this post was submitted on 03 Apr 2025
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That's true if all other things were equal, but they're not. The US is the largest economy in the world, based on GDP, so it has a lot more weight to swing around than others. So theoretically, the US should have more leverage than smaller countries.
That said, I don't think the US has enough leverage to get away with this. Retaliatory tariffs will come and the net result is that trade in all regions will suffer. When you tax something, you get less of it...
The US might be able to get some leverage if we had an economist in power w/ strong diplomacy skills, but we have Trump.
I don't know how we define "enough" in this scenario, but as you allude to: in the end the USA is just some 400 million people buying things from overseas. Absolutely those who buy the most, and that is what drives the economy in many countries. It is what has picked up countries in SE Asia from poverty to industrialization.
Problem is that now when everything is more expensive in the US, the same people will stop spending. They might have spent the same money on products made in America, but those are precious few and just increased in price. So in effect everyone in America can now buy less for the same money and the industry capacity to produce what's demanded doesn't exist in short term. And in real estate, short term is 3-10 years.
The rest of the world? Well, most of the world just lost their biggest market. Of course, the demand that can't be produced domestically in the US will still be seen, but at a reduced rate, which will reduce the economic development world wide, until new markers are found. China still needs to sell, but the market for the high margin stuff is reduced.
In the end? I wouldn't be surprised if this stunt reduces world trade to such a degree it might be viewed as a notable side effect that carbon use went down. Trump might have managed to stop overconsumption like nobody else and with it energy demand. So despite doing the oil industries bidding and go against renewables, the shipping industry stand to loose enough trade that it might affect oil use world wide.
I agree with most of that.
The thing is, other countries don't want to see a slowdown in trade, so there's absolutely a chance that they'll be more willing to make deals with the US in exchange for reduced tariffs. In the short term (again, like you said, could be years), there will be reduced demand, which will hurt markets, and I wouldn't be surprised if conservatives get slammed in elections in the next 2-3 years since the pain will likely still be fresh. I don't trust Trump to actually make those deals though, especially since so many other countries seem to hate him.
We'll see though. It's going to suck if he sticks to his guns and keeps tariffs going in his apparent plan to revitalize US industrial capacity. I'm not sure why we want that, but that seems to be what he wants.
Unfortunately i think it's the same old extortion we've seen before. Trump Jr already posted "I wouldn't want to be the last country to cut a deal", so I guess we will see more if this. Ukraine stood up against it, I hope the rest of the world does to, but I'm afraid most wount.
They probably won't, but I guess we'll see. Trump is certainly playing with fire here, and that doesn't make me feel great as an American.
Yeah, the US has a lot of economic weight to swing around, but the world has also spend the decade (!) since Trump was first elected finding other business outlets and generally needing the US less, meaning that the relative weight of the US and the rest of the world has normalized significantly. The EU is stronger, China is stronger, Canada is stronger. The US withdrawing from the world economy would hurt everyone, but it would hurt the US a whole lot more than everyone else.
Maybe, but I think you're overselling the EU a bit. Yeah, there have been some high profile changes (in terms of stuff that makes the media), but I wonder how much that actually matters.
The EU hasn't really ever been a big importer of US goods anyway, at least not for decades. The biggest importers of US products are Mexico, China, and Canada. The US imports a fair amount from the EU, so if they retaliate with tariffs of their own, the US will just buy less from them, which will hurt the EU more than the US.
The US will have a bunch of negatives in the short term too, but I guess we'll see if those are permanent or just represent a shifting in trade partners.