Those in charge of Silicon Valley will regret supporting Trump

The most famous American economist, Barry Eichengreen, expressed his deep concerns about the negative actions of the second administration of President-elect Donald Trump towards the economy, considering that those in charge of “Silicon Valley” will regret their support for Trump, because they will eventually realize that tariffs are harming the economy.

Eichengreen said, in an interview with the German magazine Der Spiegel, that Europe may face violent economic winds blowing from Washington, as he put it.

Below are excerpts from that interview:

. Since Donald Trump’s election victory, it seems that the economic mood has turned for the better, and stock prices in the United States have risen significantly. Did Trump’s election contribute to this economic movement?

So far, Trump appears to be doing well for the markets, which is different, of course, from saying he is good for the economy, as markets hope to cut taxes, increase profits, and stimulate demand.

Markets expect US companies to benefit when foreign competitors face higher tariffs, but I think the markets are witnessing a rush toward optimism.

. What do you mean by that?

.. The uncertainty about the direction the country is taking has decreased, because the elections have been clearly decided, but Trump, with his erratic policies, has become an uncertainty machine, so uncertainty will return, and at that point the markets will react negatively.

. Republicans will soon control the White House, both chambers of Congress, and the Supreme Court. Do you think Trump will implement everything the conservative Heritage Foundation outlined in the “Project 2025” plan? The plan includes deregulating and cutting taxes, eliminating federal agencies, and replacing tens of thousands of civilian employees with those loyal to the president.

Yes, there will no longer be anyone in this government to stand up to Trump, as was the case in his first term, and at the same time Trump will not be able to focus on anything for a long time, and this includes the agenda outlined in the “2025 Project.”

. As happened in his first term, Trump announced again that he would impose high tariffs on imports, and Europe and China will respond to this. Is the world on the brink of a trade war?

Yes, almost no one will be able to stop Trump, given the extent of his power to reshape US trade policy, and because the US trading partners have been aware of this since his first term in office, they are preparing to respond.

. How can Europe, especially Germany, react to Trump’s threats? How do you do it?

…The moment will come when the Germans and Europeans have to decide whether they want to cling to their trade relationship with the United States, impose high taxes on Chinese imports, just as the European Union does with Chinese electric cars, or instead lose access to the market. Trump may force the Europeans – if they are interested in good trade relations with America – to impose a flat tax of 60% on Chinese products, and if they do not agree, Trump will punish Europe by imposing high customs tariffs on the products. Therefore, it is expected that Europe will face violent economic winds blowing from Washington.

. Trump wants to impose high tariffs on all imports, including chips from Taiwan that American digital companies depend on, and at the same time he has the support of influential representatives from Silicon Valley. How can this happen?

.. Those in charge of “Silicon Valley” will regret their support for Trump, and in the end, they will realize that tariffs harm the economy as a whole, and that their business models depend on globalization, but I have given up trying to understand these men and their motives, and you must be a psychologist, not an expert. Economically, so that you can understand their intentions. About “Der Spiegel”