UPDATE: [Sigh] From CNN:
Stocks finished a volatile trading day sharply in the red Friday, after a selloff driven by President Donald Trump’s response to new retaliatory tariffs from China and Fed policy.
Fans of the classic movie, “The Princess Bride,” are well aware of the warning that you should “never get involved in a land war in Asia.” Getting involved in a trade war with China might be the applicable modern version.
The trade war between the U.S. and China worsened Friday as Beijing imposed retaliatory tariffs on $75 billion in American goods and President Trump took the extraordinary step of calling on U.S. companies to stop doing business with China.
The new tariffs, which included reinstated levies on auto products, delivered a strategically timed blow as recession warning signs cast doubt on the strength of the U.S. economy.
Trump initially directed his ire at Federal Reserve Chair Jerome H. Powell in Friday tweets, painting the Fed’s lack of monetary easing as a greater threat to American workers and businesses. But moments later, he said he would be responding to China’s tariffs later Friday and demanded American companies cut ties with China. [Pols emphasis]
That’s not a misprint. President Trump announced via Twitter today that American companies are “hereby ordered” to stop doing business with China. This is as absurd as it is unenforceable. As Brian Riedl of the conservative think tank the Manhattan Institute tells the Post:
“I have no idea how the president thinks he can order companies to stop working with China. I’m baffled.”
Earlier this week Trump said triumphantly that he is “The Chosen One” who was, uh, chosen to fight this great trade war with China. Or maybe it was Federal Reserve Chairman Jerome Powell — who was appointed to that post by Trump himself — who is the real “Chosen One”:
….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
— Donald J. Trump (@realDonaldTrump) August 23, 2019
Though he’ll never admit fault, President Trump has been slowly coming around to the reality that “winning” a trade war with China — a fight, remember, that Trump picked himself — could mean a whole lot of losing for the average American and may even drive the United States into a recession. As the Huffington Post explains:
On Tuesday, Trump seemed to acknowledge the turmoil on Wall Street, even as he argued the U.S. has “no choice but to” impose tariffs on goods made in China.
“My trade deals aren’t causing a problem. This is something that had to be done,” he said. “I could be sitting here right now with a stock market that would be up 10,000 points higher if I didn’t want to do it.”
In another tacit admission, Trump said his administration may offer some form of aid to U.S. companies like Apple that are struggling as a result of the trade war.
“If I didn’t help them, they would ― I mean, they would be ― they would have a big problem,” he added, without offering details about the form of assistance.
President Trump himself says he didn’t have to start this trade war with China that is literally killing American farmers and weakening an export-heavy economy here in Colorado. But he did, and now we’re all paying the price.
To quote Sen. Cory Gardner (R-Yuma): “The President is going to continue to do what the President is going to continue to do.”