Article Summary
Trump’s tariffs, initially met with skepticism and fear of a Smoot-Hawley style stock market collapse, have proven to be beneficial for the American economy. Manufacturers are returning to America, China is willing to talk tariffs, and the UK and the US have agreed upon a new trade deal. These events suggest that Trump’s necessary gamble to remake America’s trade and clip China’s wings is working.
What This Means for You
- Be informed about the ongoing trade wars and their impact on the American economy.
- Stay updated with the latest developments in trade negotiations between the US and other nations.
- Understand how these changes can benefit American manufacturers and consumers.
- Be prepared for an increasingly marginalized China in the world trade stage.
Original Post
When Trump announced all his tariffs, naysayers said it would quickly destroy the American economy. The immediate stock market drop following the new tariffs seemed to reflect this. However, some thought that Trump was doing what needed to be done, and events seem to be supporting that take.
Even those who agreed that China needs to be brought to heel and that the rest of the world has been taking gross advantage of American trade inequity argued that doing everything at once was unsustainable. The system wouldn’t be able to stand the shock and, most scarily of all, we’d see a Smoot-Hawley style stock market collapse.
I disagreed. For one thing, America was a creditor nation in the 1920s, but now it’s a debtor nation. For another thing, the stock market in the 1920s was roaring in part because so many people were buying on the margin. The whole thing was a bubble. The stock market today is much more limited and regulated.
Trump had no choice but to move quickly, as midterms are looming, and if Republicans lose, all is lost. He needed everything locked up quick – the trade wars, China being put in the box, and the inevitable stock market adjustment.
Currently, Trump’s necessary gamble seems to be working. Manufacturers are returning to America. China, having initially taken a hard line, is willing to talk tariffs. And, in the latest victory, Trump says that the UK and the US have agreed upon a new deal. If Trump can get countries behind him on new trade deals, China gets increasingly marginalized on the world trade stage.
Key Terms
- Trump’s tariffs
- American economy
- Trade wars
- China trade negotiations
- Debtor nation
ORIGINAL SOURCE:
Source link
