Memo to The Donald: Cut Tariffs NOT Rates

Guest Post by Antonius Aquinas

trump tariff

So far, President Trump’s economic response to a potential coronavirus outbreak and a further stock market sell off has been expected – calls for more interest rate cuts and an additional round of monetary stimulus.  For the stock market, economy, and the virus itself, neither measure will have their desired effect and, in fact, may exacerbate things.

Further rate cuts and more money printing will not alleviate the situation since it has been the Federal Reserve’s recent “repo operations” which has pushed the market to its unsustainable highs.  For President Trump’s re-election hopes, the current “correction” better be short lived since he has repeatedly boasted about the stock market and has tied its success with the supposed health of the economy.  He will pay a political price if the market continues to tank and brings the economy down with it.

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Furious China Warns “The US Plot Is Doomed”, Threatens Retaliation After Trump Signs Hong Kong Democracy Bill

Via ZeroHedge

Update (2035ET): As expected, China has responded to President Trump’s decision to sign the Hong Kong bill (out of respect for Xi?). China’s foreign ministry says in a statement that America’s decision was “a naked hegemonic act” without offering any details on possible retaliation.

The United States signed the so-called “Hong Kong Bill of Rights and Democracy” into law. This move seriously interfered with Hong Kong affairs, seriously interfered with China’s internal affairs, and seriously violated international law and basic norms of international relations. It was a naked hegemonic act, and the Chinese government and people firmly opposed it.

Since the return of Hong Kong to the motherland, “one country, two systems” has achieved universally recognized success, and Hong Kong residents enjoy unprecedented democratic rights in accordance with the law. The United States ignored the facts, turned black and white, and blatantly supported the violent criminals who smashed and burned innocent people, trampled against the rule of law, and endangered social order. They are extremely bad in nature and very dangerous. Their fundamental purpose is to undermine Hong Kong ’s prosperity and stability, The great practice of “one country, two systems” undermines the historical process of the Chinese nation’s great rejuvenation.

We must tell the US side that Hong Kong is Hong Kong of China, and Hong Kong affairs are purely China’s internal affairs. No foreign government or power has the right to interfere. This so-called bill will only make the Chinese people, including our compatriots in Hong Kong, more aware of the sinister intentions and hegemonic nature of the United States, and it will only make the Chinese people more committed. The US plot is doomed.

The Chinese Government is unwavering in its determination to oppose any external forces interfering in Hong Kong affairs, its determination to implement the “one country, two systems” policy, and its determination to safeguard national sovereignty, security, and development interests. We advise the United States not to act arbitrarily, or China will resolutely counteract it, and all consequences arising therefrom must be borne by the United States.

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Trump’s Great Gamble

Guest Post by Pat Buchanan

Trump's Great Gamble

Like the Russian army carting off German factories after World War II, the Great Arsenal of Democracy was looted by its postwar allies and adversaries alike. The weapon Trump is using to stop this looting is tariffs…

President Donald Trump’s reelection hopes hinge on two things: the state of the economy in 2020 and the identity of the Democratic nominee.

The further left the Democrats go to select their candidate, the greater the probability Trump wins a second term.

Thus Trump got good news this week.

The verbal flubs of Joe Biden reached critical mass. They are now so numerous and egregious they have begun to call into question whether Biden, who turns 77 in November, is really up to a year of campaigning, followed by four years of leading the nation in the world.

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Doug Casey on Trump and the Trade War

Via Casey Research

Justin’s note: The trade war is spiraling out of control.

If you’ve been reading the Dispatch, you already know what I mean. In short, Trump’s taken his tough stance on trade to new heights.

He hit China with more tariffs last month. He also threatened to impose tariffs on Mexico. This is a huge deal. After all, we’re talking about two of America’s biggest trading partners.

Unfortunately, this is likely just a taste of what’s to come.

Doug Casey explains why in today’s brand-new Conversations With Casey. Doug also tells me why Trump absolutely cannot win the trade war…

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Poor Americans to be hit the hardest by President Trump’s tariffs

Via AP

The president announced a 5% tax on Mexican imports unless Mexico halts all unauthorized border crossings — the tariffs would rachet up to 25% in the coming months

PHOENIX (AP) — The biggest victims of President Donald Trump’s tariffs won’t necessarily be Mexicans or Chinese or young urbanites who will have to pay more for avocado toast.

The people likely to pay the steepest price for Trump’s attempts to bend Mexico and China to his will are poor Americans, who already live close to the financial edge and could have to pay more for everyday purchases.

For many low-income households, tariffs “are a tax on their consumption, and by raising the cost of their consumption, they will likely have to cut back,” said Jay Shambaugh, a senior fellow at the Brookings Institution.

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