President-elect Donald Trump's proposed widespread tariffs seem harsh to some investors, but he is not backing down. The Washington Note Founding Editor Steve Clemons joins Catalysts to discuss his views on the potential impact and the prospect of a trade war.
Regarding China's position, Clemons believes the nation has "a deep confidence in its situation in the world," the tariff proposals enabling it to adapt and maneuver if faced with a trade war. However, he adds, "I think China and [President] Xi Jinping are gonna respond very toughly on the front end, drive costs, and send signals."
Addressing US strategic considerations, Clemons explains, "I think the bottom line is... if China is the global geopolitical threat... then you gotta ask if you're gonna onshore [jobs] because you're concerned about China, if you're gonna friend-shore to friends, well you gotta be nice to those friends and you gotta have a good relationship of mutual trust. Canada and Mexico are these most vital friends for friend-shoring and backstopping the North American strength against China."
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Trump has proposed new tariff policies that he could enact using the International Economic Emergency Powers Act (IEEPA), while also threatening longtime ally Denmark with tariffs over its territorial ownership of Greenland. The incoming president has also described plans to tax imports from Mexico and Canada at 25% each.
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This post was written by Angel Smith