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| President Donald Trump |
History
has taught us that trade wars are not good and in fact, not easy to win. In
March 2002, President George W. Bush
took a similar approach to Trump, imposing tariffs of 8-30% on steel to revive
the domestic industry and exempted Canada, Mexico and a few other countries.
These temporary duties were scheduled to remain in effect until 2005. As a
result, the EU threatened to impose retaliatory tariffs on U.S. products and a
case was filed at the World Trade
Organization, which ruled in November 2003, that more than $2 billion in
sanctions would be levied if the U.S. did not remove tariffs. Less than a month
after the ruling President Bush backed down and withdrew the tariffs.
The
S&P 500 dropped more than 30% from March until July 2002, U.S. 10-year
treasury yields fell 100 basis points, and the U.S. dollar lost more than 12%
in the same period. Of course, many other factors led to these declines, but surely
the tariffs did not benefit the economy as Bush thought it would.
Investors
seem to believe that President Trump is using his “Art of the Deal” skills to
get a better trade deals with the rest of the world or, as Ray Dalio, the Bridgewater Associates founder, wrote on Monday: “what is happening now is more for political show than for
real threatening."
Trump
tweeted, some days ago, that “Tariffs on steel and
aluminum will only come off if new & fair NAFTA agreement is signed.” This
confirms my belief that this mess will likely end up with Mexico, E.U. and
China taking a less protectionist stance, rather than the U.S. taking a
stronger one.
House
Speaker, Paul Ryan, and other
conservatives are not falling in line behind Trump, only time will tell how the
situation will evolve, given the unpredictability of Trump. Although we are optimistic
that things won’t degenerate to a full scale trade war, caution is warranted at
this stage.
Futures
indicate that equities will continue the rebound when Europeans markets open,
but there’s little action in currency markets. We think investors are holding
off from big bets ahead of the European Central Bank meeting on Thursday and
the U.S. jobs report release on Friday. With no tier-one data on the economic
calendar today, expect range-bound trading to resume unless we see a surprise
on the political front.
Hmmm!!! Folks, have you ever
imagined how the financial status of your firm will be when more than 20,000
CEOs and other key decision makers of blue-chip corporations pay for your
products and services or even give you very juicy deals. The link below will
tell you more: http://www.tectono-business.com/2015/07/tectono-business-review-in-conjunction_21.html
Have you heard this? Many
Nigerian exporters have been defrauded of huge amount of money in the process
of exporting commodities to foreign countries. Do you know why? They were not
trained on export operations, management, documentations and the best methods
of payment in export trade. This is terrible!!! Nigerians cannot continue to
lose money to foreigners in the course of export business. Exporters, why don’t
you get a practical manual that teaches the stages of export trade from
processing and packaging of commodities to receipt of payment by the foreign
buyers. It teaches export operations, export management, export documentations
and methods of payment in export trade? It is a contemporary step-by-step guide
to export trade. It tells all the contemporary dynamics in export trade. To get
it, click on the link below:
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