Source item
Open original source ↗Why Dr Doom is becoming “Dr Boom”? Because “Tech Trumps Tariffs” both in the short run and the medium term. Mickey Mouse could be US Prez rather than Trump or Bernie or Kamala and we will still get US potential growth at 4% by 2030 regardless of because US dominates the key 12 technologies/industries of the future and China is only a close second (and Europe is nowhere to be found)! Tech innovations will increase US potential growth by 200bps from 2% to 4% by 2030. Even relatively high permanent tariffs (say 15% weighted average for US after negotiations) would reduce potential growth only and at most by 50 bps. So tech is a 4X boost to growth relative to the negative impact of high tariffs (200/50 = 44). So Tech Trumps Tariffs even if Mickey Mouse or a clown were to run the US! It doesn’t matter and American exceptionalism will remain and be resilient regardless of Trump given the hyper dynamism and innovations of the US private sector. We are moving from an era of logarithmic tech innovations (initial growth spurt that fizzles out over time) to an era of exponential growth where growth accelerates over time for decades to come. In a world of exponential growth first mover advantages (US ahead) compound over time and imply that second movers (China) never fully catch up to the first mover US even if China will do quite well too. DeepSeek is not a revolution. It is an evolution and it would have never existed without the huge investments that OpenAi and other US hyperscalers did for years. MAG-7, hyperscalers and tech firms (in Nasdaq) could not care less about tariffs. They gotta continue and increase massive Ai capex to avoid becoming obsolete relative to each other. Ditto for most of the US corporate sector. This AI driven capex boom in the US has been a massive tokens to US growth since 2023 and will remain so this year and ahead regardless of the outcome one of the current tariffs madness and uncertainty. Thus Tech Trumps Tariffs both in the medium term as well as in the short term, ie this year and the rest of the decade!