A Class on Tariffs

Here’s a new definition or meaning for the word tariff: Economic Coersion. But you won’t find it in any dictionary.

 

Instead, you need to look at the markets to see the definition in action. For example, it was widely reported from Switzerland, by many sources, that the US and China had compromised on a tariff argreement. Only a PAUSE was agreed to. Nothing was announced by any high-ranking official yet from either country.

And last week, we saw the positive result of the tariffs with the US/UK tariff agreement.

But this morning, at 8 AM, the futures markets exploded. The Dow is up 1,030 at 42,353, surpassing the April 2 closing of 42,225, the day the tariffs went into effect. Equally, NASDAQ and S&P are up substantially, as well, surpassing their April 2 closing numbers.

While Wall Street, the Democrats and the Lame Stream Media wailed and fretted that gloom and doom was upon us, what does this mean to Main Street? It means that patience was key to maintaining confidence all would return to normal. And it has.

Once again, the naysayers need to shut up because they know not of what they speak. The master deal maker, President Trump, knew what he was doing. If only the naysayers had read The Art of the Deal.

Yes, it is early in the day, and anything can happen in the stock market. Day traders and some pension fund administrators will cash in to take their short-term profits, and that is expected. But, smart investors and people not ready to retire are in it for the long game.

The question was asked recently if the market would ever hit 50,000. It wasn’t all that long ago that it hit 30,000.

When President Trump gave his address to the Joinf Session of Congress in March, he discussed the tariffs and how it would rock the markets. But he also predicted that the short-term pain would result in long-term gain, the likes of which we had never seen.

As more countries see that agreeing to negotiate and sign agreements, their economies, as well as ours, will flourish and begin the rebound to greater heights. And maybe, finally, those negative nabobs of negativism will begin to cheer President Trump and the positive effects of tariffs, too.

After all, those of us who voted for Trump understood his long game when he talked bout it during the campaign. We knew it would be a bit tough, but we saw past history, long ago and during his first Administration, to remember how good our economy really was. And wanted it again.

So, class. What did we learn? 

Patience is required to see benefits. Tariffs are NOT a tax if you refrain from buying the tariffed products. And tariffs are only economic coersion, not an all-out war against our trading partners.

Class dismissed.