Trumponomics Centers on Trade
More for Americans Using Trade as a " Big Stick"
Deficit solved by tax cuts and Debt left to Federal Reserve
But, US Political Economy Will Decides
 the  of Trumponomics and who gets or pays.

 
With US Capitalism,
New Technology and Better Management Systems create unmatched efficiency, but the
resulting Creative Destruction efficiency hurts once productive American owners.
To help, US provides an extensive Safety Net.

Americans Own

Trade

 Owners Receive

Rent

Deficit

 
A Trade Deficit means Americans Buy More---Stuff In & dollars out,
than Americans Sell---Stuff Out & dollars in.
Resulting Deficit Dollars Americans get more Stuff and Foreigners get more dollar

Dollars come back to US as foreigners investment in US Assets,
especially US treasuries, stocks, businesses, real estate, natural resources plus travel in US.
This system is always in balance, so
but some foreigners do not buy assets, they hoard dollars,
Americans gets free stuff in as paper dollars stay out.
suggestions to antonw@ix.netcom.com

Will Trump replace tariffs on companies with a tariff on nations with a US trade surplus.
Rather than a 10% tariffs on $400+ billion dollars of Canadian export to US,
he puts a tariff on Canada equal to their $40+ billion, payable in US Treasuries.
Let Canada pay a tariff and encourage companies to move operations to US.
Toyota built its fist US assembly plant in 1972, #12 opens in 2025.
See Democratic Capitalism Vs. Capitalistic Democracy

Domestic Savers and Foreign Creditors provided most US Deficit Financing.
Covid and the Great Recession threatened depression,
 so the Federal Reserves created needed financing (dollar credits i.e. printed money).
It took ten years for Great Recession these dollar credits to be paid back.

To limit inflation, the FED controlled the rate these $ credits enter the real economy.
Economic growth limits the
long real economy cost of US Debt Interest Payments.

To date, the FED has managed this entire process reasonably well.
Watch 1) ten-year interest rates to see if savers need higher interest to continue leading and
2) the value of the $ to see how the balance of trade is affected.

Tariff Increase as a "Big Stick."

Tariff effect makes FG  more expensive decreasing imports.
 Fewer $ needed to buy FG  reducing exchanger rates making a stronger $.
$ effect may increase imports.
Result: higher tariffs may have little effect on trade.

 A stronger $ makes US exports more expensive, foreigners buy less hurting all business.

Worst result of tariff is
 tariff effect is > strong $ effect so US imports less.
strong $ makes foreigner imports less
recession begins
 

Trump appears to asking foreigners
to pay tribute
 to replace  losses
 from his attempt to reverse 
gains from 50 years of
manufacturing creative destruction

Few Crony Capitalists

US Political Eras 1790-2025