Amerixit

Why is Trump intentionally destroying the U.S. economy?

The first 100+ days of Trumpocalypse2 brought the most drastic shifts in American economic policy since the Great Depression. On April 2, which Trump announced as “Liberation Day,” he imposed massive tariffs on every country in the world — 27% on average, quickly wiping out $3 trillion in value from the Stock Market. When the US bond market started to crater, Trump lowered his tariffs significantly, while still requiring 10 percent on almost every imported good.

Economists realize that the tariffs are taxes that will be paid by American consumers. Trump (whose net worth is estimated at $3 billion and still maintains over 40% approval ratings) has maintained tariffs on most Chinese goods of 145 percent. He quickly dropped them on electronics such as Smartphones and computers after hearing from tech executives who donated millions to his inauguration. He now seems set to reduce the massive surcharges on Chinese products — just the prospect he would do so caused a 883 point jump in the Stock Market yesterday.

The fact is, we haven’t really started to feel the impact of the economic chaos Trump has already unleashed. Even if he stops his erratic onslaught, things will not go back to normal. The US dollar has lost 3 - 6% of its value relative to other world currencies in the last month alone. As someone who is considering moving to Europe to escape Trump’s lawless Fascist regime that is openly shredding the Constitution and denying immigrants and legal residents the basic right of due process and deporting them to foreign concentration camps, I will now be poorer when I do move abroad.

While Trump calls the policy “reciprocal,” this is just an empty word. Economists across the ideological spectrum stress that these tariffs function as a historic tax increase on consumers and businesses. Trump has already terrorized financial markets and sabotaged U.S. interests. Businesses can’t plan ahead and can’t build factories when they don’t know what tariffs they will face a few months ahead. Centrist and international institutions forecast the impacts of Trump’s shambolic, chaotic policies as systemic destruction of America’s prestige and power in the world, encouraging China, in particular, to replace us.

The IMF has cut its 2025 global-growth forecast to 2.8 percent and U.S. growth to 1.8 percent, warning that Washington has become the chief drag on the world economy. Former Obama economic adviser Larry Summers likens the combination of steep tariffs and open pressure on the Federal Reserve to the “Liz Truss moment,” which caused Britain’s collapse after Brexit. We are seeing massive capital flight from U.S. bonds ($150 - 200 billion in one month) and a record surge in gold prices, because investors no longer view America as a safe anchor. The Financial Times argues that the United States has forfeited the credibility that once let it set the rules of global trade. Unless we return to a coherent strategy, this loss of leverage “could prove permanent.”

Leftist economist Michael Hudson warns that these steep, across-the-board levies will “cause huge global crisis,” by shrinking the dollar earnings of debtor nations: “US protectionist policies could cause financial crises, as many currencies depreciate and countries can’t earn the dollars needed to pay their foreign debts.” This raises the possibility of cascading financial crises around the world.

Also, Trump’s unilateral, unforced actions have accelerated moves to settle trade in other currencies. This benefits China, among other BRIC countries. According to researchers at Economic Policy Institute, replacing income-tax revenue with tariffs shifts the tax burden down the income scale, squeezing real wages.

Economist Kenneth Rogoff argues that Trump’s chaotic fiscal policies could end the dollar’s safe-haven status “gradually, then suddenly.” We are seeing foreshadowings of this in the massive sell-off of Treasuries since the tariffs were announced. The US dollar’s status as global reserve currency gives the U.S. much of its leverage in the world: Trump is intentionally eviscerating this. We need to ask why.

Some Right Wing economists still support Trump’s lunatic policies. The Heritage Foundation, for instance, calls the tariffs a long-overdue incentive to “reshuffle the international paradigm in America’s favor.” Heritage is behind Project 2025, which guides Trump’s White Christian Nationalist “revolution,” deconstructing the administrative state to support authoritarian despotism. On the other hand, libertarian and market-oriented conservatives at AEI and Cato call the program “a historic tax hike” based on faulty math, and a “bureaucratic, nonsensical mess.”

Food-system experts note that higher farm inputs and retaliatory duties on U.S. grain will hurt farmers while lifting grocery bills. Food & Water Watch projects that the average family’s annual food budget will rise by nearly 10 percent if the levies are maintained. Shoppers have already begun stockpiling staples. Cooking-oil tariffs aimed at Canada threaten to turn French fries into a luxury, because 96 percent of U.S. canola-oil imports are impacted.

The Tax Foundation estimates that the tariffs will cost an additional $2,100 per household this year. Many if not most U.S. citizens have very little savings and already struggle to survive. Academic food economists anticipate spot shortages of seafood, coffee, nuts and some fresh produce as distributors are forced to reroute supply chains. Trump is also eviscerating social services, reducing heating oil subsidies for elderly people and so on. This will make life harder for many.

Famine Coming to the U.S.?

Could the imminent disruptions lead to true scarcity or even famine in the U.S.?