Trump’s Geopolitics for the Economy

Abstract

Trump's protectionist policies, such as tariffs, have had knock-on effects on the global economy, leading to a decline in economic expectations and a decline in the economy. The negative effects have been felt not only in financial markets, but also in people's daily lives, particularly for those who depend on cheap goods. Markets reacted early to the announcement of the tariffs, with a significant devaluation of the shares, highlighting the lack of confidence in the country's economic direction. However, it is emphasized that the real indicator of economic health is the purchasing power of households, not fluctuations in financial markets. the basic idea of the Trumpian is based on the hypothesis that tariffs could lead to a return of industries in the United States, but the possibility of such a return is doubtful, given that multinationals are attracted by lower production costs in other countries, such as China. The first law of thermodynamics also applies to the economy: capital and industries will always tend towards the places of lowest cost, as heat goes towards cold and not vice versa. Tension is growing between the United States and China, especially after the imposition of tariffs and Chinese responses. China, which has benefited enormously from globalization, is now showing signs of strong resistance to a return of American industries. China's response was swift and decisive, suggesting that China is unwilling to give in to U.S. pressure. In conclusion, current economic policies may not only not bring the desired results but also aggravate the economic situation both in the United States and globally. The separation between the real economy and financial activity continues to create imbalances, and the economic future remains uncertain. A profound reflection on the need to reconnect the real economy with the financial economy could rule out the speculative temptations that have characterized the last decades.