By AFP
December 4, 2024
Donald Trump has threatened to slap tariffs of 10 percent on all imports - Copyright AFP -STR
Ali BEKHTAOUI
The OECD warned Wednesday that protectionist trade measures pose a major risk to disrupting the world economy, just weeks before Donald Trump is set to return to the White House.
The Organisation for Economic Cooperation and Development, a Paris-based body that advises industrialised nations on policy matters, never named Trump in its updated analysis of the world economy.
But with the president-elect vowing to slap tariffs on US trading partners after his return to power next month, it was abundantly clear that the OECD was warning about Trump’s possible measures.
While the organisation raised its 2025 global growth forecast to 3.3 percent, it cautioned that “greater trade protectionism, particularly from the largest economies” poses a “downside risk” along with geopolitical tensions and high public debts.
On the campaign trail, Trump threatened blanket tariffs of at least 10 percent on all imports and since his election has vowed to slap 25 percent import tariffs against Canada and Mexico, top US trade partners.
“Increases in trade-restrictive measures could raise costs and prices, deter investment, weaken innovation and ultimately lower growth,” the OECD warned in its economic outlook.
“Further increases in global trade restrictions would add to import prices, raise production costs for businesses and reduce living standards for consumers,” it added.
During his first term in office from 2017 to 2021, Trump slapped tariffs on certain products from China and other trading partners, including the European Union, but on a smaller scale than the measures he has pledged to take upon his return to the White House.
A recent study by the Roland Berger consultancy calculated the cost of the US measures and likely countermeasures by China and the EU at more than $2.1 trillion through 2029.
– ‘Major shocks’ –
Trump is far from the only risk in terms of protectionist measures.
The Covid-19 pandemic and the war in Ukraine showed the dependency of many countries upon global trade, but instead of facilitating the exchange of goods and service many countries have sought to shorten certain supply chains and protect markets.
A spat has also broken out between Brussels and Beijing after the EU imposed import tariffs on Chinese electric vehicles. China has retaliated with tariffs on EU brandy, including cognac.
The OECD noted “the global economy has demonstrated remarkable resilience despite being subject to major shocks such as the pandemic and an energy crisis.”
It even raised its global growth forecast for next year to 3.3 percent, an increase of 0.1 percentage points from its previous outlook in September, due in large part to the strong performance of the US economy.
– Strong US growth –
The OECD now sees the US economy expanding by 2.4 percent next year, up from its September forecast of 1.6 percent growth.
It also raised its forecast of British growth next year by 0.5 percentage points, to 1.7 percent, due to higher public spending planned by the new Labour government.
China’s economy is now expected to expand by 4.7 percent next year, an increase of 0.2 percentage points, while India’s growth forecast was raised 0.1 percentage points to 6.9 percent.
But both France and Germany saw to 0.3 percentage point cuts to their 2025 growth forecasts, to 0.9 percent and 0.7 percent, as both countries face political crises amid mounting fiscal pressure.
The downgraded forecast comes as France’s new minority government faces being brought down Wednesday by lawmakers after it forced through the adoption of the social welfare budget.
Op-Ed: Dunce level policy — Devalue the dollar + tariffs = massive increases in cost of living
By Paul Wallis
December 3, 2024
DIGITAL JOURNAL
America is off track. Immigration and homelessness crisis in large metropolises like Los Angeles is the best example. — Image: © AFP
This is why unemployable sycophantic nobody bozos shouldn’t do economics. The Morons Marathon of US politics has taken yet another IQ nosedive.
The constant tides of talk about proposed tariffs are bad enough. “Tariff” is code for total illiteracy in trade.
A minimum 10% tariff is the benchmark. They’ll add a lot to prices. That will cost you a lot of money you don’t have. It’ll also kill revenue by suffocating demand by volume, simply because things are more expensive.
“But, why?” you ask, clutching your non-existent but expensive ideology in your pseudopods?
It’s mainly because the idiots proposing the tariffs still haven’t got it through their thick heads that the importer pays tariffs, not the exporter.
Everything will cost so much more because you clowns put a tariff on it.
Got it, you ^&&(((&^* godforsaken3 $%&^(% half-witted brain dead fruit flies?
The stylish fruit fly analogy is because fruit fly brains work and yours don’t.
Add to this impending cluster the imbecile idea of a devalued dollar, if you please, Your dollars will be instantly worth less, at a time when the cost of living is truly insane.
Let’s go through the devaluation myths from the last century to explain:
“Devaluing will make our products more competitive.” This particular myth has bankrupted countries many times before. Anyway -What products? You offshored them and a lot of American jobs decades ago. You think you can set up an entire manufacturing sector overnight? Ain’t gonna happen.
“Our foreign currency holdings will be worth more.” Not really. Any fool can play margins and pretend to win. Those currencies also aren’t the world’s default currency, and only a very few of them are stable. It’s a meaningless statement.
“Our dollar debts will cost less because the dollar is worth less.” The exact opposite is the case. You can pay with foreign currency to a point, but not on the global scale of US debts. People holding dollar denominated debts don’t want to lose money. You’re more likely to increase interest rates on borrowing to make up for the decline in the value of currency holdings. Bond yields will also have to respond.
“Volatility will help supercharge the markets.” This one may seem a little obscure. The theory is that high turnover in anything is good for middlemen like brokers, hedge funds, termites, political skanks, etc. So it is, to a point, until constant stress destroys confidence in the market.
Given the other disasters on this list, no confidence will happen sooner rather than later. You and your money will quite rightly move to other markets and take your trillions with you. Any supercharging will be of the getting the hell out variety.
OK, now a bit of analysis.
Do you notice that the outcome of each of these loads of garbage is the exact opposite of what was stated? There’s a reason for that. All of these economic circus tricks have been tried and have failed consistently throughout the 20th century.
One of the reasons South America and Africa are such happy carefree places that everyone is trying to escape policies of this kind.
Bad management of trade, currencies, and a bizarre perspective on how the world does business are all you need.
There’s another, potentially fatal, issue for the US, though. America is locked in to global trade. Disadvantaging itself and its own trading position is stupid. Adding costs is suicidal.
What’s likely to happen is the “Russification” of America. This would be the collapse of corporate and private assets, not state assets. (A heavily devalued billion is not the same thing, Elon.)
Everything crashes. Everyone goes broke. Somebody walks in and buys all those depreciated assets at bargain bin prices. (Almost literally nothing, in the case of the USSR. It was one of the biggest systematic rip-offs in history.)
That’s worked out well, hasn’t it?
We could have another fragmented senile ex-superpower staggering around picking fights with everyone and losing.
Sound familiar?
America used to be truly great. It was the richest, healthiest, most prosperous society in history. You gave it all away to idiotic politics and your own insularity.
You’re doing it again, America.
__________________________________________________
Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
By Paul Wallis
December 3, 2024
DIGITAL JOURNAL
America is off track. Immigration and homelessness crisis in large metropolises like Los Angeles is the best example. — Image: © AFP
This is why unemployable sycophantic nobody bozos shouldn’t do economics. The Morons Marathon of US politics has taken yet another IQ nosedive.
The constant tides of talk about proposed tariffs are bad enough. “Tariff” is code for total illiteracy in trade.
A minimum 10% tariff is the benchmark. They’ll add a lot to prices. That will cost you a lot of money you don’t have. It’ll also kill revenue by suffocating demand by volume, simply because things are more expensive.
“But, why?” you ask, clutching your non-existent but expensive ideology in your pseudopods?
It’s mainly because the idiots proposing the tariffs still haven’t got it through their thick heads that the importer pays tariffs, not the exporter.
Everything will cost so much more because you clowns put a tariff on it.
Got it, you ^&&(((&^* godforsaken3 $%&^(% half-witted brain dead fruit flies?
The stylish fruit fly analogy is because fruit fly brains work and yours don’t.
Add to this impending cluster the imbecile idea of a devalued dollar, if you please, Your dollars will be instantly worth less, at a time when the cost of living is truly insane.
Let’s go through the devaluation myths from the last century to explain:
“Devaluing will make our products more competitive.” This particular myth has bankrupted countries many times before. Anyway -What products? You offshored them and a lot of American jobs decades ago. You think you can set up an entire manufacturing sector overnight? Ain’t gonna happen.
“Our foreign currency holdings will be worth more.” Not really. Any fool can play margins and pretend to win. Those currencies also aren’t the world’s default currency, and only a very few of them are stable. It’s a meaningless statement.
“Our dollar debts will cost less because the dollar is worth less.” The exact opposite is the case. You can pay with foreign currency to a point, but not on the global scale of US debts. People holding dollar denominated debts don’t want to lose money. You’re more likely to increase interest rates on borrowing to make up for the decline in the value of currency holdings. Bond yields will also have to respond.
“Volatility will help supercharge the markets.” This one may seem a little obscure. The theory is that high turnover in anything is good for middlemen like brokers, hedge funds, termites, political skanks, etc. So it is, to a point, until constant stress destroys confidence in the market.
Given the other disasters on this list, no confidence will happen sooner rather than later. You and your money will quite rightly move to other markets and take your trillions with you. Any supercharging will be of the getting the hell out variety.
OK, now a bit of analysis.
Do you notice that the outcome of each of these loads of garbage is the exact opposite of what was stated? There’s a reason for that. All of these economic circus tricks have been tried and have failed consistently throughout the 20th century.
One of the reasons South America and Africa are such happy carefree places that everyone is trying to escape policies of this kind.
Bad management of trade, currencies, and a bizarre perspective on how the world does business are all you need.
There’s another, potentially fatal, issue for the US, though. America is locked in to global trade. Disadvantaging itself and its own trading position is stupid. Adding costs is suicidal.
What’s likely to happen is the “Russification” of America. This would be the collapse of corporate and private assets, not state assets. (A heavily devalued billion is not the same thing, Elon.)
Everything crashes. Everyone goes broke. Somebody walks in and buys all those depreciated assets at bargain bin prices. (Almost literally nothing, in the case of the USSR. It was one of the biggest systematic rip-offs in history.)
That’s worked out well, hasn’t it?
We could have another fragmented senile ex-superpower staggering around picking fights with everyone and losing.
Sound familiar?
America used to be truly great. It was the richest, healthiest, most prosperous society in history. You gave it all away to idiotic politics and your own insularity.
You’re doing it again, America.
__________________________________________________
Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
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