Donald Trump is escalating his threats to increase tariffs on imports if he wins a second term in the White House, reviving fears of renewed trade wars that hit the global economy during his presidency.
The Republican candidate, seeking to win blue-collar votes in swing states pivotal to November’s presidential election, has doubled down on his protectionist rhetoric, delivering blunt warnings of tariffs to US trading partners including the EU.
On Saturday, Trump went further, promising tariffs of 100 per cent on imports from countries that were moving away from using the dollar — a threat that could engulf many developing economies too.
“I’ll say, ‘you leave the dollar, you’re not doing business with the United States. Because we’re going to put a 100 per cent tariff on your goods,’” he said at a rally in Wisconsin.
“If we lost the dollar as the world currency, I think that would be the equivalent of losing a war,” he told the Economic Club of New York on Thursday.
Pretty true. I have nothing really to add historically.
Having said that, there’s nothing preventing this status quo from changing in the future if enough economies decide the risk of an erratic main trade partner isn’t worth it anymore. The reward of controlling the main global reserve currency comes with the responsibility of not involving it in undue threats.
There’s substantial existing industrial infrastructure that makes a kilowatt of new petroleum energy easier to produce than a kilowatt of renewable energy. But that’s a result of economic policies. Change the policies and you change the math.
It appears we are, both intentionally and inadvertently, slowly stacking the deck in favor of renewables.
One might argue the reverse. The ability to hold the rest of the world hostage enables a nation to compel adoption of their domestic currency as the global reserve.