Can the United States’ “predatory†strategy succeed?
Donald Trump has certainly adopted a “predator y †strategy for the United States: He is taking advantage of the dollar’s reserve currency role to use the rest of the world’s savings to finance the United States’ deficits (external and fiscal), as these deficits are boosting activity in the United States; He wants to force companies that sell products in the United States to produce in the United States, and not in the rest of the world; He is demanding that other countries buy more US-made goods and services. What could cause this strategy to fail? A rapid decline in the dollar’s reserve currency role, which is unlikely in the absence of a reserve currency that could take the dollar’s place; A much higher price for products manufactured in the United States than for those manufactured in the rest of the world; The United States’ inability to make products currently manufactured in the rest of the world (the corresponding production capacity or the necessary skills do not exist); An acceleration in the ability of other countries to produce themselves the products that they currently import from the United States.