Economic growth is clearly slowing. Manufacturing output is down, as are exports, thanks to Trump’s trade cold war with China.
The government has run out of stimulus tricks. Even interest rates that are close to zero, plus an immense fiscal jolt in the form of a trillion-dollar deficit (courtesy of Trump’s tax cut for the rich) isn’t fixing what’s broken.
Corporate America is sitting on trillions in profits that it can’t find ways to invest. Thus, stock buybacks.
(This is why massive public investment is the only solution to America’s sagging economy. But I digress—that’s a post for another day.)
Now, just to make things worse, Trump is launching a new trade war with … wait for it … Europe.
Washington has had a long-running trade dispute with the Europeans over their creation and subsidy of Airbus. Europe has long maintained that American aircraft manufacturers benefit from a hidden subsidy from the Pentagon, which was the source of technology and purchases that gave Boeing an immense head start. Trying to sort all of this out definitively is like counting angels on the head of a pin.
But yesterday, the World Trade Organization gave Trump the green light to impose retaliatory tariffs on Europe. So Washington plans to impose $7.5 billion of duties on aircraft, food products, and other goods.
You can be sure that the EU will retaliate, slowing trade further. This is on top of the hundreds of billions in U.S. tariffs already imposed on China.
What is it with this guy? Does he want to sink his own presidency and chances for re-election? Well, you might try such search terms as Ukraine, treason, civil war, and impeachment, and that old favorite, certifiably insane.