President Trump considers himself a great negotiator — the best. However, history shows he leaves economic carnage with multiple bankruptcies and lawsuits. Now he claims to be prepared to follow through with a trade war on China.
China is not going to lay down and go quietly without a fight
And China appears to be better armed than Trump could ever hope to be for a fight he is ill-equipped to understand.
CBS News reports:
White House advisers like National Economic Council Director Larry Kudlow have been telling Wall Street and Corporate America that despite President Donald Trump’s tough talk this spring on trade and tariffs, the administration isn’t pursuing a trade war with China or anyone else. “This is just a proposed idea,” Kudlow told reporters in early April about potential tariffs on $50 billion worth of Chinese steel, heavy machinery and 1,300 other products. “Nothing’s happened. Nothing’s been executed.”
However, the impact of Trump’s irresponsible blustering with China has already caused observable economic harm as CBS notes:
…early signs are emerging that areas of the country that voted for Mr. Trump in the 2016 election., proposed or imposed, already are hitting some U.S. industries, some in
American industries from pork exports to pecan farmers have already seen a downward trend in profits. China no longer is importing American soybeans — relying on Brazil instead.
It is not just agriculture that is suffering
CBS notes the impact on the imposed steel tariffs:
Companies from Caterpillar (CAT) to Harley-Davidson (HOG) have said on earnings calls that higher commodity prices tied to tariffs are expected to be a drag on results this year, according to The Wall Street Journal. Steel costs for the equipment industry as a whole were up about 15 percent in the quarter ended in March, executives at construction and mining equipment maker Caterpillar said on an earnings call in April, according to a transcript. “We expect steel and other commodity costs to be a headwind all year,” Caterpillar CFO Brad Halverson said.
- Earlier this year 86 million pounds of pork sat in frozen storage anticipating increased sales to China.
- The 2000 American pecan growers do a third of their business with China. They are now slapped with a 15% tariff.
- Small businesses are having to cut back on hiring in anticipation of the importation of aluminum and steel tariffs.
This game of brinkmanship is yet to produce results according to CBS:
A U.S. delegation including Treasury Secretary Steven Mnuchin emerged from without an agreement as the Trump administration inches closer to imposing the first round of tariffs on at least $50 billion of imports from China.last week
Trump’s history of economic disasters are well known. And he was failing at ventures on a scale dwarfed by America’s trade with China, and right now, China appears to be winning.
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