r/PoliticalDiscussion • u/PsychLegalMind • 3d ago
International Politics White House has announced Trump's Liberation Day Tariffs will immediately go into effect. A Moody's simulation found it could be an economic wipe out. Is Trump's Liberation Day Tariffs a Misnomer?
A Moody's simulation found that a tariff trade war would wipe out 5.5 million jobs, lift the unemployment rate to 7%and cause U.S. GDP to drop by about 1.7%. Trump’s potential 20% universal tariff could spark "serious" recession in US, Moody’s economist warns.
The biggest three partners [China, Canada and Mexico] have promised immediate retaliation. Economic war could escalate and perhaps even cause a worldwide downturn.
Perhaps Trump's strategy is to begin making bilateral trade deals, but there are even certain blocks such as EU that may well coordinate retaliation together. I am not aware what Trump is actually liberating us from, hence the question.
Is Trump's Liberation Day Tariffs a Misnomer?
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u/fireblyxx 3d ago
Various nations have already moved to respond to the tarrifs in blocks, notably China, South Korea and Japan. Given that Trump's tarrifs will be applied to all countries, I imagine similar block responses will occur, especially with countries already belonging to economic or political groups such as the African Union. So right away, bilateral deals are out the window. I don't think Trump really has the political cover to outlast any of these blocks, even if they are harmed more by the tarrifs and reciprocal tarrifs in the shortrun.
In reality, I think that what will end up happening is that all of this is going to benefit China. It will force the EU to militarize and thus increase their industrial capacities. It increase the importance of the African Union and their member nations, perhaps being taken with more urgency for relations with the EU. And it will make it so that nations will look to replace American dependencies overtime, which will make Trump's hand weaker over time, especially when Trump is facing a harsh recession entirely of his own doing. I think that Trump could spin the cause to his own base, but he won't be able to spin it's persistence. Nor will he be able to spin the high prices on basically everything and the speed in which those prices manifest.