More of the same
Re: "Trump has eye on chip, drug tariffs", (Business, April 16) & "The dollar correction is finally here", (Commentary, April 16).
Under the MAGA initiative and national security concerns, the Trump administration appears fixated on reversing the US current account deficit and bringing ballooning public debt under control.
Amid the prohibitive cost of bringing manufacturing and factories home, American manufacturers remain cautious and even contemplate shifting operations elsewhere. While tariff revenue increases or corporate tax cuts may in part help offset the reshoring costs, a sharp drop in US imports could undermine the effort.
As a global destination of capital and the world's leading consumer market, America has long been able to attract massive investment into its deepest and most vibrant financial markets, amplified by the US dollar's role as the dominant global reserve currency.
In terms of real effective exchange rate, the USD has steadily appreciated by 46% since July 2011, further cementing its global standing.
The current account deficit (US$311 billion in Q3, 2024) implicitly suggests 1) national savings less than investment because America provides attractive returns, or 2) low savings due to its excessive private and public consumption, or 3) a combination of both.
It makes little sense to argue whether the current account deficit (especially the bilateral trade deficit) is "bad". If long-term investors continue to finance American productive capacity building for a return higher than the cost of capital, the current account deficit will likely be sustained.
Ninaja Kun
Backtrack beckons
Re: "I just saw the future. It wasn't in the US", (Opinion, April 12) & "China primes rare earths weapon", (Opinion, April 14).
Since his inauguration on Jan 20 with the promise of a "Golden Age of America", President Donald Trump has been having a field day for two months by causing havoc with his declared tariffs on all nations trading with the US and threatened leverages. China was hit with a 145% levy on its exports to the US while China, without wishing to have any dialogue with Mr Trump, retaliated without fear with a 125% levy.
One stock guru claimed the 145% rate was not a tax but a goods embargo.
Mr Trump's bluff has failed. While visiting Vietnam two days ago, President Xi Jinping hit back, calling Mr Trump's actions "unilateral bullying" and called on other countries he is visiting on his Southeast Asian tour -- Malaysia and Cambodia -- to "uphold the stability of the global free trade system" (strangely, not Thailand).
Your articles by the NYT's Thomas Friedman, and Reuters' Andy Home, give rise to the question of why in this game of "poker" or "chicken", China seems to have more leverage against the US.
It will be interesting to see how Mr Trump backtracks, most likely via his Treasury head, Scott Bessent.
Songdej Praditsmanont
Undeniable facts
Re: "Just response", (PostBag, April 15).
I wish to support the letter by Peter Atkinson on Israel's role in Gaza. Also, I want to remind your readers of some undeniable facts: Gazans chose Hamas. In power, Hamas killed gay people and Fatah supporters.
Hamas chose war even though they could have existed in peace with their neighbour, Israel. Gaza could have become a prosperous homeland, but it squandered billions of dollars on tunnels and weapons manufacturing.
Ask the Arabs living in Israel how happy they are!
E L Wout
