On the afternoon of Feb. 13, 2025, President Trump announced from the White House, perhaps the most dramatic item of economic/financial news in decades, even centuries.
It was a vivid example of the massive latent power of the United States, when led by a patriotic, decisive leader with the courage to use that power to create a fairer and more realistic world. The world will be shaken as by no other item of news since the use of the atomic bomb in 1945.
How so?
President Trump announced yesterday that, to revive "fair trade" globally, America would charge every nation "reciprocal" tariffs on their exports to the United States.
As with many great events in human history, it was simple in outline, but more complex in detail.
For example, in simple terms. if a country selling motor cars into the U.S. charges 20% on its automobile imports from the U.S., they can expect a reciprocal tariff of 20% on their motorcar exports to the United States.
It's simple, clear and fair, at least in principle.
Of course, the exact mutual trade product mix for each country is complex, but the general thrust is clear.
The exact tariff can be based, not on individual product items, but on the product matrix of the gross value of trade with America.
Few announcements in history will have had had such a stunning and far-reaching effect.
Fair trade was talked about, but most often resulted in billions of American dollars being transferred to other countries and financed by massive debts to be repaid by future generation of Americans.
The massive unfair trade at America’s expense was a road to ruin for America and its Dollar currency.
At a stroke, Trump had restored sanity and renewed faith in America’s national finances.
Canadians, Icelanders, and perhaps citizens from other nations may clammer sooner that one may think to join Trump — as Americans.
Investors can expect the Dollar to rise strongly, with gold falling.
The BRICS (the countries of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the UAE) challenge to the U.S. Dollar appears to have been neutered by a brilliantly aimed slice of Trump’s knife.
The fallout will be complex, affecting each country, industry, and equity differently.
It's as if an asteroid has hit the global economy, which means it will take time for the dust to settle and offer clarity for investors.
Former Conservative Member of the UK Parliament, John Browne, was a vide president of UKIP which triggered the Brexit Referendum. Graduated: RMA Sandhurst; Harvard Business School; worked with Morgan Stanley in New York. In England, formerly a governor of a school; university, and director of a bank; investment firm; hospital, and a satellite TV station.
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