Quote:
Originally Posted by elysiantraveller
I don't think Trump understands how trade works.
How deterrence works.
How leverage works.
How are alliances work.
Etc. Etc.
Do I think he's lying...? No... maybe not. I just don't think he understands.
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Trump also does not understand globalism, which he condemned at the UN. We have a global economy, and it would be in serious trouble if anything interfered with that.
One recent example was shown by Trump's tariffs on imported aluminum. Those tariffs were supposed to help American companies by making imports more expensive. Alcoa was actually hit hard by those tariffs because part of its aluminum production process is smelters it owns and operates in Canada. The output from those smelters then enters the US for final production. So Alcoa has to pay tariffs on its own aluminum before the finished product is produced here.
Alcoa has one stage of its production in Canada because smelting is energy intensive, and Canadian electricity is cheaper than American power. This is a large part of globalism. Many American companies, including automakers, operate global supply chains that feed into final production or assembly here. Current estimates are that Trump's proposed tariffs could increase the price of an "American made" automobile by up to $5000. Achieving what?
One of Trump's favorite whipping boys is the iPhone. The phone is assembled in China, and Trump wants that production moved here.
He doesn't understand that maybe $10 or $20 of the value added to a $500 iPhone comes from assembly. The rest comes from R&D, marketing, etc., most of which happens here. Apple has over 35,000 employees just in California. And those people are making a lot more than American workers assembling iPhones would make. And it would cost billions to build new plants here, hire and train workers, etc. By some estimates, the cost of an iPhone would double. Which would greatly hurt sales, and probably lead to job cuts.
