https://voxday.net/2025/04/12/trade-deficit-whip-hand/
Trade Deficit = Whip Hand
Vox Day
April 12, 2025
Donald Trump makes the textbook economics explicit:
https://www.rt.com/news/615679-trump-tariffs-too-high-dont-do-business-us/
The countries that deem US tariffs on their goods to be too high can just stop doing business with America altogether, President Donald Trump has suggested. He further insisted that his latest trade policies have made
the US "strong," bringing "billions of dollars a day" into its coffers.
On Wednesday, the US president slapped stiffer "reciprocal" tariffs on
nearly 90 nations, only to announce a 90-day pause and a "substantially lowered Reciprocal Tariff during this period, of 10%," in a post on his
Truth Social platform several hours later. The pause however does not
apply to China, with which the US has engaged in a tit-for-tat exchange of ever-higher tariffs, with most of Beijing's imports now subject to a 145% duty.
Speaking to reporters aboard Air Force One on Friday, Trump proclaimed
that "ultimately, we pretty much can do what we want to do. We can set the tariff, and they can choose not to deal with us, or they can choose to pay it," he explained, asserting that "if they think it's too high, they don't have to do business with us."
It's a simple and obvious power equation. When you have nothing to lose, and you're the one who owns the market in which everyone is interested, then
you're in control. No country with a trade deficit with the USA has any leverage at all, because the US is obviously better off not trading with it than continuing to trade with it on the basis of the system that has impoverished and hollowed-out the US economy.
This is why the threats of returning the favor are so empty and stupid. The
USA would BENEFIT from pure autarky, so trade restrictions are not a viable threat. The President's move is brilliant, because it not only protects the
US markets, it prevents US companies from leaving the USA as well.
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