Dear Republicans, what has happened to the party of free trade and fiscal discipline? Where are the Tea Party people? Trump might trigger a recession and sabotage his own reelection with his trade war.
The “master dealmaker” only likes bilateral deals. Instead of accepting Macron‘s offer to confront China in a united effort together with the European Union, he adopted a protectionist approach both towards China and his ally, the EU. In fact, The Donald does not know allies, he only knows subordinates and vassals.
Protectionism is poison to world trade. It could trigger a recession. Ironically, the growth rate and the low unemployment numbers are Trump’s best arguments to stay in office. With his trade war, he could sabotage his own reelection. The state of the economy in the last two or three months before the next presidential election will be crucial.
The United States have witnessed 120 months of growth. This is unusal. There are economic cycles. After 10 years, the first signs of a downturn, of a recession are there. The Purchasing Manager’s Index (PMI) fell to 49.9% in August 2019. The manufacturing sector shrank for the first time since 2009. A PMI below 50% is normally an early sign of an upcoming recession.
Trump’s trade war with China and the EU, the US deficit out of control, the US debt reaching a critical level: the awakening could be rude for the entire world. Too many countries have a public debt which is unsustainable. Only ridiculously low interest rates keep some countries, many companies and many individuals from bankruptcy. The interest rates do no longer represent the underlying risks. The big banks are bigger than before and remain too-big-to-fail. Add Italy and other countries (including China with hidden debts!) to the mix.
We already live in an age of right- and left-wing populism. In an economic and financial crisis, it will get worse. Trump might trigger a recession and sabotage his own reelection. What a price to pay to get rid of The Donald!
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Official portrait of President Donald J. Trump, Friday, October 6, 2017. (Official White House photo by Shealah Craighead).
Article added on August 26, 2019 at 17:30 Polish time.
