So China’s Yuen has dropped like 0.0001 % since it’s last high two years ago. Big poo-dee-poo. Wall Street is imbecilic and over-reactive.
And they are double witching their reaction because of the Fed rate cut, which is clearly predicated on the world slowdown, not on America’s direct economy. So again – idiots. Sure, it’s time to worry a wee bit, but not time to sell off 800 points.
And let’s look at the tariffs. 25% of 250B is 62.5B. Trump is adding a tiny 10% tariff on 300B for another 30B. Add them up thats 92.5B. What is our trade imbalance with China? Not EVEN discounting for the rampant intellectual property theft, just tariff until we match our trade deficit with China. This is important because it balances dollar flow for the USA. Which stops China from having dollars to buy up our ports, railroads, and movie studios. So how much do we NEED to tariff to equal that number?
Well in June it was $55.2 billion. Our total trade sales from China are 300B + 250B = 550B and our US sales to China are: 120B. So that means we need enough tariff to cover 430B. That means we need a tariff of 78% on China on ALL Goods.
Folks we have a long way to go. these 10% tariffs are tiny wasp wings of discontent, easily wiped away by a minor currency devaluation. China is showing our stupidity.
Let’s put out a tiger – 50% tariff on all Chinese goods starting Jan 1, 2020 if a trade deal is not reached. Try that on for size you slant eyed uncreative invention stealing noodle munchers.