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The golden prize for America's enemies is to remove the US dollar as a global reserve currency. Since trade is conducted largely in USD, that means other gover

• thegreatpeter 2y ago
  You should read the book lol
• cromka 2y ago
  A big, resounding AMEN.
  • SlightlyLeftPad 2y ago
    Something tells me that both China and Russia know all this and yet, the US administration is completely blind to it or are naively playing into their hands.
    • elliotec 2y ago
      Some say it's quite deliberate.
    • rschiavone 2y ago
      Naively? They are actively acting in bad faith to destroy the US from within
      • ookdatnog 2y ago
        I'm convinced Trump is 100% sincere in his belief that his economic ideas are brilliant and will lead the US to a golden age. I think his (and much of the far right's) mind is characterized by: - a deep incuriosity and unwillingness to learn about the world - extreme overconfidence in his own judgment - an understanding of the world as being pervasively zero-sum (shared with Putin); your loss = his win - obsessive preoccupation with the dynamics of humiliation: he feels an extreme need to be perceived as strong and to humiliate his enemies, and he greatly fears being humiliated I feel like these characteristics explain most of his policy. The idea of tariffs arises from his zero-sum mindset: the only way to gain is by making someone else lose. This is of course factually wrong, but he's too incurious to learn from history or economics. And, of course, he's massively overconfident, so the thought that someone else could know better does not occur to him. And once the ball is rolling, his fear of humiliation will ensure that he has to stay the course. His perceived enemies (which is everyone) have to come crawling to his throne, begging to have their tariffs reduced while praising his brilliant policies, and then he might consider it. So if that doesn't happen, his only options are (a) perpetually retaliating with ever-increasing tariffs, disregarding the consequences entirely; or (b) capitulating in the trade war (lowering or abolishing tariffs) while not admitting that it's a capitulation ("don't worry, my brilliant policy fixed the mass influx of fentanyl and illegal immigrants from Canada, so now we can drop the tariffs on Sri Lanka" or something similarly incoherent).
• cjrp 2y ago
  > This is Russia's and China's liberation day With the tariffs in Asia (Vietnam: 46%, Thailand: 36%, Cambodia: 49%) it feels like a good opportunity for China to increase their trade/influence in the region as well.
  • hliyan 2y ago
    Sri Lankan here. They just slapped 44% on us (higher than on China). The country is just trying to recover from the economic crisis and the sovereign debt default of 2022, so we have very high import duties on certain items (e.g. vehicles) to discourage dollar outflow. Looks like the US just saw that as hostile and decided to strike back.
    • re-thc 2y ago
      > They just slapped 44% on us (higher than on China). Not true, China's is on top of its existing tariffs.
      • lom 2y ago
        So 53% on China in total, because the previous rate was 20%
        • wkat4242 2y ago
          The strange thing I find is that Trump is not going after the companies who were the ones that decided to move production to China in the first place.
    • Danmctree 2y ago
      The numbers appear to be based on the trade deficit alone, not on any differences in import duties etc.
      • matt-p 2y ago
        You're right I think it's MAX(10%,(imports-exports)/imports) as a general tariff plus targeted reciprocal (in some cases, not all)
• vkou 2y ago
  > This is Russia's and China's liberation day. There's no reason to believe that Russia will not continue to be a declining, stumbling, brain-drained backwater hawking a nuclear arsenal over its current borders, Belarus, and The People's Freest and Greatestmost Republic of Donetsk-Luhansk.
  • oblio 2y ago
    There is a somewhat small chance Donetsk-Luhanks escape in the next 5-10 years. Let's see.
• zaik 2y ago
  > Foreign countries buy US dollars so they can trade with other people Who are those other people and why do they want to be paid in USD so badly instead of their own currency in which they presumably pay their employees and taxes? I never understood that.
  • oblio 2y ago
    Look up the petrodollar. If I'm Romanian and my currency is leu (RON) and you're Mexican and your currency is pesos (MXN), you don't want my RON since you can't use it for anything except for imports from Romania and I don't want your MXN since I can only use it for imports from Mexico. If we both agree on USD, I can go to any other country which wants USD (all of them) and buy whatever I want.
    • cabirum 2y ago
      Trading in USD means that all your transactions become known by a third party (US). That is why everyone should be interested in cutting out the middle man.
      • 8note 2y ago
        they dont have to be its just more convenient.
      • oblio 2y ago
        That's the case for everything except for bartering or using commodities (gold, etc) as intermediate trading mediums.
  • tossandthrow 2y ago
    This is called the euro dollar (look it up, it had nothing to do with Europe). In short: when two non us countries trade, eg., oil they settle on USD. So for south Africa to buy oil from Kuwait, they need USD.
    • inexcf 2y ago
• kortilla 2y ago
  > Since trade is conducted largely in USD, that means other governments must purchase USD to trade. But then they sell it back. What you’re describing is not a trade deficit. To produce trade deficits they need to actually trade with the US. Buying forex does not do that. > If trade stops occurring in US Dollar, which is a consequence of the stated goal of our current ruling regime, that would be the coup de grace on this country's hegemony. It is the definitive end to it, and the birth of Chinese hegemony. Nobody will use Chinese currency because it doesn’t float and it’s subject to tight capital controls. Nobody in their right mind would switch to that from outside of China. You can argue that China could become a hegemony anyway, but that is because everyone wants to trade with them, not because they want to use their currency in 3rd party transactions.
  • tossandthrow 2y ago
    Should be understood as buying dollars for goods. Also us trade is not bilateral. The usd that are exported from the US, is not used to buy gods from the US. They are used to buy gods from other countries.
  • yladiz 2y ago
    I think you’re somewhat missing the point, which is that the collapse of the dollar as the reserve currency around the world will eventually lead to default of US debt, which has cascading consequences domestically and internationally. This is the direction the US is heading if it really continues to alienate its allies and try to “fix” its trade deficit. However, the OP was wrong about the fact that China will become a hegemony, for reasons like you mention, and so what’s likely happening isn’t the change of hegemony, it’s the beginning of the end of the era of the American Empire and to a likely a multi polar world. It’s going to take another world war, in some form, to create enough of a vacuum to give us another superpower/hegemony like we have with the US currently.
  • owisd 2y ago
    Foreign countries buy USD through trade. Japan needs dollars for international trade so the US Treasury prints dollars and gives them to Japan and in return Japan gives the US Nintendo Switches or whatever. Those dollars go into the international trade system and some of those dollars will just circulate internationally indefinitely and won't ever make their way back to the US, hence the perpetual trade deficit. This is a great deal for the US because at the national level they effectively got those Nintendo Switches for free.
• testrun 2y ago
  This is a decapitation strike (Timothy Snyder: Decapitation Strike -- https://archive.is/1xkxK https://archive.is/1xkxK) on America by our enemies. This was done by Trump, nobody else.
  • choult 2y ago
    Like GP said - America's enemies.
    • testrun 2y ago
      Ah, light bulb slowly going on. I was thinking Russia, North Korea or China. The traditional enemies.
      • switch007 2y ago
        Is Trump not their US representative in chief?
      • pcthrowaway 2y ago
        I agree on Russia, but wouldn't be so sure Trump isn't a Russian asset.
  • cantrecallmypwd 2y ago
    That's an over-simplified answer. There are many people who share in the blame. Him for doing it as a visible catalyst, everyone who voted for him, presidential advisers who recommended these disastrous policies, and those who sat idly by and let the country be destroyed without acting to prevent it, especially those with greater-than-ordinary power who failed to act.
    • testrun 2y ago
      The buck stops here - Harry S Truman. He had this sign on his desk when he was president. Here is an explanation of what it means: https://www.trumanlibrary.gov/education/trivia/buck-stops-here-sign https://www.trumanlibrary.gov/education/trivia/buck-stops-he...
• csantini 2y ago
  It's typical Empire Hubris: thinking you can get away with anything because you are special. Trump doesn't really know what he's doing. He surrounded himself with yes-men that know perfectly not to contradict him. The global Dollar order was built to American advantage. Trump is dismantling it for no reason. If the dollar order crumbles, the US will discover it has much lower productivity. There is no American exceptionalism: it's just Dollar exceptionalism. No Dollar, no exceptionalism.
  • piokoch 2y ago
    Do you know how many taxes on many goods European Union has introduced? Was that "empire hubris" as well?
    • csantini 2y ago
      Everyone puts taxes on some sectors. It's economic policy. Trump is not doing economic policy. He's using a simple formula to ideologically reduce trade deficit. No matter the consequences! Trust the experts: America will be poorer because of these tariffs.
    • ta1243 2y ago
      Why don't you enlighten us?
    • csantini 2y ago
      Not only America will be poorer. Everyone will be poorer
      • cue_the_strings 2y ago
        That's the point, people need to be poor and desperate enough to fight a (world) war.
        • anonfordays 2y ago
          And they're backing down on just enough woke stuff due to the concern about the lack of participation of checked-out-of-society White men in said (world) war.
• anoncow 2y ago
  Time to learn Mandarin
  • thaumasiotes 2y ago
    然后呢？
• piokoch 2y ago
  Yes... and no. Having own currency as a global reserve currency has its disadvantages too. For instance it keeps value of the currency high, what makes whole USA production noncompetitive. USA exports two things: internet services (all those Googles, Facebooks, etc.) and military equipment. The problem is that internet services are making rich small group of people (owners, software engineers), military production is a niche, so there is a big group of people who lose jobs, are on low paying positions, as being, say, a car factory worker, does not bring enough money. Those people voted Trump, so Trump is trying to solve their issue by bringing back production back to USA, and the way to do this is twofold: make USD weaker and make foreign goods more expensive. All this was not a problem till early '00, when USA didn't have much competition (basically Western Europe and Japan), but the times has changed and USA is seeing that. BTW this is not a Trump thing, Obama, Biden administrations were also noticing that and taking actions, like (in)famous Obama reset with Russia to be able to expand trade over there. "Pivot" to Asia - failed Biden project of Indo-Pacific, that was supposed to convince Vietnam and others to follow USA job regulations, what would make their products more expensive. Surprisingly, they told Biden to go away... Another thing is that for years USA was in a sense donating European industry, for instance taxes on European cars in USA were 2%, while taxes on American cars in Europe (that is European Union) were 10%. Trump puts this to an end.
  • munjak 2y ago
    >Another thing is that for years USA was in a sense donating European industry, Sure and Europe is not at all donating to US arms industry or to US tech sector? Europe is pretty liberal about letting US dominate those domains inside the EU, without opposing that. Plus in geopolitics it simply follows the US, that's sort of been the deal. Seems like this US leadership thinks it can both have its cake and eat it.
    • ilikerashers 2y ago
      Tech giants have no competition in Europe and no capital to do so. In some ways, what Trump is doing is a call to arms for the EU to kick their economies into shape. We've been stuck in 0 growth for years, the UK is in a 0 growth trap since the GFC.
• short_sells_poo 2y ago
  The Pax Americana died during the first week of the Trump administration when he proceeded to turn on practically every single one of US' long standing allies and dissolve NATO for all intents and purposes. All the soft power disappeared right there. Perhaps the world will be better for it in the end, but it's definitely a turning point. A new world order will emerge and America won't be at the helm.
  • ozmodiar 2y ago
    I'd feel a lot better about it if more countries held values of free speech and democracy. If mainland China were like Taiwan, great. Unfortunately I fear those might just end up being viewed as instruments of America's decline.
• red_admiral 2y ago
  So much for making America great again. It looks like they're doing the exact opposite.
  • tobr 2y ago
    Looking forward to ”great” as in ”great recession”.
    • saulpw 2y ago
      Make Another Great Depression
  • raverbashing 2y ago
    Not surprising from someone who could bankrupt a casino
    • stockerta 2y ago
      A casino? Didn't he bankrupt like 3 casinos?
      • azan_ 2y ago
        It was four.
      • op00to 2y ago
        Look at Atlantic City. Trump (among others) did that to that city. That is what the US will become. It is heart breaking.
  • tim333 2y ago
    Make America a great mess.
  • latentcall 2y ago
    Good. Time for this idea to die finally.
• deleted 2y ago
  [deleted]
• lapcat 2y ago
  > This is a decapitation strike on America by our enemies. > if foreign governments spend money, they can elect their preferred candidates. > We institute regime change in other counties, and I see no reason to believe we are immune. Do we really need such conspiracy theories? There's a much more mundane explanation, which is well-documented: "Trump’s Love for Tariffs Began in Japan’s ’80s Boom" https://www.nytimes.com/2019/05/15/us/politics/china-trade-donald-trump.html https://www.nytimes.com/2019/05/15/us/politics/china-trade-d... "Allies and historians say that his admiration of tariffs is one of his longest and most deeply held policy positions." In the 1980s, Russia still had a state-run socialist economy, and China was just beginning to grow (albeit quickly) after its 1978 economic reforms. These countries did not purchase Donald Trump's policies. If you're concerned about foreign influence and foreign money in American elections, you should be much more worried about Australian Rupert Murdoch, for example, who founded Fox News, or South African Elon Musk, who just spent a whopping $250 million to elect Donald Trump and is now personally dismantling the US government (although Musk's money didn't help in the local Wisconsin election), or Israel, which has had one of the most powerful and well-financed lobbies in Washington for decades.
• Juliate 2y ago
  > This is a decapitation strike [...] on America by our enemies. From within. Make no mistake: whatever influence has been or is behind, this is entirely driven by USA citizens.
  • beAbU 2y ago
    [flagged]
  • sph 2y ago
    My long term wish is in 40 years, after civil wars/world war and rebuilding efforts, that we discover a better alternative to democracy; we have gone all in on it the past 200+ years and is utterly exploitable in the information age, as the populace gets less informed and more malleable to any malicious actor. It is a pretty fatal problem if the success of your government model depends on citizens not being total idiots. My anarchist wish is that we figure out that large states have large benefits but also very large downsides. A country as big as many Western countries have simply no business existing, as they are unworkable. How is it realistic to have a functional government for 300 something millions souls and an area the size of the United States?
    • AlexandrB 2y ago
      > A country as big as many Western countries have simply no business existing, as they are unworkable. I don't know why you would single out western countries when China and India make most of them look like tiny.
• musha68k 2y ago
  I wonder which nations are truly "antifragile" to similar takeovers? The U.S. seems especially vulnerable with its limiting two-party bias, among other factors. I'd argue that the level of education of the general populace in (still) functioning democratic countries might be the prime mitigation factor. Based on this, if I were placing bets on prediction markets, I'd wager that e.g. Finland would be among the last to succumb.
  • ljm 2y ago
    It would also help to have a population without a deep-seated beef going back to the civil war. You arguably have two separate 'America's split down that historical line that might not ever see eye-to-eye and, just like the US itself has installed dictators or favourable governments by funding disruption abroad, it is open to be exploited the same way.
    • p3rls 2y ago
      Albion's rotten seed was never unified as one. Seeing the civil war as some unique historical genesis of the split-- instead of a national shotgun-wedding of sorts is completely backwards.
      • giantg2 2y ago
        It wasn't much of a shotgun wedding. Yes, it was a common enemy/cause during the revolution, but then took years of debate for the constitution and years more for the bill of rights. Over time, we've forced more and more homogeneous (federal) laws. The more laws you pass, the more likely people are affected in the outgroups under the splits you mentioned and it compounds. All the concerns about states rights and small states being less powerful are still concerns for some groups of people today. We've essentially been eroding the initial status quo that had been agreed upon.
        • p3rls 2y ago
          Personally I think calling it a shotgun wedding is one of my best metaphors of the week and perfectly evokes what I was going for. Contemporaries from like Lincoln's 2nd inaugural of course would call it finer things, like a national baptism etc. but shotgun wedding captures the borderer element, too. I like it and stand by it.
• karmasimida 2y ago
  There is no American hegemony in this current day and age. Probably dead like 15 years ago. Say what you well regarding Trump, he understands this. Trump is a smart man to spot problems, but he surely didn't know how to do it in a way that doesn't lead to self harm. He crazes for a bombastic firework that demands for all and any attention. The US version of capitalistic economy has driven its internal inequality to the point the political system can no longer sustain it, while in the meantime, doesn't have an established social safe net, as major European countries have. So the populace elected Trump to root it up. It is absurd, it is ridiculous, but deep down it is logical. Weird and dangerous time ahead.
  • rokkamokka 2y ago
    I can't imagine any person having listened to Trump even once would in good faith claim he is a smart man
    • karmasimida 2y ago
      If he isn't a smart man, he can't be US president TWICE. Or being book smart is irrelevant. He didn't talk the way the political class prefers for sure, but it doesn't matter. I judge things by outcomes, even Trump doesn't lack any credentials.
      • stockerta 2y ago
        Trump isn't smart, he is an idiot, but an useful tool to others so they made sure he gets elected a second time.
        • hjgjhyuhy 2y ago
          Yep, people behind Trump are the ones we should pay attention to. They are the ones with long term plans.
      • lonelyasacloud 2y ago
        Rats and cockroaches are great survivors; neither are particularly smart.
• theropost 2y ago
  My take on all this is that everyone seems focused on the U.S. dollar’s dominance, the empire, trade deficits, and exchange rates. And sure, there’s some validity to that, but the real issue, or really the real goal, is getting people back to work. You might not see it, and maybe I don’t fully see it either, but as office workers, bureaucrats, and technologists staring at screens all day, we’ve lost sight of the fact that America no longer produces like it used to. Yes, there are still people out there working with their hands, feeding the country, and running small industries. But broadly speaking, the U.S. relies heavily on other countries for complex manufacturing — for actual building. Shipbuilding is just one obvious example. A lot of critical industries have withered to the point where they can't even meet domestic demand, let alone compete globally. Meanwhile, other countries are pushing forward in tech, producing better, more efficient, more productive products — and pulling ahead. It’s not happening all at once. It’s a slow decay. Generational knowledge industrial skills, trades, machinists are all fading. And when those go, the backbone of resilience and self-sufficiency starts to collapse. A nation that can’t produce can’t stand. Export power becomes a dream. And I think part of the issue is that we’ve become lazy. People don’t want to work anymore — they want things handed to them. Entitlements, bonuses, luxury homes, multiple cars, the works. But someone has to build all that. Someone has to maintain the food supply. Someone has to assemble the vehicles. Someone has to keep production alive. Yes, technology can help fill gaps, and we’ve done amazing things — and still do — but America’s edge in tech? That’s slipping away. China has surpassed the U.S. in key areas of advanced technologies, auto manufacturing, aerospace, and absolutely obliterating in shipbuilding. U.S. industry? Ashes in many places. So what’s the answer? Unfortunately, hardship. Nobody likes to say it, but raising prices and tightening the belt forces people to make hard choices. And when that happens, the jobs that matter won’t be office jobs or desk jobs — they’ll be builders, machinists, welders, factory workers. Producers. And those jobs will start commanding the wages. People who’ve been unemployed or living on subsidies will be pushed — or pulled — back into that kind of work. Slowly, painfully, maybe, but steadily. And maybe, just maybe, we’ll rebuild that base. Maybe industry will return. Maybe factories and production will grow again. That’s the end goal here; even if we don’t like how it’s being done. Even if it’s painful. Even if it doesn’t work the way it’s intended. Because maybe we’re not as strong as we think we are. Maybe we fail. It’s happened before — look at the USSR collapse. It was a fake economy built on fake production and apathy. They endured 20 years of hardship, and they’re still trying to catch up. So yeah, that’s where I think we’re headed. Is Trump the guy to do it? He’s doing it. Someone had to. Is it the right way? I don’t know. Is it going to work? No clue. Will we succeed? Who knows. Or maybe we just keep punting the problem further down the road; business as usual — until it breaks completely. But either way, the path forward is either a slow crumble followed by a rebuild, or a brutal reset with the hope of rebuilding something stronger on the other side. That’s just my two cents.
• weatherlite 2y ago
  > If trade stops occurring in US Dollar If I understand Trump correctly he wants a weaker U.S dollar to make American exports more attractive. I'm not sure though he wants it to become THAT weak that its on longer the reserve currency. However, simply abandoning the Dollar will prove quite difficult for many countries because there is no clear alternative (the Euro perhaps but it has a tiny market share currently) and also I'm certain Trump will threaten to remove American military support from anyone who dumps the Dollar - so Europe will probably stay, Australia, Canada, Saudi and quite a few more.
  • jsiepkes 2y ago
    > and also I'm certain Trump will threaten to remove American military support from anyone who dumps the Dollar - so Europe will probably stay, Australia, Canada, Saudi and quite a few more. Europe already has the mindset US military support is no longer a given. Europe is already re-arming. I wonder if additional threats by the Trump administration are going to make much of a difference. Even though it will take atleast half a decade to re-arm the main adversary, Russia, is currently in no shape to launch any kind of new offensive against a European country. > I'm not sure though he wants it to become THAT weak that its on longer the reserve currency. Intentions aside, with big moves like these the question will be how much control he has over what happens next.
    • weatherlite 2y ago
      > Europe already has the mindset US military support is no longer a given. Europe is already re-arming. As you said it will take at least half a decade (which sounds quite optimistic to me actually to go from barely any forces at all to independence) and then there are many more unsolved questions like where does Europe get all its energy from - Russia again? It will have to be a mix of U.S LNG and the rest I suppose from Arab/African countries. Or you could be right , and everyone will dump the USD - I think not though. Europe isn't in good shape as it is, I'm expecting more carefulness going forward. BTW - I'm not advocating for anything here, I have no personal skin in the game and I think Trump is a horrible bully. I'm just not certain he's a complete idiot yet.
  • 2y ago
• matt-p 2y ago
  Major question is then, what currency should be reserve? Euro? - Nowhere near as stable as the dollar, and some quite shaky fundamentals and history? Yen? Pound? Swiss Franc? I suspect Yuan will be unpalatable.
  • kragen 2y ago
    BRICS has been proposing a sort of basket mechanism. Bitcoin is not yet thickly enough capitalized. The historical standard was gold for 3000 years, and that's what backed the dollar until that was "temporarily suspended" in 01971. That's the default.
  • helloooooooo 2y ago
    IMF does have Speecial Drawing Rights that kind of, but not really, acts as a global currency
  • gizmo 2y ago
    The new reserve currency won't be a single country's currency but a basket of currencies, where the ratio contribution of component currencies gets adjusted every once in a while.
    • matt-p 2y ago
      Ok and who will administer the basket? I'm not saying it's impossible just a bit impractical perhaps.
      • rongrobert 2y ago
        It is just economically clueless people talking nonsense. Whatever basket we come up with has all the same properties that cause the Euro to not displace USD but worse. Much worse.
        • matt-p 2y ago
          Indeed.
• amunozo 2y ago
  It is a self inflicted damage. Do not blame anybody else that Trump and the people that chose him. Good luck Americans.
• giantg2 2y ago
  "because inflating our currency to pay for them could result in functionally not being able to import goods required to run our economy." You can't inflate your currency to payoff a debt that's due in in a different currency. As soon as you inflate your currency, the exchange rate changes.
  • nycdatasci 2y ago
    The US issues debt in dollars and repays those debts in dollars. The purchasing power of dollars can change due to inflation. If you suddenly increase the global supply of dollars by 2x, dollars that existed prior to the increased supply will be able to purchase less.
    • giantg2 2y ago
      That's true for domestic public debt. But in the scenario given by the parent where the dollar falls out of favor, it is assumed that we could be issuing public foreign debt in foreign currency. Even if it was still domestic currency, the FX rate would matter to the foreign investors. Interest rates matter. So does inflation. Money supply is less relevant than the actual inflation it generates. Most debt instruments rely on the interest rates that fluctuate based on monetary policy to combat inflation. Eg your interest on debt will increase as your inflation rate does. Even the world bank will jack up your interest if your currency has issues, such as rampant inflation.
      • munksbeer 2y ago
        > it is assumed that we could be issuing public foreign debt in foreign currency. That isn't how it works. You issue bonds, denominated in your own currency, and promise to pay the bearer of the bonds a coupon (interest) and repay the full amount (in USD) at the end of the bonds life. Unless I misunderstood what you're saying.
        • giantg2 2y ago
          There are multiple structures for foreign debt instruments, of which your definition is one. Even using your example, the "(in USD)" is the part that might change if USD falls out of favor as the context of this chain is discussing.
• omnee 2y ago
  The Trump admin wants to devalue the dollar substantially, enact protectionism and maintain its reserve status. I can see them succeed with the latter two, but with these actions, the world has no choice but to move away from the USD as the reserve currency. It will take many years, but whatever replaces it certainly won't be to the US's advantage.
• aa-jv 2y ago
  >The golden prize for America's enemies is to remove the US dollar as a global reserve currency. Its also the golden prize for America's victims, it has to be said. We can't keep propping up the USA as a moral position to aspire to, when that state continually gets away with mass murder and human rights violations beyond the scale of any other peer. The USA is the worlds #1 funder of terrorism, and violator of international law on the subject of war. So its not just about 'enemies'. Its really about victims.
  • hjgjhyuhy 2y ago
    Russia is the number one war criminal in the world. Of course now that Russia owns American leadership, we can partially blame them for American human rights abuses.
    • logicchains 2y ago
      The number of civilian deaths in Ukraine doesn't come close to the number of civilian deaths in Iraq, Afghanistan and Palestine caused by the US.
      • aa-jv 2y ago
        That is correct, and this is a terrifying fact to any American nationalist who believes their country can do no wrong, as evidenced by the downvotes of an absolute truth.
    • aa-jv 2y ago
      >Russia is the number one war criminal in the world. This is absolutely incorrect by sheer statistics, alone. Anyone making this claim is simply utterly ignorant of the actual statistics, and I challenge you to overcome that personal limitation. Russia has a long, long way to go to catch up to the +million murders done in Iraq, alone - where the USA has murdered 5% of Iraqs population with its wars (including the continuing deformed baby deaths as a result of the widespread distribution of depleted uranium all over Iraq). The USA is a major funder and supporter of the mass murder of Gaza - Gaza is just another Mosul, just another Raqqa .. Israel would not be getting away with mass murder if the USA hadn't set the precedent for war crimes and mass murder in multiple other theatres. Russia, too, follows the USA's lead and uses the USA's own prior inculpability for multiple illegal wars to justify its actions. This is why it is just so dangerous for citizens to allow their nations to commit war crimes and crimes against humanity, and allow those politicians responsible for such acts to go unpunished. This is why it is so irresponsible for the American people to allow their nation to degrade the capabilities of the International Criminal Court, and to fail to prosecute their own war criminals. Because, if you let your nation do it, you are giving carte blanche to any other nation in the world to do it too. And that is precisely why states such as Russia and Israel are wilfully committing mass murder - under the cover of the prior unprosecuted crimes of extraordinary magnitude committed by the American people and their representatives. If you want to do something effective about Russia and Israel, Americans, you must first prosecute your own war criminals and establish the international precedent for those prosecutions which can be used against Russian and Israeli war criminals, also. Leaving your own war criminals unpunished gives a free ride to all other nations, who will gleefully follow you into the madness - and have done so now, for 25 years of the utterly atrocious "war on terror", in which the American people gave themselves the ultimate right to destroy any state their callous rulling class - factually fundamentalist racists - decides is inferior to their own.
• theuppermiddle 2y ago
  Is not the US export higher if they take into account all the Software and software as service they sell?
  • inatreecrown2 2y ago
    was thinking the same thing. US is a giant in software.
    • EVa5I7bHFq9mnYK 2y ago
      Software is easily pirated. It is official policy in Russia now to pirate the software used by enterprises (like SAP, Autocad etc), to own the western libs.
      • noworriesnate 2y ago
        Not if its SaaS, which is where the world has been going for a decade now at least
  • deleted 2y ago
    [deleted]
• rafaelmn 2y ago
  This is why I don't get why my EU people are attacking Trump - he singlehandedly gave Europe political capital to rebuild itself as an independent player on the international stage. He created an environment where tighter EU integration might take precedence over petty interest squabbles. For example in what other scenario would Germany making massive investments in military be politically acceptable ? Even talking about military on EU level ? Framing this as purely a win for China and Russia is very partisan, this has potential for all non-US countries to get away from under US thumb long term and at least for that we should be grateful to mr. Trump, from his foreign policy it seems like he is not interested in those games as he views them a net loss for US. And the Greenland situation is showing us exactly what happens when you position yourself as leech on US military/NATO.
  • ddalex 2y ago
    Because the EU does NOT want Germany to arm, remember what happened the last couple of times ?
    • MrBuddyCasino 2y ago
      I'm not a history buff, are you alluding to anything?
      • lostlogin 2y ago
        Last century there was the big two, World War One and World War Two. If you go back further it’s more complicated, but the short answer is that Germanic states got into wars with their neighbours a lot. The Wikipedia article has categories. https://en.m.wikipedia.org/wiki/List_of_wars_involving_Germany https://en.m.wikipedia.org/wiki/List_of_wars_involving_Germa... https://historyguy.com/How_Many_Wars_Were_Fought_Between_France_and_Germany_Before_World_War_One.htm https://historyguy.com/How_Many_Wars_Were_Fought_Between_Fra...
        • switch007 2y ago
          To be fair, everyone was warring. War was normal https://en.wikipedia.org/wiki/List_of_wars_involving_the_United_Kingdom https://en.wikipedia.org/wiki/List_of_wars_involving_the_Uni...
• ta20240528 2y ago
  "The golden prize for America's enemies is to remove the US dollar as a global reserve currency." I would argue that for this to become even remotely possible, America's list of enemies must not automatically become everyone else's enemies too. that is to say: the USA's secondary statutes have to become ineffective. To do this, the EU's blocking statutes (to ignore secondary sanctions) have to be effective. Right now Europe's own companies just ignore the statutes to keep their US trade. To make the blocking statues effective, the EU's own research recommended fines/sanctions/bans/… on licences for foreign (read US) banks, and companies that ignore the statue and don't serve EU companies trading with sanctioned countries. But to do that, the EU would need alternatives to American services. Power and influence follow sovereignty. €0,02
  • chvid 2y ago
    The Chinese have alternatives to American services. Europeans could have too if we wanted.
    • deleted 2y ago
      [deleted]
    • sph 2y ago
      Unless you have a magic lamp, “wanting” is not enough to achieve effective change. What Europeans need is pragmatic governments and politicians. In fact it might be easier to find a magic lamp than an honest politician.
      • mtrovo 2y ago
        The TikTok case in US might be a good playbook for the future. Require markets that US based companies have a near monopoly and require them to divest on EU and onshore operations. You solve tech hegemony and tax evasion in no time.
      • chvid 2y ago
        US big tech companies are dominant because they are monopolies not because they are technological marvels. If we were to ban US social media, European alternatives would emerge very fast.
• virgilp 2y ago
  Does it follow that Yuan would replace USD? Could it be the EUR instead?
  • throwaway2037 2y ago
    The RMB does not float. It would be virtually impossible. More likely: EUR will share the title (more than ever) with USD.
• huijzer 2y ago
  > Ray Dalio's Principles for Dealing with the Changing World Order feels prescient Maybe Dalio is right, but a lot of his data was sketchy [1]. My personal theory is that Dalio somehow benefits from saying nice things about the Chinese regime. [1]: https://youtu.be/s1iv0q_SW3E https://youtu.be/s1iv0q_SW3E
• rayiner 2y ago
  > The golden prize for America's enemies is to remove the US dollar as a global reserve currency. Why is the reserve dollar good for Americans? Arguments in favor of reserve currency status make the U.S. economy seem utterly fake. It’s as if the world is paying us to maintain borders frozen in 1945.
  • Urahandystar 2y ago
    It stops them from having to address their national debt, has allowed for incredible spending and the arguably pushed humanity forward with the wonderful inventions. Without it, it will be interesting to see how the future unfolds.
• jmyeet 2y ago
  A lot of people fundamentally misunderstand why trade happens in USD and what creates demand for USD. For example, you hear people say that the US invaded Iraq because Iraq was threatening to denominate oil sales in the euro. This particular conspiracy theory used to be more popular ~20 years ago for obvious reasons. Even if true, it's absolutely no threat to the petrodollar. You could sell oil in euros and what would most sellers then do? Immediately convert those euros into USD. Trade occurs in USD because there's demand for USD not the other way around. What really underpins the USD is the US military and the US still being the largest economy. So the USD will remain the global reserve currency up until the US collapses and/or another power rises to displace it, which really means the same thing at this point. That might ultimately be China but it's not yet and the Chinese yuan is wholly unsuitable to be a global reserve currency currently.
  • pcthrowaway 2y ago
    > until the US collapses and/or another power rises to displace it, which really means the same thing at this point. That might ultimately be China but it's not yet I imagine the Euro is a contender also even though the EU it's not one homogenous power. > and the Chinese yuan is wholly unsuitable to be a global reserve currency currently. Curious why you say this? I was considering holding some EUR and CNY in the event that one of those becomes a replacement for USD
    • jmyeet 2y ago
      The euro isn't a contender for two main reasons: 1. Europe is still dependent upon the US military and, as a consequence, is beholden to US foreign policy; and 2. No unified fiscal policy. As for the unsuitability of the yuan, there are several reasons: 1. The yuan was once pegged to the US dollar. It's now pegged to a basket of currencies instead. This, by definition, makes China a currency manipulator because you wouldn't need to peg the currency otherwise; 2. The yuan is undervalued by this manipulation. It should really be more expensive, making China's exports more expensive. China does this to maintain their export competitiveness. If anything, increased demand for the yuan would be unwelcome as it would increase the pressure to appreciate the yuan; 3. China runs a trade surplus. It's basically inevitable that the country with the reserve currency will run a deficit; 4. The US running a government deficit is actually kind of a good thing for maintaining a reserve currency. China, for example, holds trillions in US government bonds. Do you really think they want to upset that apple cart?
• darthrupert 2y ago
  >The golden prize for America's enemies is to remove the US dollar as a global reserve currency. At this point, who is *not* America's enemy?
  • WinstonSmith84 2y ago
    Maybe Russia, that's the only country which has not been slapped with tariffs. Apart from Russia, there are nuances. There are peaceful enemies like the EU, Canada, Australia etc. and there are threatening enemies like the Houthis or Iran.
• atmosx 2y ago
  To add to the comment: If you want to be the capital of an empire, you have to act like it—like Troy, Rome, or Constantinople—meaning you run deficits and play buyer of last resort. When you are no longer that, the empire has indeed collapsed. Relate: https://www.washingtonpost.com/archive/opinions/1998/08/18/the-buyer-of-last-resort/055b2b02-0a30-48cb-916d-648b9ab8290e/ https://www.washingtonpost.com/archive/opinions/1998/08/18/t...
  • rayiner 2y ago
    [flagged]
    • deleted 2y ago
      [deleted]
    • sgt101 2y ago
      It's not like they're the controlling power behind the scenes of the international hedgemon. They're a person commenting on HN. Calm the drama.
    • aqme28 2y ago
      I don’t get your point. Should Americans not want to improve the position of America? Make America Great, so to speak?
      • rayiner 2y ago
        Maintaining an empire will destroy your society in the long run. What’s good for America in the long run is a country populated by americans, producing and consuming goods and services made by other americans within the umbrella of the same democratic polity.
        • Pigalowda 2y ago
          Is that from the protocols? What would you know about society and empire? You’re just some dork on the internet too much.
• AlexandrB 2y ago
  > Our debts would suddenly become existential because inflating our currency to pay for them could result in functionally not being able to import goods required to run our economy. Can you elaborate on this? Every other country does not have the luxury of having its currency be the reserve currency but still manages to both inflate that currency when needed and import good just fine.
  • op00to 2y ago
    If America's reserve status goes, they will face the same constraints, except with way more debt and far less experience managing currency risk.
  • vonzepp 2y ago
    If India buys a widget off Brazil it will probably be paid in dollars. Therefore, people need to own dollars. Thus a demand for US debt. This lowers the potential interest rate. Other countries who's currency is not a need for people to buy, their debt is purchased by the attractiveness of its offering (i.e interest rate). If US dollar is no longer required than government bonds have to be attractive. Also, not all sovereign debt is issued in the home countries currency, which means that the printing press doesn't help. US debt is very large, interest repayment are close to military spending. Without the reserve currency that would get worse. Something like 68% of world holding is dollar 17% Euro, nothing else of note. The other side is that as there is a demand for dollars. The value of the currency is higher than if it wasn't which increases the price of exports and reduce price of imports. Trump might want to weaken the dollar.
• api 2y ago
  When the history is written I think the Citizens United decision might be pegged as the end of the American republic. It allowed endless amounts of dark money including foreign money to pour into US elections. In any case, I think we're seeing the beginning of the Chinese century.
  • alabastervlog 2y ago
    1) Chicago-school interest groups successfully putting people on courts and in the legislature to all but completely eliminate anti-trust enforcement, starting in the '70s. TL;DR policy used to be that a company holding too much market share was per se bad for the country and that the government could act on it, the shift added more tests making it slower (so, also more expensive) and harder to successfully enforce anti-trust, so much so that we all but stopped doing it. 2) Failure to send Nixon to prison. 3) Loss of the Fairness Doctrine under Reagan. 4) Failure to send a whole list of Reagan's folks (and maybe Reagan) to prison over Iran-Contra and other misdeeds. And those same names keep popping up, making things worse for the '90s and '00s. This was a huge mistake. 5) The Democrats totally surrendering economics policy to a newly farther-right [edit: more accurately, a set of policies championed by a certain set of pro-capital right wing interests—we recently saw this totally overthrown by right-populist policy, when Trump took over the party in 2016, which was the most remarkable development in US party politics since the '80s] Republican view, in the '80s, and adopting basically the same policy. This set the stage for the current backlash, because this all-in neoliberal shit was never popular, but persisted because both parties supported it. 6) Loosened media reach ownership rules in the early '00s. 7) CU 8) Nobody at any point finding a way to dismantle the Heritage Foundation and Federalist Society (if you're wondering "how", it seems the NRA had been doing all sorts of illegal shenanigans for a loooong time—I'd be absolutely floored if these two don't have some big ol' skeletons hanging around) 9) We all watch a coup attempt live on TV (re-watch some of the news footage if your memory is fading, it remains shocking) and then the Biden administration dicked around during the six months or so when it might have been possible to go after the leaders of it. 10) The Internet putting intense pressure on the news media, leading to even more profit-focus than before (and see also the loss of various controls above) with nothing done to try to mitigate that. 11) Extreme centralization of control of the narrative online under a handful of platforms (and the narrative is "whatever gets us more eyeballs", see again #11) and nothing done to fix that.
• melenaboija 2y ago
  What still baffles me is how people act like this was some kind of thoughtful decision. When you put someone incompetent in charge of a country, a company, or a sports team, collapse is inevitable, no exceptions. We’ve seen it play out over and over again because of stupid choices only driven by ego. Now it’s the US’s turn
  • varispeed 2y ago
    I wonder how much more evidence American people need to see Trump for being a Russian asset and working against US interests. We are in treason territory.
    • dmschulman 2y ago
      Russia noticeably absent from the global and per-country tariffs
      • ImJamal 2y ago
        Trump is allegedly planning on sanctions against Russia if they do not agree to his peace plan. Trump just added some additional sanctions on Russia for helping the Houthis. Sanctions seem worse than tariffs to me, but I'm not an expert. https://www.reuters.com/world/us/us-sanctions-russia-based-network-helping-yemens-houthis-2025-04-02/ https://www.reuters.com/world/us/us-sanctions-russia-based-n...
        • varispeed 2y ago
          He didn't add sanctions on Russia, but on people dealing with Russia - that's a different thing. But notice how people talk now - Trump might say he is "planning" something against Russia and people take it as a proof that he is not an asset. They forget about concept of sacrificing something to gain advantage. If heat turns to much on Trump, they might let him disrupt something and then run propaganda that Trump isn't bent. Until he makes next move massively benefitting Putin. Seems like they can be doing this over and over and general public will see it as Trump just navigating difficult geopolitical landscape and that we should "trust the process". etc.
• tw04 2y ago
  I’m past the point of thinking people are just being crazy or paranoid. Any baffling move this administration makes, I just ask myself: what would Russia want? And without fail, it explains the unexplainable. This move is a prime example. This doesn’t help the billionaires in America, it doesn’t help ANYONE in America, but is sure is a massive bailout to a Russian economy that was on the verge of collapse.
• DebtDeflation 2y ago
  > Since trade is conducted largely in USD, that means other governments must purchase USD to trade. This is just one facet of a broader point. When people talk about a "trade deficit" what they are really talking about is what's known in Economics as a "Current Account deficit". When discussing international trade and Balance of Payments, there are two accounts - Current Account (goods and services flow) and Capital Account (asset and liability flow). By definition, the two must net to zero. That's not an equation, it's an identity. If you have a Current Account deficit then you have an equivalent Capital Account surplus. It works in both directions. For example, foreign direct investment into another country in the form of a loan leads to a flow of funds into the country (Capital Account surplus) and then those funds are used to buy things (import) from the first country or other countries, leading to a Current Account deficit.
  • tootie 2y ago
    I was just thinking about this and I'll bet you anything that Trump is 100% hung up on the word "deficit" and that's about it. If we said "net importer" or "goods taker" or something like that we would not be in this situation.
    • hollerith 2y ago
      Good one. Trump doesn't want anyone to be able to point to any deficit in anything Trump is in charge of :)
  • sethammons 2y ago
    How does this impact consumables? The capital doesn't balance, it disappears but the money used for it still exists
• data_marsupial 2y ago
  They don't need to hold USD long term to complete transactions. Transaction demand does not explain why the dollar is the global reserve currency.
• bko 2y ago
  I agree tariffs are harmful and counterproductive, even if they're applied by the other side. My only hope is that this is part of some grand bargain where other countries reduce theirs on US goods and things reach a more balanced equilibrium. It is interesting to note that none of this panic applied when US trading partners imposed tariffs on US. But if this is part of a larger shift in terms of funding the government, I would be somewhat open minded. For instance, if instead of taxing income, we had tariffs that play a role of basically a sales tax, I think that has some benefits. For one, I think tax policy should encourage productive work (income) as opposed to consumption (sales). So a shift from income to consumption taxes would be a positive development. You can make adjustments so that its progressive (i.e. tax credits to cover the first N dollars in consumption tax). The big problem is the geo-political effect less trade might have and the effect on the markets.
  • wkat4242 2y ago
    > My only hope is that this is part of some grand bargain where other countries reduce theirs on US goods and things reach a more balanced equilibrium. The thing is that we don't. That 39% Trump claims Europe is levying on US goods? It doesn't exist. I've heard they include VAT in this which makes no sense because it applies to all goods including those made locally. That is not a trade tariff. It's just internal taxation. However I've also heard they calculated it with the trade deficit (which in itself makes no sense, it's not a tariff) but in the case of the EU that makes even less sense as Trump always quotes the deficit on goods, but ignores the deficit on services (eg IT) which is highly in favour of the US. Also when I hear people say "they don't buy American cars in Europe", we do have American brands like Ford and Tesla. Ford just sell smaller models designed for our market here. Those big SUVs and pickups are not suitable for our traffic or environment.
    • bko 2y ago
      I agree that if it was part of a grand bargain it wouldn't be so large, which makes me think its either just an insane opening play or it's being used to change how the US funds itself (the second part of my response)
    • 2y ago
• ericmay 2y ago
  > It is the definitive end to it, and the birth of Chinese hegemony. I think you’re spot on about the risks of the tariffs (I’m not really sure where I stand on them today), but your arguments don’t produce this conclusion. China is far more protective of its markets, nobody has or will have any interest in trading in any Chinese currency, and tariffs from not just the US but other nations will continue to exacerbate existing problems at home for China. Companies like Temu came into existence because global pullback on purchasing Chinese manufactured goods is resulting in job losses, and instead of having factories go under the Chinese government would prefer to sell products that very quickly fall apart or are built extremely cheaply or with very poor environmental practices to at least get some money. Further, while these tariffs seem questionable and everyone is piling on Trump (which is deserved, with prejudice, in my mind), let’s not pretend that the EU, Japan, and others are saints here. They do enact trade barriers to protect their own domestic industries as well. On the tech side for example there’s simply no argument that the EU is fining US tech companies just because they happened to enact policies and rules that the US companies break all the time. Some portion of that is a shakedown or a form of a trade restriction.
  • Spooky23 2y ago
    The narrative with the president is about us vs them. The problem here is the enemy is within. The EU may be awful, Japan may be an unfair partner. But when you play with a handgun and shoot yourself in the foot, that’s on you.
• layer8 2y ago
  One thing I don’t understand here, genuine question: If, hypothetically, US manufacturing was to become so competitive that the trade deficit would go away, would that have the same disastrous effects for the US dollar as a trade/reserve currency? Or how would that work?
  • bluGill 2y ago
    US manufacturing is better than it ever has been by all measures except number of people working in them. This means that there isn't much need for someone to get good at putting a nut on a bolt and other such mindless work that is skilled only in that with a lot of practice you can get really fast as doing it. People who don't want to spend a lot of years in school are thus not doing very well because there isn't much need for people who don't want to use their brain.
    • buu700 2y ago
      Not all measures: https://www.marketwatch.com/story/this-chart-shows-the-dramatic-shift-in-global-manufacturing-over-30-years-the-u-s-isnt-at-the-top-37b6f62b https://www.marketwatch.com/story/this-chart-shows-the-drama.... It may not have declined in absolute terms, but it still hasn't kept pace with the rest of the economy.
  • treis 2y ago
    It's impossible for both things to be true. For the dollar to be the reserve currency countries need to accumulate dollars. They can't do that unless more dollars leave the US than come back. The problem is that countries don't just take the dollars and sit on them. We're on the third iteration of solving this intractable problem: Try 1 was gold. The US was running out of gold and Nixon had to end redemption of dollars for gold. Try 2 was assets (think the Japanese buying everything in the 80s). That was unpopular and the Plaza Accords put an end to it with significant damage to the Japanese economy Try 3 is government debt. But it's the same fundamental problem. The US isn't ever willingly going to give back assets for this debt. Everyone agrees with the polite fiction that the US will and so things are fine. But if they ever expect actual stuff for that debt it will all break down again.
• belter 2y ago
  > The golden prize for America's enemies is to remove the US dollar as a global reserve currency. There you go... "Deutsche Bank says risk of a dollar confidence crisis" - https://www.reuters.com/markets/currencies/deutsche-bank-says-risk-dollar-confidence-crisis-2025-04-03/ https://www.reuters.com/markets/currencies/deutsche-bank-say...
• nilkn 2y ago
  This comment is good, yet it also reflects a lot of what I dislike about political discourse online. You've identified a potential severe negative consequence of a change or new policy, but you write as if this is a guaranteed logical corollary and there is no scenario where this consequence does not materialize. This creates an alarmist rather than genuine and analytical tone. Describing tariffs as a "decapitation strike" feels hyperbolic and even perhaps conspiratorial. Saying this guarantees Chinese hegemony is exaggerated and ignores all the other equally (if not more) significant factors influencing both American and Chinese trajectories. Applying Dalio's broad thesis to tariffs specifically is a stretch -- tariffs may exacerbate tensions Dalio describes, but they aren't necessarily the coup de grace to hegemony. Basically, you're highlighting real risks and issues, but packaging them in language that overstates their likelihood and doesn't take into account any other factors at play simultaneously. If your goal is to paint a doomsday picture of the future, this works well. If your goal is to understand the impact of tariffs on the world, there's too much emotion and speculation and not enough hard analytical work here.
  • mberning 2y ago
    Yeah, the whole "decapitation strike" talking point betrays a serious bias. It also implies something which no evidence is provided for. The idea that foreign actors got someone elected, then managed to get that person to implement a specific strategy that rapidly destroys the dollar as a reserve currency, all for the benefit of the foreign actor, is quite the stretch.
• netbioserror 2y ago
  The entirety of this scheme, in its soft and hard power forms, was financed by the parasitic impoverishment of the US populace. Everything the commenters on this site complain about: Runaway inflation, unaffordable housing, extreme financialization, excessive military budget, enrichment of the top, unaffordable healthcare, unjustifiable wars, all of it has partial or total roots in the money printing, artificially low interest rates, colossal trade deficits, and military adventurism that underpin the global US dollar reserve scheme. I think it apt to boil it down to a binary choice: Either we give up our global empire and allow the multipolar paradigm to emerge for the chance at domestic prosperity, or we grip the iron to the bitter end and force the entire country to become the dystopic open-air homeless cities of the west coast.
  • fullshark 2y ago
    Why is it a binary choice? This is just reductive. The idea that we couldn't maintain American hegemony and return more of the benefits of it to the middle/lower classes seems silly. This is about tearing down a system / world order that a lot of people are angry about, with little thought to how to replace it and make it work for the citizens. The global economy has changed, manufacturing capabilities in the west will never be competitive again for a wide variety of products, and those jobs are not ones that regular Americans want anyway. Just like they don't want the farming jobs that illegal immigrants are doing. This vision to essentially return America to a idealized view of 1900 is in for a rude awakening.
    • netbioserror 2y ago
      A wild claim, and then zero explanation as to how it would work, plus the same old tired talking points. If you're trying to convince the populace NOT to democratically give up the global empire, this is a poor attempt.
  • tinyplanets 2y ago
    "The dystopic open-air homeless cities of the west coast"? Hyperbolic much?
• tiahura 2y ago
  The world disagrees with your assessment that this is going to be bad for the dollar. See recent movement of 10Y.
• fosk 2y ago
  To be fair this strategy will work if other countries cannot tolerate tariffs for long enough to come up with non-USD trade that is accepted by everyone. Which to be fair may take them a very long time. If they fold and remove tariffs on the US (so the US can drop the tariffs on them) before coming to an agreement because the economical pressure of tariffs is too high, then this will result in the largest market expansion the United States has ever seen. My point is: yes lots of negatives can happen, but let’s also look at what happens if it works out so we are intellectually honest about what’s going on here.
  • tremon 2y ago
    (so the US can drop the tariffs on them) That would require other countries trusting the promises of the current administration, yes? How much credibility does the Orange One have on the world stage?
  • runako 2y ago
    > If they fold and remove tariffs on the US The issue with this is the "reciprocal" tariffs that were announced are not related in any way to tariffs imposed by other nations. According to the administration, they set the tariff rate for each country as (trade deficit / (imports * 2)). Obviously the country in question cannot undo this even by zeroing all tariffs with the US, because none of this is based on tariff rates.
    • bitshiftfaced 2y ago
      It's not really only about tariffs. It's about the net effect on all barriers of trade, such as currency manipulation, subsidies, regulations, etc. The formula (trade deficit / (imports * 2)) means that countries actually have to address the root of the problem and prove it before the US reduces their tariffs.
      • yojo 2y ago
        Having a trade surplus doesn’t mean you’re cheating. If I make products better/cheaper than you, I’m going to sell more to you than you are to me. Ditto if I have some valuable resource you need that represents a large share of my economy. The fact that you need my germanium more than I do doesn’t mean I’m ripping you off.
• ratedgene 2y ago
  It makes sense why Trump's family is investing opportunity into crypto like "American Bitcoin" -- they want to separate themselves from the dollar.
• roflyear 2y ago
  It is not correct that an Asian business doing business with a Italian company first exchanges their currency to USD by selling the US goods then using that USD to complete the transaction. I agree with you that the current situation in the world really benefits the US and the current policies seem to undermine that.
  • csomar 2y ago
    > It is not correct that an Asian business doing business with a Italian company first exchanges their currency to USD by selling the US goods then using that USD to complete the transaction. The only way around that is the EUR. Otherwise, most countries have very little connections to one another. Even neighbors will trade with USD and settle in New York.
    • roflyear 2y ago
      I think the dollar is around 50% of foreign trade - but anyway I am not arguing against that, I'm saying that it isn't related to trade deficits.
• csomar 2y ago
  The real traitor is Biden who handed the presidency to Trump and only cared about covering himself and his family asses. I think that was the point where you realize the democrats have just given up and did their part of selling the country. Some people must be now moving Bitcoin, Gold and other valuables out of the country before the big unveiling kinda like what happened with the soviet union. I have made a post about this after the election that got flagged: https://news.ycombinator.com/item?id=42755700 https://news.ycombinator.com/item?id=42755700 If you are still unconvinced that big fundamental changes are happening: https://goldprice.org/ https://goldprice.org/
• badpun 2y ago
  > Since trade is conducted largely in USD, that means other governments must purchase USD to trade. This is the core of trade deficits. Foreign countries buy US dollars so they can trade with other people. That guarantees the deficit since they give us something in exchange for USD I'm not convinced it works like that. When a foreign country buys something from another foreign country using USD, the seller country then receives that USD. The seller country then use those dollars do buy something else from a third country - unless they have imbalanced trade and keep accumulating the dollars, like China does. But, in general case, there's only a need for a limited number of USD in circulation to serve as "working capital" for all foreign exchange. There's no need to keep getting new dollars, as the old ones get recirculated.
• stef25 2y ago
  The only other currency that comes to mind for global trade is the Euro but even that seems impossible?
  • mkoubaa 2y ago
    BTC
• coliveira 2y ago
  I said before that Trump would be the Gorbachev of the USA, if he knows it or not. He is dismantling the system under the disguise of reforming it.
• IX-103 2y ago
  Yes, but it's even worse than you think. As these countries move away from the dollar, there becomes a glut of US dollars in the world, triggering inflation like we have never seen before. Ignoring the barriers to trade that the tariffs represent and what that will do with our productivity. Ignoring the additional cost of an uncertain market future (because all decisions are made from the gut and could change tomorrow). The massive stagflationary impact of foreign countries unloading the 75% of US dollars they hold would effectively kill them US economy. The tariffs wouldn't even matter because you effectively couldn't give US dollars away -- they'd be worthless internationally. No one that is not rich could afford to import anything.
• wesapien 2y ago
  God damn you nailed it. All the stupid wars for nothing. Rarely do I see anyone talk about these shenanigans as the mechanism to end the reserve status of the $ and the end for influence and affluence. It will breed a lot of resentment from some Americans thinking the world is against them. They could be used for war.
• glitchc 2y ago
  I believe that's Trump's plan. According to the Triffin Dilemma, the source of US budgetary deficits are due to the USD being the world's reserve currency. Once that's not the case, trade should rebalance to a healthy surplus.
• dcow 2y ago
  I quite like the idea of our debts becoming real. Then we can’t live in the dishonest fantasy where we just print money and ignore debt anymore.
  • beams_of_light 2y ago
    I assure you that the fantasy of this being a band-aid rip-off moment will turn sour when the sore becomes infected and you're living through a depression.
• kamaal 2y ago
  >> Foreign countries buy US dollars so they can trade with other people. That guarantees the deficit since they give us something in exchange for USD, which they do not then spend on goods we make. This is called Triffin Dilemma- And in many lies at the core of the most basic question every power in history has faced. That is- You can either be a Geo Economic Super power or a Geo political Super power, You can't be both at the same. You have to chose to be one. China seems to be chosing the former. USA chose to be the latter, but can't seem to be sure about its choices so far.
• mock-possum 2y ago
  I don’t get why it matters what currency people use - all currency is exchangeable, isn’t it? What does it matter if you buy something for dollars or pounds or euros or yen? If I’m buying 1 barrel of oil for $100, does it matter whether I convert my USD into 150 of this currency or 50 of that currency, according to the current exchange rate, before I pay? I still get 1 barrel of oil, and the seller still received an equivalent to $100 in exchange?
• robertlagrant 2y ago
  > This is a decapitation strike (Timothy Snyder: Decapitation Strike -- https://archive.is/1xkxK https://archive.is/1xkxK) on America by our enemies Decapitation Strike seems to be not a general principle that is applying here, but the title of a specific polemic against the Trump administration. Just mentioning for clarity, as it sounded like a general thing warned about in past times that's applicable here.
• shirro 2y ago
  > The golden prize for America's enemies is to remove the US dollar as a global reserve currency. I think it is misleading to speak in terms of enemies even if that plays to the fears of US isolationists. It is good rhetoric but I think it obscures the truth, There was a time when the stability and strength of the US made the dollar a good choice for friends and enemies alike. The world is changing and the current US administration is accelerating some of those changes. China is going to play an increasing role as the US turns inward but I doubt they will ever replace the US dollar as a reserve currency. The Euro is the second most held currency after the dollar and there are probably a few others ahead of China.