Name: America is Making a Big Mistake, and It’s Far Worse Than You Expect
Uploaded: 2025-06-17T16:42:54.000Z
Duration: 14 min 12 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

October 1929, the stock market crashed by 48%.

Adverbs of degree

While the market bounced back slightly after that, the crisis remained very painful for the US economy.

President Hoover raised the average tariff by 60% on over 20,000 goods that entered the United States in an attempt to protect US industries and prevent the US economy from a collapse.

But that plan backfired because other quickly began to raise their tariffs as well, and trade began to shrunk.

The trade between Europe and the United States dropped by 70%.

The global trade halted, and the US economy got into a much worse crisis than it was prior to that.

If it wasn't for tariffs, the United States would got out of the great depression much faster, and it wouldn't have lasted for over 10 years.

Tariffs certainly did not create the great depression, but tariffs certainly worsened the situation.

While the United States has signed a deal with the UK, and it's about to sign a deal with the second world's largest economy, China, the United States is on a new era, on a new path that is going to be very similar to 1930s, an era of high tariffs.

Although the arguments for tariffs are very logical and they make sense to a certain extent, imposing tariffs are going to usher a new era for the United States, and they are going to put the United States on a path of self-destruction.

Free trade and eliminating tariffs is what made the United States the most powerful economy in history.

It's the reason why the United States is the largest economy and why the US dollar is the global reserve currency.

Even if we remove the reciprocal tariffs, the United States made it clear that the 10% baseline tariff is not going to go anywhere, and that could be the last nail in the coffin in the end of the US dollar to beat the global reserve currency.

This is Toyota Camry, one of the best-selling cars in American history.

This is the car that you often see in the streets of New York, California, or any other state.

In fact, you have not seen that car in London or maybe even in any European city.

So why is Toyota is all over the place, while the Malaysian car is barely being seen outside Malaysia?

Japan has 0% tariff on most passenger cars, while Malaysia on the other side has a 30% tariff on all the cars that import into Malaysia and extra tariffs on other cars.

You see, an average Japanese adult, goes to a dealership to buy a car, he is presented with multiple options.

So he sees a BMW, a Ford, and a Toyota, and he starts weighing his options.

He wants to get the best deal, the cheapest car for the best possible value.

And if Toyota wants to undercut Ford, BMW, and Mercedes, then Toyota has to offer a very good quality for a much cheaper price.

So the Japanese adult is going to buy a Toyota.

Now, take this exact example and compare it to a Malaysian counterpart.

When a young adult in Malaysia goes to a dealership to buy a car, he is also presented with the exact same options.

A Ford, a Mercedes, BMW, and a Camry, and a local competitor, which is Proton in this case.

But because there is a 30% tariff on all cars imported to Malaysia, all other foreign cars are made 30% artificially more expensive, which makes the local car much cheaper.

And that means that the local competitor Proton does not have to be efficient in their prices, they don't have to produce better cars, because regardless of what happens, their prices are cheaper than foreign cars because of this tariff, which means that they will continue having sales, which means that they don't have to innovate.

That business model works within the entire Malaysia.

But on the global stage, the Malaysian car is going to lose the competition on Toyota, because Toyota is much more efficient, their prices are much more affordable, and they are much more reliant.

And that's why Toyota Camry is the best-selling car in America, while the Malaysian Proton is not sold anywhere else outside Malaysia, because nobody would choose that car over Toyota Camry.

South Korea, which is a country with almost 0% tariffs on all cars, has some of the best car brands in the world.

Kia and Hyundai, you can see them in the streets of America and London and anywhere else.

Now compare that to Tata Motors, which is an Indian brand.

India is one of the most largest countries in the world and one of the largest economies in the world.

And yet, Tata cars are not seen anywhere else outside India.

They cannot even compete with South Korea, because India has almost a 100% tariff on their cars, which makes their local cars incompetitive on the global stage.

So by imposing a 10% tariff on everything that enters the US and reciprocal tariffs on those countries, America is going to make its own industries less competitive on the global stage.

Yes, they will continue selling in the American market, but on the global stage, compared to German cars and South Korean cars and Japanese cars, they will start falling behind and they will start losing competition, because they don't have an incentive to be more innovative, they don't have an incentive to lower down their prices, they don't have the incentive to improve their quality, because Japanese cars, German cars, and other cars in the US will artificially be made more expensive with those tariffs.

In the short run, it is going to boost the American car industry, but in the long run, they will start falling behind, and American cars will lose competition to German and Japanese cars even further.

Boeing is an American company, Airbus is an European company.

And Boeing has been losing the competition to Airbus no matter what metric you look at.

Airbus has proven to be much safer than Boeing, at least in recent years, especially with what's with MUX.

If given a choice, American airlines will now be choosing Airbus over Boeing, because Airbus proved to be much safer than Boeing.

But when you are imposing a 10% tariff on everything that enters the US, and that includes Airbus planes, what message does that send to American airlines?

They will start buying Boeing planes that are less than Airbus, because Airbus planes are much more expensive now.

In fact, Boeing can even raise their prices slightly to take the best advantage out of these tariffs.

What that is going to do to Boeing is that it's not going to incentivize them to improve their planes, make them more safer, make them cheaper, because they can still get orders from American airlines since they are being protected by the 10% tariff and maybe even reciprocal tariffs that are going to be much higher than that.

Yes, in the United States, their business model is going to keep working.

American airlines will continue ordering less competitive Boeing planes.

But on the global stage, people do not judge like that.

They will start buying less expensive, much better, much safer Airbus planes compared to Boeing planes.

While Boeing is going to make some money in the short run, in the long run, it is going to lose the competition on the global stage.

Apply this logic to every other industry.

And in 10 to 15 years from now, American companies are going to start losing competition to European companies and Chinese companies.

But some people might say, well, there are countries who are protecting their industries by imposing tariffs.

Why is the United States should follow their mistakes, especially when the United States is the leader of the free world and leader of capitalism.

Now another argument for tariffs is that, well, other countries are subsidizing their industries which are undercutting prices in the market.

Which is why the United States has imposed these tariffs in order to protect American industries.

Well, let's take that argument and break it down.

Elon Musk is the richest person in the world with a net worth of almost half a trillion dollars.

Because Tesla dominates the EV market in the United States.

There isn't a single car company that would even come close to Tesla.

But if you look at China, Tesla is far behind BYD.

And BYD cars are as good as Tesla if not better.

And they are sold at the fraction of a price of Tesla.

And a lot of people in the US are complaining about the quality of cars made by Tesla.

Yeah, they are great in some sense because they are electrical, but they cost as much as BMWs and Mercedes.

If I am paying as much as Mercedes and BMW, why am I not getting the exact same quality?

The United States has imposed a 100% tariff on all EVs that enter from China.

Get rid of this 100% tariff that the United States imposed in order to protect Tesla and other EV manufacturers in the United States, and the US market will be filled with $10,000 EVs that will be imported from China.

Don't you want a $10,000 EV that is going to be as good as Tesla?

But that is going to impact negatively Tesla.

Because Tesla will no longer be able to sell their cars at that price.

Either they are going to improve the quality and match the quality of Mercedes and BMW, or they will have to lower down their prices in order to compete with BYD.

But Elon Musk will not be the richest man in the world anymore.

So frankly speaking, it's the tariffs that the United States imposed are protecting Tesla, which is making Elon Musk the richest person in America or in the world.

But some people might say, it's not fair because BYDs are being subsidized by the Chinese government.

Well, imagine for a moment, what does that basically mean?

The Chinese government is using Chinese taxpayers in order to subsidize the car that you will buy.

So basically, the Chinese government is taking money from Chinese taxpayers and paying for a portion of the car that you are going to buy.

But the government of the United States is saying, no, you are not going to get that cheap car.

If you are going to get it, you will pay double the price and half of that money is going to go to the government of the United States.

Now imagine an alternative scenario, where the US government will keep the 100% tariff.

Yes, Tesla will continue to dominate the EV market in the United States, and they will still be profitable.

But outside the United States, they will be kicked by BYD.

They have been already overtaken in China.

And recently, they are already losing competition in Europe.

And BYD is outselling Tesla in the entire European Union, and frankly speaking, probably across the entire world.

America is making a huge mistake by imposing a 10% baseline tariff.

And reciprocal tariffs are going to make the entire situation much worse than it is right now.

They might raise some in the short run for the government, but in the long run, the damage to American companies is irreparable.