There has been a hue and cry from economists that consumers will pay for Trump’s tariffs in the form of higher prices. China does not pay the tariff on Chinese products.
Parenthetically, I note that since the introduction of tariffs on China, the Chinese stock market has been going up, while Wall Street has been going down.
When it comes to small countries, however, the US is waging economic warfare against adversaries who don’t have the power to fight back economically. For example, Trump wanted to fly migrants in US military aircraft into Columbia, and when Columbia refused, Trump slapped a 25% tariff on them. The Columbian president immediately backed down.
So in this case, you can say that Columbia paid for the tariff. This is happening around the world. People tend to think of tariffs on China and big countries, but those threatened tariffs against smaller, more defenseless countries, are economic warfare that results in those countries’ paying (although not monetarily) for the tariffs.
The threat of tariffs in order to secure U.S. military landing rights in Columbia is especially worrying, because it translates an economic threat into a military solution. Suppose, for example, that Trump wanted to build a naval base on a small Caribbean island that sells its bananas to the US. He could say, “If you don’t let us build the naval base, we will not buy your bananas.” Of course the base will be built.
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The past decade has seen a deterioration in the world security, where it used to be a rather unwritten law that a big country would not just invade or take over a small country. Probably the Pax Americana had a lot to do with this. But now, Russia dares to try to take over Ukraine. We have Rwandan forces trying to take over parts of the Congo. And, of course, we have Trump threatening to take over Panama or Greenland or even Canada, and he doesn’t rule out a military takeover. Latest is an American takeover of Gaza, in which the Gazans are expelled so that Trump & Co. Can build a ‘Riviera’, complete with a Trump Tower and Trump family-owned resorts. (How about a pork-rib barbecue?)
What can smaller countries do to prevent economic bullying by bigger countries? The only solution I see is in cooperation among small countries. All the banana producers would have to join forces and vow that an economic tariff or boycott of one country would result in tariffs or boycotts against the US from all those countries. It’s hard to see this happening: if the US slaps a tariff on bananas from one small island, the next island might say, “Goodie! Now WE can sell MORE bananas to the US.”
But really now, Trump’s “America First” means “America against the rest of the world.” No cooperation with the UN, the WHO, or with any international agencies. No win-win negotiations. Trump is not just isolating America; he is actually antagonizing the rest of the world, who will before long gang up against Trump. Africa, South America, Asia will side with China in a grand alliance against the US, which will have lost all its allies.