Reciprocal tariffs could be coming to every OECD country if we believe everything Donald Trump says. He sees VAT as a tariff imposed on US imports, which means he wants to impose the same amount on those countries for goods they export to America. That would apply to every OECD country and, supposedly, the President has said there will be no exceptions.

Does this mean a global trade war is just about to happen? Steve has been a supporter of protectionism as a way to aid growth, and understands the need for America to bring jobs back home, but not with the “bull in the  China shop approach” that Trump is taking.

But Phil asks whether the horse has already bolted. The web of international supply chains is well established and difficult to break. Haven’t we all benefited from lower cost goods? And even if you brought back production functions would automation mean few new jobs would be produced?

In short, is Trump too late to make a difference. Will he just create chaos?

First Aired on Debunking Economics.

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Tariffic Trump

At least half of America is elated with its new choice of President.   Money is already flowing into the country, with early gains on the NYSE and the dollar shooting higher in value. Tariffs will be front and centre early in the new Presidency, with Trump describing Tariffs as “a beautiful word” recently.

But will it have the intended effect? Could the strength in the dollar wipe out any of the benefits from domestic production? Will higher tariffs add to the cost and drive inflation? Does America have the skills base to manage the on-shoring of so much productive capacity?

Phil Dobbie and Steve Keen discuss what will happen next in America.

It doesn’t have to be that difficult.

So, if economics is all about the allocation of scarce resources, isn’t energy the most scarce resource? And yet its not really included in any economic models. We look at labour and capital as the drivers of growth, but energy is just a contributor to those factors, not a key factor in itself. Yet without energy humans wouldn’t survive and machines would lie dormant.

This week Phil talks to Steve about the need to give energy the dominant position it deserves in economic models. As you’ll discover, it doesn’t have to be that complicated. Then, once we have a clear model we can use them to ensure that we deliver economic growth without destroying the planet.

Simples.

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