In his background report published in Focus online, Fabian Braesemann explains Trump’s all-out attack with tariffs. Apparently, the American president sees them as a universal means of achieving both economic and political goals. The recent announcement to impose far-reaching tariffs on imports from Canada, Mexico and China, shocked politicians worldwide.
Trump’s logic is simple: either the high tariffs lead to more production in the USA or the US government earns directly from the tariffs and can use the additional funds to finance other measures.
The complex effects of such a policy in the midst of today’s globally interconnected world economy seem to have been overlooked. Yet we know from history that such a mercantilist trade policy often leads to spiralling tariffs and trade wars, that could very well degenerate into actual wars. Ultimately everyone loses when goods become artificially more expensive and international trade declines as a result. It is not without reason that free trade has become the predominant dogma of foreign trade since the 19th century.
Smart economic policy takes into account the complex interactions in the global economy
Effective trade policy should take into account the complex reactions of all parties involved. Smart economic policy is data-based in order to identify critical points in the supply chain. This makes it possible, for example, to prevent tariffs from having unintended consequences such as the migration of production.
Data-based solutions are the expertise of the ASCII. We are therefore delighted to be mentioned in Fabian Braesemann’s article.
This news article is based on Fabian Braesemann’s report in Focus online.
- You can read the original article by Fabian Braesemann here
