Donald Trump and his team of economic advisers are making progress with an attempt to radically transform the US economy from spending with a huge trade deficit into a manufacturing power plant.
Economic turn, focusing on an aggressive tariffs And a significant decrease in state consumption, she sent US shares and encouraged concern about the potential slowdown of growth of the world’s largest economy. But Trump has insisted on the last few days to press forward.
“The markets will go up and they will go down, but, you know what, we have to rebuild our country,” the president said on Tuesday.
Later, he added in the speech to the leaders of the great American companies, which is dated against the largest American trade partners to strengthen domestic jobs and industrial production: “The biggest victory is if IF [businesses] move to our country and produce jobs. It’s a bigger victory than the tariff themselves, “he told a business round table.
The Karolina Leavitt White House secretary said earlier on Tuesday that Trump’s administration had started an “economic transition”.
“The president is unwavering in his commitment to renew American production and global dominance,” Leavitt said, while vowing to “end the last globalist age of America” and will be replaced by the “American First Economic Plan”.
Trump eavesdropped by the frame of former business leaders to direct his economic efforts. But compared to his first term, a new team is missing numbers like former operating director Goldman Sachs Gary Cohn and former Treasury Secretary Steven Mnuchin to reduce their economic shock therapy.
Top officials instead supported the president’s message that the US may need a period of recession before they capture what they claim to be significant benefits from ie, TJmponomy.
Kevin Hassett, director of the National Economic Council, said on Monday, CNBC said “there are still” many reasons to be extremely tumultuous about the economy that goes ahead “and that every slowdown in the first quarter of this year is the result of” Blips in data “.
Notes of the Scott Bessent Treasury Minister – former manager of Hedge Fund that Wall Street initially welcomed as a moderate impact – that the American economy would need a “detox period” and no longer existed “Trump” that prevented the fall in stock also caused concern among investors.
“Their approach is that you cannot make an omelet without first breaking eggs,” said Paul Mortimer-Lee, an economist based in the US for the National Institute of Economic and Social Research. “Trump has always said that there will be pain before it gets to a gain. I guess he would blink at some stage. If [stock markets] is 20 percent, there will be someone who will blame, someone will get a bag. “
In November, Beesent also supported another wide position among the Trump economic team – that Washington should push countries with large trade surpluses with the US to ask for “Bretton Woods diverting” and to collect its currency at a higher level than the dollar. If they do not, they will no longer take them as allies and face tariffs and less security guarantees.
While Cohn was publicly stood against Tariff during his time as head of the National Economic Council, and eventually resigned in March 2018. After losing the battle against the order of Steel and Alumini, Trump’s current advisers inclined to retain any disagreements over trade policies private.
Differences in approach – such as a trade carrier Howard Lutticka, a more moderate attitude and a flashy idea to gradually introduce any tariffs – mostly remained behind the scenes, even while the markets are lowered, and the banks on Wall Street have reduced their growth forecasts.
This gave more to the power of Trump’s loyalists like Peter NavarroA determined supporter of aggressive trade policy who often struggled to turn his views into politics during the first administration.
The rise of more radical figures during the president’s second term helped to turn the initial stroke of stock, in the midst of the promise of reducing taxes and rapid deregulation, in the route While investors wake up so that the determined decision in the administration is highly pressured with her daily order.
The uncertainty that was captured by the possibility of criminal tariffs on Mexico and Canada, the two largest trade partners in the US, as well as the levies to the EU and other traditional allies, launched sales on the stock market.
“As [businesses and investors] They started seeing the effects of passing, realizing that these tariffs were really killer, “said John Llewellyn, a partner in an advisory independent economy.” They operate in the opposite direction with everything that has brought prosperity over the entire period of 80 years since World War II. “
The climate of uncertainty about the new administration is also the leading market to hit the other thing as follows, and investors indicated the potential risks of several inortodox policies that his economic team endured.
Lutnick said earlier this month that he was considering ripping state consumption from the calculation of GDP trade department to alleviate the impact of an attempt by Elon Musk to capture federal consumption of US through the so-called billionaire of a technology billionaire.
“We have seen, not at least in the fall of internal investment in the cinema, to what extent it can diminish trust if people lose their confidence, including data,” Llewellyn said. “People think that authorities have to hide something and that the economy has to do less good.”
The market speculation of the so-called MAR-a-Lije Agreement, which the future President of the Trump Council for Economic Advisers, Stephen Mira dreamed of late last year, Stephen Miran to weaken the dollar-dottioner for understanding the administration of the American Treasury Market.
The idea that was calmly presented is his November work – to surrender countries to the current share of US government debt in exchange for centuries -old bonds and security guarantees – “it could be considered an assessment of the agency as technical set settings,” said Mahmood Pradhan, Global Macro Macro Amundi Assette.
Some people think that the idea of an agreement to weaken the dollar, which – as suggested by peaceful and bezen – would be aimed at the earlier agreement signed at the Plaza Hotel in New York in 1985, is advisable to think in an environment in which the US administration destroys its relationship not only with markets, but to foreign governments.
“For the beach [Accord] Of course, we had [James] Baker and [Ronald] Reagan and they were artists in accordance with friends and influence on people. So they got a lot of people on board, “said Steve Hanke, a professor of an applied economy at Johns Hopkins University who served under the administration of Reagan.” I can’t really think of any country, except maybe Argentina, who is very friendly with the United States. “
Hanke added, “The idea of collecting a gang? I mean, can you imagine the cinema complain about that?”
Additional reporting by Steff Chávez in Washington; Oliver Roeder’s data visualization in London
