From Strategic Culture
Trump False Fake?
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US President Donald Trump often brags about his visionary business prowess, and his acolytes hail the former property tycoon for his razor-sharp intelligence. Critics and detractors, on the other hand, speak of his impulsiveness and reckless, short-attention span.
The latter uncharitable characterization of the 45th president seems more than amply substantiated this week as he launched a trade war with China and, further, spooked global oil markets over his belligerent showdown with Iran.
Given the dire financial repercussions for the US and, more generally, the international economy from Trump's actions one wonders how he can ever claim to be such a business guru.
First on China, the Trump administration this week finally implemented its threats to raise punitive taxes on $34 billion-worth of Chinese exports. Trump is threatening to ramp up the tariffs on all Chinese traded goods to the US -- some $450 billion-worth a year. Beijing condemned the "first shots" of the "biggest trade war in economic history." It immediately hit back with equivalent reprisal tariffs on US exports.
Warnings from Beijing that "no-one wins in a trade war" reverberated with panicky losses across international markets, fearing that the escalating tensions between the world two largest economies will severely inflict collateral damage on the entire globe.
Even in the US, Trump's hard-balling with China had rapid repercussions. Industries which are associated with Trump's voter base are reeling over concerns about the impact of Chinese counter-measures.
The New York Times reported: "American metal producers, energy companies and automakers are worried. Some businesses are bracing by halting hiring, putting off expenses and otherwise cutting costs."
If the Trump administration goes the whole hog in its trade war with China, as it is belligerently claiming to do, then it is highly likely that the American economy, along with the rest of the world, will tank into recession.
None more so than Trump's core voters will be worse affected through soaring consumer price inflation and job lay-offs as China cuts off its massive annual trade with the US in search for alternative markets.
It is not as if this consequence is obscure. It is blindingly obvious in such an elaborately intertwined global economy, and especially between the interwoven two biggest national economies. Already, the US economy is being impacted, and yet Trump the supposed business guru plows forth into the abyss as if wearing a blindfold.
The other big wake-up call about Trump's thinking limitations is his detrimental showdown with Iran. The American president's bullish demand that all nations cancel oil exports from Iran is sending market prices upwards.
Higher oil prices will, again, hamper the international economy and US growth in particular.
The prospect can only get much worse if Trump persists in trying to isolate Iran -- the world's fourth biggest supplier of oil.
Iranian President Hassan Rouhani said this week that his nation is prepared to block off the Persian Gulf choke-point for global oil trade if the US continues its plan to embargo all Iranian crude exports. Rouhani is referring to the Strait of Hormuz, the narrow stretch of water which links the Persian Gulf to the Gulf of Oman and thence the rest of the world.
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