The Brexit debacle is on its way to the toilet again. Boris Johnson wants to exit the European Union on January 31st, and he wants to work out a trade deal with the EU by the end of the year. According to European Commissioner Ursula von der Leyen, that won’t happen. It took the EU seven years to work out a suitable trade deal with Canada. Johnson knows the Brits won’t tolerate more delays now that the end of this Putin-inspired nightmare seems to be a reality.
Europe’s Central Bank chief told the press von der Leyen is right to worry about the U.K.’s push to come up with a suitable trade deal in record-breaking time. Mr. Johnson wants to use his relationship with Trump to carve out a trade deal with the U.S. after he bulldozes a deal out of the EU. But making a deal with the Trumpster isn’t easy either. Trump told Boris he would give him a sweet trade deal without consulting Congress, but that won’t happen.
The Iran conflict is on simmer thanks to Iran’s decision to blow up Iraqi military bases without hurting military and civilian personnel. The U.S. economy can’t handle a military war with Iran. Trump’s tariff war with China and his threat to tariff European vehicles and all products made in France will take a heavy toll on the economy in 2020.
U.S. manufacturing took a hit from Trump’s tariff plan. The steel and aluminum tariffs hurt U.S. manufacturing, and China’s plan to stop buying American products hurt the wholesale and retail sectors of the economy. According to several reports, corporate profits in 2020 may only increase by five percent. Business investment slowed down in 2019, and it looks like that trend will continue.
The government claims GDP growth in 2020 will be 2.1 percent or better. The latest estimate puts 2019 economic growth at 2.1 percent, but that’s not an accurate number, according to some Wall Street economists. Those same economists think the 3.5 percent unemployment figure is not accurate either. The people who stopped looking for a job due to pay inequality and other issues are not in that figure.
Mr. Trump’s continues to tariff-screw American consumers, but he claims the Chinese pay the tariffs. New reports indicate American consumers will pay more than $36 billion in tariff taxes in 2020. Consumer spending is the fuel that drives economic growth. But it looks like consumer confidence and spending eroded at the end of 2019 due to Trump’s erratic and unrealistic fiscal policies.
Source: https://www.nytimes.com/2020/01/06/business/economy/trade-war-tariffs.html
Dil Bole Oberoi
