time when family budgets are already stretched. But the president implicitly asks everyone to join a strategy that promises future advantages in attraction but which requires a sacrifice for the years to come.
Trump trade policies have already suffered billions of dollars in stock markets – the industrial average of Dow Jones plunge 700 points On Friday only – and aggravated fears of a recession as Consumer confidence ebbs. He also alienated the American allies when his foreign policy begins to disentangle Western alliances system.
As Wednesday’s deadline approach, the president damages the confidence in which economic stability depends by increasing contradictory expectations – suggesting, for example, that certain nations or industries can withdraw new prices. His leadership Lapulet risks as much damage as the policies themselves.
Trump explains that by imposing prices for imports, he will force companies to move manufacturing and supply chains in the United States, thus creating jobs and reviving the regions left by globalization.
The downside, however, is that prices will increase prices for consumer consumers from the high cost of living. And there is no guarantee that companies will bring production in the United States, because such reorientation would take years and probably Go beyond Trump’s Power time.
If the president follows, he will take a huge political risk. But it seems unconscious of the potential impact. In an amazing comment to Kristen Welker of NBC News on Saturday, the billionaire who runs a firm of billionaires and millionaires was indifferent to the increases in the cost of causms caused by his new industry rates.
“I don’t care if they increased prices because people will start buying American manufacturing cars”, ” Trump said in a telephone interview. “I don’t care, because if the prices of foreign cars increase, they will buy American cars.”
His attitude risks a political reaction when the Republicans are already wary of the electoral impact of a slowed economy and Trump policies, with Florida special elections for the house This week, threatening to embarrass the party.
Trump’s point of view also ignores the complexity of the 25% car rates that should come into force this week. Manufacturing processes are deeply integrated into plants in Mexico and Canada. This means that most cars built in the United States become more expensive. And while in theory, a car manufactured in the United States in the future could be immune to prices, production costs and higher investments necessary for the manufacture of sites only inside the United States will be transmitted to consumers. In the years that intervene, the price of new cars will be thousands of dollars higherrisking the supplies of industry jobs.
Winners and losers
Trump’s belief in the almost mystical power of prices is rooted in his vision of the world of winners and losers and his conviction that the United States has long been torn off by European and Asian powers that protect their industries.
“We are going to charge countries to do business in our country and take our jobs, take our wealth, take a lot of things that they have taken over years,” Trump said last week. “They got out of our country, our friend and our enemy so much.”
The pricing policy is as old as the United States. But many economists blame the restrictive trade policy for provoking immense difficulties in the Great Depression in the 1930s, and the period of the post-second World War saw the gradual lowering of trade barriers before radical remodeling of world trade as the 21st century.
Trump refuses to accept the economic consensus that prices cause higher prices because importers transmit additional tasks to consumers. This is a particular concern because voters did not have much relief of the cost of vital goods during the pandemic years. Inflation may have decreased, despite signs He turns again, but the cost of living did not come back where he was five years ago.
The president’s goal of trying to rekindle economic perspectives in areas hammered by the loss of factories is commendable. The economic transformation caused by globalization has been painful, stripping communities of perspective and contributing to the epidemic of opioids. Administration officials argue that Trump policies will restore the main streets marked by rows of closed stores.
The feeling of loss in rust belt areas fueled Trump’s political rise while he was clinging to the anger of ordinary Americans more effectively than other politicians of his generation.
There is no doubt that the promises of the history of the power of globalization to make each rich American wealthier were not confirmed by the results. And Trump’s commercial transformation is fueled by these broken commitments.
One of the arguments to expand free trade and leave China in the World Trade Organization, for example, was that it released the communist giant and would make it less threatened for the United States. But there was also an economic argument that it would make us safer jobs.
“For the first time, our companies will be able to sell and distribute products in China manufactured by workers here in America without being forced to move manufacturing in China, to sell by the Chinese government or to transfer precious technology,” said President Bill Clinton in March 2000. “We will be able to export products without exporting jobs.”
This argument seems hollow for many Americans a quarter of a century. And although it seemed logical to try to promote political reform in China by economic policy, Beijing has rather used commercial concessions to finance its ascent to the status of superpower and to cement its repressive internal state.
But is the president’s idealized vision of a future American economy realistic?
The recreation of an idyll of American style manufacturing from the 1950s is a stretch at a time when American competitive edges and economic power centered on service industries, technology and boom in jobs and trade based on artificial intelligence.
While other savings – Canada, for example – are lost in a trade war with the more powerful United States, they can always inflict great pain on American consumers.
And the unpredictability of Trump – extend the deadlines, offer exceptions to prices, reverse its policy and then double – is also counterproductive, and not only because it hammered the retirement savings based on the millions of Americans.
The spectrum of a volatile politician trying to personally manipulate the global economy according to his hourly time risks. And it is to promote an uncertainty that will discourage manufacturers from going home.
There are also doubts about the question of whether the president is there in the long term and will be willing to pay the price politically and economically to reshape the global economy.
Some signals suggest that it is.
“Access to cheap products is not the essence of the American dream,” the Treasury Secretary Scott Bessent at the New York Economic Club said this month. “The American dream is rooted in the concept that any citizen can reach prosperity, upward mobility and economic security. For too long, multilateral trade agreements have lost sight of this. International economic relations that do not work for the American people must be re -examined. ”
But many Republicans hope that Trump simply uses prices as a lever effect to stimulate his pursuit of “transactions”.
“With President Trump, it is a negotiation to see what we are going to do in the long term,” Senator James Lankford told CNN on “State of the Union” on Sunday. “I have the impression that in some ways in the economy, it’s a bit like a kitchen renovation or a bath renovation.” The Oklahoma republican added: “It’s going to be noisy for a while, but we all know where we are heading: trying to reduce the prices of Americans and increase jobs.”
But others are less optimistic than Lankford because the White House refuses to accept that prices increase prices, rather convening a utopian scenario in which import rights create huge gains by funding tax cuts, reduced prices and a huge creation of instant jobs.
“There will be a large race to fill these factories. And we will see interior production quickly replace this foreign content,” said Peter Navarro, the main lawyer for trade and manufacturing, Kasie Hunt of CNN on Thursday.
“We will see the wages increase. … The prices will bring back a little more than $ 100 billion on cars.
Navarro has expanded this vision of “Fox News Sunday” when he put pressure on the admission of the president that the prices would result in a “disturbance”.
“Trust Trump,” said Navarro.
But for many investors and consumers, this confidence is already broken due to the volatility of the president. The next few days are likely to be turbulent because it deepens its individual experience with the global economy.