South Korea will not ‘fight’ Donald Trump’s tariffs, says acting president
South Korea will not ‘fight’ Donald Trump’s tariffs, says acting president
www.ft.com
South Korea will not ‘fight’ Donald Trump’s tariffs, says acting president
15 comments
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It costs them nothing though. It's US importers, companies, and citizens that pay the tariffs. It's an import duty.
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It's not nothing though. What happens when occupied Korea (or any country) needs more USD that it's not getting due to reduced exports to the US?
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South Korea is a country at the highest levels of technology and firmly within the center of center-periphery relations. If we get to a point where it and other major economies cannot acquire USD simply because their exports to the US are down, then its unprecedented. We might as well entertain a global sovereign debt crisis and the collapse of the dollar as a reserve currency.
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Of course the occupied nations still recieve a lot of dollars via the occupation itself, but yes these tariffs will contribute to the overall trend dedollarization.
A global sovereign debt crisis due to US monetary policy is not unprecedented, and having a single global reserve currency has only been a very short blip in the history of civilization.
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That is not what was meant as unprecedented. Of course US policy has triggered global debt crises before. The weakest countries in the world have been in one for years at this point simply due to high FED interest rates. Rather, what is unprecedented is how the underlying assumptions of US policy would render the washington consensus financially obsolete. One thing is to say that neoliberalism is hurtful austerity. While that's the truth, what is also true is that oligarchy benefits from the sort of measures countries have taken when dealing with dollar scarcity - hyperinflation, devaluation, and export volume increases.
If we get to a point where South Korea cannot acquire dollars and there's nothing it can do to finance itself and its trade, if every single thing that the US government claims to believe about its consumer market's importance in the world is true and nobody except China can retool their economies to face the new normal then this isn't just another sovereign debt crisis. It is much bigger than that.
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The US doesn't yet have the manufacturing base to make the products people are buying from overseas. They can't magic these industries into existence so importers and companies will generally still source their goods and raw materials from the same places and swallow the 10% duty that they'll pass onto US consumers, or sellers from across the world will open up new markets in other territories now that many countries are simply not buying American goods.
The US is a little over 4% of the global population, so the market isn't as big or important as Trump imagines it to be, and with the likelihood of US citizens having less money to spend, that 4% has a reduced buying power.
USD will also grow ever weaker as time progresses and these tariffs stay in place, so there'll be less and less need to trade in USD when the currency is weakening.
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The US is a little over 4% of the global population, so the market isn't as big or important as Trump imagines it to be, and with the likelihood of US citizens having less money to spend, that 4% has a reduced buying power.
That's not really true. All these net exporter nations are definitely in trouble because the US consumes about 50% of global imports. The vast majority of the world doesn't create as much demand for imported goods as the US, so the huge amount of demand taken off the world market will lead to deflation for all other countries that absorb the redirected goods.
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I think it is a mistake to give too much weight to the logic of the capitalists and ultimately imperialists. The US does not generate demand. It subsumes 50% of global exports as a tribute.
The reduction of demand for goods and resources from the US is an opportunity for countries to build internal circulation so they may use their own production for their own needs and development.
Trump's crude tariffs policy does this by creating shocks, but the US was never going to peacefully and gradually assist countries in de-dollarisation regardless of who was in charge.
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That's part of why China has been so focused on developing internal demand for the goods they can produce.
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The tariffs will be passed on to consumers, likely with a markup, and people will buy less and less as prices increase even further out of affordability. Obviously US manufacturing isn't coming back, but that doesn't mean imports will continue at historic levels.
Of course parallel to this, economic alliances like the BRICS are trying out dedollarized trade paradigms, and many countries are selling off their reserves of USD.
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It's more of an opportunity cost when they can't export to the US as easily. It's whatever though, just more decoupling of the US from its key allies
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