Why Trump's Tariffs Are Doomed To Fail

Summary

Adam Something provides a compelling critique on why Trump's tariff strategy is doomed to fail. He argues that the tactic of imposing tariffs on China and other countries might be an attempt to revert the US to a manufacturing-based economy, but it’s fundamentally flawed. The video explores how these tariffs could potentially isolate the US rather than China and weaken the American industrial sector. The Trump administration's plan to bring manufacturing back to the US ignores systemic economic issues and underestimates the complexities of today's global market, making their strategy ineffective.

Highlights

• Trump’s tariffs aim to isolate China but could lead to US isolation instead. 🌐✋
• Reviving US manufacturing while maintaining a strong dollar is contradictory. 💸💼
• US products are not competitive globally, lacking in quality and efficiency. 🚗❌
• Military power depends on a strong dollar; weakening it for exports could weaken military dominance. 🥊💵
• Adam suggests systemic economic reforms over tariffs to restore US economic health. 🔄📈

Key Takeaways

• Trump's tariff strategy is an attempt to leverage global negotiations and revive the US manufacturing sector but is fundamentally flawed. 🤔
• The plan to isolate China through tariffs may backfire, potentially isolating the US instead. 🇨🇳🚫
• Turning the US back into a major manufacturing hub ignores systemic economic issues and global dependencies. 🏭🇺🇸
• US allies are resisting becoming economic vessels, forming independent alliances. 🌍🤝
• A strong US dollar supports military power, but weakening it could undercut military and financial dominance. 💪💵

Overview

In this insightful video, Adam Something dissects Trump's tariff strategies and outlines why they are unlikely to succeed. He explains that Trump's plan to isolate China economically, while reinvigorating the US manufacturing sector, is plagued with inaccuracies and oversights, primarily ignoring the realities of global trade dependencies and domestic economic structures.

Adam humorously critiques Trump's efforts to make allies economic vessels, noting that these nations are forming their own alliances to counteract US policies. He points out the absurdity of Trump's plan, as these allies are more likely to unite against American pressures, rather than succumb to them.

Furthermore, the video tackles the importance of the US dollar as a global reserve currency and how Trump's policies could inadvertently weaken the dollar, undermining the military and financial leverage the US holds. Adam argues for systemic domestic economic reforms instead of regressive trade policies to truly strengthen America’s economy.

Chapters

• 00:00 - 00:30: Introduction to Trump's Tariffs and Objectives The chapter discusses the surprising implementation of tariffs by Trump's administration, which some believed to be a mere negotiation tactic. Despite initial skepticism, the tariffs between China and the US have been significantly increased. The Trump administration's objectives with the tariffs are to isolate China, leverage negotiations with other countries, and transform the US back into an industrial export-oriented economy. The chapter questions the feasibility and effectiveness of these objectives.
• 00:30 - 03:20: Isolating China and Global Trade Implications This chapter discusses the strategic implications of isolating China in global trade, a plan perceived as risky yet deliberate by the Trump administration. The approach is described as splitting the world into two factions: those economically aligned with China and those not. The conclusion suggests this could potentially offer leverage in negotiations but acknowledges the audacity of the idea.
• 03:20 - 04:00: NordVPN Sponsorship Segment The chapter discusses the geopolitical dynamics of how countries align with the United States for benefits in trade and military protection. Countries in the first category, which include most Western and West-aligned nations, enjoy lower tariffs and security support. However, this comes at the cost of economic domination by the U.S., as they are compelled to decrease barriers for American exports, relocate industrial operations to the U.S., and serve as markets for American products. Those countries not aligned with the U.S., such as China and Russia, do not receive these benefits, maintaining more independence in their economic strategies.
• 04:00 - 08:00: Challenges of Re-industrialization in the US The chapter delves into the challenges faced by the US in its efforts to re-industrialize through imposing tariffs on other countries. It highlights the impracticality of the plan, suggesting that other countries, particularly economic entities of comparable size like the European Union, may not be amenable to being coerced into economic subservience. Instead, these countries might unite in opposition, potentially undermining the unilateral economic strategies of the US.
• 08:00 - 13:00: Economic Consequences and Military Power The chapter discusses the economic and security implications of relying on foreign nations for industry, highlighting concerns over losing economic autonomy to less competent but potentially powerful countries. It also touches on privacy and security measures, using the example of the EU issuing burner phones to its staff to prevent espionage, particularly from the US. Furthermore, the chapter mentions the importance of practical privacy tools for everyday people, introducing NordVPN as a solution to protect personal privacy and data across various digital platforms.
• 13:00 - 16:00: Viable Alternatives and Solutions for US Economy The chapter discusses the importance of cybersecurity tools like NordVPN's specific features in protecting users from scams and threats such as phishing, malware, and credential leaks. It highlights advanced protective features including threat protection, anti-phishing tools, and dark web monitoring. However, it humorously notes that such tools cannot prevent all types of risks, such as making poor personal security decisions like inviting a journalist into a sensitive discussion.

Why Trump's Tariffs Are Doomed To Fail Transcription

• 00:00 - 00:30 Like many others, I was quite surprised to see that Trump and his cronies are actually going ahead with their little trade war. Some have postulated that tariffs are just a bluff, part of some backwards 4D chess negotiation tactic. And yet, here we are, 100 plus% tariffs between China and the US. In principle, the Trump team's plan is quite simple. By imposing tariffs, they want to a isolate China while providing leverage for negotiations with other countries and b turn the US back into an industrial exportoriented economy. But could any of these plans ever work even to a limited extent? Let's take a look.
• 00:30 - 01:00 First, let's consider point A. Isolating China and gaining leverage in trade negotiations with other countries. Just what does the Trump team plan to do here exactly? Especially with the whole threatening your closest allies bit. Have they gone mental or is there a plan behind all this? Some might ask. Well, there is a plan in fact, and it's quite mental. Yanis Farufakis wrote about this recently in an article you should definitely check out after this video. The plan here seems to be to basically split the world into two camps. Those who get to enjoy economic closeness to
• 01:00 - 01:30 and military protection by America and those who do not. So the first category would include most Western nations and most other West aligned countries. The second category would then include the likes of China and Russia. So what's the catch? Well, countries of the first category get to benefit from lower tariffs and military protection at the low low price of America dominating their economies. Basically, they would be forced to let in American exports move their industrial bases to the US and then function as export markets for American products as America makes bank on this arrangement. Those countries that remain outside of this protection
• 01:30 - 02:00 record will be forced to pay the US in the form of tariffs. So, is this plan viable? To quote an eternal classic, doesn't work. Never going to happen. Turns out other countries might have differing opinions on this issue. If you try to strongarm a bunch of countries into becoming your economic vessel states, they might just have something to say about it. Especially when it comes to economic books, which are about the same size as the US, like the European Union. See, these prospective vessel states might just start talking among each other, saying things like, "Wow, it would sure suck to
• 02:00 - 02:30 lose our industry and become economically subservient to a country run by a bunch of incompetent weird idiots." The EU is even giving it staff burner phones to stop them from being spied on in the US. And isn't that something? Burner phones are useful, but regular people need something more practical. Well, now, thanks to NordVPN, you can keep malicious actors out of your private life. Available both on Android, iOS, and PC, NordVPN protects your privacy and personal data with just a single click. It even alerts you if you visit a fake online store and if
• 02:30 - 03:00 you're about to fall victim to a scam, thanks to NordVPN's threat protection pro feature, which also doubles as a certified anti-ishing tool, protecting you from fishing websites. and as a brand new feature, the dark web monitor, alerting you in case your credentials are leaked anywhere, so you can take steps immediately. The only thing it cannot protect you from is inviting a journalist to your illegal signal chat room, where you discuss US attack plans. NordVPN also protects you from malware by blocking dangerous ads and not letting you stray into malware infested
• 03:00 - 03:30 websites. All this is integrated into the NordVPN app itself, so no need to download additional bloatware. NordVPN is also a useful tool if you travel a lot, especially on public transit. I like to use their service when using public Wi-Fi networks on longer train trips. Additionally, if access is limited by time or amount of data, you can just flip a switch and use those limits all over again. Get NordVPN's 2-year plan plus 4 months free using my link nordvpn.com/adamthing, which you will also find in the description. Subscribing is risk-free since it comes
• 03:30 - 04:00 with a 30-day money back guarantee. Thanks to NordVPN for sponsoring today's video. So prospective vessel states see that the US is run by a bunch of idiots. So they instead form their own economic alliance leaving the US out of it like the EU measur trade agreement or the EU India free trade agreement or a potential EU China trade agreement. And this aggressive American posturing also incentivizes countries to look for a new global reserve currency, one that isn't controlled by a bunch of weird idiots like the euro. And the letter is a particularly big problem for Trump and
• 04:00 - 04:30 company. Global US financial dominance. Their ultimate leverage hinges on a strong US dollar, which is the result of it being the global reserve currency. If that status is gone, then suddenly the US becomes just another country. The reason why other countries put up with Trump's is because America is the global financial center of the world. They cannot be circumvented because they control the global reserve currency. But now it seems the Trump admin no longer wants to have that role, which is insane. Their reasons for not wanting it actually ties into their second goal, turning the US back into an
• 04:30 - 05:00 industrial export- oriented economy. In the second half of the 20th century, America was famous for its manufacturing. This was the era when places like Detroit were at their height. Those idealized times when a factory worker was considered middle class and when the whole family could live on a single manufacturing salary. That world is gone, and the formerly booming towns and cities have since become rapidly depopulating urban wastelands, ravaged by poverty, opioids, and neglect. And so Trump and company want to turn back the clock by forcing companies to return their manufacturing
• 05:00 - 05:30 to the US, reviving the great industrial heartland, ushering in a new golden age of economic growth. That's the plan anyway. And the reasonable question to ask here is how? The US economy is quite simply not set up for major industrialization and exports. It's set to siphon money out of everything it can to make shareholders richer. These are what we call stock buybacks. Basically, when a company makes $100 million, the company does not spend it on development. Instead, it gives the money to shareholders. And for shareholders, this is great. But for the companies and
• 05:30 - 06:00 their employees, not so much. What if there is a bad year right after the stock buyback? Well, let's use our financial reserves to get through it. But hold on, we gave it all to shareholders last year. Uh-oh, looks like it's time for mass layoffs. So, the end result is mass poverty and joblessness for workers as shareholders pocket millions of dollars. This is a systemic issue that needs to be addressed with regulation, something the Trump team is notably not willing to do because that would go against the interest of the oligarchs backing them. Additionally, bringing major industrial
• 06:00 - 06:30 capacities to the US is not a trivial task. It's not like those logistics centers you see popping up next to cities where they just build a big metal box and a month later it's already fully up and running. Heavy industry is a bit different from that if you can imagine. You need industrial scale utilities built out. Roads, railroads, water, hazardous waste disposal, industrial water treatment. You need to upgrade the electricity grid. It's not a trivial task. And considering how the US manufacturing base has been left to rot for the past five decades, all of it needs to be rebuilt from scratch. And that would take years and billions and
• 06:30 - 07:00 billions of dollars. And much of the industrial equipment needed to start those factories is made in what country? Yeah, China. A country currently subject to 100 plus% tariffs. And these tariffs would need to stay in place indefinitely for US manufacturing to survive. The second the tariffs are gone, companies would start moving back to China due to lower production costs. Also, unemployment in the US is very low. Staffing those factories would require a large workforce. You usually get that through immigration, except the Trump team is gearing up for mass deportation,
• 07:00 - 07:30 which is notably the opposite. So, this big re-industrialization is just not going to happen, at least not on a large scale. Also because what if and now try to stay with me on this. What if other economic blocks will do to the US what the US is doing to them right now? So you know, hey America, that's a nice industrial base you got there. So nice that we have imposed 100% tariff on all its products. Good luck. you. And the standard mega response to this is, oh then our industry will just produce to our own domestic market. But that just isn't big enough to sustain an
• 07:30 - 08:00 industry the size of that of the 1970s. If you go the industrial route, you need to export. Period. But even if this mythical revived US industry starts producing to a global market tomorrow, they would get crushed by the competition. In 1970, exporting American cars was easy. Not many countries were making cars and not in such quantity or quality. Today, we have a Chinese EV sector far outpacing any Western producer. Competitors are cheaper, more efficient, and more technologically advanced. You know, in Europe, sometimes you see American pickup trucks. They are
• 08:00 - 08:30 mostly driven by socially maladapted middle-aged men unwilling to peacefully coexist in human society. Such pickup trucks are thankfully a very rare sight because they are horribly expensive, needlessly large, and consume more than three times the fuel compared to an average European car. Basically, you need to commit very hard to the bit to actually get one. And the reason for American pickup's monstrous size is to flee customers, nothing more. US car companies were looking for ways to sell more cars and figured that instead of selling more cars to more customers,
• 08:30 - 09:00 they could just sell each customer more car singular. Why sell you a one-tonon hatchback when they can also sell you a 2.5 ton pickup? With the pickup, you're essentially paying for two and a half cars while getting only one. And while this practice is great for the American market, turns out the global market is rather limited when it comes to $80,000 oversized gas guzzlers. Imagine that many American products are just not viable as exports. They are designed to fleece US customers in a protected market, not to compete abroad. And it's not like the US lets competitors cars
• 09:00 - 09:30 into its domestic market like Chinese EVs to compete with American cars. So why would other countries let in American cars? So if America wants to become an export powerhouse, it must ensure that there are as few tariffs as possible as low as possible. But wasn't this the exact problem so far that Trump and company have been raging about? Their problem is with the current global system of free trade, which supposedly disadvantages US industry. But that's mostly due to the way the US economy works, which I've talked about earlier, focusing on paying out investors instead of actual development. It's not that the
• 09:30 - 10:00 US has been getting bad deals from other countries. It's that US industrial products are not that great anymore, and that the US financial sector has turned the industrial sector and the whole country for that matter into their very own ATM machine. This is a result of the global neoliberal economic system and a lack of US financial sector regulations. Now, this system has worked out quite well for quite a few people. This is where the elephant curve comes in, showing us that in this system, pretty much everyone profited except for the world's poorest and the western middle class. Additionally, the top 1% profited
• 10:00 - 10:30 a lot. A 60% income growth is very different when you're making $15 a day versus 15 million. Okay, so with all that in mind, let's recap. The US tries to strongarm allies into becoming economic vessels, wants to bring back manufacturing to its territory, and seeks to become an exportoriented economy. But the allies or former allies are fighting back and will not become vessels. The US would need more workers, but it's currently getting ready for mass deportations. US products are not cutting edge at best and or a scheme to fleece customers at worst. And the US
• 10:30 - 11:00 economy is set to extract money from industry, not vice versa. And on top of this comes yet another problem, US military power. The upkeep of which is completely incompatible with the US being an export economy. And just how does that work? Currency. Every country has it. If your currency is strong, you can buy more stuff from other countries whose currencies are weaker. If your currency is weak, you can sell more stuff to other countries whose currencies are stronger. For example, let's say the US dollar and the euro are perfectly equal. $1 equals€1 and that
• 11:00 - 11:30 the EU US tariffs are zero. So, if a European car company makes a car costing €20,000, a US customer can buy it for $20,000. But if the dollar is stronger, so let's say $1 equals €2, then that €20,000 car would only cost $10,000 for the US customer. A strong currency is great when you want to buy stuff from abroad because you can get it for cheap. On the other hand, if the dollar is weaker, so let's say $2 equal€1, then that €20,000 European-made car will cost $40,000 for the US customer. On the flip
• 11:30 - 12:00 side, now the Americanmade car costing $20,000 will only cost €10,000 to the European customer. So now the US can go nuts with its exports, revving up those factories, ushering in a new golden age of manufacturing. Except US military power kind of hinges on a strong dollar. With the fact that it's the global reserve currency, the US dollar is highly valued no matter what. Enabling the US to upkeep a military of such size and strength. Building and maintaining their military depends on many, many foreign suppliers. To give you just one example, major parts of the F-35 are
• 12:00 - 12:30 made in the UK, Japan, Norway, Denmark, Canada, Netherlands, Italy, Austria, and so on. And all those parts are made cheaper for the US by a strong US dollar. And you also can't just move these hyper complex supply chains to the US overnight. It would take decades, assuming that all those other countries would willingly part with their military industry and pool of experts, which they won't. So, if you want to export stuff, you have to weaken the dollar. But if you weaken the dollar, the US military needs to be downsized. But if you downsize the US military, you undercut
• 12:30 - 13:00 the benefit of a military umbrella in exchange for being a US vessel state. And a weak dollar would also mean that the rest of the world would need to look for another global reserve currency. Meaning the US would no longer reign supreme in the global finance sector. So if the US wants to become a manufacturing powerhouse, it needs to weaken the dollar. But then being the world financial and military hegeimon goes right out the window, which kills most of America's leverage on the global stage. As in, why would China, India, or the EU listen to Trump at that point? The EU is the world's new
• 13:00 - 13:30 financial center, and the Chinese, Indian, and European armies are now on par with the American. So why should they give a about what Trump wants or thinks? Give us what we want, world, or we'll stop exporting our overpriced, oversized, shitty pickup trucks. Oh no, what a disaster. Right when those rural Chinese and Indian families were clamoring to buy a Ford F-150 Raptor with the supercharged Predator V8 engine, no. Come on. No. Trump's plan will not work. They're trying to have their cake and eat it too, basically.
• 13:30 - 14:00 So, with that being said, what would work? Regulations and investing into American society's welfare. Limiting the amount of stock buybacks so companies will invest into themselves instead of functioning as ATM machines for finance. Bros, linking decaying areas with high-speed rail to plug them back into the economic circulation. Spreading major corporations sites across the country so they aren't all concentrated in like three cities, making those places completely unaffordable. eliminating legal loopholes car makers use to bypass environmental regulations to sell giant pickup trucks instead of regular cheaper economical cars.
• 14:00 - 14:30 Enacting Medicare for all so that people no longer die on the streets due to curable diseases because they couldn't afford treatment in the richest country on the planet. Nationalize universities so they start functioning as actual places of learning instead of sports and real estate management firms with classrooms attached. Set a higher federal minimum wage, more paid vacation days, mandatory set periods. Hell, even the 4-day work week to increase employees well-being. Overhaul zoning laws so that more housing can be built in areas that need it the most, driving
• 14:30 - 15:00 down the cost of living. These are just some of the things the US government could do to help restore its middle class and lift millions out of poverty. The problem is not that manufacturing is gone. It's that the economy is set up to suck everyone and everything dry. There is still an ungodly amount of money circulating in the US economy. It's just that ordinary people see less and less of it since more and more of that money is concentrated at the top. It's that simple. America's economy is like a rickety rust the old gasg guzzler wreck of a car driven by a bunch of finance bros desperate to ring as much profit
• 15:00 - 15:30 out of it as possible before it breaks apart completely. The car has been getting slower for the past decades and the rattling noises are getting louder. The car needs a complete overhaul. But instead of that, Trump just wants to slap a V12 engine into it and call it a day. The US needs systemic changes. Not today, not yesterday, more like 20 years ago. An overcharged manufacturing sector, if feasible at all, might be able to mask problems for a while, but eventually they will all come back to haunt America. If by then there will be an America at all, which at this rate
• 15:30 - 16:00 I'm not so sure of, honestly.