It is becoming more clear day by day that the US President Donald Trump’s is more focused on exercising the political power aggressively rather than caring about the economics. For those who practice the art and science of economics it’s a source of frustration.
The Trump’s administration has not even shown any concern about the time-honoured linkage between trade deficits and macroeconomic saving-investment imbalances. Trump has also refused to sign the recent G7 communique due to which it is claimed that US is like a “piggy bank that everybody is robbing” by unfair trading methods. The same scenario is with the fiscal policy. Trump rises the ante on tariffs, it would not be wrong to say that he is biting the very hand that feeds the US economy.Earlier the US was spending about $270 billion on defense which is less than half $700 billion that is authorized in the current budget which is equal to the combines military outlets of China, Russia, The United Kingdom, India, France, Japan, Saudi Arabia and Germany. in the year 1988 the per capita GDP of China was just 4 percent of the US but this year the ratio is close to 30 percent which is about eightfold increase in three decades. The main challenge in front of China is the race for technological and military supremacy. The Trump’s administration’s strategy may succeed but their power game may become a problem for Trump.
By: Divya Thakur