The market futures were down this morning when China announced new tariffs against American goods including automobiles, and the market did start down, but it was going to be okay--because Jerome Powell gave a reassuring speech that he would responsibly keep the economy rolling along even if he didn't give a definite date about a rate cut. Good enough for investors; things were picking up.
Not good enough for the toddler in the White House, who proceeded to Tweet disparagements at Powell,
As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great...— Donald J. Trump (@realDonaldTrump) August 23, 2019
and included a useless demand for US businesses to pull out of China and delivery carriers (private companies!) to search for fentanyl in Chinese-based shipments. (This isn't how anything works.)
And swoosh! the markets were off to a downhill slalom. Because nothing gives a sense of economic security like President Queeg blowing up. Of course, because he's not just awful, but nasty, he blamed the slide on an unlikely source:
The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!— Donald J. Trump (@realDonaldTrump) August 23, 2019
which might have been read as an attempt at humor that Moulton did not deserve and that Trump was inappropriate at hell to go for at that time (the market kept falling), and then after the close of bell, he announces his get-back at China:
None of this seems particularly strategic at all, and it isn't. China announced the tariffs just when Trump would particularly be spooked by them, and he behaved like a spooked individual. His retaliation might show "strength" but the joke that China's tariffs are "(politically motivated)" is just dumb--what is all of his "chosen" talk about, if not politics? He's not delusional (well, he is, but this part is political), he's chalking up potential losses to rounds of a long war in which he wants us to believe we will ultimately prevail if he remains at the helm. But at the same time, his Tweets reveal insecurity and weakness. He is more answerable to public opinion than Xi, and his missteps have already demonstrated that he doesn't understand how any of this works. We may have permanently lost soybean sales in China. The US manufacturing sector has already begun to contract, and this latest round of tariffs aims right at it. This will ultimately effect profits, and jobs (usually a lagging recession indicator anyway).
Trump was chosen by the electoral college. He chose this trade war, and is doing it badly.
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