Trump 2.0 policy may reignite inflation! Krugman warns: trade wars, deportation of migrant workers are detrimental to the US economy..

Paul Krugman, a Nobel laureate in economics, recently said that after Trump took office, his repeated emphasis on raising tariffs will not necessarily reduce the US trade deficit, and even if it can be reduced, the result of this approach may not be what Trump wants to see; At the same time, its move to repatriate immigrants may also trigger an inflationary rebound. (Synopsis: JPMorgan Chase: Trump will promote BTC "8 weeks in a row", friendly BTC commitment, tariff policy double Favourable Information) (Background supplement: Trump proposes to "abolish federal income tax": collect tariffs and make a fortune in the United States!) TSMC's biggest victim? Paul Krugman, a Nobel laureate economist and columnist for The New York Times, said in an article published on November 13 that although Trump's repeated emphasis on raising tariffs after taking office will not necessarily reduce the U.S. trade deficit, even if it can be reduced, the result of this approach may not be what Trump wants to see. At the same time, he warned that his move to repatriate migrants could also trigger an inflationary rebound. Can Trump effectively reduce the U.S. trade deficit? Krugman first pointed out that Trump's logic is that the long-term trade deficit of the United States has caused damage to the interests of the United States, and that by raising tariffs, the trade deficit can be narrowed. However, Krugman said that according to traditional analysis, Trump's approach to raising tariffs will affect manufacturing that relies heavily on imported raw materials: The modern U.S. economy has Depth embedded in global value chains, especially manufacturing, which relies heavily on imported raw materials. An across-the-board tariff increase would raise production costs significantly, so it is likely to lead to a decline in manufacturing output and employment. Second, when the United States raises tariffs, it will be countered by China, the European Union and other economies, which may have side effects on the US economy: The US tariff policy may be retaliated, and Trump also sees the US economic strength as too strong. Perhaps you could argue that because the U.S. imports more than it exports, foreign tariffs on U.S. exports may not fully offset the impact of U.S. tariffs on imports, but it's worth noting that for U.S. export-dependent populations, such as farmers, it will undoubtedly be a blow. In addition, Krugman added that if we start from the perspective of "overall balance", even if there is no counterattack from other countries and manufacturing is not affected, Trump's policy may still be difficult to reduce the trade deficit: Trying to squeeze the trade deficit by raising tariffs will eventually be like holding a balloon, and the deficit will manifest elsewhere. Because if tariffs are raised, even if there is no retaliation from other countries, the dollar will appreciate, and then the inflation problem will rebound, making US exports less competitive, and ultimately it will be difficult to achieve the goal of reducing the trade deficit. What happens to the expulsion of illegal trade unions? As for the impact of Trump's promised large-scale deportation policies? Krugman said that developed countries have aging populations, slow or even negative growth of working-age populations; But in the United States, population growth has slowed less than elsewhere due to higher fertility rates and immigration. But if Trump does carry out mass deportations, this advantage will suddenly reverse; With the deficit exploding, financial markets are currently betting on Intrerest Raterise, and a shrinking labor force could further lead to Intrerest Raterise. Krugman expects that when the labor market puts pressure on it, wages and prices will rise, and inflation will rebound. Krugman continued that Trump's tariff policy may not only make it difficult to reduce the U.S. trade deficit, but more seriously, it may have a worse impact on the global economy: Raising tariffs may affect the global flow of capital, and if the U.S. trade environment is restricted, foreign capital will no longer be willing to flow into the United States for investment. Finally, Krugman said that if the above scenario arises, when foreign capital is reluctant to invest in the United States, it may reduce the U.S. trade deficit to some extent, but this outcome may not be what Trump wants: such a policy would hurt global trade and the capital market, and ultimately, Trump may be disappointed with his own economic policies because of these damaging economic results. Related reports JPMorgan: Trump will promote BTC "8 weeks in a row", friendly BTC commitment, tariff policy double Favourable Information Trump proposes to "abolish federal income tax": collect tariffs and make a fortune in the United States! TSMC's biggest victim? Trump condemns China to blame for the epidemic and considers tariff retaliation! What impact will this have on BTC? 〈Trump 2.0 policy may rekindle inflation! Krumman warns: tariff war, repatriation of migrant workers are not harmful to the US economy: This article was first published in BlockTempo "Dynamic Trend - The Most Influential Block Chain News Media".