For some unknown reason Donald Trump is trying to simultaneously undermine stock markets while at the same time eliminating millions of jobs in the red states that were his biggest supporters in 2016.
On Thursday Trump said he’s planning another $100 billion in tariffs on Chinese imported goods which increases the prospects of an ongoing and increasingly serious trade war with the largest country in the world.
Stock markets all over the globe have gotten more volatile, which makes them more risky. They don’t like uncertainty, and with Trump in the White House uncertainty is all they can be certain of.
The markets dropped on Thursday then regained their losses later in the afternoon and finished higher before Trump’s latest statement threw them into turmoil again after the markets closed in the U.S..
U.S. stock futures plunged in after-market trading on Thursday after Trump’s announcement that he had asked the United States Trade Representative to impose the $100 billion in additional tariffs against China.
“Markets rallied on the idea the tariffs were just to start a negotiation. Trump’s $100 billion comment implies this is going to get a lot more serious and basically quasi-shatters the idea that the tariffs were just a negotiation starting point,” Tom Essaye, founder of The Sevens Report, said.
Quincy Krosby, chief market strategist at Prudential Financial, added: “A pattern has developed for markets whereby tariff-related headlines can be strident only to be softened shortly afterwards by administration officials. In this instance, the president may be escalating the ‘headlines’ rather than seeking to escalate possibilities of a trade war.”
Trump’s comments about new tariffs came after China on Wednesday unveiled tariffs of $50 billion in annual tariffs on American products. China published its list of affected goods after the U.S. released its own list of Chinese imported goods that would be subject to the proposed tariffs.
U.S. Trade Representative Robert Lighthizer called Thursday’s proposed measures “an appropriate response to China’s recent threat of new tariffs,” and also said that “additional tariffs will not be implemented” until after a public comment process was completed.
As we’ve reported earlier, the president seems to be trying to distract the media and the American public by creating fake crises like the need to send U.S. troops to the Mexican border to fight caravans of illegal immigrants.
If Trump’s tariffs cause job losses in rural states that produce agricultural goods exported to China, and if the stock market continues to decline, then this will help change 2018’s Blue Wave into a Blue Tsunami. Every time Trump opens his mouth or sends out a tweet he makes it more likely that Democrats will take control of Congress in 2018.