The United Kingdom has a lot to celebrate. After all, since he announced his tariff on Wednesday (2), he has ceased to be the dumbest geopolitical suicide in a rich country in recent decades.
Trump spoke holding a bar table that listed, in a column, how much each country charged from US products charges; In the other, what tariffs, from now on, they would charge them.
It was soon clear that the numbers in Trump’s table had not been calculated by economists, but extracted by proctologists.
The numbers were not the rates that each country charged, but the result of a mathematical formula that is not in economy books for the same reason as the phrase “Blagabuuuu!” It is not in “Hamlet”: it is an account that makes no sense. It’s just a random overlap of international trade -related numbers without any economic sense.
Economists have no idea where Trump has taken the crazy formula, but computing people have their suspicion: it is similar to what you get when you ask one of those artificial intelligences available to the general public, such as: “How to solve the problem of the American commercial deficit?”
That is, in the coming years the world economy will be regulated by the equivalent of those images generated by where the subject has a third arm coming out of the ear.
In recent decades, the United States led the ideological project of globalization. They got rich with it, as they have a highly competitive economy – which explains their low tariffs. Globalization allows large American companies to produce where it is cheaper, with the cheapest inputs and labor. The delay of a country like Brazil in recent decades is largely explained because we cannot insert ourselves into these international productive chains.
On Wednesday, Trump told a story where the US was prosperous until the early 20th century, when they had no income tax, but had high tariffs. The end of the tariffs would have led to the 1929 crisis because, I don’t know, Blagabluuuu. After the crisis, according to Trump, the US would have tried to return with the tariffs, but it was too late.
It’s all a lie. In fact, the resumption of tariffs after the 1929 crisis, known as the Smoot-Hawley tariff, caused a protectionist race around the world. In the opinion of 10 among 10 experts, smot-hawley seriously worsened the effects of the 1929 crisis.
The Economist magazine called Wednesday’s tariff “the deepest, harmful and unnecessary economic error of the modern age.” All American economic indicators collapsed after the announcement. Large American companies, whose production chains are spread around the world, have lost billions of dollars in market value. Shockingly, the dollar value fell in a moment of global turbulence. In general, the opposite happens.
Trump’s “Make Smoot-Haw-HawaT Again” will make Americans poorer and can generate a new worldwide crisis a few years after the end of the pandemic. But at least no one else will have to learn the right pronouns of trans.
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