Economic theories are generally symmetrical. If more of X causes y of y, then less of x less from Y. So I was confused by a recent story in Bloomberg:
Trump is attracted to the mutual tariff plan as an important part of his push to generally increase American charges. Trump said it would apply to nations that generally have a higher average rate percentage than the US, which would increase its own rate to match.
“If they charge us, we count them,” he said on Sunday, spoke with reporters and confirmed that he intended to announce this week.
I am skeptical about the idea that mutual rates are generally a good idea. But if they are, I can’t imagine why they would be a good idea for trade with countries with higher rates than the US, but not for trade with countries with lower rates than the US. Can anyone explain this to me?
Let’s say I’m wrong and that mutual rates are a good idea. The argument would probably be that this tool would encourage our trading partners to lower their rates for exports of the US. But if that is the case, that argument applies just as much to countries with lower rates than the US. Indeed, if the policy were 100% effective, it could encourage countries to reduce their rates for American exports to zero, but only if this is induced to do this by expecting the US to follow the example.
On a related comment, Elon Musk recently met the Indian Premier Modi, and It was reported That he has printed India to lower rates on Teslas and offer a permit for Skylink. Trump was asked whether Musk acted as an US government official or as a private businessman. Trump indicated the last.
Do you believe that Modi would probably have been assumed that the world’s richest man, who happens to be the second most powerful person in the Trump administration, acted in a purely private -heredity? If you were modes, would that have been your assumption?
There has never been a complete separation of affairs and government in the US. But it is also true that the two have never been connected so deeply before.