Last night Donald Trump allowed his latest tariffs on Chinese goods to go into effect, after China made clear that it had no intention of caving to him. Why would China cave, when Trump is losing the trade war? Sure enough, China responded today – not by backing down, but by taking Trump’s legs out.
This morning China announced retaliatory tariffs on U.S. goods, including oil, according to the Economic Times. Even as we wait to see what kind of financial and economic impact China’s tariffs will have on the United States, the reality is that the perception matters more when it comes to Trump’s fate.
The stock market has been tanking for quite some time now, due to Trump’s tariffs on China, and the negative impact that it’s having on the U.S. economy. The stock market only bounced back a bit this past week because Trump falsely claimed that he was on the phone working with China to end the trade war (Trump’s handlers later admitted that no such phone calls happened).
Now that Trump has gone through with his new tariffs, and China has responded by retaliating instead of backing down, U.S. investors will interpret this as a death knell for economic growth. The stock market will go off a cliff this week, even before the negative impact of these new tariffs shows up in economic growth reports. China just took Trump’s legs out – but only because Trump forced the issue. The question continues to be if and when Trump will humiliatingly admit defeat in his failed trade war and try to begin repairing the damage he’s done, or if he’ll simply allow the trade war to finish him off instead.
Bill Palmer is the publisher of the political news outlet Palmer Report