Trump Shakes His Tariffs Feathers At China
The Senate gave Trump another month to solve his border wall financing issue. If Trump and Congress can’t agree on a new spending budget, another shutdown will be the flavor of the month in January.
The last thing the Trumpster needs is another government shutdown. Gross Domestic Product growth took a hit the last time he got his balls in a wad over border wall funding. Another shutdown would take another bite out of the half-eaten economic growth Trump keeps raving about. Mr. Trump thinks low unemployment and low inflation equal a great economy, but those two ingredients are just part of the economic pie.
The main piece is consumer spending. Another government shutdown would hurt consumer spending again. Consumers stopped buying big-ticket items in October. The impeachment noise scared consumers. Plus, the manufacturing sector of America’s economy has serious growth issues. Mr. Trump went to Apple’s factory in Texas to boast about U.S. manufacturing and new jobs.
Mr. Trump told Business Insider he just opened the seven-year-old factory in order to show big corporations, like Apple, took his advice and moved overseas production back to the states. Apple wants Trump to drop the tariffs on the Chinese components the company needs to assembly those expensive computers in Austin.
Jerome Powell told the press Fed members won’t approve another rate cut unless Trump’s economic policies give them no choice. The Feds know the zero and negative interest rates Trump wants are a disaster in Europe and Japan. Those rates didn’t help increase GDP growth. The Netherlands is a good example of what negative interest rates due to pension fund returns. The pension funds in the Netherlands usually provide retirees with 80 percent of their working income. But that percentage is not the norm now that negative rates are in play.
Mr. Trump still has the $156 billion worth of December tariffs on the trade table. Plus, he threatened to raise the existing tariffs unless China makes the concessions he demands. Chief negotiator Liu He told the press China wants to sign the trade deal, but Trump needs to take the December tariffs off the table. Liu He also said China will buy $20 billion worth of farm products in 2020, not the $40 to $50 billion Trump said they agreed to buy.
Wall Street economists don’t expect a trade deal this year. The tech part of the deal is an issue. President Xi told the press he won’t sign phase one until Trump drops the tariffs on more than $390 billion worth Chinese products.
Dil Bole Oberoi
