“`html
keep
President Donald Trump recently finalized a significant trade agreement with Japan, which he has characterized as “the biggest trading deal ever.”
Trump, who has long expressed concerns about trade imbalances disadvantaging the United States, believes these new agreements will benefit the U.S.
Though, questions remain about the actual economic impact of these deals.
Nobel laureate Paul Krugman has voiced strong criticism of the agreements, labeling them a “really stupid deal.”
Krugman argues that the terms of the agreement may actually harm American industries.
The automotive sector is cited as a key example. American car manufacturers continue to face a 50% tariff on imported steel adn aluminum.
In contrast, Japanese manufacturers benefit from more favorable terms for importing these materials.Moreover, Japanese cars imported into the U.S.will be subject to a 15% tax under the new agreement.
This disparity creates a cost disadvantage for American automakers compared to their Japanese competitors, who can produce vehicles more affordably.
Krugman commented on this situation, stating, “If this sounds incredibly stupid, it is because it is also incredibly stupid.”
the broader implications of Trump’s trade policies are also under scrutiny.
Despite Trump’s assertion that other countries will bear the cost of imposed tariffs, available data suggests that American companies are currently absorbing most of these costs, leading to increased operational expenses.
this increase in business costs has potential consequences for inflation.
american companies may pass these higher expenses onto consumers.
Initially, businesses may have refrained from raising prices in anticipation of the tariffs being temporary.
However, as it becomes apparent that the governance intends to raise import taxes to levels not seen since the
