Hello everyone, good evening. How are you all doing? I hope things are going well. Cuz I myself am having a tough time navigating my very tight schedule. Between class and Ramadan and other things in my day-to-day life, this is quite a busy time I am passing. But anyway, I found something that could be a problem for all of us in the coming future. And that is Donald Trump's tariffs, again. At this point most of you might be fed up of me talking about the situations again and again, but really it is the kind of this version that you need to talk about again and again.
So what I want to say is these tariffs which America is putting on different countries are hurting them and hurting us and hurting you. Basically everyone. How? The main purpose of putting tariffs on stuff is to incentivize domestic production because the additional import cost isn't falling on the exporting country. The imported product is becoming more expensive than the competitive domestic product. So when a consumer is in the market for let's say chocolate. The imported chocolate is more expensive than domestic chocolate. So eventually the demand for imports goes down. So any country who exports stuff, is going to be upset about it. And they will put tariffs too. And that has already happened. There is an ongoing trade war at the moment. Everyone vs America. But there is another even funnier side to this. And that is production costs. So there are many big Tech and car companies in America. Which use different parts from different parts of the world in order to assemble them. For example, every iPhone you buy, on its back there is written, designed in California, made in China. The components for the iPhone come from China, or the whole phone is assembled in China. The iPhone is from an American company but because certain parts and the assembly is outsourced to China, where tariffs are imposed, The production cost with the phone increases even while being an upstanding American tech company. And this is happening in many places, general motors is also facing similar problems due to tariffs in Mexico and Canada. Hence the average price of everything, not just imports, are increasing. And many economists are fearing a recession.
Another funny part is even Donald Trump is hesitant to deny anything about the recession. We have already seen the stock market in the red S&P 500 is losing money. Crypto is also losing money. The overall economy is facing a barrel. So God knows when these terraforms will stop and the economy might get better. The textbook example is that in the short term there will be difficulties but it will be a fruit in the long term. For such an interconnected economy across the whole globe, I doubt things will be as easy as in that textbook.
Your post has been curated from the @pandex curation project. Click on the banner below to visit our official website and learn more about Panda-X.