Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S. May 31, 2019. REUTERS/Lucas Jackson
The stock market tanked after Trump announced that he is launching a trade war with Mexico as Wall Street is realizing that chaos and instability are Trump’s economic policies.
“President Trump’s latest trade bombshell … might turn out to be a short-lived threat that is quickly defused by commitments on border security, but it nonetheless looks damaging at a number of levels,” Krishna Guha, head of global policy and central bank strategy at Evercore ISI, wrote in a note. “At the big picture level, it suggests that Trump trade policy might well mean a permanent state of endemic uncertainty and instability in the global trading system not simply a hard-headed sequential re-set of prior arrangements that started with Mexico and proceeds via China to Europe and Japan.”
Shares of GM dropped 4%. Ford lost 3.3%. Both have significant production in Mexico that could be subject to tariffs. Shares of railroads Kansas City Southern and Union Pacific also fell 5% and 2%, respectively. Fiat Chrysler traded 5.1% lower.
There is no endpoint to Trump’s trade wars. There is no point where Trump is going to declare victory and the economic damage will stop. Trump’s entire policy on trade and the economy is based on maintaining chaos. Investors hate turmoil and instability. There is no master plan at work in the White House. Policies are being made by a tweet from an unstable idiot’s Twitter account.
Trump should not be called an idiot lightly, but this is a president who refuses to accept the reality of how tariffs work. He is sticking to his false belief that foreign countries, not US businesses and consumers, pay tariffs.
Donald Trump is losing is own trade war and taking the nation’s economy down with him.
Even Wall Street has finally caught on that Trump’s unstable and ignorant actions are bad for the country.
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