Why US will fail in its trade war against world powers?

September 14, 2018 | By Admin | Filed in: Business, Tech.

In order to know why US started the trade war, we need to know what’s the exact mechanism of US economy and the way it works. According to history, US didn’t hurt during WWII but its European rivals were almost destroyed to dusts. US gave EU countries some funds and loans in terms of its currency dollar but when those countries were ready to pay back their loans, US treasury department didn’t accept to deliver those dollars in the form of the dollar currency but products. This main reason forced Europeans to become workers of the US to spread US dollar globally and buy products and give those money back in the form of products or services for many years.

The spread of dollar and use of it in interactions made dollar a powerful means till the union of Europeans and the birth of Euro. Now that EU countries plus China have succeeded much in economy, US can’t use the same trick to shift the burden of its economy on the shoulders of the world countries, therefore it has started to complain that current economic relations that US has had with the world are not fair enough, therefore US needs to protect its interests and to support its own manufactures by imposing tariffs on other countries.

This time rivals of the US can’t be tricked so easily as all experts believe that with current situation, it’s almost impossible for the US economy to grow faster than what it does now. Even by means of tariffs, US economy doesn’t have powerful structure and itself good infrastructure of an advanced country anymore and on the basis of this and its external debts, US can’t defeat China and EU except if it re-builds its economic infrastructures which itself needs external loans which will add to its external debts.

In simple words, the amount of money needed to generate enough revenues to compete with the world powers is at least 1000 times of the money US needs to build such infrastructures. And this mission is impossible as even if other countries had such fund to help US, such payment would make themselves poorer and would add to their debts. For example, the EU countries couldn’t save tiny Greece economy unless with many economic reforms in that country resulting in pressures on people. Therefore, trade war is intended to do this job little by little, however, until now, this strategy has failed to work well and just added to US problems.

 

#China #US #Trump #TradeWar #EU #Euro #dollar


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