Trump’s Trade and Tariff Wars Are a Mask to Hide the Real Risk of an Economic Crisis
Trade disputes could trigger a global economic crisis. Any hope that President Donald Trump was bluffing to secure better trade terms with China has vanished.
The veritable tit-for-tat exchange of tariffs and duties between the two largest economies in the world, the United States and China, has grown into something far more serious and insidious.
It’s not just a temporary dispute. It’s the start of a veritable trade war. And these have rarely ended without at least some shots being fired.
Those shots are helping create a global economic crisis. President Trump has even intimated that he would pull the U.S. out of the World Trade Organization (WTO) unless it—an international body and referee—changes the rules of the game in favor of the United States.
At the very least, this has triggered anxiety. Ultimately, it could grind the world economy to a halt. (Source: “Trump threatens to withdraw from World Trade Organization,” CNBC, August 30, 2018.)
So far, Trump’s tariffs against China or the European Union have had mixed results.
Stocks have continued along a bullish path throughout the past summer. Occasionally, they have taken a break from rising all the time with some slight bearish snaps.
Yet, as precarious as the trade disputes are in themselves, the real danger comes from what the trade disputes are masking. The biggest threat of an economic crisis, actually, remains debt.
And while Washington, Berlin, and Beijing are targeting tariff shibboleths, the Trump presidency has accumulated a massive amount of debt. (In fairness, its predecessors were not better).
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Who Cares About Debt When We Have Growth?
The financial burdens are growing. Trump appears to be one of those “I don’t give a flying…” kind of White House occupants. And America’s debts, given the primacy of the U.S. dollar, affect the whole world.
