Everybody is so happy right now. The Dow Jones Industrial Average surged over 1,000 points today, television commentators are overflowing with positive sentiment, and even many of President Trump’s fiercest opponents are celebrating. It warms my heart to witness such widespread happiness, and part of me hesitates to cast a shadow on this collective jubilation. But I cannot simply tell people what they wish to hear just to please them. I must speak truthfully about the recently established agreement with China, and the reality isn’t all sunshine and rainbows. First and foremost, we haven’t actually secured a “trade deal” with China. What we have is a 90 day “cooling off period” during which we might potentially negotiate a “trade deal” with China.
There is a substantial distinction between these two concepts.
For 90 days, both parties will substantially reduce tariffs.
Without question, this represents a positive development.
If we had maintained a 145 percent tariff rate on the majority of Chinese products, we would have faced barren shelves and shortages throughout America. But a 50 percent tariff rate on Chinese imports is still really going to sting. The U.S. economy has been heading in the wrong direction for years, and this is certainly going to accelerate our problems.
There’s much celebration for now, but it won’t be long before the reality of what we’re facing becomes undeniable.