The Recovery Has Begun and the Tariffs Will End

Once you take the negative feedback which gathered and accumulated over the weekend, post those futures at the opening bell, watching the market drop 1400 points and then, look at the closing numbers, short of that first hour or so, the market had a pretty good day.

 

The Dow dropped almost 350 points for the session, which actually was a net recovery during the day of 900 or so points In addition, both NASDAQ and the S&P reacted similarly.

And if you look ar the futures for all three markets at the time this is written, the Dow, NASDAQ and S&P, they are all showing respectable gains as futures trading has begun. The futures will rise and fall over the next several hours until market opens tomorrow.

This was after President Trump said Monday he plans to add an additional 50% tariff on China starting Wednesday if the country doesn’t withdraw its retaliatory tariff increase on the US. “Additionally, all talks with China concerning their requested meetings with us will be terminated!” he wrote on his social media pages.

As many other countries continue to come back to the negotiating table to fix the tariffs all of them are charging the United States, the world will see that it was all caused by China’s bullying intransigence which caused this problem to begin with.

Then, if the nations begin to boycott buying Chinese goods, the prices and overall cost for everyone else will drop.

China thinks it is fine to practice capitalism outside the People's Republic, while still enforcing the failed principles of Communism within its borders? Good. President Trump will show how the game is played  by a master.

Of course, each country needs to be on the same page as the US, but those who come first will get Most Favored Nation Status, MFNS, the faster they drop their pernicious tariffs, which hurt everyone.

There may be another day or two until everything starts heading back to normal. And that is to be expected. But someone needs to be the first to make a move. Who will it be?

Threaten a reciprocal tariff and be courageous to implement it. Watch how how everyone reacts and responds. Some will be “panicans” and others will hold firm. Economics 102. Class dismissed.

And that is how you kill inflation.