The strong Trump economy, accelerated by his administration’s tax reform is outweighing the drag from tariffs on China, explains James Freeman in The Wall Street Journal. He writes (abridged):
Stocks are taking a beating today as consumers in both China and the U.S. face higher prices on a broad range of products.
Thank goodness the Trump tariff drag is still less than half as large as the Trump tax reform’s boost to the economy, which the foundation pegged last year at a long-run GDP increase of 1.7.
As a Journal editorial notes today, government revenue is rising thanks to the economic growth surge.
If tariffs are temporary and serve as effective leverage to force the Chinese regime to provide reasonable terms to U.S. business and protect intellectual property, citizens in both countries will benefit. For now, it seems that the Chinese negotiating position remains unreasonable.
Read more here.