Leverage Flashcards

(7 cards)

1
Q

Why do other countries care so much about what we do with tariffs?

A

We buy more stuff from the world than anyone else. If we stop buying, other countries lose more than we do

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2
Q

How can we be sure that other countries will be more hurt by tariffs than us?

A

Because no country takes in as many imports as us. If we start buying American, they’re screwed

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3
Q

What two reasons do we have to believe our economy can take the hit from tariffs without collapsing?

A

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

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4
Q

How can imposing tariffs help America if it might make everything more expensive?

A

Other countries losing their sales hurts them more than our higher prices hurt us

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5
Q

If we stop buying from other countries, how do we win in a trade war?

A

In a trade war, we stop buying their stuff and they lose big money. Since they need our market, we have the upper hand

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6
Q

Why don’t countries just ignore our tariffs and trade with each other instead?

A

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

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7
Q

What gives the U.S. power to set global trade terms in the first place?

A

We set the terms because everyone wants to sell to us. Our market is too big to ignore

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