Pensez le Futur.

It not tariffs it's a cost on trade deficit. 87

Tariq Daouda, 13 h.
1 min de lecture.

It not tariffs it's a cost on trade deficit.

Tariq Daouda, 13 h.
Trump tariffs are not traditional tariffs, because they are indexed on the US trade deficit. Historical, tariffs have usually been either as a way to protect internal markets, get revenue for the government by indirectly taxing the population or both. They have also been used as punitive measures. A tariff is both a tax on outside goods, and a subsidy to the internal market. As such they are either seen as distorting the market, or a way to put a price on not been able to produce something internally. However, this new form of tariffs tell a different story, they are blanket tariffs based on the general trade deficit that the US has with different countries. Which means they go up and down with the trade deficit, that alone makes them function differently. How they will impact the global market remains to be seen. From a strictly optimization (the mathematical discipline) perspective, the most likely outcome, after a period of instability, is a general lowering of US trade deficit, mirrored by a lowering of reciprocal tariffs leading to an increase in trade and GDP. This of course does not take into account specific geopolitical sensitivities and the complexity of the potential readjusting in regulations, fiscal policies and otherwise that countries may have to do lower their trade deficit with us.

It not tariffs it's a cost put trade deficit.

Tariq Daouda, 13 h.
Trump tariffs are not traditional tariffs, because they are indexed on the US trade deficit. Historical, tariffs have usually been either as a way to protect internal markets, get revenue for the government by indirectly taxing the population or both. They have also been used as punitive measures. A tariff is both a tax on outside goods, and a subsidy to the internal market. As such they are either seen as distorting the market, or a way to put a price on not been able to produce something internally. However, this new form of tariffs tell a different story, they are blanket tariffs based on the general trade deficit that the US has with different countries. Which means they go up and down with the trade deficit, that alone makes them function differently. How they will impact the global market remains to be seen. From a strictly optimization (the mathematical discipline) perspective, the most likely outcome, after a period of instability, is a general lowering of US trade deficit, mirrored by a lowering of reciprocal tariffs leading to an increase in trade and GDP. This of course does not take into account specific geopolitical sensitivities and the complexity of the potential readjusting in regulations, fiscal policies and otherwise that countries may have to do lower their trade deficit with us.