Hi HODLers, Hiveans and Lions,
Well, Donald has decided to screw the stock and crypto markets as well as the US Economy.
What happened yesterday with what he called: "Liberation Day" will be remembered as a pivotal date for the US Economy and its citizens.
First of all, it will be remember as a day where he decided to unilateraly bully his allies. By allies, I am naming Canada, Japan, South Korea and the European Union.
The previous backlash following his comments on Europe and NATO alliances as well as his handling of Ukraine and Zelensky were very unpopular in Europe. The follow-up with he constant talks about annexing Greenland just raise more animosity and European customers (in particular Danish, French and Germans) have started boycotting US Brands.
Canada which has recently been targeted by aggressive rhetoric and tariffs has pushed back and Canadians have been boycotting US Products and their trips to the US have dropped by more than 70% over the past few weeks
At a time when the West and its allies should be together to push back on Chinese expansion and Russian war-happy ruler. Donald Trump and his cabinet have decided to bully its allies. Smart...
If this does not setlle rapidly and if Asian and European countries start retaliating, this could get out of hands quite quickly. Europe could tax profits from the MAG7 as an example and of course increase their own tariffs.
As US economy and consumers are having issues, it seems to be one of the worst time to do a trade war!
Recession, here we come!?
List of tariffs
Finally, this list is laughable. The tariffs % listed for countries are Completely wrong. As an example, European Union tariffs are listed as 39% whereas they actually are around 1%!
I would have been ashamed to present this live to the world while knowing these were made-up percentages. I have seen an excel table where it seems these % are actually the US trade deficit against each of these countries (Imports -Export / Total Trade).
DeepDive on EU-US Trade
Total bilateral trade in goods reached €851 billion in 2023. The EU exported €503 billion of goods to the US market, while importing €347 billion; this resulted in a goods trade surplus of €157 billion for the EU.
Total bilateral trade in services between the EU and the US was worth €746 billion in 2023. The EU exported €319 billion of services to the US, while importing €427 billion from the US; this resulted in a services trade deficit of €109 billion for the EU.
The EU and the US are also major investment partners. EU and US firms have €5.3 trillion worth of investment in each other's markets (2022 data).
Nevertheless, considering the actual trade in goods between the EU and US, in practice the average tariff rate on both sides is approximately 1%. In 2023, the US collected approximately €7 billion of tariffs on EU exports, and the EU collected approximately €3 billion on US exports.
Seems like quite a balanced relationship to me...
Source: https://ec.europa.eu/commission/presscorner/detail/en/qanda_25_541
Stay safe out there