By Justin Spittler, editor, Casey Daily Dispatch
President Trump’s latest move could trigger a “chain reaction.”
And this could have serious negative consequences for the U.S. economy… engulf the stock market… and even start a global trade war.
This is a major warning. You can’t afford to take it lightly.
That’s especially true when you consider the source of this message. It didn’t come from Hillary Clinton’s camp… a talking head on MSNBC… or some left-wing journalist.
• It came from two of the largest trade organizations on the planet…
These organizations—the Consumer Technology Association (CTA) and the National Retail Federation (NRF)—represent more than 40 trade groups.
Their members include corporate giants like Apple, Google, and Walmart.
In short, they’re a voice for Corporate America.
And like me, they think that Trump’s tough stance on trade will backfire… and not just on big companies. Everyday Americans are also in danger.
Fortunately, there’s still time to prepare. In a minute, I’ll show you what precautions to take today.
But let’s first look at why these giant companies are going against Trump’s trade policy…
• Trump’s “America First” policies could trigger a trade war…
If you’re just tuning in, let me bring you up to speed.
Three weeks ago, Trump slapped a 25% tariff on steel and a 10% tariff on aluminum. A tariff is essentially a tax on imported goods.
He did this because he thinks U.S. steelmakers have been screwed by bad trade deals. But, as I said on March 6, Trump would look to “help” other industries too, by rolling out a lot more measures like this.
• Earlier today, Trump introduced more protectionist policies…
He hit China with $60 billion in tariffs on imported products.
This is a huge deal. After all, China is the world’s second-biggest economy. It’s also one of America’s most important trading partners.
So why did Trump do this? Well, there are a few reasons.
Number one, he wants to put a dent in America’s $375 billion trade deficit with China. He also thinks that the Chinese stole intellectual property from U.S. businesses.
It sounds like Trump is doing the right thing. You might even support how he’s handling trade.
But I think he’s making a mistake here… one that could do far more harm to the economy than good. It could even tank the fragile U.S. stock market.
• I realize you might not want to hear that…
You might even think that I’m an idiot for thinking this. I say this because readers flooded my inbox with emails the last time we condemned Trump’s tariffs. See for yourself:
No. Trump knows what he is doing. He’s the only president yet that does what he says he would do with high success.
Your editorial regarding Trump was a load of crap and an insult. I never really knew how stupid and disrespectful you are! Now that it’s known what a confused liberal you are, I’ll never subscribe to your newsletters again. Didn’t anyone tell you to keep politics out of your business? Really stupid of you.
Look, I love getting feedback from readers. But let’s be real…
• I can’t keep politics out of the Dispatch…
And there’s a simple reason for this.
We don’t have a free economy. That’s a myth. Instead, we have a politicized economy where big government sets the rules… and often decides the winners and losers.
In short, you’d be a fool to ignore trade policy… foreign policy… and tax policy. They have major implications on your well-being. They impact your job security… your stock portfolio… and even the value of the money in your wallet.
America’s most powerful businesses understand what’s at stake. That’s why they’re begging the White House to rethink its stance on trade.
Here’s what 49 of America’s largest businesses wrote in a joint letter sent directly to Trump’s desk:
The Administration should not respond to unfair Chinese practices and policies by imposing tariffs or other measures that will harm U.S. companies, workers, farmers, ranchers, consumers, and investors.
They issued this plea for the same reason I condemned Trump’s protectionist policies three weeks ago.
• China won’t take these tariffs lying down…
They will fight back with their own tariffs. They’ve already hinted at doing so. The Wall Street Journal reports:
China is preparing to hit back at trade offensives from Washington with tariffs aimed at President Donald Trump’s support base, including levies targeting U.S. agricultural exports from Farm Belt states, according to people familiar with the matter…
China is likely to target U.S. exports of soybeans, sorghum and live hogs, according to the people with knowledge of the matter. The U.S. is among the top suppliers of these products to China, which imports around a third of soybeans that the U.S. produces, data from the two countries show.
It's now not a question of if China retaliates. It’s a question of when.
That’s why America’s biggest businesses are so nervous. They know we’re racing toward a global trade war… and want to avert that at all costs.
Unfortunately, their pleas will likely fall on deaf ears.
That’s because Trump’s hell-bent on putting America first. He also thinks “trade wars are good” and “easy to win.” But he’s clearly forgotten that there are no winners in war. Only losers. Even the so-called victors end up worse off.
Free trade allows countries to buy goods from other countries for cheaper than they could produce those same goods themselves. It benefits all parties.
Protectionist trade policies do the exact opposite. They help one country at the expense of others.
China understands this. That’s why it will fight back. And if that happens, we could find ourselves in a global trade war.
• I encourage you to shield your wealth before that happens…
Here’s how you can get started…
Hold extra cash. This will prevent huge losses should a global trade war break out. It will also give you “ammunition” to buy world-class companies on the cheap after the next major leg down.
Own physical gold. Gold is real money. Plain and simple. Not only that, it’s survived every financial crisis in history. That makes it an ideal safe haven during times of economic and financial turmoil. So, be sure to always store some of your wealth in gold.
If you’ve never bought gold before, check out our free report: “The Gold Investor’s Guide.” It explains the best ways to buy and hold gold.
Investors who take these steps will be much better off than investors who do nothing during these uncertain times.
March 22, 2018
Are you going to follow our three steps today? Are you doing anything else to prepare? Let us know here.