President Trump’s trade war with China seems to hurt the American economy more than China’s economy. China’s gross domestic product growth in 2018 was 6.9 percent. U.S. GDP growth as 2.9 percent that same year. China expects 2019 GDP growth to be in the 6.5 percent neighborhood while U.S. growth will muddle along at a 2.0 percent growth rate. The trade war doesn’t hurt China’s domestic economy as much as it hurts America’s domestic economy.
According to Commerce Department reports, in 2018, the United States posted a more than $890 billion trade deficit in the import-export arena. That is the largest deficit in America history. Mr. Trump still claims his trade war and his America first policy work is the answer to the trade imbalance. Trump’s reason to put additional tariffs on Chinese merchandise was to reduce the trade deficit and super-size the economy, but that’s not happening. According to economists, Trumponomics is a figment of Trump’s imagination.
The economic experts say Trump’s plan to cut taxes and increase government spending did help the economy in the short-term. But now that the big corporations used the tax cuts to feather their bottom line-profits, the experts say 2019 corporate profits will be way down. Mr. Trump did eliminate some government regulations, and he pushed companies to hire more people. But Americans spent a ton of money on imported iPhones, automobiles and other products like German beer and that made the deficit explode.
The four Federal Reserve interest hikes in 2018 strengthen the dollar, and that made American products more expensive for the rest of the world. Trump said his tariff plan would bring the trade deficit down, but the opposite happened. The president promotes his trade policy as the magic elixir that will even the trade playing field. But in reality, the trade war costs American consumers billions of dollars every month.
The American economy is not the fastest growing economy in the world as Trump claims it is. Trump’s economic and financial moves, as well as his attacks on the Federal Reserve, and the dollar’s strength hurt American consumers. Consumers pay dearly for Trump’s inability to understand the basic principles of economics.
Mr. Trump claims he is an American patriot. And he stands up for American workers. And he’s the first American president to do that in a very long time. But the figures don’t lie. Trumponomics is a disaster.