Donald Trump announced a 90-day suspension of duties announced virtually a fewer days ago. And it surely amazed the world. And now it's full of ideas why it was taken.
Something like this has not been seen in the planet since 1929. I wrote about it a fewer weeks ago. Something like that, a customs war. If we take into account the volatility of the U.S. President's decisions on key issues, then I think Trump is indeed unique here. In the morning we hear that there will be something, a fewer hours later, that there will be no, and in the evening, that there will be negotiations.
The problem is that the words and of course the decisions of the president of the world's largest economy are of large importance. Almost everyone. besides for the financial markets. What we've been watching on them these past fewer days is simply a real rollercoaster. I am far from utilizing words like “bloods on the streets”, “catastrophe” or “breakdown”, due to the fact that I remember perfectly well 2008 and the fall of Lehman Brothers (actually what happened afterwards). However, there is no uncertainty that the first reactions to the entry into force of the duties announced by Trump can be called a dulling. And it happened because, first of all, the duties actually entered into force, which surely not everyone expected. I mean, they were hoping their ad was 1 thing, but coming into force is the other, and I'm certain the American president won't go that far. He did.
Secondly, since what has happened has already happened, something ends erstwhile it comes to the alleged free planet and the principles of cooperation applicable in its area, based primarily on trust and peaceful searching for solutions. This is not an optimistic constatation, which is besides a negative origin for markets. Besides, if this is simply a conscious revolution, a breakdown of order, what happens next?
Thirdly, duties are price increases and price increases are a possible constraint of economical growth. Together with another risks for this year, this increased the likelihood of recession.
Only that in a minute Trump changed his head again, which in turn introduced strong optimism – growth on the stock exchanges. But not everything has returned to normal, due to the fact that for example the dollar has clearly weakened. In any case, how can we take action in specified a situation? I mean, anything is possible. Unless Trump has a plan and all you gotta do is find it and realize it. But no, it's not adequate due to the fact that there's inactive a question of how others will respond to this plan. The example of China clearly shows this. If China had not imposed retaliatory duties, would Trump have besides suspended the duties imposed on this country? If so, the marketplace situation would be different. This is best shown by Apple’s example. The most valuable company in the planet has lost over 30% in fresh weeks, over 1 trillion dollars. Mainly due to the fact that the bulk of its production is being carried out in China and Trump customs will hit, for example, the sales of iPhones in the US.
So if individual wanted to make money out of this full mess, they'd gotta not only sit in Trump's head, assuming he had a plan, but inactive sit in the heads of the remainder of the planet to know how the remainder of the planet would react.
Does Trump truly have a plan and does everything go according to him? He most likely has a plan. Let us presume for a minute that he truly wants to overthrow the present order for the benefit of his homeland. The problem is whether he can foretell the consequence to his actions.
Of course, the last fewer days have brought a full heap of conspiracy theories in this area. For example, Trump is doing all this to lower oil prices and thus hit Russia and force her to end the war with Ukraine. Or that this is not about the remainder of the world, because, for example, with specified a European Union Trump will get along, it is about China. However, it was essential to play more widely so that the main nonsubjective of the action, the impact in China, was not so visible at first. Thus, Trump immediately predicted that China would neglect and the consequences would fall on the mediate Country, and with the remainder of the planet the American president would agree. This is simply a convenient concept for many due to the fact that we know that China is an undemocratic country, stealing technology and mostly not precisely safe. This concept is besides based on the statements of the U.S. Treasury Secretary Bessent, which can be summarized as follows: first we will work with our allies and then we will talk to China together.
Unfortunately, Trump's assessment of his actions has a problem even with his immediate surroundings. At least with a single version of this assessment. For example, we hear that all of this was planned, and the declines on the stock exchanges are even smaller than expected. That's Vice president Vance's thesis. Another associate of the administration talks about effective negotiations, which means that it was essential to shake up to sit down for talks now. Hence the 90 days. It's time to talk. In turn, specified a Musk puts forward the thesis that it would be best to completely abolish customs duties towards the EU and let people to decision freely. any government officials talk little officially of surprise to the markets, especially the debt market, or bond market. After all, U.S. borrowing needs are enormous. Did fear of borrowing problems or the increase in the cost of borrowing truly take a step backwards?
In my opinion, even if the aim is to hit China and revise trade rules with many another countries in favour of the US or even to demolish the current order, however, it does not make as Trump thought. So much confusion serves no 1 and definitely reduces trust in the United States. erstwhile again, what I have already written: Trump's authoritative argument in all of this is simply illogical and not data-based. Leading by the volume of trade deficits and the algorithm for calculating the duties imposed. Thus, the base in all this, even if it is thoughtful, deliberate and long-term action, is very questionable and this surely does not aid to build credibility of both Trump and the full United States and the credibility of its possible revolution.
