Trump’s Tariffs, Iranian Threats, and an Italian Referendum
Trump has taken to Twitter yet again to launch off a tirade of bombastic tweets. This time around, Trump has promised 35% tariffs on any company that decides to move American jobs abroad. Over the past thirty years the United States has seen a mass wave of outsourcing & offshoring as American companies have moved jobs abroad in order to tap into lower wages.
Trump threatened not just tariffs, however, but also offered some carrots along the way. The incoming President has promised that he would lower taxes and reduce regulations to make it easier for businesses to compete. The Carrier air-conditioner plant has already secured approximately $7 million dollars in tax incentives to keep roughly 1,000 jobs in the United States.
Meanwhile, outgoing President Barack Obama has found himself the target of some minor saber rattling. The Iranian government has promised a “firm response” if Obama fails to block U.S. Congressional efforts to extend sanctions on Iran. These sanctions are separate from the nuclear deal and cover other issues, such as convention weapons.
The government of Iran, however, doesn’t seem willing to separate the two, and has called efforts to extend the sanctions for a further ten years a “violation” of the nuclear agreement. In a speech on live television Rouhani claimed that Iran would “firmly” respond should the President not meet his “obligation” to use his authority to prevent the sanctions from being signed into law.
Outside of the United States, Italians are now voting in a referendum that will chose which direction the country heads in. Prime Minister Matteo Renzi has promised to resign if Italians do not pass the proposed referendum, which would overhaul the Italian government. Renzi has been a generally popular prime minister, but recent scandals has tarnished his name, so threats of resignation might not hold all too much weight with the public.
The reforms would see regional authority and the power of the senate reduced substantially. Renzi has claimed that the lack of strong, centralized power is holding the country back. Italy’s banks have already been battered by years of too-high debt loads, and a sluggish economy in Italy and much of the rest of southern Europe.
So far, it appears that the “no” camp, which would reject the proposed changes, is likely to win out in Sunday’s power struggle. Will Renzi make good on his word and resign if he loses? Will European markets suffer turbulence if the vote fails to see through major reform? The next few days will be telling.