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Trump signed a decree on tariffs

Yesterday Trump signed the Presidential Decree on the establishment of import duties on steel (25%) and aluminum (10%). True, he struck out Canada and Mexico from the decree, that is, import duties will not be applied to these countries. Thus, Trump confirmed that he intends to deal seriously with the trade deficit.

Liberals in the United States are horrified and tear their hair. But I think it's time for them to get used to such somersaults, because Trump templates break for the first time. Earlier there was an exit from the Agreement on a climate, cancellation of DACA, an exit from TPP. Trump is not at all like a puppet like his predecessors Clinton, Bush and Obama. Apparently the alignment in the American elites has changed seriously, since this became possible.

Duties on steel and aluminum are an invitation to the main US trading partners for a serious conversation. Talking about the fact that bilateral agreements on terms of trade should be completely revised. This conversation just will not be easy. We see that Britain for a year can not agree with Europe on the new terms of trade.

Yesterday in the comments to me many readers wrote that the trade deficit is the reverse side of the dollar's status as a reserve currency. Indeed, such an opinion exists and even popular. But we need to understand that any opinion exists and spreads in minds only because it protects someone's interests. This opinion protects the interests of globalists (ie, supporters of reducing the role of national states in international relations). In reality, the reserve dollar status and the trade deficit are never related at all. Until 1975, the US did not know the trade deficit, although the dollar became a reserve currency back in the 20.

I will remind readers of the history of the matter. Prior to 1945, international trade was built on bilateral agreements. Countries tried to balance trade in such a way that exports with each trading partner were approximately equal to imports. After the World War II, the global oligarchy came up with the WTO. Once you have entered the WTO, you can not take and change the import duties. That is, if you, for example, did good cars, and then suddenly the cars learned to do everything, then you have to watch how competitors eat your domestic market and your car manufacturers leave the market, unable to withstand competition. It happened with the USA. WTO supporters respond to this as follows: if you no longer know how to make good cars, then learn to do something different.

As a result, trade imbalances began to accumulate. The US began to lose Germany and Japan in the 70. In 1985 signed the Plaza Accord and for a while the situation was ruled out. And then China appeared and with it the United States could not do anything. I have the whole story described in detail here.

The problem is that the board learn how to produce something that does not help much. The United States has lost a lot of competencies. Hence the hole in the trade balance in 800 billion dollars. Therefore, the revision of trade agreements was inevitable. If Trump did not start this process, he would start another thread. The globalists naturally face the problem of the United States deep down to the bulb. They even have a US bulletin before the bulb. But the Anglo-Saxons do not care what happens to the US, because the US is their home. Trump is a representative of the Anglo-Saxon elite, who suddenly realized that being friends with globalists is great, but tomorrow they will lose the country and will not be needed at all. And among the Anglo-Saxons there are still very large businessmen. For example, the Rockefeller group is pure Anglo-Saxons. They by the way delegated to the Trump Government their best top manager Tillerson.

Now about the connection of the trade balance with the US dollar. Many readers argue that if today the US balances trade, then tomorrow, US trading partners will give up the dollar. This is heresy. The status of the dollar as a reserve currency is due to the fact that the US has the largest financial market. Its capitalization is 100 trillion. dollars. If, for example, you have money and you want to invest it in order to have income, then you will not go to the Chinese or Europeans. The Europeans have a low yield, the Chinese have little tools for investing, and the risks are large. There remain Americans, and there everything is only for dollars. Plus, oil is quoted only in dollars. So the reserve status of the dollar, Trump is not threatened. Then you should not consider the US president as an idiot, it's simply stupid.

Here the size of the stock market from the trade deficit depends most directly. Look, this is Nasdaq Composite

Over the past 5 years, it has grown from 3000 to 7000 points. This is the result, including a trade deficit. Because the trade deficit is closed by the inflow of speculative capital, which all settles on the stock market. Therefore, the stock market and swells. For financiers, this is the main source of income. They are already used to it. If this shop is covered up, they will have to work again, and they have already forgotten what it means to work. Therefore, they are furious.
Well, returning to Gary Cohn. The dude realized that he does not influence anything, he is listened to, but ignored. And so he left. At the last meeting of the Government, Trump in person called him a globalist. Generally speaking, in the US this is not the most flattering characteristic. Because the very notion of "globalist" directly implies that you serve not a country, but a supranational oligarchy. Here's a video.

Very funny video. Especially when Trump is talking about what kind of Gary Cohn is cool and suddenly "Where's Gary?".

By the way, at some point Gary Cohn claimed the position of chairman of the Fed. But after his famous phrase "People who stand for equality and freedom should not be equaled with white suprematists, neo-Nazis and the CCC," I think Trump did not consider him anywhere.

PS On the main photo, Trump signs a decree on tariffs. See what colorful people invited to the signing ceremony. These are all hard workers, with helmets. See what their red faces are. And at the time of signing they are directly leaning over to Trump to see what he signs there. Very funny. Video can be here look.

A source: Monetary Policy

Tags: Trump, Economy, USA