This past week Donald Trump announced that because his tariffs on Chinese goods hadn’t pushed China into giving the U.S. a favorable trade deal, he was going to enact additional tariffs. This sent the stock market plummeting, because everyone (except Trump) knows that tariffs are a lose-lose proposition. That’s when China decided to fight back.
China responded to Trump’s additional tariffs by allowing its own currency to slide a few percentage points in relation to the U.S. dollar. This was China’s way of saying that it can out-maneuver, and essentially, outlast, Donald Trump. Sure enough, U.S. investors agreed, and the U.S. stock market has fallen even further into the dumper. Trump then retaliated further by accusing China of being a currency manipulator, which didn’t impress anyone.
Here’s where it gets tricky. Even though China did allow its currency to slide down in value of its own accord in order to teach Donald Trump a lesson, the International Monetary Fund has announced that China did not manipulate its currency. In other words, the worldwide economy thinks what China is doing to Trump is just fine and dandy. For reference, the IMF is based in Washington DC, so it’s not as if the IMF is part of some plot against the United States.
This leaves Donald Trump without a leg to stand on. U.S. investors are still trying to push the stock market higher. But investors are so leery of Trump’s economic idiocy, these days they start selling off the minute Trump opens his mouth about the economy. U.S. investors and the Chinese government seem to agree rather emphatically that they’d like to see Trump gone from office after this election. In fact China is betting heavily that Trump will lose.
Bill Palmer is the publisher of the political news outlet Palmer Report