You two assume Trump is having a grand complicated plan and the tariffs are just means in his big game of 5d chess - what makes you think that?
When has he ever had a big plan in politics that came together by some complicated puzzle?
Heres a paper by Dr. Stephen Miran, Trumps senior economic advisor. Im only half-way through it, but it seems like a good read and outlines why the orange man went with operation Liberation Day. Having America rely on global supply chains in the event of an all out war aint the best strategy.
A little snippet:
e world’s reserve currency. This overvaluation has weighed heavily on the American manufacturing sector while
benefiting financialized sectors of the economy in manners that benefit wealthy Americans. And yet, President
Trump has praised the reserve status of the dollar and threatened to punish countries that stop using the dollar
for reserve purposes. I expect these tensions will be resolved by a suite of policies designed to increase burden
sharing among trading and security partners: rather than attempting to end the use of the dollar as the global
reserve currency, the Trump Administration can attempt to find ways to capture back some of the benefits other
nations receive from our reserve provision. Reallocation of aggregate demand from other countries to America,
an increase in revenue to the U.S. Treasury, or a combination thereof, can help America bear the increasing cost
of providing reserve assets for a growing global economy. The Trump Administration is likely to increasingly
intertwine trade policy with security policy, viewing the provision of reserve assets and a security umbrella as
linked and approaching burden sharing for them together.
Both tariffs and currency policy are aimed at improving the competitiveness of American manufacturing, and thus
increasing our industrial plant and allocating aggregate demand and jobs from the rest of the world stateside.
These policies are unlikely to result in significant reshoring of low-value-added industries like textiles, for which
other countries—like Bangladesh—will retain comparative advantage despite significant swings in currency or
tariff rates. However, these policies can help preserve the American edge in high-value-added manufacturing,
slow down and prevent further offshoring, and potentially increase negotiating leverage with which to procure
agreements from other countries to open their markets to American exports or protect American intellectual
property rights. The Phase 1 trade deal with China in 2019 made advances in these domains, before China
abdicated its commitments under that agreement.
Moreover, because many in the Trump camp see trade policy and national security as inextricably intertwined,
many interventions will be targeted at industrial plant critical to security, to the extent they can. National security
will likely become ever more broadly conceived, for instance to include products like semiconductors and
pharmaceuticals.
Despite the dollar’s role in weighing heavily on the U.S. manufacturing sector, President Trump has emphasized
the value he places on its status as the global reserve currency, and threatened to punish countries that move
away from the dollar. I expect this tension to be resolved by policies that aim to preserve the status of the dollar,
but improve burden sharing with our trading partners. International trade policy will attempt to recapture some
of the benefit our reserve provision conveys to trading partners and connect this economic burden sharing with
defense burden sharing. Although the Triffin effects have weighed on the manufacturing sector, there will be
attempts to improve America’s position within the system without destroying the system.
No matter what policy is adopted, there is the risk of material adverse consequences for financial markets and the
economy. However, there are steps the Administration can take to try to mitigate these consequences and make
the policy changes as successful as possible.
https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf