The stock market took another Trumpian hit when the president said he would increase the tariff percentage on Chinese imports. The tariff on $250 billion worth of Chinese exports will be 30 percent instead of 25 percent effective October 1st. And he’ll put a 15 percent tariff on the other $300 billion worth of Chinese exports in December.
Increasing the tariffs was just one of Trump’s knee-jerk reaction after China retaliated by adding tariffs to more American exports. American-made autos and cars will face a 25 percent tariff in China, and other American products will also face additional tariffs. American farmers find themselves in a war they wanted, but some farmers now claim the tariff war was a bad idea.
The farmers are Trump’s sacrificial lambs. China’s big farm orders went to Brazil and Argentina, but China did buy more than 9,000 tons of soybeans, recently. That order was in process before the Chinese said they would stop buying farm products after Trump reneged on the agreement to lift the ban on Huawei.
Farmers question Trump’s ability to reach an agreement with China, but they still support him. But support for Mr. Trump’s foreign and domestic agendas is in the toilet. More than 60 percent of Americans think Trump’s political agenda hurts the economy. But it’s not just the American economy that Trump steps on in his quest to control international trade. The world’s economy is in trouble, and Trump’s tariffs and sanctions helped create the global mess.
The Brexit situation also plays a role in the pending global recession. The U.K.’s new PM, Boris Johnson, is a Trumpian, and he plans to exit the EU without a deal unless they change the backstop clause in the Brexit agreement. Johnson met with Angela Merkel and Emmanuel Macron before the G7 meeting. Johnson let the EU members know he’ll leave the EU on October 31st without a deal. Macron and Merkel told Johnson Trump won’t save him if he does. Johnson thinks Trump will stand behind him if he creates a financial, social, and trade nightmare in England.
Mr. Trump called Fed Chair Jerome Powell an enemy when Powell told a group in Jackson Hole Trump needs to get a grip and find a solution for his trade war. Powell said the Feds won’t cut interest rates to control international trade. Powell said the Feds may cut rates in September if there are signs of an economic slowdown, but right now the fundamental economic signs are still positive.