07 August 2019

Spiraling Out of Control

John Cassidy at the New Yorker published a great shorter piece yesterday (link here) with the title "Donald Trump's Trade War With China Is Spiraling out of Control." That's an understatement.

Given that Trump's ideas about trade and tariffs are often profoundly wrong and steeped in his economic ignorance, proving that he learned next to nothing at Wharton, the entire country and even the world are held hostage by his whims.

This paragraph from the linked article gives you an idea of how capricious Trump's decision making process is: "The current crisis began on Thursday, when Trump--ignoring warnings from his top advisers--suddenly announced that his Administration would levy tariffs on an additional three hundred billion dollars’ worth of Chinese goods, beginning September 1st. After meeting in June with Xi Jinping, the Chinese leader, Trump agreed not to take this step, and talks between the two sides resumed. But the President changed his mind after Robert Lighthizer, the U.S. Trade Representative, and Steven Mnuchin, the Treasury Secretary, returned from talks in Shanghai without securing the concessions that Trump had been demanding, including an immediate agreement by China to boost its imports of U.S. agricultural products."

The pain is not here yet from these tariffs but it is coming and it will hurt hard economically. Many people will suffer because of him. Elected officials in Washington need to stop this imminent economic derailing by any means necessary.

Otherwise, what more than a few economists are predicting could well come true: a severe economic recession or even a full-bore depression. Trump should be not allowed to make that happen.

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