The Trump rally on Wall Street is stalled. It pays to play it conservatively and maintain a strong position in dividend-paying stocks, and to impose protective stops on more aggressive positions.
Update on Trade War
If Trump had tried to get Congress involved, his proposed tariffs would have never passed. But the imperial presidency is alive and well at the White House. Instead of going through Congress, President Trump is using an obscure 1962 law to impose the new taxes unilaterally based on “national security” concerns. What a joke! Most of our steel imports come from Canada, Brazil and other allies, not China or Russia.
The funny thing is that the steel and aluminum industries in the United States are already profitable. Companies such as U.S. Steel, Nucor and Alcoa are reporting rising revenues. The new tariffs will benefit some 170,000 workers but hurt the 6.5 million workers who are employed by companies that use steel and aluminum.
We’ve made great progress over the years to reduce trade barriers and, until now, U.S. and world trade have been growing faster than gross domestic product (GDP).
Trade (imports plus exports) is around 30% of GDP here in the United States. Overall, it has increased our standard of living. But with the impending trade war, all bets are off. The European Union already has announced plans to retaliate, raising tariffs on Harley Davidson motorcycles and other products. The biggest impact could be on farm products that we export to China.
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