The strong dollar has an unexpected victim. Last week’s report from the European Federation of Economic Policy Advisors (EF EPI) showed that the strong dollar is reducing the competitiveness of US exporters.
The report showed that while the US exported the most, it didn’t have much effect on its trade balance, and it also fell short of its own GDP forecast.
But the US still has a significant impact on global trade. For instance, the US has the second largest share of global trade. The dollar has an effect on that, too, but the US has no choice about its trade deficit. That’s because of the US tax policy.
The US tax code favors capital over labor. That’s what the US Congress has decided. To prevent any “social safety net,” the US has decided to tax any capital flowing in the US, forcing it to give a lot back to the US government. This has led to an unprecedented level of redistribution from US workers to US investors by forcing the US to pay huge income tax to its foreign investors.
But there’s also another reason why the US has to pay such huge taxes to foreign investors. The US government’s foreign policy is a protection racket for foreign investors.
The US, one of the most important contributors to the world economy, would like other countries to depend on it as much as possible. But the US does have its own short-term crisis. It’s already paying huge amounts of money to foreign investors, which are trying to build up their market share through buying US companies and moving them to other countries using the US “exchange rate.”
So, even if the US would like other countries to depend on it as much as possible, it can’t just depend on them. The rest of the world has to depend on it, too.
The US has only one choice. The US has to open up its markets to competition from other countries. This means that any country other than the US is competing with the US. It has to lower the