Trump Giveth, Trump Taketh Away
This post Trump Giveth, Trump Taketh Away appeared first on Daily Reckoning.
Trump giveth… Trump taketh away.
The post-election stock market ran further and further again, mostly because of the pretty plums Trump dangled in front of investors:
Tax cuts… deregulation… infrastructure.
Until last month’s “correction,” the overall market had swelled some 30% since that unforgettable night in November 2016.
Has the president delivered the full cargo of goods — and on the appointed schedule?
No, we must acknowledge in fairness, he has not.
But the methane swamps of Washington are vicious wastes, drowning most who hazard the passage.
And you must admit this much if nothing else:
The president was able to paddle his tax cuts through to a safe shore.
Meantime, the agents we’ve assigned such matters inform us he has taken the presidential ax to hundreds of useless government regulations.
Here, as far as markets go… Trump giveth.
Ah, but the Trump that giveth is also the Trump that taketh…
Trump shook the dust from his tariff blueprint earlier this month… and unfurled it before a watching world.
Under its terms, steel and aluminum competitors the world over would feel a good hard pinch upon entering American shores.
Due to their volume of metallic exports, such perennial hellcats as Canada and Brazil would take the brunt.
The Dow Jones industrial plunged 420 points the day the news broke — and for cause.
Tariffs invite counter tariffs.
And markets believe a global trade war is bad for business.
As we noted recently, Bloomberg Economics estimates a trade war could cost up to $470 billion in global GDP.
Since the tariff unveiling, markets have been a seesaw affair… rising and falling at least in part on Mr. Trump’s passing fancies.
Trump dangles tariff exemptions before Canada and Mexico and the stock market gets a bounce.
He threatens universal tariffs unless the devils yield on NAFTA and stocks tumble.
But yesterday, the president opened a new front in the global trade war…
Trump vowed retaliatory action against Chinese thieves of American intellectual property.
“We have a tremendous intellectual property theft problem,” said the president. Resolving it will make us “a much stronger, much richer nation.”
It appears justice is with him.
Estimates suggest Chinese piracy of U.S. intellectual property costs American business up to $600 billion per year.
But markets are global citizens with loose attachments.
Trade war is trade war — justice be damned.
The Dow Jones plunged a ghastly 724 points on yesterday’s trade news.
After yesterday’s trouncing, the Dow Jones occupied the same perch it occupied on Nov. 28.
It ended today another 424 points lower.
Four months of overall gains have therefore vanished into the ether.
Where once Trump giveth with tax cuts and deregulation… Trump now taketh with trade.
Overnight, China promised retaliation.
$3 billion of American agricultural and steel products will confront 15–25% tariffs of their own.
Ana Boata is the senior economist at trade credit insurer Euler Hermes.
Ms. Boata estimates retaliatory Chinese tariffs could cost U.S. exporters up to $700 million.
And so it goes.
Are Trump’s trade adventures solely responsible for the stock market volatility now upon us?
No, they are not.
Remember, the Federal Reserve is also at its tricks.
Just Wednesday it raised its target rate yet again — the sixth occasion since December 2015.
It is likewise chiseling its balance sheet.
It is on schedule to shave $420 billion this year alone… $600 billion next year… and another $600 billion the year following.
Mix the latest trade business with the monetary tightening and a sour potion emerges.
We fear markets might choke on the dose.
Time, as is often said, will tell.
Trump hath giveth, Trump hath taketh away.
Which way does he go next?
The Lord only knows…
Regards,
Brian Maher
Managing editor, The Daily Reckoning
The post Trump Giveth, Trump Taketh Away appeared first on Daily Reckoning.
This story originally appeared in the Daily Reckoning
Source: https://dailyreckoning.com/trump-giveth-trump-taketh-away/
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Whistler Blowers, Insiders
Let’s see it get’s spent for the future of the people. Build back our own industry. Industry has been sold off to foreign interest and shut down just so they could cut out competition. Many of these closings fail to produce the results expected anyway. There are thousands of examples but, Commodore bought Atari. It cut out the competition. Commodore went belly up. They destroyed a company that made better equipment and games. This one of a 1,000 examples has continued till all we have left is the military/industrial complex. The workers were thrown under the bus. Now listen to them cry that they bought bad steel from the monopolies they supported to throw you under that bus. The ones that exploit foreign workers and unequal trade laws. We do not just need a steel industry. We need all the industries. We need modern indoor LED grow light farms that run on 12 hour days. We need the most fabulous fish farms on the planet. We need to detox the entire country and force the use of the clean air and water acts. We need to shake the science they are hiding by declaring it a matter of national security. If they are going to spend money it had better be spent correctly. That done we have no need to go to war because we need nothing from the rest of the world. The deep state will be having a heart attack after reading this, yes their spooks are in here, they infiltrate everywhere. We can turn this into they need us instead of us needing them. It is going to require oversight and an honest court system.