Uncle Sam's Trade Policies Spark Controversy - Elon Musk Pushes for Peace Amid Wall Street Turmoil
"Subpar Customs Policy" - American managers voice concerns over Trump's customs calculations
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Beware, Wall Street is feeling the heat as outrage grows over President Trump's trade tactics. Major economists, such as Jamie Dimon of JPMorgan Chase, are crying foul, foreseeing a "trade war against every country" with escalating uncertainties, flesh-grinding corporate profits, and US dollar pressure. Dimon fears such confrontations may jeopardize America's long-standing economic partnerships.
Adding fuel to the fire, billionaire and hedge fund manager, Ackman, a previous Trump supporter, is now pointing fingers at the president, accusing him of making disastrous moves based on "bad math." In withering tones, Ackman urges Trump to reconsider his disastrous strategy to avoid a grave error wrought by numbskull mathematics.
Even Trump's economic guru, Elon Musk, has gone rogue. Amidst the chaos, he slings videos of the deceased economist, Milton Friedman, who preaches "harmony and peace" between nations, the cornerstone of free markets. Over the weekend, Musk tossed a bone to the EU, advocating for a free trade zone between them and North America.
Two Republicans' Growling Muzzles
The Republican pack is grumbling too. Senators Cruz and Rand, Trump allies, brace themselves against the tariffs. They're fearful that the economic burden would hit US citizens like taxes. They're hopeful for a speedy end to the storm, they whimper softly.
The Great Politico-Economic Rumble
Rumors of an impending global trade war are swirling. As escalating tariff skirmishes threaten trade ties, central banks are bracing for a possible surge of inflation. Fed Chairman Powell hints at the possibility of a perilous transition to price escalation and sluggish growth, a scenario that seemed nearly impossible just weeks before. Trump's demands for interest rate cuts persist.
Unyielding, Trump stands his ground despite the mounting criticism. He's currently back and forth with European trade negotiations, demanding regular tributes from the Europeans to America—their coin for his ear.
Market Musings
Things are getting bumpy on US Treasury bonds. After enjoying a tenure as a haven, bond prices are nosediving. The yield on the 10-year U.S. Treasury note spikes by 12 basis points to 4.12 percent. The oil market is taking a hit, too, with prices falling by around 3 percent. The gold market, a conventional safe haven, slips below the $3,000 mark, shedding a hefty 1.7 percent to $2,986 per troy ounce.
Things are rocky on the foreign exchange market. After a morning dip, the euro recovers to $1.1040 before settling at $1.0920. The stocks are a sloppy mess, with Apple plunging another 5.2 percent.
Sources: ntv.de, mpa/AFP/DJ
Bureaucratic Battlefield
In economic quarters, President Trump's trade policies are more likely to spark controversy than appease his fellow economists. Critics point to expected GDP and wage declines bearing the brunt of the tariff burden. Concurrently, tariffs can stifle international capital flows and create higher yields, damaging domestic capital investments. Furthermore, concerns over business and consumer impact abound, with surging prices and reduced competitiveness as potential outcomes.
Additionally, soaring policy uncertainty resulting from trade measures can deter investment and consumption, affecting the overall economy. Critics may also query Trump's trade reciprocity initiatives, arguing that tariffs may provoke retaliation and bypass underlying issues like currency manipulation and non-tariff barriers. Lastly, the impact on national security is hotly debated. While intended to boost domestic manufacturing, tariffs could inadvertently bring down sectors reliant on international supply chains, potentially weakening rather than strengthening national security.
However, specific statements from U.S. economic representatives or prominent figures condemning these policies aren't delved into in the search results. In general, adversaries and economists might argue that these tariffs could harm trade relations, raise consumer costs, and ignite economic instability.
- The Commission, in light of the ongoing trade disputes, is proposing to ease the tension by extending the period of validity of the trade agreement between the US and its trading partners, from 1 January to 31 December, in an attempt to stabilize global trade and avoid excessive tariffs.
- Despite the push for peace in global trade relations, JPMorgan warns that President Trump's trade tactics could potentially escalate into a full-blown trade war that may jeopardize America's economic partnerships and increase corporate profits through tariffs.
- Tariffs, which are at the heart of the current trade controversies, have led to concerns among economic experts and even some Republicans like Senators Cruz and Rand, as they fear the economic burden of such measures could negatively impact US citizens and compromise the nation's long-standing economic partnerships.
