Opinion | Trump Economy Soars; Tariffs May Impede
The May job reports were revealed earlier this week, revealing that the unemployment rate under President Trump has now reached a nearly 50-year low. Trump took the opportunity to credit his administration for facilitating such economic success, which he knows is the most popular attribute of his administration. Certainly, Trump deserves credit for the tax cuts which had begun to take effect earlier this year, as well as the rigorous efforts to cut unnecessary regulations on business. However, there are those who are skeptical of the notion that the current economy will remain vibrant.
Mark Zandi, chief economist at Moody's Analytics, suggests that the future of the Trump economy could experience turbulence. “There are a lot of fissures out there, and some of them are starting to blow”, Zandi said regarding the impending downturn. He continued “volcanoes can blow when you least expect.” Although most available information suggests that America will likely remain safe for the remainder of 2018, several reports were written in 2017 that say the next two or three years will create fertile soil for an abounding recession that can alter Trump’s re-election chances. Aside from the forecasts, The stock market has been characteristically unstable but gaining after the pleasant surprise from recent job reports.
Should Trump be Afraid?
Although his performance on the economy has been undoubtedly successful, the new state of global economic affairs ought to startle those who want Trump to maintain his good grade on the economy. Days ago, the Trump Administration announced tariffs on steel and aluminum, affecting both Canada and the EU. Trudeau called the tariffs “insulting and unacceptable”, while the European Union warns Trump that the new tariffs are a “dangerous game”. In fact, besides global opinion against Trump, the domestic opinion also falters at the idea of such impediments to trade. A survey conducted during Trump’s first year in office found that 72 percent of Americans thought free trade was good for the U.S. economy, 78 percent thought it benefited consumers like themselves, and 57 percent thought it helped create jobs in the United States. On this front, the American people are correct. Free trade is the capitalist gift to consumers who wish to buy products at lower prices. Effectively, the Trump tariffs could potentially undo the economic gains that were generated by the GOP tax cuts.
Lastly, these tariffs are a dark reminder of the Great Depression, especially leading up to the stock market crash in 1929. Senator Ben Sasse, a fervent Trump critic, reminded us that blanket protectionism is a “big part” of why America had a Great Depression. The Great Depression had already begun six months before the United States passed the Smoot-Hawley tariffs that helped exacerbate the Depression. President Trump must stay away from these tariffs at all costs going into the future.
Trump has largely been on the right economic track, and given the continued prosperity of his Presidency, Republicans will have an easier time keeping as many seats as possible during the midterm elections.
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