Despite what you might hear from CNN, MSNBC, Slate, and a myriad of other left wing news outlets, the Trump Economy is booming. The inflation rate has not doubled in the period of time he has been in office. In contrast, the inflation rate doubled under Obama multiple times due. This, combined with the 1.5-2% Real Wage Growth since Trump took office and the Trump tax cuts are allowing American households to save more money. Regardless of whether you like the tax cuts or not, a family of four with $59,000 in income would save $1,182 in federal taxes under the cuts. Additionally, new business confidence and consumer confidence indices report the highest levels since the nineties, meaning more businesses are feeling like they are in a safe environment. This increases the amount of capital put into the US to forward their company, and in turn, the American people. To top it all off, the unemployment rates are staggeringly low for all American peoples, regardless of race, sex, or wealth.
Although there have been significant tangible economic gains that have resulted from Trump’s economic policies, opponents to his governing style disapprove of his use of tariffs. However, the Trump administration is intending to use these tariffs to force trade partners to adopt fair trade practices, and redress existing trade imbalances. Some opposing analysts go so far as to saying that Trump’s tariffs would cause an economic and political disaster throughout domestic and international markets. However, this style of thinking has many faults. Using data provided by the MSCI World Index, a fund composed of high performing companies in all of the major markets of the world, it’s clear that overall global economic growth has risen 23% ever since Trump took office. In addition, the DOW Jones Industrial Average, S&P 500, and NASDAQ Composite have reached record highs here in the United States.
It is also important to realize how his tariff policy, however brash it may be, is having its desired function. When Trump used Twitter to state how he loved tariffs, he scared us- and the markets- for a while. But, over time, we understood that this was just Trump being Trump. He did not actually love tariffs, but how much power they gave him to sway other countries around the world, including many allies, who were charging exorbitant tariff rates on American goods.
So, what did this accomplish?
The EU, along with Canada, Mexico, and China* have been overpowered by the US and forced to sit at the table and negotiate, removing their tariffs against US natural gas, oil, steel, and much more, with more adding to the list every day.
The EU understood that they could not stand up to the US, so after a brief period of finger waving, Belgium and Germany came to the negotiating table. Without Germany, the rest of the EU has no hope of beating the US in an escalated trade war, as they are less efficient producers, have higher tax rates for companies, and lack natural resources. So, as we negotiate with the EU, they have suspended all tariffs against US goods.
With the Renegotiation of NAFTA, Mexico and the the US have agreed to amendments to NAFTA such as a six year lease on the deal which allows both countries to renegotiate a better deal if the current deal doesn’t ease trading multiple years from now. In addition, Canada is engaged in negotiations to do the same by the end of the month.
China cannot stand up against the US either in this trade war, as they are hurt much worse than America with the issuing of every counter tariff. The Shanghai Index YTD has fallen about 17% in valuation, whereas the US markets are up from over 14% on the NASDAQ, and the S&P 500 has gained 8.5-9% YTD.
And even though there have been significant gains in the economy thanks to Trump’s economic agenda, the true genius of his policies is the fact that they’ve forced us as a country to think more about our economic future and accept a hard truth: economic progress is just as important as social progress. Even though we live in an America plagued by numerous social issues, we can’t neglect the impact the economy has on all of our lives. The 21 trillion dollars of debt that loom over all of us have the possibility to affect our generation and the generations after us. Trump’s twitter rants and talk of tariffs, however unconventional they may be, provide the basis of a conversation that will define the prosperity of our country for the many years to come.