Why Trump’s Tariff Blues Might Cost the U.S. a Whopping $31 billion Every Month
Short‑Term Trade War, Long‑Term Pain
Got a minute? The latest research from the University of Sussex is a warning bell for anyone who thinks America’s trade wars are all good for the national budget. It turns out the tariffs could leave the U.S. economy hiking a hefty $31 billion tax bill out of every foreign investor’s purse each month.
What’s the Deal?
The study dives into the “flight home” phenomenon—when investors dump overseas capital and stash it into their own backyard because geopolitical shocks seem too risky to cross borders. In America, that means living on a fragile safety net of international investment that’s now on shaky ground.
“Trade War = Capital Drain”
- Tariffs began with China back in 2018, re‑igniting this trend.
- If the trade war keeps rolling, the projected loss is about $31 billion/month for the next two years.
- The numbers come from comparing post‑tariff data to earlier inflows.
Why Investing in the U.S. Isn’t So “Safe” Anymore
Back in 2023, foreign residents pumped a colossal $750 billion into U.S. equities. Researchers warn that if tariffs keep cropping up, that flow is going to plummet. Think about the dip after 2018: Chinese investors pulled out roughly $228 million every month for six months— a 129% slide from the months before the tariffs.
Some Inside Take‑aways
- Australian economist Dr. Faek Menla Ali says the U.S. has made a serious mistake if it thinks cutting the trade deficit will help anything.
- His point? For decades, the U.S. had a surplus in international investments that balanced out its trade deficit.
- Now, the tariffs are killing that balance.
Bottom Line: The Orchestration of Loss
Trump’s tariff strategy goes hard on imports, aiming to trim the deficit. The side‑effect? A drain on foreign capital inflows that could undermine the very foundation of U.S. economic prosperity.
The Verdict
It’s a classic case of trading one problem for a bigger one. Cutting imports might seem beneficial, but the cost is the erosion of international investment—and that’s a nasty hassle to reverse.
