Trump’s 25% Tariff Sparks Market Surprise – News Directory 3

Trump’s 25% Tariff Sparks Market Surprise – News Directory 3

⁤ ⁢Former⁢ President Donald Trump’s⁣ renewed focus on tariffs has sent ripples ⁤through global markets,⁣ impacting everything from⁤ stock prices to⁣ cryptocurrency values. This policy shift is drawing⁢ attention to ⁣a document known as⁣ the “Miran Report,” which some analysts believe ⁤is shaping Trump’s economic strategy.

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The “Miran Report,” ⁢authored by Harvard economist Steven Miran, who later served as chairman of the White ⁤House Economic Advisory Committee, proposes a⁢ important overhaul of the global trade system. The 41-page ⁣paper, originally titled ‘Global Trade System Reconstruction Guide’, advocates for combining tariffs with other ⁣policies to address what it sees as essential flaws ⁣in the post-World War II Bretton Woods⁣ financial order.

The report’s central⁢ argument revolves around the idea of sharing the costs ⁣associated with maintaining the dollar’s status as the world’s reserve currency.It suggests using tariffs as leverage to pressure allies into contributing more to ⁤the system. While initially dismissed⁢ by some, the “Miran Report” gained traction within the ⁣Trump governance and is now viewed by some as a key influence on the former president’s economic policies.

A core tenet of the “Miran⁣ Report” is the concept of a “structural strong dollar.” The report argues that ⁢the dollar’s dominance has led to an overvaluation, making U.S. exports less competitive and imports cheaper, thereby harming American manufacturing. ⁣This,⁤ in turn, has led to job losses and economic hardship for many ⁢Americans,⁣ according to ⁤the report’s analysis.

⁤ Classical economics suggests that a country with trade ⁢deficits should see its currency weaken, boosting ⁢exports and restoring balance. However, the report contends that⁣ this mechanism doesn’t function properly in the⁤ United States due to the dollar’s unique role as the world’s reserve currency. ⁣The persistent demand⁤ for dollars and U.S. Treasury bonds allows the country⁣ to sustain⁣ large deficits without the currency weakening as was to⁣ be expected.

⁤ The ⁤report references what is⁤ known as “Triffin’s dilemma,” where a country issuing⁤ the global reserve currency faces a conflict between meeting global demand for its currency and maintaining a healthy domestic economy. The “Miran Report” proposes a restructuring of the international monetary system to address this dilemma.

⁢ Instead of abandoning⁤ the dollar’s reserve currency status,⁢ the “Miran Report” suggests finding ways to share the benefits and burdens with other countries. The report outlines three primary goals: resolving the “structural strong dollar” issue, revitalizing U.S. manufacturing, and preserving the dollar’s global⁤ dominance.

To achieve these ⁢goals, the report proposes a combination ⁢of incentives and pressure tactics. It suggests converting foreign countries’ dollar assets into “permanent bonds” with near-zero interest rates. In exchange for accepting these terms, allies would receive assurances⁢ of U.S. security and reduced tariffs.The report suggests a tariff rate of 20-25% as a potential ⁣level.

⁣ ⁣ ⁤ ⁣ Trump has previously declared April 2⁣ as “Liberation Day,” signaling a renewed focus on tariffs. He ⁢has argued that⁤ the United States has been exploited for decades and that it is time to reclaim wealth ⁢and respect.The “Miran Report” provides a potential framework for achieving these⁤ goals, outlining specific policies and strategies.

⁤ ⁣ Whether the “Miran Report” will be fully implemented⁣ remains to be seen. However,⁣ its ⁤influence on Trump’s economic thinking is undeniable, and ⁢its proposals ⁣could have far-reaching consequences for the global economy.

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