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| Will Trump's Tariffs from Hell really work ? Or tank the Economy? |
In 2018-2019 Donald Trump's first term, he tried to pull TARIFFS on China, just before COVID STRUCK . IT was a shit show, the Stock Market back then slightly rattled . But nothing as of now with the market losing almost 6 trillion dollars 💰🤑 in just a few hours. Trump's tariff war will overhwhelmingly raise prices for Americans, while Chinese consumers will see prices very slightly decrease. Millions of Americans will not be able to meet their needs very soon. What does this mean? Despite proclaiming it “liberation day,” the Trump administration’s tariffs are hurting the U.S. economy, increasing inflation, and leaving America isolated on the world stage.This means that the effects of the trade war will remain for much longer. 👉This means that a recession will be inevitable. And it is going to be a nasty one. The inflation that the Fed hasn't been able to find is going to land like a thump.👈 Business restructuring is going to result in massive layoffs. This was all done with little preference given to countries that are allies or whose exports are critical to support the U.S. economy.The president seemed to think this approach had few costs to the U.S. He argued that “trade wars are good, and easy to win.” However, international trade policy is not carried out in a vacuum. Like Brexit, Britain’s fateful vote nearly nine years ago to leave the European Union, Mr. Trump’s tariffs struck a hammer blow at the established order. Pulling the United States out of the global economy is not unlike Britain’s withdrawing from a Europe-wide trading bloc, and in the view of Brexiteers, a comparable act of liberation. Trump's tariff calculations were even dumber than we thought, according to a conservative think tank . Beyond the idiocy of falsely equating trade deficits w/ trade barriers, Trump's team (mistakenly?) used retail prices instead import prices, drastically inflating the tariffs. Countries first tried to negotiate exemptions from the tariffs on their exports. When that failed, they retaliated with their own tariffs on U.S. exports to their own countries. Trump’s trade war will cost American families dearly by raising consumer prices. It has already reduced their savings in the stock market. And, it is bound to fail at one thing Trump promised to do: bring back jobs. And the stock market is going to crash. The world’s 500 richest people lost a collective $536bn (£417bn) in the first two days of stock market trading after Trump’s “liberation day” announcement last Wednesday. It was the biggest two-day loss of wealth ever recorded by Bloomberg’s billionaires index.The cascading bad news will compound itself and we will be stuck in a vicious cycle of bad news feeding on itself. Hoover tried this during the Great Depression. The Smoot-Hawley Tariff Act of 1930 raised tariffs on both agricultural and industrial goods. This prompted other countries to impose high tariffs on U.S. exports and plunged the US deeper into the depression. 🤔👉Some nations labelled "worst offenders" are scrambling to make nice with the White House to end this game before it reaches a potentially devastating climax. China, in contrast, is playing a different game, one of retaliation and resistance.Meanwhile, Trump has pressed ahead, even as some allies – in Congress and on Wall Street – wonder if he's going too far. On Sunday, when asked what level of market fall he would tolerate before changing course, he snapped that it was a "stupid question". 👈 White House has announced Trump's Liberation Day Tariffs will immediately go into effect. A Moody's simulation found it could be an economic wipe out. Is Trump's Liberation Day Tariffs a Misnomer? A Moody's simulation found that a tariff trade war would wipe out 5.5 million jobs, lift the unemployment rate to 7%and cause U.S. GDP to drop by about 1.7%. Trump’s potential 20% universal tariff could spark "serious" recession in US, Moody’s economist warns. The biggest three partners \[China, Canada and Mexico\] have promised immediate retaliation. Economic war could escalate and perhaps even cause a worldwide downturn. Perhaps Trump's strategy is to begin making bilateral trade deals, but there are even certain blocks such as EU that may well coordinate retaliation together. I am not aware what Trump is actually liberating us from, hence the question.The market's mentality is unlikely to recover until we get a more sensible outcome if anything positive as in returns we will see in the next few months.
