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No Mr. President, Trade Wars Are Not Good

President Trump rattled the markets on Thursday by announcing that tariffs were going to be imposed on steel.

No Mr. President, Trade Wars Are Not Good

President Trump rattled the markets on Thursday by announcing that tariffs were going to be imposed on steel. Of course, this can encourage other countries to do the same. It makes me a little nervous when our President says that trade wars are good and we will win.

It's Easy." - he tweets.

One thing for sure, other countries don't like is the arrogance of the United States. President Trump is tweeting that arrogance out in big fashion. How do you know it is easy to win when you have never fought a trade war? In fact, I could be wrong, I don't think that a tariff like this has occurred since 1930 with the signing of the Smoot-Hawley Act.

Between 1929 and 1932, the stock market dropped -86% and the country suffered through the greatest economic decline (Depression) of our time. There is great debate as to how the Smoot-Hawley Act effected the great depression. Lets just say that there was not a positive impact.

The biggest concern is how sure Trump is of himself. He is the master of speaking things into existence. He is trying to speak into existence the winning of a trade war. This potentially goes down as the biggest mistake he makes. We are a country in uncharted waters with interest rates and the ongoing effects of a post financial crisis environment.

Do you really think that China is going to bow down to Trump? So let's say we win the trade war. Do you want a ticked off country figuring out how to wage other wars on the US that they can win? There is such a thing called country pride.

Keep in mind that China is the largest holder of US treasuries. We depend on China to buy our bonds. Do we really want to bite the hand that feeds us? We need their money. This has disaster written all over it.

I'm a little surprised this is "new" news as the steel industry has been talking about it for years. And it isnt so much Trump news either, since in was the January 11th 2018 conclusion of a Section 232 investigation that had been on going. Here's more detail than anyone wants. Recommendation from DoC gave the following options:
1) a tariff of 24% on all steel imports from all countries, 2) a minimum 53% duty on steel imports from 12 select countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, South Korea, Russia, South Africa, Thailand, Turkey & Vietnam) with other countries able to export at 100% of 2017 levels (product specific), but face tariffs above that and 3) a quota on all steel products from all countries equal to 63% of the countries' 2017 exports to the US.

@B-investor - I think that this is new news to most of Wall Street plus there is the way trump is delivering it. It is not a good negotiating tactic and it is like poking the bear. Then again that shouldn't be a surprise either -lol - by the way once again great detail

Agree, Wall street prefers less volatility and rather Trump to act like a politician. Set up a committee, then review recommendations, and then take absolutely no action. For better or worse just not his style

It seems the markets get nervous when someone who knows nothing about a topic, say international trade, starts tweeting about it, particularly if he's the POTUS.

@atkinsww1 - remember it is easy!