The US-China trade war is only amplifying, and tensions are rising as the media warns of a possible recession.
President Trump held to his threats by requiring China to halt its unfair trade practices. With both President Trump and Chinese President Xi Jinping not willing to withdraw from their stances, the possibility of an all-out trade war is looking more and more plausible according to mainstream media reports.
On August 1st, President Trump made it known that on September 1st, the US will put a Tariff of 10% on an additional $300 billion on goods from China. Following this release, the Dow Jones Industrial Average lowered a staggering 900 points at one point. It finished the session 767 points lower, making it the market’s worst day of 2019 so far. The DOW and S&P 500 both dropped close to 3%, and the Nasdaq Composite plunged 3.5%.
After record-high historic numbers in the stock market under President Trump, this fall seems drastic.
Seemingly in retaliation, China dropped its currency, the yuan, drastically on Monday. China’s defense for this occurrence, via the Chinese central bank, is that market forces drive the monetary declines. There is growing speculation that China may indeed take further action to devalue its currency even more. China was designated as a currency manipulator by the Treasury Department, and the trade dispute is now shifting towards a currency war. There is speculation as well that the Chinese government might decide to crack down on American business operations located in China by increasing regulations.
The US-China trade dispute has been occurring for over a year and a half. These two countries hold the title of the largest economies in the world, and both show no signs of being the first to back down. President Trump and China’s President Xi have a history together, but both are intent on standing up for their respective countries.
“I used to say he was a good friend of mine,” Trump said at a White House event back in July. “We’re probably not quite as close now. But I have to be for our country. He’s for China, and I’m for the USA, and that’s the way it’s got to be.”
The two country leaders have met several times in the past, and the most recent was in June at the G-20 leaders meeting in Osaka, Japan where they agreed to continue with trade negotiations. There next meeting is slated to take place in September possibly, but with the current upset, the uncertainty is ongoing.
The non-tariff trade barriers promoted by China have been a hindrance to American businesses, which in turn hurts the American people. Plenty of business executives and investors still stand behind Trump’s efforts to require China to trade fairly.
While most media attention has been negative and predicts a harrowing future, some are recommending that investors should instead focus on consumer-friendly stocks.
Ladenburg Thalmann Asset Management CEO Phil Blancato told FOX Business’ Charles Payne, “Move onshore, move to US focus … focus on consumer stocks. A Verizon or a Walmart, something that’s going to earn income based on the strong US consumer and you’ll be just fine.”
While the mainstream media is claiming that a recession is projected to be inevitable at this point, there is a belief this is necessary for successful trade in the future.
However, if we learned anything from the Russia collusions narrative that perpetuated for two-plus years is that what the mainstream media reports and what the truth is can be two very different things.
Taking into consideration the accomplishments that have been achieved under the Trump administration, it might seem logical to assume that President Trump may know what he’s doing. Since Trump’s election, the economy has added over 6.2 million jobs with more Americans currently employed now than at any other point in history.
The American economy is remaining secure, where unemployment rates are at record lows, and wages are stable. American minority and women’s unemployment have reached breaking low rates, and close to 4 million Americans are off food stamps.
The Tax Cuts and Job Act got signed into law which cut the corporate tax rate to 21 percent from 35 percent. When it came to regulation, 860 proposed regulations were restrained in the first five months alone under the Trump Administration.
Now more than ever, there are higher numbers of FDA approved generic drugs available to the American people. The US has become a successful net exporter of natural gas for over a year. President Trump took action to withdraw from the Paris Climate Accord, which would have killed numerous jobs and probably negatively affected the economy.
Under the Trump Administration, it is not just Americans who are benefiting economically. An example of many would be the Women’s Global Development, and the Prosperity Initiative (WGDP) is led by Ivanka Trump. It aims to aid in economically benefitting women in the developing world. This initiative is planning on helping approximately 100,000 women in 22 different countries.
“We are just getting started, but we are committed to delivering real results that create transformational change for women in developing countries by helping them prosper in the workforce, succeed as entrepreneurs, and fight for legislative change,” Ivanka Trump relayed in a statement to The Associated Press.
While many top Democrats have publically claimed that the booming economy is nothing more than a result of the Obama administration economic recovery, the facts show otherwise. In the eight years that the Obama administration was in control, there was not one single month where there were more job openings than there were people unemployed.
President Trump succeeded in reversing many of Obama’s economic policies. This has only aided in booming the economy and creating an abundance of opportunities for America’s workforce.
One thing is clear, while under Trump’s reign, numerous gains to the American people have been accomplished. The American economy is remaining secure at the moment, where unemployment rates are at record lows, and wages are stable.
So it begs the question, does President Trump’s pristine economic track record give Americans the confidence to believe the economy will stand a lasting chance?