Tariffs, Economics 101 and a Little Common Sense

Many people, on both sides of the aisle, in the media, and even those considered knowledgeable in economic and fiscal affairs, spoke ad nauseum over the weekend, how the Trump Tariff was destroying the global stock markets. 

This was based on the last few days since the tariffs were rolled out, when more than $4TT was lost in market equity.

 

And perhaps, the markets may continue to lose, at least on Monday and Tuesday. But as with every other market upheaval, the markets will come back and will surge to new heights.

It happened in 1929, 1986, 2000, 2001, 2008 and 2020. And each time, the Chicken Littles who had wrung their hands, had to eat crow.

Now, while the “experts” are predicting gloom and doom that the world is in upheaval because of the tariffs and castigating President Trump, if you listen closely, there are about FIFTY countries who want to make some type of deal so that the President will roll back the tariffs.

These include Vietnam, India, Israel, Taiwan, Argentina, Italy, South Korea, Mexico, and even Great Britain and Canada. But as the mighty begin to fall, so will others.

The point has suddenly become clear to these countries which have now expressed a desire to negotiate. The President’s message was to let the world know that open trade, as well as, free and fair trade should be the norm. Not blocking our products while we import theirs.

Within a week, we will see agreements signed and placed into practice which will benefit those who drop tariffs on American goods and we drop tariffs on theirs. Those who come quickly to the table will be the biggest winners because the tariffs will be gone in a snap of fingers.

This is a lesson which we learned in a high school Economics class. But, apparently, the Chicken Littles in the LSM and Globalist politicians were absent the day that class was taught. Hence, the wringing of hands.

So, we may feel a little more pain for a few days. But as with every other market downturn, the bounce was showing a greater gain.

By Friday, more countries will acquiesce to remove their tariffs and so will we. That is the whole point of this negotiation.

And by the way, if you don’t buy a Mercedes-Benz S-Class

Maybach S 680 4MATIC Sedan

or a 1.5 liter bottle of Domaine Jean Grivot Richebourg 2020, or anything made in the Peoples Republic, the tariff won’t impact you. Buy American.

Lastly, if you own stock and choose NOT to sell, how much did you lose? Uhm, none, since your shares are only on paper as long as you hold them. Another lesson learned in that high school Economics class. The value WILL increase, eventually.

And then, it will be another promise made, and a promise kept.