E Keynes And Trump Tariffs

Manufacturers certainly have concerns that tariffs will cause more problems than they solve, but we also recognize that the administration may intend to use them as a negotiating tactic to bring China to the table and achieve larger goals.

(Click on image to enlarge)

US Exports to China slowly on the Rise but in Danger. OECD, "Main Economic Indicators - complete database", Main Economic Indicators (database), (Accessed on 6/26/2018)

Copyright, 2016, OECD. Reprinted with permission.

It appears that Timmons is speaking to Trump's desire to work out bilateral agreements. Those agreements fragment our trading partners and give the USA more leverage. As of the writing of this article, the stock market shows us that most investors continue to buy into this strategy. 

Keynes had said, in making the case for British tariffs, that the risks of not being able to reverse tariffs as overblown, because they can be reversed and used for short-term gain. Negotiations can bring these to a halt if the trading partners of the USA are willing to negotiate and make a deal with Trump. 

But the situation has been complicated by Trump and his trade advisers making harsh and insulting statements towards our allies, even more so than made toward China. 

Since the beginning of June, there has been a little word on negotiations. It can't be assumed that there are no negotiations or the market would have been in urgent decline by now. The key is how the market reacts in the next few weeks and months. If negotiations fail, the stock market could become a slow-moving train wreck, which wrecks all the same. 

With Keynes, Britain devalued the pound sterling. With China, the threat of devaluation of the Yuan is great. So, the indicators are clearly devaluation of currency and how stocks behave. Those who are not privy to information regarding the negotiations should either get out of stocks now or have a plan in place to get out soon. 

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Disclaimer: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment advice. The ...

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Moon Kil Woong 1 year ago Contributor's comment

Look to invest in technology and software which so far is free from tariff tiffs so far. There is already protections against foreign countries buying up key assets in the US if Trump hasn't noticed by now. Hopefully, the latest Washington junk will fade away. The tariffs on steel hurts US industries and our reputation enough already.

Gary Anderson 1 year ago Author's comment

The market has a lot on its plate, but adding the uncertainty of tariffs makes it tough for ceo's and investors alike. It is hard to feel sorry for those who supported Trump, but we have to face it, there were two very flawed candidates running for president.