Oh America . . . What Have You Done?
How will Trump 2.0 affect the world, your pocket and your job?
It’s all over, bar the final vote count. Donald Trump is president-elect for the second time.
A triumph or a disaster for the USA and the world? My money is on catastrophic disaster.
Why did American voters think that a criminally convicted felon and twice impeached former president was the right person to be their commander-in-chief? The US has a strange voting system that differs from state to state. The same rules don’t apply everywhere and are sometimes open to interpretation. Despite that, Trump is the clear winner and will take his place as only the second president to win a second term that is not consecutive.
Here are some predictions on actions Trump will take in his first days back behind the desk in the Oval Office:
Trump will close down the remaining legal actions against him.
Trump will take legal action against those officials, such as Jack Smith.
These actions will be taken out of spite against those officials and for no other reason.
Some will see these actions as a dictatorship and others as nothing less than heroic.
Import tariffs will be introduced to help “Make America Great Again”. (They won’t by the way)
And that is just the start.
The new president of the United States will look to impose tariffs on imports from outside the USA. This has been a stated intention during the campaign, but most Americans, or the rest of the world, don’t understand the ramifications to their pockets from such an action.
What was frightening to me, watching some US television channels during the election cycle, was the lack of understanding by both the public and many news pundits of how tariffs work.
Trump uses words to the effect “. . . we will impose a 60% tariff on Chinese companies . . . “ That is simply not true.
The Chinese companies don’t pay the tariff - the end consumer pays them. The 60% is paid by the US-based importer when the products land at the US border, and the cost of shipping is included. Those costs will be passed on to the end customer. For instance, the person on the street who buys a new iPhone is affected, as most of them are assembled in China. Apple will have paid the import tariff but will pass on that cost to the buyer.
Let’s look at you as an individual American buying a product from one of the world’s largest online retailers, Alibaba.
You pay, say, $100 for your chosen product plus $10 shipping. That’s $110 today, and you are happy with that. In 2025, a 60% tariff will be slapped on your Chinese import, and before you open the box, your shipper, be it DHL, UPS, or another, will demand you pay the 60% tariff on your purchase. That adds $66 to your box of goodies, the tariff is paid in shipping, too, remember.
The cost to your pocket is now $166 rather than $110. There is a good chance that DHL or UPS will also charge you a handling fee on top of the $66 to cover their costs of paying the tariff. Still happy about putting America first?
An interview I saw on, I think it was CNN spoke with a Republican voter who believed that prices in the shops were too high and that Donald Trump had promised to reduce the cost of living for everyone. The opposite is the case - imported goods will go UP, not down, due to the tariffs. Be that on your new iPhone or from $100 to $166 in our simple example of a direct purchase.
And where does the tariff money actually go? It’s a tax - it goes to the US government.
More widely, taking the United Kingdom as an example, what happens to exports to the US?
Trump is talking of a 10% to 20% blanket tariff on all imports, with higher rates for China. As we have seen, it isn’t the UK exporter who pays the tariff, but the US importer and, eventually, the consumer. The aim of tariffs is to reduce imports, but businesses in the UK will find that orders from the US market will be reduced or even cancelled altogether.
The effect on British business following the US election will be lower sales and lower profits, which will feed through to job losses. The election of Donald Trump in the US could result in you losing your job in the UK.
Thanks, America!