A Moody’s analysis found that Trump’s trade war has already cost 300,000 Americans their jobs, with another 500,000 to lose their jobs by the end of 2021 if Trump wins reelection.
According to Moody’s, “The trade war has already done meaningful economic damage to the U.S. and global economies. Since it began in earnest just over a year ago, the trade war with China has cost an estimated 0.3 percentage point in U.S. real GDP and almost 300,000 jobs. Tariffs on Chinese goods have made a notable dent in bilateral trade: Imports of Chinese goods subject to tariffs have contracted at a double-digit rate.”
Things get really dire if Trump wins reelection and escalates the trade war with China into a technology cold war:
To approximate the fallout of a technology cold war between the U.S. and China, we shock sentiment and growth expectations across countries. The result is a large pullback in investment that, along with price increases and ruffled consumers, causes U.S. and global GDP to contract sharply.
Although the Fed quickly lowers the federal funds rate to the zero lower bound and both major and developing economies adopt monetary stimulus, the blow to global demand overwhelms efforts to ease financial conditions. The U.S. dollar appreciates as capital flight intensifies and emerging market currencies depreciate sharply. However, external accounts worsen because of the sharp contraction in global trade. All told real global GDP contracts by 0.3% from peak to trough, with deep recessions in the U.S., Europe, and most emerging markets. Growth in China slows substantially and falls just short of recession.
If Trump wins reelection, and escalates the trade war 500,000 lose their jobs
The country might already be in a recession before voters go to the polls next November, but if it is not, Trump’s reelection will put it there. The president has warned China on numerous occasions that he is going to increase tariffs if he wins reelection, and Trump has yet to show an ability to do anything other than double down.
Trump’s reelection would mean that the economy is going to plunge and people will lose their jobs.
If this election is about kitchen table issues than the biggest issue will be that things are already getting bad, but if Trump gets four more years, it’s will get much worse.