Quantum Physics

deltaland

While this is good, wouldn’t this hurt every other sector of our economy if we drop tariffs and they only buy energy? Sure it’s a boom for O&G but all other sectors would suffer
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No, at worst it would just add jo US exports with no change as before the tariffs. Trump and his team are looking for removal of trade barriers, while also looking for more US imports from foreign countries to even out the trade deficits.

Even if the US only gets the trade reciprocity from all countries, then the US would grow at 10% nominal gdp per year, while lowering our debt to gdp ratio by 4% per year

There wouldn't be a negative, just not as good as the Trump team set out to do, yet still great compared to current times.

Bloomberg :

"This tranquility may be broken, however, if China can’t come up with a concrete fiscal figure by the Politburo meeting in July, when top politicians set out economic priorities for the rest of the year. Monetary tools may have to be deployed instead. In this case, the yuan might trend toward 9 per dollar from the current 7.3 to offset Trump’s tariffs, estimates Barclays."
----- Every country in the world will get real upset about this

"Beijing will need to roll out another 12 trillion yuan ($1.6 trillion), or 8.6% of gross domestic product, the bank reckons. At the National People’s Congress in March, China already raised its broad budget deficit to 8% of GDP, versus 6.6% last year."
----- 8% deficit plus 8.6% more, equals a deficit of 16.6% gdp per year(wow; this is what a collapse looks like)

"Barclays, for instance, assumes a fiscal multiplier of 0.3, so every(one) percentage point increase in budget deficit gives only 0.3% boost to growth. Morgan Stanley, on the other hand, is more generous, seeing a 0.5% lift."
----- china won't be able to save themselves mid term because of this alone


https://archive.ph/Ad58Z

The taxes can all be given back to American households. This can be done in several ways.

Give all households ~ $2,100 dollars per American

Another creative way would be to give the bottom 90% of taxpayers their $2,100 per person, then give an additional $2,100 per person(stimulus) in place of giving the top 10% of earners their tariff payback.

This would give the average family of 4(consisting of the bottom 90% only -whose average household earning are ~ 55,000) an additional $8.400 on top of the $8,400 to make up for the tariffs. That amount represents an increase in discretionary spending of around 33%(with the assumption that roughly half of household income is discretionary)

First, the most important thing to remember is that all tariffs taken in, can be given back to American households, making the cost to the American people nothing. The only cost then goes to foreign producers.

Two, foreign producers have to lower their prices and absorb the tariff cost, or American people will buy the cheaper product(American goods or low tariff foreign goods). This causes the producer to lose market share. Loss of market share means loss of sales, local gdp, possibly higher input costs from buying less inputs(raw materials), less workers needed(higher unemployment), higher debt cost for the company(worst financial debt/assets/sales volume), along with less tax revenue for the foreign government.


Four main scenarios:

1. All tariffs are implemented.
~700 billion is raised and then returned to the American people(no
loss nor cost to the American people)

2. All tariffs are implemented and producers eat some, or all, of the
cost(China Trump trade war 1.0)
This leaves left over money(all money raised by tariffs minus the amount eaten by producers gets distributed to American households(no final cost to Americans) with the remainder(the amount producers ate) being free money that can used for America(pay down debt/invest in America's future/household stimulus)

3. Bigly beautiful trade deals that lead to American exports, employment, gdp growth, and additional tax revenue from gdp, employment, and additional inputs(raw materials). All of which add great growth to the economy.

4. A combination of 2 and 3(most likely).


Countries that sign deals with America First, have their markets sky rocket as the rest of the world looks for safe investment with all the world wide chaos going on.(foreign leaders have already said they want to be towards the front of the line; this is why)

This provides natural bargaining chips as counties that fight America will have their economies continue to be ruined while the rest of the world starts an epic growth cycle.

In the end, the tariffs will not hurt America, nor the American people, even in the slightest long term. They will instead add 1-2 gdp percentages to the economy, while destroying China and a few other countries.

If you're worried about the US economy READ THIS