2019-08-23 16:35:251 Oct 2018 01:53 AM EST
By Laura Tucker, Staff writer; Image: Donald Trump and Jerome Powell in happier times (Image source: Public domain)
While Donald Trump has patterned himself as the great negotiator, the further we get into his four-year term as president, the more we see his tactics for negotiating. He's smiley and positive when he thinks it's working, but when it's not, he goes on the attack and makes things worse. He expects to get his way, and when he doesn't, he picks up his toys and goes home.
When campaigning in 2016, he insisted the United States was getting a bad deal from China. He also said he would fix the deficit. But now 2-1/2 years into his presidency, he's done everything he said he would, but the deficit is worse, the economy appears headed to a recession, and things are worse with China.
But he doesn't know how to adjust. He can't adjust his tactics and go a different way to make it work out. He just keeps pushing the same thing and getting blustery when it doesn't' work out.
The trade war with China has not made things better. On Friday Beijing imposed tariffs on $75 billion in American goods. This wasn't what Trump was expecting. But instead of adjusting his business tactics, he ordered U.S. companies to stop doing business with China.
This is not only worsening the prospects of steering clear of a recession, both the move by Beijing and Trump's answer to that move is worse than ever. New tariffs will jack up the prices of the goods, meaning it won't be encouraging the U.S. to spend, increasing the chances of recession. And not allowing business as normal between the U.S. and China certainly won't be helpful.
To continue his usual negotiating model, Trump aired his grievances on Twitter. "Our country has lost, stupidly, trillions of dollars with China over many years. They have stolen our intellectual property at a rate of hundreds of billions of dollars a year, and they want to continue," he complained.
"I won't let that happen! We don't need China, and frankly, would be far better off without them. The amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP.
"Our great American companies are hereby ordered to immediately start looking for an alternative to China," he continued, "including bringing your companies HOME and making your products in the USA."
In addition, Trump ordered all carriers to search for and refuse all deliveries of Fentanyl from China, noting it kills 100,000 Americans a year.
Once again, Trump does not provide proof of his claims, and he is wrong. A quick check says that in 2017 there were only 72,000 deaths caused by drug overdose. That's all drugs, not just fentanyl. Synthetic opioids INCLUDING fentanyl were 29, 418. But somehow Trump got that there were 100,000 deaths every year from fentanyl alone.
"I have no idea how the president thinks he can order companies to stop working with China. I'm baffled," said budget expert Brian Riedl with the Manhattan Institute.
"Trump may be frustrated with China, but the answer isn't for U.S. companies to ignore a market with 1.4 billion consumers," explained the Chamber of Commerce executive vice president Myron Brilliant. "Escalating tensions is not good for market stability, investor confidence."
After Trump's comments, the Dow Jones industrial average plummeted more than 530 points, 2 percent, and the Nasdaq Composite was down 2.7 percent.
Federal Reserve Chair Jerome Powell, a usual punching bag for Trump, said Friday that the trade war is a "complex, turbulent" situation and that the Fed will "act as appropriate to sustain the expansion." He indicated there may be another interest rate cut but not as big of a cut as Trump wants.
"Our economy is in a favorable place," he insisted, while also saying there are "significant risks" from slowing global growth and the trade fight between the U.S. and China.
Attacking the Federal Reserve chair is going to do nothing to help the value of the dollar.
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