- In the CEO today: Jeff Colvin on the effect of Trump’s tariff on corporate profits.
- The big story: The eye of the eye is a global stagnation.
- Markets: The worst since Kofid in 2020.
- Analyst notes From Jpmorgan, Wedbush, UBS and Oxford Economics at the risk of economic contraction under the new global trade rules.
- plus: All news and water chat from luck.
Good morning. Economic chaos around the world today, which was raised by President Trump’s new tariff, may be horrific, but not new. A similar story was played eight years ago, in Trump’s first as president. A look at what he did, and the repercussions that followed, are beneficial to business leaders, investors and consumers. This is not encouraging in any way.
Unlike his current term, Trump at that time did not launch a commercial war immediately. He devoted his first year as head to relieve business organization and obtain a historical tax through Congress. The executive chiefs were cheerful. But then, in January of his second year, the reason for the announcement of a customs tariff was announced. Imposing a tariff on China and then quickly expanded the definitions to more countries. The party is over. especially:
The definitions helped a few American companies, but they were also wounded by thousands. For example, Trump imposed a tariff on imported steel – great for a handful of American steel makers, but increasing the painful cost of thousands of US manufacturers who use steel. Expanding the example of steel through the economy and the result was a difficult punch on profits. During the first year of Trump in his position (2017), before he imposed a tariff, American companies’ profits increased by 8 %. In the following five quarters, with customs tariffs, profits rise to the opposite direction, 1.5 %, annual.
Stock prices have been hit. From the 2016 Trump elections until the customs tariff began in January 2018, the S&P 500 increased by 27.3 %. But with the addition of definitions, the S&P rose by only 3.8 % (January 2018 to November 2019).
Executive chiefs reflected their point of view of Trump. Immediately after Trump’s victory in 2016, the presidents raised their confidence as it was measured by the Conference Council, and confidence varied a little up and down about this new level during the first year of Trump in his position. But shortly after the announcement of his commercial wars, the confidence of the CEO decreased to levels that were not seen since the worst days in the financial crisis in 2008-2009.
Note that Trump is implementing his main economic policies in the reverse order he followed in his first term. At that time, he got the tax bill first, and then turned into a tariff. Now, after announcing a historic trade war, many of 2025 will eliminate this tax law, which is scheduled to exceed many elements on December 31. He will try to maintain the tax cuts of this bill and even reduce taxes. If he succeeds, he may regain his current support from business leaders, investors and consumers. But this is a big thing “if” and “may” are great. Jeff Colvin
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This story was originally shown on Fortune.com
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