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Economists: Trump’s trade war a ‘tipping point’ for global economy

Trump is playing with economic fire in his quest to ‘negotiate’ better ‘deals’ with the rest of the world

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Economists and investors alike are really hoping that Trump’s threats to hike the tariffs even further turn out to be a bunch of hot air, aimed at scoring a few policy points, as their manifestation as a reality would spell some bad news not just for the American economy, but for that the whole world. It’s for this reason that they’re describing Trump’s trade war as a ‘tipping point for the global economy’. That has a lot of implications. If Trump enacts an additional $200 billion worth of tariffs on China and tariffs on imported European cars, then growth will experience a slowdown, and could do even more than that to certain other more ‘vulnerable’ markets, such as Europe.

Bloomberg reports:

The escalating trade battle between the U.S. and the rest of the world is raising the risk of a meaningful slowing in an otherwise vibrant American economy.

While the tariffs already in place and set to be implemented will barely dent U.S. growth, economists say the panoply of additional measures being considered would take a perceptible bite out of gross domestic product if they go ahead.

“It’s going to be more noticeably painful,” said Peter Hooper, chief economist at Deutsche Bank AG in New York.

Hooper, who expects the economy to expand 3 percent this year, said the steps already taken or in the works would clip just 0.1 percentage point off GDP growth.

Throw in President Donald Trump’s threat to slap a 10 percent tariff on an additional $200 billion of Chinese imports and a 20 percent levy on car shipments from the European Union and the impact grows to 0.3 point to 0.4 point, he said. And the fallout could even be greater if heightened tensions begin to infect consumer, business and investor confidence.

“It really dings the economy but certainly doesn’t undermine it,” said Mark Zandi, chief economist at Moody’s Analytics Inc., who agreed with Hooper’s estimate of a roughly 0.3 percentage point impact from the accumulated trade actions.

Even though markets have taken the contretemps largely in stride — perhaps in the belief that Trump’s latest threats are more of a negotiating tactic than a concrete plan — U.S. equity futures followed Asian shares lower early Monday after an escalation of tensions over the weekend.

Corporate Mindset
Central bankers though are taking notice. Federal Reserve Chairman Jerome Powell said on June 20 that officials are beginning to hear that companies are postponing investment and hiring due to uncertainty about what comes next.

“Changes in trade policy could cause us to have to question the outlook,” he said during a panel discussion at a European Central Bank conference in Portugal.

The increasing tariff strife poses particular problems for the central bank because it’s likely to both raise inflation and depress growth.

Trump administration officials have played down the economic impact of the trade battle.

“Anyone who thinks the economy is being wrecked doesn’t know what they’re talking about,” Commerce Secretary Wilbur Ross said in a June 21 Bloomberg Television interview.

The worsening trade friction comes at a time when the U.S. economy is, in the words of Powell, “performing very well.”

Growth in the second quarter is on track to clock in at 4.5 percent, according to IHS Markit’s Macroeconomic Advisers, as tax cuts power both consumer and company spending. That would be the strongest in almost four years and twice as fast as the first quarter’s annualized advance of 2.2 percent.

The tariffs though will put a crimp in activity going forward by raising costs for households and businesses.

“It’s starting to chip away at the tax cut,” said Nariman Behravesh, chief economist at IHS Markit. “If they keep down this path, all the positive effects of the tax cut will be gone.”

Thanks in part to the tax cuts, the U.S. does look to be in better shape than its trading rivals to weather any fallout.

“The U.S. can afford a trade war relatively more than Europe, China” and other countries because its economy is more domestically driven, said Christian Keller, head of economic research for Barclays Plc.

Export Reliance
Exports amounted to almost 12 percent of U.S. GDP in 2016, compared with close to 20 percent for China and 43 percent for the EU, World Bank data show.

While China has policy levers it can pull to try to offset the impact from trade struggles, Europe is more vulnerable, Zandi said. The ECB’s benchmark interest rate is already at zero.

Of course, Europe’s troubles could redound back on the U.S. if the euro weakens against the dollar, as seems likely, he said.

It “would be a tipping point” for the global economy if Trump goes ahead with tariffs on $200 billion more of Chinese goods and a 25 percent tax on all car imports, said Ellen Zentner, chief U.S. economist for Morgan Stanley.

They’re concerned about losing the benefits that Trump’s tax plan gave them. If they’ve become sufficiently used to that margin of profits to play with, then it’s possible that some corporations may slow down expansions or experiment with chopping their labor force as they react to cuts in the profit margin due to facing taxes from a whole other direction. In America, while profits are not known for trickling down, retarded profit and losses certainly do, meaning that Trump’s tariffs could spell the end for lots of American jobs, and likely for jobs in other nations as well. Trump is playing with economic fire in his quest to ‘negotiate’ better ‘deals’ with the rest of the world, one at a time.

 

 

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Nightcrawler136Red Pilled ThoughtCrimesJeffrey SpinnerDenLilleAbetibetan cowboy Recent comment authors
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Nightcrawler136
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Nightcrawler136

Go Trump go! Crash the world economy and then watch as gold back currencies rise like a Phoenix!

Jeffrey Spinner
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Jeffrey Spinner

What I read elsewhere was the trade war by Trump is a way to crash the economy to get the cabalist NWO bankers of the west to go down in one fell swoop. Personally, without total war here in the US, the population is done, so whatever. Come to ‘Merica and be exposed to constant aerial spraying, GMO bioweapons, tainted with herbicides and pesticides that endocrine disrupt, contaminated water, drugs, vaccines, psychotic media, education, courts and government. You really haven’t lived until you look around and can’t find any clean food for a reasonable price, breathe air unless filtered, same… Read more »

Red Pilled ThoughtCrimes
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Red Pilled ThoughtCrimes

poor globalists….. trump letting em kill themselves with bad economic policies

DenLilleAbe
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DenLilleAbe

The US is the country of milk and honey! The American consumer is loaded with greenbacks, what does he care is his nr. 2 Mercedes Benz is going to cost 25 % more, nahh! These tarifs will not hurt a true American!! Anybody earning less than 100 000 greenbacks a year is not a patriot, is not a Republican, but is a commie Democreep. True Americans Honk it down on mainstreet, in their Merc or BMW Cabs, playing with gold chains, smoking weed and picking up 2 dollar whores. They dont care about tarifs, they would not know the difference… Read more »

tibetan cowboy
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tibetan cowboy

” … in an otherwise vibrant American economy.”

Ignorant article with unacceptable factual errors. Unemployment is 21+%, inflation 10+%, negative economic growth, and most Americans getting poorer with no purchasing power or sustainable jobs, as starters:

http://www.informationclearinghouse.info/49632.htm.

The nation is a wreck for all but the very wealthy, and collapsing fast.

The GOP has become for years now the party of negligent homicide if not genocide in its destruction of the society except for the 1%, and all safety nets:

https://truthout.org/articles/unmasking-the-gop-as-the-party-of-negligent-homicide/.

JNDillard
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JNDillard

At some point the off-shoring of both jobs and income are going to have to stop. It is difficult to tell at what point the music stops and who is going to be left without a chair, but off-shoring will stop, one way or the other, sooner or later. However, the severity of the addiction to the status quo by the plutocracy that runs the US is so great, and the collusion to maintain it in the EU and China is so strong, that there seems to be no way to break out of cycles of chronic corruption.

thomas malthaus
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thomas malthaus

Fairer trade with China might mean dollar capital outflows from there would accelerate. Could it be that China remains a quasi capitalist-Communist-in –practice
nation that people and money are leaving regardless?

Euclides de oliveira pinto net
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Euclides de oliveira pinto net

A quantidade de informações falsas é gritante !!! Só botam banca porque os mercados mundiais ficaram atrelados ao dólar, papel pintado impresso pelos Rothschilds, único autorizado a imprimir os “toilet paper USAdo” que sustentam a economia norte-americana… se ocorrer a introdução de novas moedas, o dólar de mentira vai para o ralo da história… só papel pintado sem garantia de nada, a não ser a ameaça militar dos valentões !!! FUCK´s dólar !!! Vão passar fome !!!

Gonzogal
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Gonzogal

“If they’ve become sufficiently used to that margin of profits to play with, then it’s possible that some corporations may slow down expansions or experiment with chopping their labor force as they react to cuts in the profit margin due to facing taxes from a whole other direction”

Harley-Davidson To Move Some Production Outside US Over EU Tariffs
https://www.zerohedge.com/news/2018-06-25/harley-davidson-move-some-production-outside-us-over-eu-tariffs

gragor11a
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gragor11a

” … tariffs ….. will barely dent U.S. growth, …

What passes for US growth is actually Cannibal Capitalist. Few are benefiting from this growth, Those of the ‘lower classes’ see no benefit what so ever from such growth.

This house of cards is extremely wobbly and 45 just might be the man to bring it all tumbling down. Avarice will kill this golden goose.

Rastislav Veľká Morava
Guest
Rastislav Veľká Morava

The “Global Economy”….Globalism is not a good thing for most countries.
There will be pain to go through, to get out of it.

IanSeed
Guest
IanSeed

It’s a shame to see that even the decent alternative media are buying into this narrative that Trump is going to crash the world economy all on his own. “Tipping point” might technically be true but look at the state the world is already in! The world economy is about to crash because of a decade of zero interest rates and endless QE has caused an “everything” bubble”. Stock markets, bond markets, property, all asset prices in fact. That free money works its way into high end goods like clasic cars and paintings. one sold for $450m, just one painting.… Read more »

Vince Dhimos
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Vince Dhimos

US economists are just like all other journos. They lie to the benefit of the US. But the real impact of this could be totally different.

John Mason
Guest
John Mason

Picture very symbolic, walking on a tight rope the wrong way designates disaster!

Artyne
Guest
Artyne

Tump may be on the bridge and everyone sees him thru the window, but he’s definitely not steering the helm. There’s someone else tilling the helm and it isn’t Trump. There’s involved economic theory here and its beyond Trump, so the steerage is likely from a World Group with authority to do it. Just like Deep State decided on the Twin Towers destruction, Bush was just along to be seen thru bridge windows, but he wasn’t steering the helm. That decision was way out of his hands although, Cheney was certainly cooperating 200%, he didn’t decide either. Nor is Mr.… Read more »

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Russia’s economy continues to outperform as gold takes center stage (Video)

The Duran Quick Take: Episode 118.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris examine how US and EU sanctions have continued to provide a huge boost to Russia’s economy. Russia’s food sovereignty has practically been achieved, as the Russian central bank continues to buy gold and lower its exposure to western financial markets.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Follow The Duran Audio Podcast on Soundcloud.

Via TASS…

Outside pressure in the form of sanctions has become an incentive to resolve various issues of Russia’s economy, Russian Security Council Secretary Nikolai Patrushev stated in an interview with the Izvestiya daily.

He noted that through introducing sanctions against Russia, “the West aims to destabilize Russia’s economy and to create social and political tensions in society.”

“But during the difficult times, Russians have always stuck together and mobilized their resources in order to ensure the country’s sovereignty. This is what is happening now – the outside pressure has become an incentive to resolve many problems in Russia’s economy,” he said.

“Before the sanctions, it seemed that we would never be able to feed ourselves and that we are doomed to be dependent on Western import. However, right now, Russia’s food sovereignty in crucial sectors has practically been achieved, and in some areas, Russia has become the leading exporter,” Patrushev noted.

Those who apply the sanctions “can see that they (the sanctions – TASS) are ineffective and often achieve the opposite goal,” the Russian security chief concluded.

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US Neocon Foreign Policy and the War Waged Against Serbia

The Serbian assault began first by a ‘financial war’; by sanctions and finished off by an aggressive unprovoked incessant NATO bombing campaign.

Richard Galustian

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The ‘witch-hunt’ against President Trump over Russian collusion has officially ended, following the submission of the Mueller Report, enabling us to now focus on the real problems of America that effects the whole world.

In the hope of a waining of the Russophobia in America, let’s look at the US’s recent war history by starting with the 20th anniversary this month of the NATO war on Serbia in 1999 which amounted to almost 100 days of bombing of historic cities and infrastructure.

Firstly, these problems are, in the main caused by the Neocons, or Deep State, whatever you wish to call them, and the continuing promotion, by the US Military-Security Industrial Complex, of wars and regime change and secondly, Trump’s unreserved support for Israel, regardless of war crimes they may continue to commit against the Palestinians.

Incredibly after that one sided unjust and illegal war that NATO executed, NATO has the audacity to invite Serbia to join it! Something that will never happen. What do they smoke in DC, in the Pentagon and Brussels based NATO?

To compound these overall problems, the US Military and Israeli Defence Forces collaborate on these US regime change policies on all continents evidenced most recently by the arrival of crack Israeli troops last month in Brazil, prepared to support an attack potentially by Brazil and Columbia on Venezuela.

As, has now come to be expected, America pursues its Venezuelan regime change with full main stream media (MSM) cooperation, using well proven sophisticated propaganda techniques along with a variety of pretexts.

From Serbia to Iraq to Libya, where does it end? Observe that Trump is now seeking a ‘NATO alliance’ offering NATO status, to President Bolsonaro of Brazil to back the invasion of Venezuela.

So it is important to remember, as an example, that after a long war of economic and financial destabilization ended with the bombing of Serbia.

Serbia was previously a part of Yugoslavia, a country which had successfully evolved after 1945 to solve the old rivalries of the 19th and early 20th Century Balkan ethnic animosities which was, prior to the advent of power of President Tito, its past history.

The United Nations, instead of supporting, in effect, so called ‘humanitarian wars’ and ‘regime change wars’ by the US, using NATO, helped and relentlessly driven home by MSM outlets like CNN and FOX NEWS into people’s heads, must finally take a stand.

So too, Yugoslavia, once the envy of many in the world, given its then ‘non-aligned’ status under President Tito, was destroyed and broken up; ‘Balkanized’ in the early 1990s.

The Serbian assault began first by a ‘financial war’; by sanctions and finished off by an aggressive unprovoked incessant NATO bombing campaign. That’s what we can expect in Venezuela next.

This ‘Balkanization’ strategy similarly applies to Afghanistan, Iraq, Libya, Syria et al. It serves US Neocon interests to dismember States in the world and create smaller more ‘manageable’ countries.

‘Regime change’ runs against the intent, the very words contained in the US Constitution. No one in MSM ever reminds us of that fact. Nevertheless America’s ambition to overthrow other States continues, which they arrogantly now make no secret of. The next States will probably be Nicaragua then Iran to name but two.

A very noteworthy most recent outrageous unilateral declaration was made by President Trump, not yet formally agreed by US institutions, ‘giving’ something he has no authority to give; Syrian territory, the Golan Heights to be precise, to Israel. Something that one day could trigger a full scale Arab-Israeli War.

This is of extreme importance yet no real outcry comes from world leaders; well not so far.

The main reason for that decision given by senior US Administration figures is that “God anointed Trump to save the Jews”.

Not forgetting Trump’s need (which we the people don’t understand exactly why) to support Prime Minister Netanyahu in his difficult upcoming elections in Israel – in part because both countries failed to ‘regime change’ Syria – but more importantly to help the ‘financial terrorists’ who formed a company jointly that has already started drilling for oil in the Golan Heights. You might like to know who owns such oil drilling company which should answer a plethora of questions in one go that you must be asking yourselves.

The shareholder’s names tells us everything; Dick Cheney; Baron Rothschild and Rupert Murdoch. The titular heads of neocons, bankers and media on the planet.

In ending there is no more evidence required for us, the people of the world, to rise up against the globalist dark forces wherever they exist, be it in Brussels, London, France or Washington. We must demand democratic elections or start revolutions, the latter has already begun in France in the form of ‘the yellow vests’. And Brexit, by definition, is a rejection by the British people of globalism and American Hegemony.

The pattern of US destabilization and destruction of States to loot them of their sovereign resources is the unseen history of the last 100 years, not taught in any university, anywhere in the West.

As far as Ukraine is concerned, its government was taken down by the CIA and replaced by an ultra fascist regime that has full backing from America. This is no secret. But the MSM simple don’t report it.

US led NATO is ‘the transnational war machine’ of the world, devouring almost all free countries wealth. It can extort to terrorize all into conformity to the global ‘carcinogenic’ US Neocon imperialistic strategy.

A total estimated 20m people around the world have died since the end of WW11 at the hands of US Forces. Think about that for a moment.

One of the most famous sayings attributed to America’s great President Abraham Lincoln is about deception: “You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.”

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‘Dark day for internet freedom’: EU approves controversial copyright reform

Julia Reda, a German MEP with the Pirate Party, described it as a “dark day for internet freedom.”

RT

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Via RT


The European Parliament has voted to adopt the highly controversial Article 13 provision which would govern the production and distribution of content online under the auspices of increasing copyright protections.

Tuesday’s move will update the EU’s 20-year-old copyright rules and will govern everything from audiovisual content to memes, much to the dismay of many social media users who have already begun outpouring their grief online.

MEPs passed the legislation by 348 votes to 274 Tuesday. Opponents had hoped for last-minute amendments to be made but their efforts were in vain.

Julia Reda, a German MEP with the Pirate Party, described it as a “dark day for internet freedom.”

Article 13 or ‘The Directive on Copyright in the Digital Single Market’ makes all platforms legally responsible for the content hosted and shared on their platforms.

The process of updating the bloc’s copyright laws began in the European Commission two years ago, ostensibly to protect Europe’s publishers, broadcasters and artists and guarantee fair compensation from big tech companies.

By essentially forcing companies like Google, Facebook and Twitter to pay artists and publishers for the reproduction of their work online, include in meme format, the EU is effectively clamping down on online memery.

The onus will now be on tech companies to clamp down on content-sharing on their platforms, which will likely ensure yet more draconian policing of speech and content.

EU member states now have two years to pass their own laws putting Article 13 into effect.

Tens of thousands marched in protest across Germany ahead of the vote, decrying what they viewed as severe online censorship.

Tech giant Google said that while the directive is “improved” it will still lead to legal uncertainty and will damage Europe’s creative and digital economies.

Critics have argued that the only way for Article 13 to be effectively enforced would be through the use of upload filters which automatically check content to see if it’s copyrighted or not, at least in theory. However, the exact mechanics of such a system have yet to be fully debated and the potential for abuse is immediately clear.

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