Trump's continuous trade disputes frequently lead to more losses than gains.
Hittin' the 25K Mark: Trump's Trade War Leaves Scarcely Any Victors from Europe
Let's face it, Donald Trump's economic strategies are dismantling the American economy - and it ain't just Uncle Sam's wallet that's takin' a hit. Greater Europe is feelin' the burn too, revealed through financial markets.
But wait - it's not just about the tariffs themselves, y'all. It's frickin' chaos caused by the to-and-fro game. The Prez just gave a brief respite, waiving some hefty tariffs beginning April Fools (no joke) for a cool 90 days. US got a deadline, you see. By summer, Trump wants deals with other nations for "fair" trade - his perspective. But given the list of trading partners, chances of all of 'em agreeing are slimmer than a supermodel's waistline. Alas, the tariff tug-of-war doesn't look like it's gonna end soon.
Latest indications suggest Trump's throwing another curveball, supposedly ordering the Department of Commerce to levy 100% tariff on all foreign films comin' in. He wants the movies made in USA again - again, stay tuned to see if this plan materializes or not.
Economic Rollercoaster Ride
Trump's whims keep American and foreign companies on their toes. This lack of predictability ain't doin' no favors, slowin' down investment decisions. The tariff games are also causing uncertainty among consumers, evident in the US's balloonin' trade deficit, which spiked to $140.5 billion in March, an increase of 14% from the precedin' month.
For temporary relief, companies and consumers have been stockpilin' imports, hopin' to beat the tariff increase. But real talk, it's just a short-term win. Long-term, tariffs lead to a decrease in demand as they drive up prices, and that's a recipe for disaster for a consumer-driven economy. And word on the street is - more and more consumers and economists in US are expectin' a recession.
Fed's Hands Are Tied
In theory, when prices go up, the Federal Reserve (Fed) should cut interest rates to stimulate the economy. But Trump's callin' for the same puts Fed in a tricky position, cause rising prices mean higher inflation.
But it ain't just America bearin' the brunt of these tariffs. Despite government guarantees, there's nothin' in this trade war for the win. The losses in global economic growth due to US tariffs on aluminum, steel, cars, car parts, country-specific tariffs, and global import tariffs will be substantial, with significant damage felt this year.
Economists call China's economy the major target of Trump's trade policy, which holds true. While Beijing can cushion the blow with fiscal and monetary stimulus, a significant slowdown in growth to around 4% is expected this year.
Europe ain't immune to US tariffs either. The impact differs significantly among countries, dependin' on their industries and export dependence. Thus, growth losses in Germany and Italy are greater compared to France and Spain.
Bottom Line:Trump's trade policies have left investors in a bind - markets crashed since the year kick-off, and gold is the only clear winner. Makin' prudent choices is key in this uncertain environment. Invest less than half of a 25K euros investment in stocks to limit risk. Keep the focus on Europe rather than the US. US stocks are overvalued, so a less heavyweight on 'em. A higher share of gov'ment and corporate bonds will provide more stability, and gold's star is likely to keep shinin' due to central bank and private investor demand. Keep liquidity handy for price corrections.
PS: This ain't a solicitation, just here to help you make informed decisions.Sources:
- The uncertainties caused by Trump's employment policy, particularly the tariffs on various goods and services, have been negatively impacting both American and foreign companies, slowing down investment decisions.
- The outlook for employment in the US is looking uncertain, with a growing number of consumers and economists predicting a recession due to the increased tariffs, leading to a decrease in demand and a ballooning trade deficit.
- The financial implications of Trump's trade policy extend beyond the US, with substantial losses in global economic growth expected due to tariffs on aluminum, steel, cars, car parts, country-specific tariffs, and global import tariffs.
- In contrast to Trump's claims of fair trade, the chances of all trading partners agreeing to new deals within the given timeline are slim, leading to a prolonged tariff tug-of-war.
- For personal-finance and investing purposes, it is advisable to limit the risk of investment in stocks, focus on Europe instead of the US due to its current economic outlook, consider government and corporate bonds for stability, and keep a liquidity reserve for price corrections.