President Donald Trump’s trade war victory becomes clearer each day as American companies are forced to pony up new fees to import critical parts and supplies for the survival of their business. Many small businesses have razor thin profit margins and are forced to pass these costs on to the American consumer as the newest casualty in this unnecessary and misunderstood trade war, and many large companies are expected to follow suit to maintain value.
To make matters worse, Donald Trump has a fundamental lack of understanding when it comes to who pays the tariffs, wrongly stating that “China will pay these costs”, much like he promised Mexico would pay for a border wall with the United States: He doesn’t understand how money works. Unless Trump committed tax fraud by vastly exaggerating his business losses, then he actually lost over $1B between 1985-1994, further illustrating that he has the same understanding of finance as Mc Hammer.
This trade war could continue for some time as Trump has replaced anyone who disagrees with him publicly which has created a culture within White House staff of keeping the president happy rather than challenging his poorly informed ideas. Loyalty is far more important than reality, which in Trump’s world is whatever he says it is.
China retaliated with $60B in new tariffs on american imports, further hurting American companies as China‘s businesses and consumers can afford to buy less American goods. The DOW dropped over 600 points (over 2%!) Monday as market uncertainty grows under this foolish trade war where virtually everyone loses.
The only winner is the president himself, and only in a political sense among a minority of Americans who have yet to realize that American companies pay tariffs on Chinese imports. The people who get that simple concept want this trade war to come to an end for the benefit of all sides.