alt Hacker NewsTo 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.
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(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?
British tariffs come to a weighted value of 1.02%. That's what the US is worried about, 1.02%. Seriously.
> If they fold and remove tariffs on the US
Part of the problem is that Trumps's definition of tariffs doesn't make any sense. VAT isn't a tariff but according to Trump it is.
Does he seriously expect other nations to just get rid of VAT? Or somehow replace it overnight with some other system all just to appease the US? Because that's the only way you can lower 'tariffs' to zero.
It just won't happen and we'll be in a continual standoff until Trump concedes that trade barriers are not in fact a good thing for anyone. He'll never admit it, but it wouldn't surprise me at all if the illusion of a 'deal' is struck in order to save face and reverse this mess once it becomes clear it's not sustainable unless you want to shrink your economy and destroy others at the same time.
> 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.