Charles Gasparino, a Fox Business Senior Correspondent, argues that the recent truce in U.S.-China trade talks is no reason for celebration for President Trump. He emphasizes that both countries compromised, stating that markets signaled their power, particularly the bond market, causing Trump to retract his tariffs. Gasparino critiques the idea that tariffs can effectively address the budget deficit or support tax cuts, suggesting that the U.S. is in a precarious economic position, nearing recession amidst failing negotiations with China.
Trump raised tariffs on the world, the markets, particularly the bond market which we need to finance our debt rebelled. Trump then was forced to back off.
What we have seen is a little lesson on how markets exert their power when you have to depend on them, as we still do.
Gasparino argued that Trump didn't have great leverage in the talks with China, claiming the consequence of a prolonged trade war would be dire.
I guess the notion that tariffs will pay down the deficit and for the tax cuts is off the table.
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