As demagogic Very Stable Genius Donald "Rump" Trump lurches toward more trade wars with key trading partners, global markets are showing signs of anxiety. With Rump threatening to cut Canada out of a trade deal, one which Mexican President Nieto urged as part of Mexico's "deal," China appears to be ready to retaliate for $200 billion in tariffs on its goods, a move that would likely lead to a recession in the U.S.:
Worries about U.S. tensions with China were also kept alive by a report last week that Trump had told aides he was ready to impose tariffs on an additional $200 billion worth of imports from China as soon as a public comment period on the plan ends on Thursday. That would be a major escalation given the United States has already applied tariffs on $50 billion of exports from China.
[snip]Then, there's the enormous debt that Debt King Don has created with his reckless tax giveaway for the top one percent and corporations. Transferring his bankruptcy-inducing business practices to the Government, Rump has set in motion a situation where replacing lost tax revenues will require the Government to borrow hundreds of billions of dollars, and will drive up the interest payments on that borrowed money (Treasury bonds, etc.). While large investors will buy up the Treasury notes, the middle class will face increased interest rates on their commercial loans and will almost certainly get hit with cuts to Federal programs to offset the loss of tax revenue.
There was also bad news on the economic outlook with surveys showing manufacturing activity took a hit from weak orders in August, a sign firms are feeling the pinch from an intensifying global trade war that could derail global growth.
Stay tuned. Rump's braggadocio about the economy that he largely inherited from President Obama may have to be adjusted in the months ahead as his reactionary economic programs stall the economy for all but the very wealthy.
