Continued from (1), (2), (3), (4), (5), (6) and (7)
It is very difficult to comment on Mr. Trump's ideias because his volatility is as great as the America he wants to make. And by the way, although it is an apparent contradiction, but the most achievable purpose is his motto MAGA because, as it has been written, a country that has an unemployment rate of 4% and a GDP per capita of $85,000 does not have to be made great again - it has been great for a long time.
To the volatility of Mr. Trump you have to add the unrealism of the ideas of the people he picked for his government. For example, the designated secretary of Health and Human Services and dropout candidate Robert F. Kennedy Junior promised that he and the President will «transform our nation’s food, fitness, air, water, soil and medicine», a purpose that the Democratic party would not disdain.
And to RFK Jr's unrealism we must also add the unintended consequences (or perhaps intended) of Elon Musk's announced purposes, whose objective of eliminating bureaucracy could very well degenerate into the creation of an oligarchy.
Returning to the increase in tariffs and citing the conclusions of economist Ricardo Reis, the experience of Trump's first term showed that, with some exceptions such as steel, a US tariff of 10% on a Chinese import leads to an increase in the price paid by Americans of 9.5% and a drop in the price received by the Chinese of 0.5%. In other words, the tariff ends up being almost entirely paid by Americans.
Furthermore, it was found that a 10% increase in rates came with a decrease of about 10% in purchases after 3 months, and about 20% after 18 months. And it was also found that those who benefited from these tariffs were mainly countries such as Mexico, Vietnam, Thailand and South Korea, that increased their exports to the USA, and at least in some cases Chinese companies opened branches in the country and continued exporting to the USA through of them.
In the end, according to the best available estimates, Americans lost out in margins and in profits and wages, or in prices. Other countries may gain slightly, although the world will lose by producing in less efficient and more expensive places.
(To be continued)
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