Why a Trade War Is Unlikely for Us
There has been a lot of talk out there about a potential trade war happening between the U.S. and our major trading allies, but in my opinion, this is unlikely to occur.
In reality, it is probably a lot of saber-rattling. Why? Trade wars are not good. The U.S. placing tariffs on our trading partners does have the potential to start a trade war—I am not dismissing that threat—but I still do not think it is likely.
According to the World Trade Organization (as of January 2018), our average tariff here in the U.S. is about 3.5%. Here are the tariffs of some of our major trading partners:
- The EU: 5.2%
- China: 9.9%
- Canada: 4.1%
- Mexico: 7%
As you can see, we are already at war—and losing (I’m kidding). What is really going on is perhaps a negotiation to get lower tariffs among our trading partners around the world. This would only help the U.S. economy.
Our country’s current tax position, our government deregulation, and our monetary policy are all good for our economy. Government spending and tariffs, on the other hand, are bad for our economy, in our opinion. Make no mistake, though—there is nothing out there on the horizon that suggests any impending economic trouble. We believe the volatility you are seeing in the markets today is just regular market volatility.
If you have any other questions about our market or you need any kind of financial advice, please feel free to reach out to me. I’d be happy to help you.