There is a reaction for every action taken.
It does not take a futurist to see the consequences that Mr. Trump’s recent tariff actions will have.
There is the short-term reaction in trade when retaliatory tariffs are placed. But that is on the surface; look below.
Importantly, it is the shift in attitude. Countries understand that the United States is no longer a country to be counted on or trusted. Once trust is lost, that trust does not reappear.
Step into the shoes of these allies, friends and neighbors (and even countries like China). What steps would you take if the roles were reversed?
Columbia has become a US trading and military partner. Trump has humiliated and blackmailed them. They will now forge relationships with China and others. They will increase trading with Central and South American countries.
How about China? It just placed 15% retaliatory tariffs on liquefied natural gas, crude oil, some coal, cars as well as restricting tungsten and rare earth metals exports. China produces 80% of the world’s tungsten and much of the world’s rare earth materials. They are investigating Google for anti-trust. This is part of China’s reaction to our tariffs.
Musk manufactures Telsa in China, yet Byte is selling more cars. China could retaliate against him, and probably will.
China has long tried to create relationships with other countries for trade and defense. That time has come for them.
One “secret” about trade is that we export more services than we import. Here trade imbalance favors us. But Ontario just canceled its contract with Musk’s Star- link and will no longer outsource government contracts to US companies. Canada exports its oil to the US Midwest, which they can slow down or tax. Their oil, like Mexico’s is essential to the US economy.
You get the idea. The trust that other countries had in its relationships with the United States is gone. Other countries- friends and foes- will seek other relationships.
This is the long-term effect of Mr. Trump’s actions. He sees this as a negotiating tactic. It is much more. Once trust is questioned; it is lost.
For every action, there is a reaction.
