TRUMP, TARIFFS and his PANDORA'S BOX

So Trump's 'beautiful' tariffs are already coming back to bite him.

Trump has imposed new tariffs on China including increasing those on semi conductors from 20.5% to 50%,  which means those semi-conductors which are essential for the manufacture, of amongst other things, micro-chips, which these days control just about everything from mobile phones to 'smart' fridges, from EV cars  to TV sets, will now become considerable more expensive to the US customer.

Trump's 'plan' if you can believe that he actually has a plan, rather than just a collection of knee-jerk sound-bites, is that America will now make its own semi-conductors........only China controls some 60% of rare earth metals essential for their manufacture, and to rub salt into the wound have retaliated by imposing a tariff of 75% on the export of rare earth metals to the USA.

Trump has also imposed 100% tariff  on Chinese EV's (electric vehicles) which supposedly will mean his new best friend, Elon Musk, will corner the market with more and more Teslas........but but but...... even Elon can't make electric cars without the now far more expensive rare earth metals!!!!!!

A problem with meddling with trading procedures is that no longer are American cars, fridges, TVs et al made exclusively in America using components all of which are made in the USA. America, like all other countries, sources its components and raw materials world-wide and to disrupt one avenue has knock-on consequences which are both complex and far-reaching, and frankly are beyond Trump's limited intelligence.

One thing is certain, by upsetting the delicate balance of inter-continental trade Trump has opened a Pandora's box, one he has no hope of containing.