PNN – In an article, CNN, citing experts’ warnings about the widespread consequences of tariffs, described the result of Donald Trump’s inflexibility towards this policy as very unpleasant.
According to the report of Pakistan News Network, this American television network: The chaos and fear caused by the imposition of tariffs last Wednesday, which Donald Trump called “Freedom Day,” has heightened his insistence that the American economy is being victimized by competitors who seek to destroy it.
Trump threatened China with 100 percent tariffs on Monday, while announcing his readiness to hold talks with Japan and Israel to discuss tariffs; a threat that, according to CNN, could lead to sharp price increases for American consumers, especially in products such as iPhones, computers, and toys. He also called the European allies “former friends” and “very stubborn enemies” with whom, in his opinion, a fair agreement cannot be reached.
CNN cited these cases and argued that this has frustrated some observers, including a group of Republican senators who are trying to create leverage to improve trade conditions for the United States.
This American media outlet has viewed Trump’s inflexibility as increasing risks that could lead to a loss of confidence in the global economy and runaway inflation, or even, as billionaire investor and Trump supporter Bill Ackman put it, a “nuclear economic winter.”
According to the author, although Trump may be forced to change course at some point due to the economic and political consequences of this decision, in any case, the current situation is a daunting equation and everything depends on how much Americans are able to bear the consequences of this.
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CNN has cited these cases to argue that Trump’s ideas make sense only based on his own internal logic and contradict accepted economic theory, expert advice, and reality.
Regarding the European Union’s proposal to reduce tariffs on cars and industrial goods to zero, the US president added: The European Union has been very tough over the years. I always say that this union was formed to hurt the United States on trade.
Is Trump’s vision for bringing factories and large-scale industrial production back to America realistic?
Trump is calling on big companies to bring manufacturing back to the United States by building factories in the country, a plan that will certainly last beyond his presidency and more than a decade. On the other hand, it should be noted that factories require huge initial costs to achieve such a decision, and it will take years to pay off these costs. In addition, it is unlikely that factories in the United States will be able to produce cheaper goods compared to competitors abroad.
For this reason, major financial institutions such as Goldman Sachs increased their assessment of the probability of a recession from 35% to 45%.
Former Federal Reserve Vice President Leal Brainard also stated in an interview with CNN that Trump has created the possibility of a “self-inflicted recession.”
He added: The consequences of this path are already visible. We are seeing how much Americans have lost through their retirement savings accounts, and it won’t be long before they see 20% tariffs on iPhones or washing machines when they go to the store.
Greg Mankiw, who headed the Council of Economic Advisers under former US President George W. Bush, also told CNN in this regard: If President Trump does this, it will be an economic mistake on a grand scale, the likes of which we have not seen in the past half century.