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August 14, 2019

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Since you wrote your comment the markets have recovered. The U.S. economy is strong, but there will be volatility in markets. Stocks still should trend higher (with dips). Traders love these dips in the markets. They are an opportunity to buy what the panicked are selling and make a profit.

"Tariffs on Chinese goods are paid by the importing companies, not by the Chinese. So tariffs are a tax on Americans."

That statement is incomplete and indicates ignorance. Tariffs obviously will cause the price of Chinese goods to go up, ultimately to the consumer, thus slowing the purchase of them. That is the whole idea. To cause the purchaser to look elsewhere for a better deal thus putting pressure on the Chinese to negotiate more fair trading practices or lose market share. Simple.

This is a negotiating tactic. Not a long term policy position. Trump says his goal is to get the Chinese to play fair. If successful, this will benefit U.S. business and consumers in the long run. Trump is trying to correct a situation that creates a trade imbalance and intellectual property theft that hurts the U.S.. Previous administrations have not had the courage to address this issue. Trump is the first to take it on. He feels the U.S. is ultimately in a stronger position than China and will prevail in the long run.

Tariffs over an extended period have the potential to increase corporate costs and raise consumer prices for some products and slow GDP, but relative to continued strong consumer and business spending as well as increased Federal spending they are not enough to send the U.S. into a recession. It's just not a big enough chunk of the entire U.S. economy.

Recession may ensue in the event of strong inflation, global economic slowdown, bubble stock valuations or corporate earnings collapse. This is not the case with the exception of sub par growth in Europe and some other countries, but this not bad enough at this time to upset the U.S. economy which is rolling right along.

Trump is not a fool. One may disagree, but he is not a fool. Of course if one actually believes the biased media against him then they may think he is. But that would be foolish. Wouldn't it?

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