Three things about Trump's Liberation Day tariffs:

1. are they merely transactional? will concessions mean they'll be reduced/abandoned?

2. Trump is acting as if the US still controlled a large proportion of global trade; it doesn't, its around 13% of international trade (by value); which implies

3. If rather than retaliate, other countries' firms re-focus on regional markets (& states maintain free[ish] trade in those blocs], the harm may in the end be focussed on the US!

#trade #economics

@ChrisMayLA6 exactly. The worst thing all other governments can do is reciprocate the tariffs. I feel like this is one of those cases where the only winning move is not to play. Or at the very least, to not accept the premise of the game.

Tariffs mean US buys less steel from the EU? Fine, let the EU buy that steel instead by funding massive infrastructure projects like railways... Etc...

This feels so obvious to me. I wonder what I'm missing.

@quixoticgeek @ChrisMayLA6 Many EU governments will have no choice judging by the level of pissed off involved. Even in the UK Starmer is beginning to get beaten up for appeasement

Overall though my sense is the same - Trump is going to make everyone else work on trade agreements without the USA. There's not a lot of physical goods the US produces that anyone actually needs any more.

And multinationals won't care. Just like last time, shuffle who supplies whom to minimise and done.

@quixoticgeek @ChrisMayLA6 Keynesian policies are out of fashion but aside from that, you're not wrong.

@cstross @quixoticgeek @ChrisMayLA6 very cool that the economic future and stability of the world may be destroyed because a proven economic policy is now out of fashion for some god forsaken, neoliberal shaped reason

@ChrisMayLA6 I think they’re a loyalty test.

Trump is operating like a mafia goon. If you buy into his protection racket, he’ll give you relief.

@etchedpixels @quixoticgeek @ChrisMayLA6 Why is "retaliate" bad option? Seems like prisoner's dilemma to me, and retaliation is crucial there.