At this moment, something remarkable is taking place in the world of investment. Business leaders, seasoned Wall Street veterans, and everyday investors—whether they manage 401(k)s or are involved in momentum trading—are all experiencing a unique spectacle. They’re watching intently as President Donald Trump engages with global leaders with unabashed flair.
Figures like Donald Tusk, Justin Trudeau, Xi Jinping, and Angela Merkel find themselves facing off against President Trump as if they were contenders at a heavyweight boxing match. The scene often seems more like a surreal reality TV show than serious international diplomacy, eliciting disbelief and amusement.
This behavior aligns perfectly with Trump’s audacious approach to politics: Shock, confuse, backtrack, counter, and repeat. The more unexpected and rapid the maneuvers, the more formidable they appear.
But such tactics come with substantial risks. The potential for backlash is ever-present, and as the term of this administration progresses, surprises are likely to unfold.
Opening Jabs
On July 6, Trump launched his first offensive in this high-stakes game by imposing a 25 percent tariff on $34 billion worth of Chinese goods. China’s prompt retaliation included tariffs on American soybeans and automobiles.
Billionaire investor Ray Dalio marked this event on Twitter, deeming it the “first day of the war with China.” Interestingly, the markets didn’t appear to share his outlook; both the S&P 500 and the Shanghai Composite Index ended the day on a positive note, leading many to believe that Trump’s threats were more bluster than reality.
However, on July 11, Trump doubled down with plans for 10 percent tariffs on an additional $200 billion in Chinese imports, causing a dip in the S&P 500. Yet, the market quickly rebounded, closing up 24 points by the end of the week.
In response, China indicated there would be more retaliatory actions, although specific details remain unknown as of this writing. Reports continue to underscore the tension, exemplified by a Telegraph headline reading: “Beijing ‘shocked’ by Trump unveiling new tariffs on $200bn of Chinese goods as stocks slide.”
The True Sport of MAGA
Months ago, President Trump proclaimed that “trade wars are good and easy to win.” His approach has involved imposing tariffs on various trading partners—including China, Canada, Mexico, and the EU—to secure more favorable trade deals.
It’s undeniable that the U.S. has felt short-changed in trade for years. Merely relying on diplomatic discussions has proven futile, but are tariffs the right remedy?
Such tariffs, along with the retaliatory measures they provoke, risk escalating into a damaging trade war with no clear victory in sight. In this scenario, businesses suffer, livelihoods are jeopardized, and multiple economies can be adversely affected without achieving the intended results.
If we liken the trade conflict to a sport, one might wonder about the U.S.’s chances. Many speculate that since the U.S. imports significantly more from China than it exports, the situation should favor America. After all, “the customer is always right,” or so the saying goes.
What are the odds of winning this trade war? Would one say it’s a 75-to-25 percent win/loss ratio? Perhaps 65-to-35? Or even a 50-50 chance? Do such odds justify initiating a trade war?
It’s critical to note that a trade war resembles no conventional sport; there are no points, referees, or set endings. The regulations of this “game” are continuously adjusted, and the outcome remains uncertain.
What truly defines this sport of MAGA is its fluidity. It thrives on uncertainty and allows Trump to make bold moves without adhering to traditional parameters of winning or losing. The essence lies in the act itself, rather than in the outcome.
As July 2018 unfolds, the true sport of MAGA has brought a sense of exhilaration to its supporters—a stark contrast to the previous administration. At this moment, it feels not just acceptable, but downright exhilarating for many.
This, at its core, encapsulates the spirit of MAGA! What an experience!
Sincerely,
MN Gordon
for Economic Prism
