What is Trump really trying to achieve with his tariff plan, and will it work?

• Explaining. President Trump has discovered one of the most aggressive agenda agenda of the tariff In recent history, the statement of China, India and the EU residents followed the announcement of 10% blanket on all other countries. While President Trump Cookie’s external agenda may shock markets, his approach is not something new.

President Donald Trump says he wants a level playing field with level Tariff agenda He announced this week. Whereas Economic sanctions It can go to achieve its goals in some way, experts are afraid that aggressive foreign policy can also isolate the largest economy on the planet.

This week, the White House overturned with decades-long casinos with its closest commercial partners. For example, the EU is subject to 20% tariffs, while China is facing 54% accumulative increase.

And when President Trump said that the “all countries” would be subject to the day of liberation, he meant that. The peoples who have not been given the established tariff are facing 10% directly, on duty of the blanket.

In the next hours of the rose garden, they turn to foreign leaders began to formulate their answersSome of some people, as British Prime Minister Sir Keyir Stary, said they were “cool head” because the talks continue, while the President of the European Commission Ursula promised a quick and continuous vengeance.

The final question remains. The agenda of President Trump will be reimbursed. Will he be able to re-rich at the cost of burned bridges?

Or will he fall due to the traps found by his predecessors?

What is Trump’s purpose?

Treasury Secretary Scott Best put in Confirmation hearings The goals of President Trump tariff plan.

Some that are directly related to America’s people and businesses– For example, by creating and protecting US jobs, by increasing industrial capabilities, making home goods more competitive and income to finance families and businesses.

For example, to increase America’s position on the global stage, which reduces competing countries, in particular, when it comes to national security needs, as well as the use of economic sanctions, the US security interests advanced.

Of course, President Trump, President Tram, stated none of these things. Tools have been used as negotiating instruments in the debate on immigration and expatriator

Professor of Colombia Bret House He plotes another motivation to Trump’s actions, which has shown that the White House has implemented both individual and blanket tariffs. He said Fortune“The President likes to create a situation where other countries or individuals should come and deal with him.

“This is the power of such a force that rape and the carawries are trying to create people by dividing and ensuring that it is very difficult for them to unite and negotiate them.

Breaking the tariff code

Other economists present a different opinion that prompts the White House, sharing its methodology of how it forms tariff interest rates.

Hotspent[The tariffs] mainly refers to elimination of dependence on the rest of the world, or what is perceived as [America’s] Excessive dependence on the rest of the world and other countries have been explained ” Joao GomesThe senior transformation of the university research at the University of “Uarton” Business School in Pennsylvania.

“Eliminating the trade deficit is the most important when you look at the numbers, and you understand how they compete, it’s just obvious that it’s not about any politics.

“This is really about economic principles, and I may not agree with them, but at least I understand what they want to do, and I think it helps with predictability.

Such a thing has been done before.

Comparisons for economists will be compared to the distance from White House, they must be dusted with history books and return to pages up to a century.

In 1930, As the world sank into the Great DepressionPresident Hoover has signed the “Smoot Hawley” tariff plan from the law, American business and farmers under the application of cheaper agricultural products imported from abroad.

Before Smoot-Hawley, the average import tariff was about 35.7%, according to Douglas Irvin, the Professor of Economics of Dartmouth University and the bill was followed by 41.1%. Similarly, the “Fordney McUubumber” tariff act entered into force in 1922 to 38.8%.

For comparison, 10% Trump has placed on the United Kingdom in the United Kingdom, or 20% placed in the EU seem relatively more restrained.

However, the economy has moved in 100 years after the latest major tariff changesGlobalization has continued to bend Since then, the US economy has been more closely involved in its health partners.

According to Dartmouth Irwin, in 1930 and 1922 imports as a percentage of GDP represented only 1.4% and 1.3% respectively. Tariffs announced before 2025, on April 2, 5% of America’s GDP imported 5% of America’s GDP in Mexico.

As such, lower tariffs for the much higher share of goods and possible mutual tariffs from competitors can be a more painful pill than less products experienced in the past.

While President Trump himself used Smoot-Hawley as an excuse for his tariff operation, Westhone Gomez said Fortune Both cases are removed so far that “ridiculous comparison” is.

At the simplest level, he explained. “I would say a) [The 1930s] B) was a decline, b) we had the gold standard, and monetary policy was all the golden standard, which led to huge deflation. ”

Transatlantic examples:

Tariffs can be useful transactions in the negotiation sense, depending on who you ask, can cause some economic benefits.

Professor of the Macroeconomic of the University of Cambridge Michael Kitson: He acknowledges that he is in the minority of his peers when he attaches importance to the total tariff imposed by the United Kingdom in 1932, which can bring some good to the economy.

However, 10% imposed by the United Kingdom were quite cry out of changes made by President Trump, and Kitson emphasizes the conditions for the British economy.

This “unique condition” included a high level of unemployment (US unemployment rate is currently in a Stable 4.1%Tariffs have been imposed on competitive imports, not the complimentary imports of raw materials and food (President Tramphone has already announced the 25% growth of aluminum and steel), and the exchange rate has failed to increase tariffs.

And most likely, there were no potential for other countries (for example, the EU could now complete the export of American service, which could not be done before).

“Most of these conditions do not apply to the United States now,” Kisk said FortuneSaying not only these conditions are not met, there are complex factors that push the US economy, even far from tariff success.

“What we now have is a very complicated supply networks than we had in the 1930s, which makes it more difficult to impact the tariffs,” he added.

Is there any merit in the theory of hard transformation?

The S & P 500 Tanks of Trump’s Tariffs The Courtighted Courtighting is true what many analysts are expected to win the Oval office for the first time.

It has decided to decide whether President Trump’s goal is to be an engineer “heavy recovery” with the economy has slowed down to curb inflation, and produces a more stable economic landscape.

At first, many analysts denied the theory as a conspiracy. Still Kevin Ford, FX and Macro Strategy, comes in the concept.

“The victory in three of the last four state of the Union is in the center of attention to the stock exchange, often to silence by his strong presentation and recently, and his team does not appear.

Ford added that the adoption of “disruptions” compared to the “promises of the Golden Age,” he said.

Of course, the J-Curve economic trajectory (a short immersion before drastic profits) will serve cool activity without falling downfall, but Ford added.

“It’s a sign of a big question, but time is going on the idea of ​​engineering engineering, which is a J-Curve economic transformation, no longer seems so far away.”

Field of Forgotten Service:

There is a flattering omission in the back of the tariffs. The motive for this action is based on the deficits of the goods, ignoring the enormous service in America Counts two-thirds of the nation’s economic activityA number

In fact, the White House actual Establishing tariffs does not indicate service sector once, despite the fact that The exporter of the world’s largest servicesA number

The impact of these tariffs on the field should be ignored: said ebehi iyohaBusiness Management Professor Harvard Business School.

IYOHA is due to release worksheet The impact of tariffs on SMEs Taking partnership was engaged until April 2. The respondents were not aware of tariffs on China, Canada and Mexico, which were added to the founders and entrepreneurs who were behind them.

However, Iohoh said that the business on the sphere serving the effects of foreign policy cannot be ignored, told Fortune.

“There has been a lot of attention [in] Trade policy rhetoric on goods, but they don’t really think. “How to use the United States in the field of global commercial services and how [small businesses] used this global trade integration. That’s something I think is constantly absent in conversation. ”

This story was originally shown Fortune.com