Donald Trump gives us out of the liberal world of the law to return to that, illiberal, of the balance of power. This civilizational decline will have an end and will remain as a shame for our American friends but, for the time being, we must manage the present, a present which was also perfectly predictable for those who had listened to Trump during his presidential campaign. The Canadians, as badly prepared as Europeans, were taken short by the completely crazy announcement of the American president of the establishment of customs duties of 25 % on their exports to the United States, officially to fight against imports of goods, fentanyl and illegal immigrants.
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This decision is now suspended for a month, like that carried out with regard to Mexico. This protectionism is done in defiance of the treaties. And if it is put into practice, it will have a negative impact on the American economy and its Soft Power. And then let’s be realistic: after Canada, the Tour of Europe will come. We, Europeans, are now alone. In order not to remain so, it is of interest to deepen all our commercial, scientific, environmental, energy, diplomatic, military relations … with Canadians and British.
Europe must favor European products
Trump is all his protectionist madness and we have to prepare for the worst: the effective implementation of these customs duties. The right answer to bring it will not be that of the “eye for eye, tooth for tooth” but that of the surgical response. By customs duties, the Republican president punishes his fellow citizens of the middle class (who largely voted for him) by taxing their imports, that is to say a part of their consumption. Let’s not respond to a stupid American policy by a stupid European policy. On the other hand, let us explain, for example, to the Americans that, now, our purchases of military materials will favor European and more American materials. Hopefully our German friends, when they have finally put the head of their country a more pro-business and more courageous chancellor than Olaf Scholz, will have the lucidity and daring to follow us in this approach.
In this context, the Bayrou-Lombard budget, which has the merit of existing, is nonetheless completely economic. The countries targeted by Trump’s protectionism, from Canada to Germany via the United Kingdom, will respond with a policy giving more competitiveness to their businesses. We are in particular at the start of a global cycle of lowering corporate tax coupled to a simplification of the bureaucracy which the private sector faces. It is, for countries threatened by protectionism, to respond with a form of competitive tax and normative devaluation. Even the European Union finally seems to be decided, under the pressure of events, to weight its normative madness.
VAT, the only tax that can be increased
Meanwhile, France is preparing to increase taxation on the largest companies. This policy will decrease the attractiveness of our country and reduce its tax base. This more taxes will not pay almost nothing and we unfortunately imagine enough that with this policy which loads companies instead of reforming the State, our public deficit at the end of 2025 will be almost as high as that of 2024. We will talk about it again . Bernard Arnault (LVMH), Eric Trappier (Dassault Aviation) or Florent Menegaux (Michelin) have had a thousand times to alert the French on the consequences of this policy and not to leave the word monopoly to commentators and parliamentarians who give economy lessons but have never held the accounting of a stand at the school’s fair.
The only tax that is possible today to increase to support a strategy for reducing public deficits and completing the drop in expenditure (which is still expected) would be VAT. Only VAT little affects the long -term economy, does not penalize our competitiveness and does not reduce our growth potential. Weighing down VAT would not in itself be a policy. But, if our country cannot really help but touch the taxes, it would be the least bad. Too late for this budget but our deficit problems have not yet found the start of a solution.
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