I guess the vast majority of people actually don't understand who pays the tariffs?

If you understand who pays for the tariffs, you will understand Trump's strategy. On the surface, tariffs have triggered a trade war, but why did Trump initiate a trade war? It's actually just one formula: Surplus = Income - Expenditure.

Currently, the core issue for the United States is to focus on the main contradiction. Where is the contradiction? Excessive expenditure and insufficient income, especially the interest payments on the $36 trillion U.S. debt.

How to increase income:

1️⃣ Tariffs. Taxes are paid by the public, money that goes into the government's pocket. Essential durable goods, food, and basic needs—you have to buy them.

2️⃣ The stock market needs to be suppressed to squeeze out the high returns of foreign capital in recent years, allowing the national team to buy cheap chips, whether it's 401k or these national team shadow funds (BlackRock, Vanguard, etc.).

3️⃣ Resources, including Canada as the 51st state, Greenland, the Panama Canal, and reparations from Ukraine—this is essentially the logic behind it.

4️⃣ Manufacturing. By lowering interest rates, it stimulates the return and reinvestment of manufacturing, while also suppressing the dollar to boost manufacturing exports. This is Trump's two-step approach, which has been mentioned in previous articles. Ultimately, it's about reducing taxes on manufacturing, which can increase income.

How to reduce expenditure:

1️⃣ U.S. debt interest. Currently, the yield on 10-year U.S. Treasuries has dropped from a high of 4.9% this year to a low of 3.8%, a decrease of 110 basis points, saving the U.S. about $396 billion per year in interest payments.

2️⃣ The dollar index. Recently, the dollar index has dropped from a peak of 110 to around 101, marking the largest decline in such a short time in history. The depreciation of the dollar effectively means less expenditure in dollars while stimulating domestic exports.

3️⃣ Increasing tariffs is also a way to indirectly reduce expenditure.

4️⃣ The DOGE sector. Musk's decisive actions have indeed reduced a lot of unnecessary expenditures.

5️⃣ Reducing wars, such as the ceasefire negotiations in Ukraine, withdrawing from environmental protection, etc.

Looking at things, one must see the essence. The essence is to increase the government's surplus. The strategies are good, but the methods may be somewhat extreme. However, from the current perspective, the 20% cost of the S&P has brought so many benefits without triggering a substantial recession, and the job market remains strong. To be fair, there is some wisdom in this. Nowadays, it can be simply understood as a rebalancing of income between government and private sectors, transferring money from the private sector to the government to get through tough times. In next year's midterm elections, Trump is likely to present a relatively good report card; otherwise, losing both houses would not be fun!

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