How China Could Punish the US in a Trade War
March 20, 2018
President Trump is preparing to impose a package of $60 billion in new annual tariffs against China, following through on a long-time threat to punish China for intellectual property infringement and create more American jobs.
I, on the other hand, fear that this move will result in a trade war with China just ahead. Many Americans believe we could simply stop buying so many products from China to punish them. Yet there’s a reason we run such a huge trade deficit with China: their products are cheaper than if they were made in the US.
What most Americans don’t realize is that China can retaliate against new US tariffs in ways that can hurt our economy, perhaps significantly. This is information investors need to know about, so that’s what we’ll talk about today.
Following that discussion, we look at the strengthening boom in US manufacturing which is adding jobs at a faster pace than most of the rest of the economy, for a change. Over the past year, the manufacturing sector has added 222,000 jobs, the best showing in several years.
Before we get to those topics, let’s take a look at last Friday’s stronger-than-expected report showing consumer sentiment this month at the highest level in 14 years. Let’s get started.