U.S. investors offered up a pretty strong hint about what they think of Donald Trump’s newest tariffs on Chinese goods, and China’s subsequent retaliatory tariffs, when they sent the Dow Futures down a whopping 230 points over the weekend. This points to a potential bloodbath when the stock market officially reopens tomorrow after the holiday weekend. Now there’s even more bad economic news for Trump today.
It turns out China isn’t just fighting with tariffs on U.S. oil. China has also filed a formal complaint against the United States with the World Trade Organization, according to CNBC, thus taking the trade feud to the world stage. The escalating trade war will result in weakened economies for both the U.S. and China, but the reality is that Trump may not last that long.
If the U.S. stock market continues to interpret these new tariffs as bad news, and investors continue to push the market sharply lower, it’ll create the public perception that we’re in a recession before the tariffs can even push us into one. That kind of perception can quickly become a self fulfilling prophecy, as it’ll prompt Americans to begin making the kinds of monetary decisions that’ll slow down the economy even further.
From a political perspective, this will all land on Donald Trump. Most Americans are aware that the trade war and tariffs are entirely his doing, because he keeps taking credit for it. And in general, most Americans tend to blame the president when the economy turns bad. China’s WTO complaint is a sign that it’s willing to stand its ground against Trump’s tariffs as long as necessary – and that’s an ugly thing for Donald Trump.
Bill Palmer is the publisher of the political news outlet Palmer Report