A ‘shocking secret’ that the global economy survives despite Trump’s tariff bomb

🌪️ A ‘shocking secret’ that the global economy survives despite Trump’s tariff bomb

The global economy is growing by 2.4% even as Trump hits all-time tariffs, even with an effective tariff rate of 20.6%, the highest level since 1910. 😱

How on earth is this possible?

🎯 Real reason: Companies changed the ‘rules of the game’

That’s because it’s absorbing supply chain shocks with the learning effects of companies learned from the pandemic and the first trade war. Companies have begun to ramp up inventories and move production networks locally, which has returned to the uptake of tariff shocks.

The same goes for China. Exports to the U.S. are down 10 percent, but overall exports are up 6 percent. It’s an indirect export through Vietnam, Thailand, and Mexico. 🔄

💰 But there’s a real cost.

On the surface, it looks fine, but it’s actually paying the price. The cost of building data centers, housing and semiconductors is soaring, especially as copper prices hit record highs. Inflation rose to 2.7% in June, with tariff effects clearly in the price of imported goods like furniture and clothing 📈

🚗 The reality of GM performance

General Motors saw its net profit fall 35% as tariffs sent $1.1 billion flying.
CEO Mary Barra has announced that she is moving production from Mexico to the U.S., saying she is “adapting to the new trade policy,” but how long will it last this way?

⚠️ Hidden Dangers

The real problem with the current situation is that it is not sustainable.
Companies are absorbing tariffs, and the government is bolstering the economy with its finances, but these buffers are bound to hit their limits one day.

🔮 Short-term holdout, but structural cracks in the system have begun

What we are witnessing now is a major shift from ‘efficiency’ to ‘safety’ in the global economy.
In the short term, economic growth can be maintained, but in the mid to long term, slowing productivity and inflationary pressures are inevitable. How much longer can this “inefficient stability” last?