Trump's Tariffs Will Create More Problems Than They Can Resolve

He insists trade partners have been unfair to the US even though America Inc has not complained

- DEVINA MEHRA

Donald Trump has put paid to the world's proverbial 'Raaton ki neend and din ka chain' (night's sleep and day's peace) as everyone now tracks index and future quotes from around the world around the clock. His tariffs have created a sensation, but what I wonder about is the problem he is trying to solve.

After all, the US was pretty close to full employment and its labour market has been fairly tight for years. Inflation had begun to float down. So it is inexplicable why he would break something that wasn't broken.

As Fareed Zakaria set out in a recent video, in 1990 the US economy was the same size as the EU's. It is now almost 85% larger. In 1990, the US per capita income was way below Japan's. Today, not only is it far higher, even the per capita income of the poorest state in the US is more than that for the UK or France.

Yes, America has many problems, including a disgraceful healthcare system with frankly terrible outcomes for a country so rich. Inequality is also high, which the Trump campaign capitalized on. But how are these policy measures going to get Americans better lives?

Every policy measure, be it a corporate tax cut or production incentive, has to be measured against what it is trying to achieve and how effective it is in reaching those goals.