In a series of 10 posts released in a period of less than half an hour, the President of the US has reinstated his rhetorical battle in an attempt to support his tariff policy towards China. His manner of conducting foreign policy over social media has already become notorious because of its capacity to rattle up various financial markets without warning signs.
Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch! In the meantime, China should not renegotiate deals with the U.S. at the last minute. This is not the Obama Administration, or the Administration of Sleepy Joe, who let China get away with “murder!”
— Donald J. Trump (@realDonaldTrump) May 10, 2019
Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind. Also, much easier & quicker to do. Our Farmers will do better, faster, and starving nations can now be helped. Waivers on some products will be granted, or go to new source!
— Donald J. Trump (@realDonaldTrump) May 10, 2019
It is becoming increasingly evident that Trump’s stance on China is amended continuously and the only thing that seems to be never changing is his determination to impose the tariffs. Initially, Trump’s argumentation in support of his decision to initiate tariffs on China was centred around the notion that China “had been getting away with” unfair trade policies for decades.
Trump used this reasoning to partly blame previous administrations as well, in an attempt to gain even more popularity. However, in this most recent string of statements, the President has made it evident that he is no longer interested in promoting fair trade and instead is focused on bringing "FAR MORE wealth to our country", and also openly acknowledging that imposing tariffs is a way easier policymaking process as opposed to devising trade deals of "the traditional kind".
Furthermore, in a typical fashion for Trump, he used the situation to attack Joe Biden, who is considered to be the next Democratic Presidential candidate. Overall, Trump's indirect admission that his policy of imposing tariffs on foreign goods is devised to benefit the USA, instead of promoting fair trade as it was initially stipulated, can potentially cause a new significant short-selling in the stock market, as investors begin to realize that this policy of economic expansion through aggressive imposition of tariffs is unsustainable.
The Dow Jones Industrial has depreciated with almost 3% in the past several days, as Trump’s tweets become more and more explicit, and investors are becoming increasingly worried that the recent escalation of the renewed tensions between China and the US can once again throw the international trade into a slump. As a result of the most recent posts, as shown above, the DJI opened in today’s trading session with another -0.47% gap.
Image source: Trendsharks ©, created with TradingView.com
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