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Bidenâs Tariffs Are Another Nail in the Dollarâs Coffin
Ron Paul •May 27, 2024
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President Biden recently raised taxes on American consumers and businesses and may have hastened the end of the dollarâs world reserve currency status. President Biden did this by increasing tariffs on Chinese imports.
Specifically, President Biden raised tariffs on products including Chinese-produced steel and aluminum and many components imported from China for use in manufacturing electric vehicle batteries. Tariffs on Chinese-made semiconductors are rising from 25 to 50 percent while tariffs on Chinese-made electronic vehicles are rising from 25 percent to an astounding 100 percent.
Of course, the costs of these tariffs will be borne by Americans wishing to purchase electric cars and American electric car manufacturers that use material imported from China. These new tariffs thus undercut Bidenâs goal of getting more Americans to drive electric cars.
The tariffs on Chinese goods give China even greater Inventive to challenge the dollarâs world reserve currency status. The same week Biden imposed these tariffs, China President Xi Jinping and Russian President Vladimir Putin announced they were strengthening their alliance in order to better challenge US military and economic hegemony. This is a reaction to US foreign policy of the post-Cold War era which has reversed the Richard Nixon-Henry Kissinger strategy of pursuing good relations with China.
A part of the announcement recognized use of the Chinese yuan and Russian ruble for over 90 percent of the trade between the two countries. This is only the latest challenge to the dollarâs world reserve currency status. Chinaâs share of the global economy has more than doubled in the last twenty years from 8.9 percent to 18.5 percent while the US share of the global economy has fallen from 20.1 percent to 15.5 percent. Chinaâs rise is one reason why the US currency held by foreign central banks has dropped from over 70 percent in the early 2000s to under 60 percent today.
Last year, China and Saudi Arabia agreed to expand their use of their own currencies in trade between the two countries. This is the first time the Saudis have agreed to use a currency other than the dollar for the oil trade since Henry Kissinger negotiated a deal where the Saudis would trade exclusively in dollars in return for US support for the Saudi regime. The âpetrodollarâ is a major reason why the dollar retained the world reserve currency status after President Nixon severed the last link between the dollar and gold.
If the dollar loses its world reserve currency status, the US government would lose the ability to âweaponize the dollar.â Other countries would then have less incentive to abide by US demands, including related to regime changes. It would also reduce other countriesâ interest in purchasing US debt instruments. This would increase pressure on the Federal Reserve to monetize the debt, creating more price inflation and leading to a major economic crisis. This will not just end the US military and financial empire abroad. It will also end the welfare state at home.
Since both major presidential candidates and most Congress members are not serious about making the changes in foreign, domestic, and monetary policy necessary to avoid the crisis, America will likely face hard times in the near future. However, the end result may be a return to limited, constitutional government and a political class that realizes that Ronald Regan was correct when he told me that no nation has ever abandoned gold and remained great.
(Republished from The Ron Paul Institute by permission of author or representative)
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•Category: Economics •Tags: Free Trade, Joe Biden, Tariff
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"Bidenâs Tariffs Are Another Nail in the Dollarâs Coffin"
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Rich says:
May 27, 2024 at 9:12 pm GMT •100 Words
If we repealed the 16th Amendment, tariffs might be acceptable. In this high tax, high inflation America, tariffs are just going to make people poorer. We’re sliding and the people who pull Biden ‘s strings appear to have lost their minds. They are killing the golden goose and are unable to control themselves. All to make hom*osexuality and transsexualism acceptable? Just crazy.
Jokem says:
May 27, 2024 at 10:57 pm GMT
The answer is to dial back the oppressive tax and regulatory environments in this country.
Red Chine would then have to take their foot off the next of their people or go back to making ceramic plates and dolls to be competitive.No need for tariffs then…
meamjojo says:
May 27, 2024 at 11:44 pm GMT
“President Biden did this by increasing tariffs on Chinese imports.”
Old man Paul: Did you forget that Trump was first to raise tariffs on China?
•Replies: @Jokem
Jokem says:
May 28, 2024 at 12:59 am GMT
@meamjojo
I think Dr Paul criticized Trump for that also.
https://www.unz.com/rpaul/tariffs-are-not-the-answer/meamjojo says:
May 28, 2024 at 8:24 am GMT
You may find this of interest:
A Detailed Look at Bidenâs New China Tariffs
Breaking Down the Data on the White Houseâs Increased Tariffs for Chinese EVs, Solar, Batteries, and More
JOSEPH POLITANO
MAY 25, 2024
https://www.apricitas.io/p/a-detailed-look-at-bidens-new-chinamile7bar says:
May 28, 2024 at 2:25 pm GMT
Biden and his activities?
What should you know about Joe Biden? https://mile7bar.substack.com/p/joe-biden
bjondo says:
May 28, 2024 at 4:20 pm GMT
Tariffs can be good.
Don’t want the higher price, make item here.
Drop income tax. Tax hell out of foundations, Wall St entities.
5ds
•Replies: @Truth Vigilante
Mark G. says:
May 28, 2024 at 10:02 pm GMT •100 Words
Manufacturing goods here is not really the answer under current conditions. Factories went overseas because inflationary Federal Reserve policies raised the price of American labor and made American workers uncompetitive on the world labor market.
So, we would need to end inflation first. Otherwise, high wage American factory workers would be turning out expensive goods many American consumers could not afford. Currently Americans have record household debt levels and record credit card debt levels.
•Replies: @bjondo
bjondo says:
May 28, 2024 at 10:44 pm GMT
@Mark G.
You could be right but high wage Europeans could
afford European wage items before US policies destroyed
their economies, Japan’s also.Hang a few hundred Americans and things would be solved.
5ds
Truth Vigilante says:
May 29, 2024 at 4:58 am GMT •300 Words
@bjondo
Donât want the higher price [of the Chinese product with tariffs applied to it], make item here.
In fact, if that suggestion of yours was implemented you’d end up with this situation:
You’ll STILL pay a high price, but end up with a lesser quality U.S made product.
In other words, a LOSE/LOSE outcome.
People who advocate for tariffs being applied to Chinese products have not thought things through. For example, let’s assume a 1000% tariff was applied to all Chinese products so that not a single thing they made was cost competitive.
The Trump MAGAts assume that this would entail that U.S made products would fill the void.
In fact, NOT SO.You see, in place of these low cost goods being made in China, low cost producers from Vietnam, or Bangledesh or India or wherever, would instantly fill the void.
In other words, said products (for the most part) would not end up being made in the U.S anyway.SUMMARY: The ONLY way to ensure that producers from other third world sh*t-holes don’t fill in the void, is to apply tariffs on ALL imported products, irrespective of the country of origin.
But this would be a repeat of the 1930 Smoot-Hawley tariff act all over again and would ensure that the standard of living in the U.S collpased overnight, that the U.S would descend into the deepest of Depressions imaginable.Simply put, Tariffs never work. They have never worked anywhere.
They punish the poor disproportionately and create misery and despair for those least capable of looking after themselves.
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