When President Trump announced new tough tariffs, aimed mainly at China, the headlines that followed the next day accused the President of acting hastily, predicting jobs and the stock market would suffer greatly due to his actions.
When USA today reported the day after Trump’s announcement, the headline was:
Dow closes 425 points lower on trade war fear after Trump moves to impose tariffs on China.
That headline was followed by the ominous warning:
“Driving the market tumult was President Trump’s decision Thursday to follow through on his threats to slap tens of billions of dollars in tariffs on Chinese imports to the U.S., a move that prompted Beijing to retaliate and announce plans to impose tariffs on many American-made goods, including fruits, nuts and wine, entering China.”
In truth, the Trump administration spent seven months investigating China’s unfair trade practices. But Jim Cramer would proclaim with confidence one day later on CNBC’s “Squawk on the Street” that Trump was to blame for what would be a sure to come prolonged bear market that would cripple the stock market and people’s retirement savings.
That was followed on March 26th by Fox Business:
The Dow recorded its biggest one-day point gain since 2008 on Monday, as reports of trade talks between the U.S. and China reduced fears of a possible trade war.
Cramer and others in the mainstream were either strangely quiet or subdued at that last headline. Trump the great negotiator doesn’t fit into their narrative that the president is inept and has no idea what he is doing.
Our trade deficit with China has been a matter of concern to the President and many others for some time. Since 2000 when the U.S. normalized trade relations with China the deficit has exploded from less than $84 billion to over $375 billion in 2017. To put things in perspective, that amount alone funds the entire Chinese military.
Even so, experts like William Hauk at conservation.com offered little encouragement to Trump’s hard line. He said:
“As an economist and expert in international trade, I don’t see how the proposed tariffs will resolve either one. In fact, it’s more likely that they will create two new problems by hurting both consumers and businesses.”
Lost in last week’s hand-wringing over tariffs was Trump’s landmark decision to confront China’s illegal trade practices that threaten the security of our economy.
U.S. Trade Representative Robert E. Lighthizer’s investigation was the basis for Trump’s ultimate decision. His findings only confirmed what those in the private and academic sector have known for a long time – something unconventional had to be done to curb China’s unfair trade policies.
A bipartisan commission chaired by former Utah governor Jon Huntsman and retired Adm. Dennis Blair estimates the loss to the U.S. economy due to intellectual property theft to be between $225 billion and $600 billion annually.
As the Wall Street Journal reported:
“Make no mistake, these are deviations from normal practice to single out China — for good reason. For one, Chinese firms are increasingly connected to the Chinese government, serve the political objectives of the Chinese Communist Party and are the beneficiaries of massive subsidies and protectionist benefits given by Beijing. In essence, China has politicized its entire economy.”
Treasury Secretary Steven Mnuchin, a Trump appointee, noted this week that the U.S. and China have quietly begun negotiations to improve trade relations. But none of this happened until after a week of harsh words, the threat of tariffs combined with a promise to leave the door cracked if China negotiates fairly, all the Trump haters venting their biases and Trump standing firm!
CNN and the rest of the mainstream media were quick to warn that farmers would be hardest hit by a trade war and that bode badly for Trump come 2020.
Farmers and companies in the agricultural supply chain who have mostly welcomed Trump’s policies are preparing for a downturn due to disruption from an escalating trade battle with China. But unlike CNN, most in the Midwest are resolute in their support for the President.
South Dakota farmer Todd Bushong is representative when he says:
“I am willing to take a few financial hits if it will make it better for him down the road.”
Trump’s move to prevent China from unfairly dominating the industries of the future is risky and complex, but the future of our economy depends on its success. Like many Trump supporters, Buhong believes that Trump’s policies will pay off over time, including for his son who plans to farm alongside him.
~ American Liberty Report
