Will Donald Trump’s policy strike its goals?

If you can’t put your own house in order, you’d better not try to impose your order at your neighbors’. Donald Tramp has easily managed his domestic scaremongers, who were going to shift their productions abroad to avoid import tariffs in the EU. Harley-Davidson claimed its damage to cover $100 mln and started dreaming of India, Brazil and Thailand. The White House host threatened to strangle it with taxes and make the entire world forget the brand. Well, you can’t just get a person out your head right away, but you can get them out of the window.

You need the blood and sweat to earn the money. The blood of your enemies, turning out to be your slaves then. Harley-Davidson got the gist very quickly and responded that the bikes, sold in the USA, would be built there as well. After such a skirmish with the president, other companies will hardly dare to move their productions abroad. The slave uprising is suppressed at its root; it’s time to take on the enemies. Among them are both China, close on the heel of the US economic power, and the US yesterday’s allies from the EU. Beijing is apparently willing to make concessions. Following the promise to buy more US goods, worth $70 bn, it suggested the foreigners would be allowed to enter the industries, they couldn’t have dreamt before. Washington had better do something in response, for a real enemy should give you his dinner when you’ve given yours to him.

Financial markets featured quite a calm reaction to trade wars until the last week of June; thought them to be a part of Donald Trump's game. First, the US administration’s representatives were noting that any wars should end with negotiations sooner or later, second, the president himself was hinting at it.

He asked Harley-Davidson to “be patient” on his Twitter. The enemy will certainly retreat. I must admit, the financial market doesn't treat Donald Trump any more like a guy, whose head is always haunted by nonsense, featuring its home inside. Investors really believe that threats can get the opponents to make concessions and cut the US trade deficit.

Even the drop of Shanghai Composite and yuan down to half-year lows doesn’t break the card house, as it used to in August 2015. Most Bloomberg experts believe that Beijing is just saber-rattling and will stem the avalanche as soon as USD/CNY hits 6.7. Belief is, of course, a virtue, as long as the depressive phase is not followed by the maniac one. Beijing certainly wishes to retaliate on Donald Trumps’ $200 bn + $200 bn import tariffs. That is the secret of Asian cuisine: if a dish bites you in response, it is fresh.

It is the cutest when the US president is smiling and shaking hands with his colleagues form China or North Korea, or with Canada’s prime-minister, and goes on with new import tariffs, extended economic sanctions or calling them mean names. Anyway, the rest of the world got used long ago that it is better to stash everything precious away from your pockets when the USA stretches its hand of friendship.


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The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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