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Totally agree that Trump is trading long-term dominance for short-term gains. I think that in a few months, we will see the U.S. economy doing very well and so
by gip 2y ago
Totally agree that Trump is trading long-term dominance for short-term gains.
I think that in a few months, we will see the U.S. economy doing very well and somehow rebuilding its industrial base. In the long term, U.S. influence and wealth will make up a much smaller share of the world’s wealth than it does today.
- fifilura 2y agoHe does not rule out recession. Why do you think the US economy will be doing very well because of his policies? https://www.independent.co.uk/news/world/americas/us-politics/trump-recession-fox-news-tariffs-b2711750.html https://www.independent.co.uk/news/world/americas/us-politic...
- gip 2y agoI do think there will be a recession yes. But within 6 to 18 months, the recession could be over with and growth will come back as the US rebuilds some of its industrial base. US imports and exports will decrease over time. Note: it is my prediction at 70% (e.g. I think there is 70% that it will happen).
- tpm 2y agoIt could be over, but it won't be over, because he can't be trusted, changes position on important issues every night, and this does not create environment welcoming to investors. Nobody sane will commit to longterm investment. No investment, no growth. > US imports and exports will decrease over time. So prices will rise and and government expenditures will fall. Where exactly will that growth come from?
- gip 2y agoI think companies who want to access the large U.S. internal market will have an incentive to have factories in the U.S. That will likely fuel growth. The growth will be coupled with less imports and exports given nationalism and tariffs. And if it is what the Americans want why not. But as the U.S. take this new direction, let's make sure former allies are treated with respect and given proper notice of the changes so that they can adapt their economies and defense postures.
- fifilura 2y agoCould work. Or they could just decide to invest elsewhere. I guess if the economy is in a recession and people spending less it is not the best place to invest. Unless it is for cheap labor but then you'll have problems with export tariffs.
- gip 2y agoIf they invest elsewhere, they will have limited access to the U.S. market—that is Trump’s policy it seems. If the U.S. has one thing going for it, it’s the strength of its market, characterized by high consumer spending and strong potential for growth. Contrast this with the Japanese consumer market, for instance: in real terms, salaries have not increased over the past 10 years, and consumer spending is below what it was a decade ago. (Note: I love Japan, but this is the reality.) European market is between these extremes I believe. The U.S. market may be significantly more attractive to most companies.
- toast0 2y agoIf the high tarriff environment sticks around, including reciprocal tarriffs, the issue is either you produce in the US and have good access to the US and poor access everywhere else, or you produce outside the US and have poor access to the US, and good access to much of everywhere else (depending on things). The US is a big and important market, and for some things, it would be better to forgo competitiveness in the rest of world market; but for others, rest of world adds up to be more important.
- piva00 2y agoSame line of thinking was used during the Great Depression of 1929, protectionist measures only made everything worse, deepening and extending the recession. It won't work...
- rapjr9 2y agoIt usually takes five to ten years to move a factory from one country to another, and it costs an enormous amount of money that mostly will not drive new profit. Costs in the US will be higher also. There is more to consider in moving a factory to the US than market access.
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- drumhead 2y agoThere isnt the slack in the US labor force to rebuild the manufacturing base. Not without significant inflationary pressure. Especially with the hostility towards migaration.
- piva00 2y agoWho will be building, and manning all that newly developed industrial base? You cannot create enough labour in 18 months, it's a very hard fact of reality. Your labour market has been running at full employment for a while, 4-5% unemployment, there's no leftover hands to help with building up multiple industrial bases. Unless you want massive inflation when all these openings for the rebuilding of USA's industrial base, and need to pay a lot to absorb as much labour as possible to actually happen. Not even considering in how much risk the investors of this new industrial base will be having to hedge against, who knows when Trump will increase tariffs on their inputs until everything rebuilds internally, financial hedging, oversupplying their warehouses to prepare for shocks, etc. are all quite expensive. Who will pay for it?
- dzhiurgis 2y agoI'm only partly serious, but AI is about to make quite a bit of people redundant.
- jppope 2y agoIn fairness, he's getting kind of old.
- dboreham 2y agoUS economy definitely won't be doing well.
- throwaway48476 2y agoI don't even see the short term gain.
- schmookeeg 2y agoI keep expecting him to rally his support base and attempt to overturn the 22nd amendment. Short-term "winning" might be exactly what he needs to rally them. Honestly I expected it on his last term.
- riehwvfbk 2y agoGet out of an unwinnable war with minimal losses and re-group for the war that will really matter. China.
- Epa095 2y agoOne would think it would be a bit beneficial to have some allies in that war...
- CapricornNoble 2y agoYeah, would have been really useful for the US to at least convince China's northern neighbor to constantly do mobilization exercises [1] on their shared border to keep the PLA off-balance and draw combat power away from important theaters. Instead, we've pissed away the Sino-Soviet Split and enabled Eurasia to operate with secure interior lines. This can be chalked up entirely to really arrogant and foolish neocon decision-making with regards to Russia 2003-2007. [1] https://www.chathamhouse.org/2018/09/russias-vostok-exercises-were-both-serious-planning-and-show https://www.chathamhouse.org/2018/09/russias-vostok-exercise...
- Sabinus 2y agoIt's interesting you bring up the Sino-Soviet split. I would argue that Trump has inflicted the same thing on NATO. Atlantic relations are at an all time low. Putin will be delighted.
- terrabiped 2y agoSo far we’ve only traded our long term dominance. I’m yet to see any short term gains or even prospects of those. Unbelievable amount of damage done in just a month.
- hdjjhhvvhga 2y ago> Totally agree that Trump is trading long-term dominance for short-term gains. I'd say the other way round - rebuilding everything that was outsourced will take a long time, so hard times are ahead. In the long term, I hope the USA will be less dependent on China. But at the same time the way it was done completely destroyed the credibility of the USA as a reliable partner, both in trade as well as military relations. Countries will organize new treaties, and the USA will be a powerful player but with far less influence than before.
- fifilura 2y agoThere has to be cheaper, faster and easier ways to bring coal mines and steel plants back to USA? For the coal mines, maybe you could fund them through some museum budget?
- MaxDPS 2y agoAssuming that does happen, it won’t be “in a few months”. At best, this is a timeline measured in years if not decades.
- throwaway48476 2y agoNo one is going to invest in building the US industrial base unless there's stability.
- brokenmachine 2y agoMore like trading long-term dominance for short-term losses.