DonaldTrumpisnotactinglikeamanseriousaboutwinningthispresidentialelection.Hiskeyproposal(universaltariffs)iswildlyunpopularwithvoters.
AnNBCNewspollrevealedthat44%ofvotersarelesslikelytobackacandidatewhosupportstariffsofupto20%onimports.Only35%saidtheywouldbemorelikelytosupportsuchacandidate,and19%saiditwouldn’tmatter.Thisisnotawinningstrategy.
Despitethebacklash,Trumpisdiggingin.Hislogic?PushtariffssohighthatcompanieshavenochoicebuttorelocatetotheUnitedStates.Inarecentinterview,Trumpexplainedthat:
“Thehigherthetariff,themorelikelyitisthatthecompanywillcomeintotheUnitedStatesandbuildafactoryintheUnitedStates,soitdoesn’thavetopaythetariff.”
He’sfloateda20%tariffonallimportsanda60%tariffonChinesegoods,bettingthatthiswillforcejobcreationandmakeAmericarichagain.
Trump’sfacesejectionfromallsides
Theproblem?Economists,voters,andevensomemembersofhisownpartyarecallingtheideareckless.ExpertswarnthattariffshurtAmericanbusinessesfirst.
Importerswillpaythetariff,andthosecostswillgetpassedontoconsumers.Moreexpensivegoodsmeanhigherinflation—justasinflationintheU.S.hadstartedtoease.
Withinflationataround5.5%year-on-yearinOctober2024,someeconomistsfearthattariffscouldpushinflationbeyond7%.
RepublicanSenateMinorityLeaderMitchMcConnellsaidinSeptember,“I’mnotafanoftariffs.TheyraisepricesforAmericanconsumers.”
KamalaHarris,Trump’sDemocraticopponent,jumpedontheissue,callinghistariffproposalthe“Trumpsalestax.”
TheBidenadministrationhaskeptsomeTrump-eratariffsbutclaimsitsapproachismorecalculated.TreasurySecretaryJanetYellenemphasizedthattheirtariffsaretargetedatstrategicsectors.
Shealsosaidthatagroupofeconomistsoverwhelminglybelievebroadtariffswouldharmtheeconomy.TheBiden-HarriscampinsiststheyareprotectingAmericanindustrieswithouthurtingconsumers.
ElonMusk,Bitcoin,andTrump’stariffs
AsTrumpbattlesbacklashovertariffs,he’sgotastrongsupporterinElonMusk,whohasbeenpushingapetitiontoenticeswingstatevotersforhim.
AtaneventinPennsylvania,Muskpromised$1millionadaytoasignerofhispetitiontogetvotersmotivated.Naturally,thishasgottenbothmenatonofbacklashoverthepastcoupleofdays.
ForBitcoin,Trump’stariffplanmightbebothathreatandanopportunity.Ifhispoliciesspikeinflation,itcouldgetaboost.
Historically,Bitcoinisviewedasahedgeagainstinflation.DuringTrump’sfirstterm,histariffsonChinacontributedtopricehikesacrossvarioussectors,andanalystsexpectarepeatperformance.
SomeanalystsbelieveBitcoincouldhit$150,000ifinflationjumps.Still,volatilitywillbeamajorconcern.Politicaleventslikedebatesandelectionshavemadepricesswingwildlythisyear.
ShouldTrumpwin,theannouncementofnewtariffscouldtriggeranothershort-termsell-off.Butinthelongrun,BitcoinmightthriveundertheinflationarypressuresthatTrump’stariffswouldunleash.
cryptopolitan.com