TryGOLD- Free

Trump's tariffs will not eliminate the dollar's exorbitant privilege

Mint New Delhi|December 25, 2024
Exporters to the US may want to shift trade into other currencies but the dollar won't be dethroned
- VIVEK KAUL is the author of 'Bad Money'.

Idous Huxley, the English writer and philosopher, once said: "That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach." This dynamic is currently playing out in the United States. President-elect Donald Trump has been warning of imposing tariffs on countries with which the US has a trade deficit—that is, countries from which the US imports more goods and services than it exports.

There will be a few obvious effects of these tariffs. From January to October, the US ran a trade deficit of $736 billion, 12% higher than in the same period of 2023. Imposing tariffs to reduce the trade deficit would require sourcing goods and services locally, which might not be available at the same prices as imported alternatives or in sufficient quantities to meet demand. Goldman Sachs has estimated that tariffs will lead to inflation going up 1%. Further, many American and other companies that import what they sell in the US, from automobiles to household durables, may see their profits fall.

Indeed, the tariff threat may also be about nudging companies to move their sourcing and supply chains out of China. This is something that started during Trump's first term as US president and continued under Joe Biden. In fact, in January to October 2022, the US trade deficit (in goods) with China stood at $337 billion. In January to October 2023, it fell to $235 billion. This year, it was at $245 billion, implying that the US has seen some success on this front.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,500+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,500+ magazines and newspapers.

MORE STORIES FROM MINT NEW DELHIView all
Mint New Delhi

RJs ditch radio to become influencers

Radio jockeys were the original influencers in the time before social media. So, it's no surprise that RJs are now making the most of their soaring popularity on social media to become content creators and regain their status as influencers.

time-read
1 min  |
June 19, 2025
Mint New Delhi

Victimhood Is Costly: Don't Warp Policies to Favor Special Groups

Politicians who find it convenient to portray locals as victims of 'outsiders' tend to ignore the economic cost of nativist policies

time-read
4 mins  |
June 19, 2025
Mint New Delhi

Toll Relief, Annual Pass for Pvt Cars on Highways from 15 Aug

The government on Wednesday announced a FASTag-based annual pass priced at ₹3,000, effective from 15 August, offering commuters relief from having to pay frequent hefty toll on national highways.

time-read
1 min  |
June 19, 2025
Mint New Delhi

Ather to double India retail network

Indian e-scooter maker Ather Energy said on Wednesday it plans to double its retail network to 700 centres across India by the end of fiscal 2026 as it looks to strengthen its reach in the northern parts of the country.

time-read
1 min  |
June 19, 2025
Mint New Delhi

Intel Brings In New Engineering Leaders

Intel Corp. named new engineering leadership as part of a turnaround effort under chief executive officer (CEO) Lip-Bu Tan, tapping veterans of Cadence Design Systems Inc., Apple Inc., and Google.

time-read
1 min  |
June 19, 2025
Mint New Delhi

Jagdishan seeks quashing of FIR

HDFC Bank's managing director and chief executive officer Sashidhar Jagdishan has approached the Bombay High Court, seeking quashing of the FIR (first information report) registered against him based on the financial fraud allegations made by the Lilavati Trust, which oversees the Mumbai-based Lilavati Hospital.

time-read
1 min  |
June 19, 2025
Mint New Delhi

'Starbucks profitable, expansion hurting biz'

Coffee chain Starbucks, which operates in India via a 50:50 joint venture with Tata Consumer Products Ltd (TCPL), is seeing store-level profitability, but rapid expansion is hurting its profitability, a top Tata Group executive said.

time-read
1 min  |
June 19, 2025
Mint New Delhi

Indian cement stocks are dearer than some global peers

Sprinting ahead

time-read
1 min  |
June 19, 2025
Mint New Delhi

Vodafone partners with SpaceX rival

Telecom operator Vodafone Idea on Wednesday announced a partnership with Elon Musk-owned SpaceX rival satcom firm AST SpaceMobile for delivering satellite service on smartphones directly.

time-read
1 min  |
June 19, 2025
Mint New Delhi

Stentmaker SMT to file draft papers for ₹2,000 crore IPO

July filing would mark company's second attempt to go public after it shelved a 2021 plan

time-read
2 mins  |
June 19, 2025

We use cookies to provide and improve our services. By using our site, you consent to cookies. Learn more