Summary
Trump snapped at a reporter who asked how much economic pain he was willing to inflict amid plunging markets triggered by his new tariffs.
Speaking after a weekend at his Florida resort, Trump dismissed speculation he was trying to crash the market, claiming tariffs would bring in “$1 trillion” and spur U.S. manufacturing.
When asked about a pain threshold for Americans, he called the question “so stupid,” arguing economic “medicine” was necessary to reverse decades of “stupid leadership.”
He insisted the strategy would make the U.S. “solid and strong again.”
That’s the plan:
https://unherd.com/2025/02/why-trumps-tariffs-are-a-masterplan/
Varoufakis is wrong.
What Trump is doing will result in a cheaper dollar.
It was also destroy the USD as the world’s reserve currency.
wall of text further explanation so as not to clutter the thread
The USD has been the reserve currency because:
Huge, growing, stable economy.
Low debt to GDP ratio.
Very, very willing to cooperate with international trade deals.
Powerful military that can enforce its will as a hegemon.
Many deals with many oil producing countries who agree to only sell their exported oil via USD.
… all of these except the last are as seen in statistical comparison to other countries. Its all about comparative advantages.
Not sure if you haven’t noticed, but all of those are now rapidly crumbling, after a last 2 decades of slower, more incremental decline.
But ultimately, all of those things could be smoothed over by a reasonable presentation of trustworthiness and reliability generally.
Trump has utterly destroyed all of that now.
…
If Varoufakis were citing some kind of Project 2025 masterplan for this, I’d be more inclined to believe his read on the situation here is at least Trump’s plan.
But even then, it still won’t work as he describes.
Trump is acting with unimaginable hubris, his actions will destroy the USD as a world reserve currency, rapidly accelerate other countries looking for regional or possibly international alternatives, and as a result, less people will need to use dollars for trade, there will thus be less demand for US debt.
Less demand means we have to offer higher yields, higher interest rates on our debt, as the us dollar weakening means the real price of debt goes down.
Varoufakis may be correct in that this is what Trump will try to do, but I see no evidence that… the plan has actually been thought out that far by any actual administration or adjacent thinkers.
Beyond that, this plan won’t work.
We are acting like a rogue nation doing economkc terrorism to literally the whole world… other than basically Russia and Israel.
China, Japan and South Korea have recently entered into a pact, an agreement, to coordinate their responses of retaliatory tariffs.
Please take a moment to appreciate how insane that is.
The past … since ww2, SK and JPN have firmly been in the US’s sphere of economic influence and military collaboration.
They just fucking noped out of that the economic part of that and made a pact with China.
Japan is now rapidly trying to militarize and there are even talks of starting their own nuclear program.
Please, again, appreciate how fucking insane it is that the most anti nuclear weapons country on Earth is now maybe rethinking that.
Most other world leaders are not stupid. They know Trump will try to do piecemeal, one on on negotiations.
They are already forming into blocs to resist this tactic.
There’s talk of Canada joining or at least much more seriously integrating with the EU.
NATO is now basically defunct in all but paper only, the EU is finally ‘shouldering its burden of defense costs’, but uh, they’re working on an EU Army, that doesn’t involve the US, after Trump repeatedly threatens to acquire Greenland, and has totally betrayed Ukraine.
The EU is also rapidly pivoting away from being reliant on or using US software solutions.
These actual adults in the room have actual plans to deal with the US, and they have been enacted astonishingly rapidly given how comprehensive they are.
… The rest of the world does not need us anywhere near as much as Trump does, as much as Varoufakis estimates Trump thinks they do.
This article has been posted by me several times. You are only the second person who notices. The US cannot have it all. I think Varoufakis just doesn’t want to be the one who delivers the message. He must have known better.
I don’t fully agree with your outlook. The companies are not massively objecting. I think the concept has already been discussed by key people, in the US and internationally. Like Japan is prepared to build a nuclear bomb and Britain was prepared for Brexit, the big companies are prepared for decoupling from China.
Probably because I am one of the few people on lemmy that actually has a degree in Economics on lemmy.
EDIT
jammed the rest in spoiler tags for the thread's sake
Granted, just a BSc, but I got it during and after the 07 08 financial crash in the US, and remember arguing with my PhD professors that uh actually, the fact that Iceland just literally jailed all their bankers and did not bail them out… and then their economy just suffered a moderate down turn, instead of a complete collapse, meant that their whole reasoning behind ‘we have to bail out the banks and do QE, there is no other way’ … well here is a case study that disproves your model.
I get that he is attempting to explain what he thinks the real plan is, and he’s done a decent job of theory crafting…
But he is wrong. There is no hidden well thought out plan.
The people in the Trump admin are unqualified, uncoordinated morons. They are only there because they are loyal to Trump.
It is chaos. Not 12D chess.
Varoufakis, and you, are sane-washing the Trump regime. You both cannot comprehend something this tumultuous would occur without some reasoning behind it.
There is none, at least none that is coherent and makes any sense.
These people are dangerous megalomaniacal idiots who failed upward because of nepotism and corruption.
They are idiots, as are the Americans who voted them in.
There is no silver lining to this.
America is now as corrupt and broken and oligsrchichal as Russia, if not more.
Please give me some examples of any companies based outside of the US who are doing anything other than cowering in fear and issuing statements that amount to ‘We believe in Donald Trump’s plan, we love Trump, please don’t hurt us, please give us a tariff carve out, we’ll bribe you.’
I genuinely have no idea what you’re talking about.
Even domestic US companies are going fucking nuts.
Are you just stating your opinion?
Britain was not prepared for Brexit, and it was a disaster.
The US is currently trying to do… WorldExit, just fuck over our capacity to trade not just with the EU, but the entire fucking world.
It will be a much larger disaster.
What big US companies have plans to just somehow not use any imports from China?
What are you talking about?
We do not have the capacity to source the needed materials internally, at comparable prices.
The only plan there could be would be basically ‘fire half our workers, pare down operations to the bone, focus on core competencies, pray to baby jesus that somehow this nightmare all ends.’
Britain always had bad news about the EU in the newspapers. Their population was never fully committed so it was possible to create a majority against the membership.
Likewise US companies will regularly discuss what they will do when China is going to overtake them. That moment has come. I don’t believe in the coincidence that the US is doing its biggest blunder at the most crucial time of their history.
Of course, the strategy can be that half the workers are fired, but with the expectation that they are hired by somebody else.
Cool, Brexit was still a disaster.
Overtake is a gradual, predictable process.
Suddenly putting roughly 30% tariffs on the entire world in a very sudden and chaotic matter is not even in the same galaxy as US corporations making business plans based on predictable market trends.
We are making a blunder because we became decadent, entitled, and privileged, and aggreived and then fell under the allure of an incompetent fascist, who, again, is a fucking moron at policy.
… What? If everyone is firing, no one is hiring.
This is called a recession or depression.
Lose your higher paying job and maybe replace it with a shitty part time job.
Net result is everyone is poorer.
… If you wanted to kickstart making new manufacturing jobs in the US, well you’d need actual money to build the factories.
If the entire economy crashes, no one, no companies, have money to invest in new capital expenditures. Foreign investment won’t come because exporting out of the US will be a shitty prospect due to retaliatory tariffs, and the general lack of a skilled manufacturing labor force in the US.
There would have had to have been some kind of accompanying domestic fiscal policy to throw government money, subsidies, tax breaks, whatever to kickstart domestic manufacturing… before you throw the tariffs on.
But Trump is an idiot and is ideollgically opposed to the government spending money on seemingly anything other than bitcoin and explosively liquifying brown people in ‘removed’ countries (his words).