By fuelling inflation and potentially collapsing the US stock market, Trump's trade dispute has dealt a heavy blow to the US economy. The US President has started a trade dispute with China that almost nobody outside the United States supports. Not only did very few people inside America want it, but it seems to have come as a surprise even to his own economic advisers.
Let's look at the reasons why businessmen, politicians and economists around the world see Trump's decision as a potential disaster.
Trump's trade dispute fuels inflation and impoverishes US consumers. In a globalized economy, increasing tariffs on Chinese exports will lead to a general rise in prices in the United States. Many of the Chinese companies hit by the over $100 billion of US tariffs are exporters whose products cannot be easily replaced by US importers.
Not only is China the largest supplier of daily necessities to the consumer market in the United States, but also supplies specialized products for American manufacturers, such as Apple. In the short term, Chinese manufacturers cannot be replaced, and the increased prices of their products will impoverish every American consumer.
The result of lower consumer spending affects every company in the US and therefore the price of US stocks declines. The US stock market reacted with horror to the news of Trump's decision. In one of the worst days in recent years, 3% was wiped off the value of stocks. The Dow Jones Index fell 730 points in one day. Losses have continued, with a decline of $1.8 trillion in values. Traders are awaiting future developments in the dispute with trepidation .
Before his election as the president, Donald Trump tweeted that if the US stock market lost more than 2000 points, the US president should step down . This may be another tweet the US president regrets making.
However, it is ordinary Americans who will suffer the economic consequences.
The President's tactics could backfire.
The decision to raise tariffs on imports will only add fuel to the fire.
With the effects of the housing slowdown likely to be non-linear, a big fall in prices will deal a blow to public confidence and the financial sector will not remain unscathed.
Rising wages could also fuel inflation , economists said.
We need to reduce the burden of taxes that impoverish the economy.
He also felt a rising sense of trepidation about the impact of the disaster on his business.
The president needs not step down so long as the elections are held under international supervision.
Photo Source: CCTV News Center.