Zero Hedge: “If Trump really captures the White House, what will it mean? This scenario is becoming increasingly serious.
According to Trump’s current policy proposals, a Trump-led US might be inclined to isolationism and attach more importance to “America First,” and American economy. Ideology will be downplayed. Washington might engage in more squabbles with its free-riding allies, and tighten up its immigration policy which as a result will upset the Latin Americans.
After enjoying massive trade surplus from the US for years, China and Japan will be demanded by Washington to widen market access.
Opinion: Critics of Mr. Trump say that his threat to impose tariffs on China, Japan and Mexico will cause a trade war that would raise prices for Americans similar to the 1930 Smoot-Hawley legislation, which raised tariffs on imports, inflamed trade tensions, and worsened the Great Depression.
On Trump’s to-do list:
- United Technologies must reverse a decision to move two Indiana plants to Mexico
- Tax auto imports from Mexico to stop U.S. automakers from moving production there
- Stop Nabisco from replacing nine production lines in Chicago with four in Mexico.
To show how serious he is, Mr. Trump vowed to give up Oreo’s.
But will all the populist rhetoric work? According to an economic model of Trump’s proposals, prepared by Moody’s Analytics at the request of The Washington Post, suggests Trump is half-right about his plans. They would, in fact, sock it to China and Mexico. Both would fall into recession, the model suggests, if Trump levied his proposed tariffs and those countries retaliated with tariffs of their own.
Unfortunately, the United States would fall into recession, too. Up to 4 million American workers would lose their jobs. Another 3 million jobs would not be created that otherwise would have been, had the country not fallen into a trade-induced downturn.