Is Trump trying to trigger
the next great depression all by himself?
By the way, if you are a Trump supporter, before responding, please look at:
- how many major countries have massive debt (Japan and Italy are the most worrisome, but there are so many more), with ever increasing debt (I mention this factor because it would eventually, just by itself, if not corrected, lead to a depression, and possibly a great depression); and
- then look at how intertwined markets are now; and
- the tariff war that immediately preceded the last great depression
First he's looking at upping tariffs on Chinese goods, blacklisting Huawei etc. By itself, per above, the tariffs are a major issue, but my true concern is that Trump at heart:
- loves shooting his mouth of without fully considering the consequences
- is a loudmouth who thinks he's can bully anyone and everyone (and as he's so often gotten away with it, doesn't fully consider the consequences)
- is going to put himself into a situation where he has to back up his words (and he has pride, and internal anger issues)
- won't have the diplomatic nous to manouver himself out of such
- will eventually have to go through with it to save face (in his mind 'show them that I mean what I say, else I look weak, and that just won't do!')
While the China saga is still festering, he comes up with the idea of also imposing tariffs on Mexico:
US stocks have fallen broadly, hit by fears that US President Donald Trump’s shock threat of tariffs on Mexico could prove the trigger that pushes the world’s largest economy into recession.
Washington will impose a 5 per cent tariff from June 10, which would then rise steadily to 25 per cent until illegal immigration across the southern border was stopped, Trump tweeted on Thursday...
“American companies needed to find supply chains outside of China when it looked like the (US-China) trade deal is going to take much longer and one of those countries that was pointed to outside the Pacific was Mexico,” he said. ..
The United States imports more than $US350 billion in goods from Mexico including $US128 billion in autos, auto parts and engines key to the integrated North American auto market, which already is facing challenges and massive lay-offs.
The only saving grace is that the Chinese may wish the U.S. to go into a recession (they are without doubt aiming for a reserve currency status, and U.S. instability helps), but they won't want the U.S. to go into a depression (likely to trigger economic problems within their own country). But internal politics (what allows people to stay in power) sometimes overrule common sense decisions (ie. what's good for both the country, and the world).
In any event, it appears to me that Trump is currently doing a mighty fine job of manoeuvring himself into a position that (has the potential to) wreck of lot of economies.