Since US President Trump has begun threatening China in the trade war, and implementing his first round of tariffs along with other barriers to trade, China has dropped its tariffs on automobiles from 25% to 15%.
That is progress for Trump. The China front is still open, but what is next?
He has not really begun threatening Europe to the same extent, but I reckon that will come soon. Over the weekend he said Europe was a 'foe'. He couched his comment in terms of trade:
- "I think the European Union is a foe, what they do to us in trade."
The most important thing for any politician is, of course, votes. Trump can, rightfully, point to China reducing as tariffs as progress. this will play well with his base of support and may even expand it.
Europe (EU) currently has 10% tariffs on imported autos. This will be a target (amongst others, of course). Any progress here will increase Trump's support.
In addition to this, US tax cuts have made the US (at the margin) a more attractive place to invest. Tax cuts are highly visible. While tariffs increase costs to US consumers, they are hidden whereas tax cuts are more obvious.
---
At the end of the day its all about votes for these guys, so he won't stop. prepare yourselves for MOAR angry tweets from the Orange One!
