War with only validity …

Suddenly, the mountain gave birth to an elephant. On April 2, Donald Trump has recently presented a policy of tariffs related to US imports.

Written by Jose Fiorido *

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On the basis of this policy, the “mutual” tariff will be calculated, which is supposed to make it possible to compensate for barriers to trade, citizens and others, which are used by different countries to facilitate exports to the United States and/or obstruct imports from the United States.

The formula for access to the “mutual” fee is very simple. The American trade deficit with a specific country is divided into the size of this country’s exports to the United States, and then the percentage found by two is divided.

If any country is exporting 100 to the United States and from there, it matters to 50 has a commercial surplus of 50. It is divided into 50 by 100 which gives 50 %, then, to calculate the magic number, it is divided by 50 % by 2, a process that leads to a “mutual” tariff by 25 %.

Understanding this absurdity is not for economists, perhaps psychologists can find any rationalism for this huge nonsense.

At the base of repetition is an expensive idea of ​​some tramp circles, that the presence of external imbalances, deficit or surplus, due to the artificial barriers in front of trade, or, or more worse, deliberate and regular glow of commercial partners in America.

As is clear ignorance. The American trade deficit is only related to any unfair practices of economic partners, such as excessive military protection, or reduce the value of the artificial currency or more veiled subsidies or less for exporting sectors.

Take a very simple example. The United States imports European cars, especially in the luxury sector, and export some cars to Europe. It is true that European car protection is higher than American protection that can submit Donald Trump’s complaint with some experimental basis.

However, it is the moderate European Palmal barrier on cars that prevents American cars from selling in Europe. Countries like Japan, South Korea and recently China are exporting large quantities of cars to European countries, despite the protection of the European tariff.

The American cars problem is that it is designed for the local market, which is very different from Europeans, starting with the big difference in the price of fuel. Europeans do not buy American cars just because they are not compatible with their car transport habits. The opposition teams have more than a marginal role here.

As Stephen Miran also admits, the current head of economic advisers at Donald Trump, who has regained an old idea of ​​contracts by economist Robert Treenvin, on the basis of the American trade deficit is the fact that the United States is the broadcasters of the dollar, which represents the major global reserve currency and the most important treatment in international trade.

It is a great privilege for the United States, but it comes at a cost. Since the demand for dollars should not be seen only with trade flows, but it results in a great deal of its role in the reserve currency and international transactions, and the price of the dollar will be more exaggerated in terms of what may be necessary to achieve a balance between the trade balance. It is estimated that the dollar must reduce 30 and 40 % in order to reach the balance.

Another way to know that the American deficit has nothing to do with public issues is just an account. The state always has an external frankness when what its economic agents (families, companies and the state) want to invest is superior to what they want to provide. It turns out that American internal savings are much lower than investment, so, while the situation, the United States will be missing abroad.

Since the American deficit is not due to the lack of treatment in general ideal, nor the deliberate and systematic glow of business partners, it is clear that increasing the tariff of import brutally will not resolve anything accurately.

Real solutions can be reduced by the value of the important dollar and the international depicted as it seems to defend Scott Beesen, the current secretary of the Trump administration treasury, the image of the famous square agreements in the eighty years, or the decision of the United States’s internal economy imbalances, which indicates a decrease in domestic demand for demand for near years.

Unfortunately, no solutions can be effective. In the aftermath of the Trump administration, with the policy of ridiculous and aggressive tariffs, one does not see where the climate generates an international consensus on reducing the value of the concerted and non -concerted dollar.

On the other hand, it is also not seen that the subject of the American public deficit can be solved when Donald Trump’s promise was a tax reduction, and on the other hand, this will definitely not be the added customs recipes that will be provided today.

American tariffs will not strictly solve the background problem, but it has the ability to do America and the world very badly.

Prices will rise, and may hinder the course of interest rates, not excluding the recession, whether in the United States or in the countries most affected by the brutal increase in definitions.

Market reactions were those that would wait for a noticeable exception.

Scholarships for fear of a potential recession declined, the prices of US Treasury obligations increased (and this is the same saying that the price of implicit interest has decreased) because it has become the origins of the shelter, but it is strange that the dollar has decreased.

This is usually not like – in times of turmoil, the dollar tends to be estimated that it is seen as the safest shelter.

I admit that I did not find any reasonable justification for this anomaly.

However, it is not excluded that the behavior of the strong dollar is a sign of the times. Perhaps, the world has ended as we know it in recent decades and what will come, unfortunately, may not be beautiful. War with the expiration of its validity only …

* Economic expert. The material was originally published in the solidarity newspaper online.