By lunchtime on Wednesday, the American stock market — more specifically, the Dow Jones Industrial Average — was down more than 200 points, a direct result of the new $200 billion in tariffs China imposed on American goods in response to tariffs placed on Chinese goods by President Donald Trump.
“Is this what a trade war looks like? Yes. And at this stage, we’re only in the skirmish section.”
So what does that mean if things get worse, as seems likely judging by Trump’s harsh rhetoric? Quest pointed to a chart filled with red numbers and noted:
“This is what the next stage looks like! Wherever you look, you are seeing the damage that is being done! And remember the important thing about a trade war: The gains are very limited. There are those industries that benefit. The losses are widespread and diversified throughout the economy.”
The preliminary results of the Trump tariffs are not encouraging for American workers, many of whom are in states that voted overwhelmingly for the Republicans in 2016. And they could well have long-term economic effects which threaten to cast the country into a recession.
Politico recently reported:
- “Consumers could soon be paying higher prices for cars and trucks, electronics, homes, and staple goods like canned foods and canned beer.”
- “Higher costs (whether for U.S.-made steel and aluminum or that made abroad) mean that manufacturers like Boeing will have to pay more for raw materials.”
- “One of the U.S. heartland’s biggest cash crops — corn — is on the EU’s [tariff] retaliation list. Wisconsin produces about half of the U.S. cranberry crop — another product on the EU’s list.”
- “If a company has a choice of putting a plant in Detroit, where it may have to pay the tariffs, or over the border in Windsor, Ontario, where it doesn‘t, it may choose the latter.”
So if you happen to have a 401k, mutual funds, or other stock holdings, don’t count on any big returns as long as Trump is in office. Once again, we see that Republicans are terrible for the economy.
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