Donald Trump does not serve American companies
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Donald Trump does not serve American companies
Donald Trump thus maintained his position to tax imports of steel and aluminum. While we complain about politicians who do not respect their word, here the Americans are spoiled, here is a president who does not return to his positions. But is it really good?
For Bill Bonner, an American economic commentator (founder of the “Agora Chronic” newsletter), the narrow-minded side of Trump is proof that in politics, one prefers win-lose deals rather than win-win deals.
First, because Europe, to name a few, will not let it go and has already announced that it will target its response. Targeting legendary industries or brands like Harley-Davidson, an iconic American brand whose sales are already suffering. If Europe raises its tariffs, Harley-Davidson may have serious difficulties. In the end, Trump’s customs taxes will do more harm than good to the national sectors he wants to defend.
Bill Bonner, with his usual good sense, reminds us that a trade war is mostly designed to reward elites at the expense of others. The elites are the sectors that benefit from the protection of the American state because they have relays in the political world. And this protection is to the detriment of other sectors and citizens. It is estimated that there are only 200,000 jobs in the steel and aluminum production sectors in the United States: they will be the winners of this trade war. And indeed, the stock market has not been mistaken: the stock market price of steelmakers has increased in recent days.
Donald Trump, like many politicians, knows only win-lose deals
On the other hand, industrial companies, aeronautical manufacturers and automobile manufacturers saw their prices drop. All this means what? But there are more people and companies that use steel and aluminum than people who produce it. And they are unfortunately the losers of this trade war. American car manufacturers, Bill Bonner tells us, use an average of 1,500 kg of steel in each car. This additional cost will force American car manufacturers to increase their selling prices… This is not ideal when you have the slogan “America First“.
In fact, Donald Trump, like many politicians, says Bill Bonner, does not know what a win-win deal is. He knows only the winner-loser, which is probably true in politics, because one party replaces the other, whereas in real life, the only valid agreements are win-win agreements. However, by initiating a trade war, it will destroy the productivity of all American industry to please a single sector. And business leaders, Bill Bonner tells us, are human beings like any other: if given the opportunity, they would rather be protected rather than face honest competition. “Except protection is one of the worst things you can do to a business: tell your kids not to break your head with their homework!” Says Bill Bonner.
