This is like shooting yourself in the foot to splatter blood on your opponent. It "works" in a sense, but is about the stupidest approach possible.
There's a reason the dollar weakened in this crisis instead of strengthening like usual. Everyone can see that the US will be hurt far more by this idiocy than other countries will.
The US has crashed its own stock market, tanked its own government's approval ratings, and had its own business leaders speak out against the government. This definitely does not increase leverage.
Was the plan to incentivise Korea, China and Japan to work together? You know you've screwed up when bitter rivals decide to cooperate together.
Every government that has to do something undesirable to their citizens have been given something to blame: a beautiful excuse that will be milked relentlessly to the disadvantage of the US.
Businesses get screwed by flaky management - and now we get to see the US get screwed by its unreliable self-centered Prez.
Even countries like Singapore, hit with a 10% tariff (marginal, and far lower than most countries) absolutely panicked.
Interestingly, I looked up the size of consumer markets - the US is twice the size of the next biggest market, the EU.
So I don’t blame countries for panicking.
And if you’re really conspiratorial, one could question whether the push for free trade was really an attempt to put the US into a situation where it had leverage against most of the globe.
With the bounce back the Dow Jones lost 400 points. For comparison, the German DAX lost 900 points, but is only half the size. It is a reckless and probably counter-productive strategy, but I do think Trump will be able to extract short-term benefits from a number of countries. I just hope the EU will finally decrease reliance on the US going forward. Our extreme reliance on US tech and defense makes us easy marks.
"I bought $200 worth of stuff from your store and the store bought $0 worth of stuff from me. To punish them, I'm going to pay myself $100 every time I buy anything from the store in the future - that will show them!"
He only has political leverage over Congress. If they chose to act, they could stop him. Seems weird to kick off negotiations with them by inflicting damage on their constituents.
