Leverage Flashcards
(7 cards)
Why do other countries care so much about what we do with tariffs?
We buy more stuff from the world than anyone else. If we stop buying, other countries lose more than we do
How can we be sure that other countries will be more hurt by tariffs than us?
Because no country takes in as many imports as us. If we start buying American, they’re screwed
What two reasons do we have to believe our economy can take the hit from tariffs without collapsing?
If we stop buying or buy less of their stuff
1. They lose more money than we do
2. We keep our money and they lose their income
How can imposing tariffs help America if it might make everything more expensive?
Other countries losing their sales hurts them more than our higher prices hurt us
If we stop buying from other countries, how do we win in a trade war?
In a trade war, we stop buying their stuff and they lose big money. Since they need our market, we have the upper hand
Why don’t countries just ignore our tariffs and trade with each other instead?
They can trade with each other, but no market is as big or rich as ours. Skipping the U.S. means losing their biggest customer
What gives the U.S. power to set global trade terms in the first place?
We set the terms because everyone wants to sell to us. Our market is too big to ignore