Trump Spooks Global Markets: China “Broke The Deal. They Can’t Do That, So They’ll Be Paying.”

It sure looks like nothing can stop the trade war now, and that could potentially be absolutely disastrous for the global economy.  The last major trade war began in 1930, and it turned an economic downturn into the Great Depression of the 1930s.  But without a doubt something needed to be done about China.  They have been lying, cheating and stealing our technology for a very long time, and previous administrations simply allowed them to walk all over us.  President Trump had hoped that a new trade agreement would put trade between our two nations on a fair and equitable course from now on, but at this point it appears that isn’t going to happen.

On Wednesday evening, Trump commented on negotiations during a rally in northern Florida, and he greatly shook up global markets by stating that the Chinese “broke the deal” and that “they’ll be paying”

Speaking at a rally in Florida, the president attributed his recent threat of increased tariffs to Beijing’s negotiating position.

“By the way, you see the tariffs we’re doing? Because they broke the deal. They broke the deal,” Trump said. “So they’re flying in, the vice premier tomorrow is flying in — good man — but they broke the deal. They can’t do that, so they’ll be paying.”

In other words, Trump fully believes that the tariffs that he threatened China with on Sunday are going to go into effect on Friday.

All over the world stocks immediately began to fall following these comments, and one economist interviewed by CNBC said that Trump “is sure scaring the daylights out of the financial markets”…

Chris Rupkey, managing director and chief financial economist at global financial group MUFG, wrote in a note responding to Trump’s Wednesday evening speech that markets may continue to be roiled by that sort of rhetoric: “We are not sure who the president is addressing tonight in a campaign rally, but he is sure scaring the daylights out of the financial markets.”

For most of the year, global markets had been lifted by hopes of a trade deal, and now that it appears to be dead nobody is quite sure what is going to happen next.

Earlier on Wednesday, in a two part tweet Trump accused China of trying to drag out negotiations until after the 2020 election…

The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to “negotiate” with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come….

….Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers…great for U.S., not good for China!

Trump definitely nailed this one.

As I detailed on Monday and Tuesday, the Chinese had been hoping to run out the clock on the Trump administration and deal with whoever follows Trump in the White House.  The mainstream media was absolutely shocked that Trump would say such a thing, but it is the truth.

U.S. negotiators truly believed that they were getting close to a deal in recent weeks, but a diplomatic cable which arrived from China late last Friday changed all that.  The following comes from Reuters

The diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world’s two largest economies, according to three U.S. government sources and three private sector sources briefed on the talks.

The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.

In essence, the Chinese had totally gutted the deal that the Trump administration had been working so hard on.

So now we know that Trump’s angry tweets on Sunday didn’t just come out of nowhere.  He was greatly upset because “China got greedy”

One private-sector source briefed on the talks said the last round of negotiations had gone very poorly because “China got greedy.”

“China reneged on a dozen things, if not more … The talks were so bad that the real surprise is that it took Trump until Sunday to blow up,” the source said.

“After 20 years of having their way with the U.S., China still appears to be miscalculating with this administration.”

The only way that a trade deal will be possible now is if somebody backs way down, and that does not seem likely to happen.

In fact, the Chinese are already threatening to implement “necessary countermeasures” once Trump hits them with tariffs on Sunday…

China’s Commerce Ministry said Wednesday that Beijing will retaliate if U.S. tariffs on $200 billion of Chinese goods are hiked to 25% from 10% as threatened by President Donald Trump on Sunday.

“The escalation of trade friction is not in the interests of the people of the two countries and the people of the world,” the ministry said. “The Chinese side deeply regrets that if the US tariff measures are implemented, China will have to take necessary countermeasures.”

And even if by some miracle a trade agreement happens, the truth is that relations between the U.S. and China have already deteriorated so dramatically that there is no way we will be returning to “business as usual”.  The following comes from a Bloomberg opinion piece

U.S. Secretary of State Mike Pompeo has been traveling the world warning allies that getting too close to China will harm relations with Washington. Buying telecom equipment from Huawei Technologies Co. would compel the U.S. to curtail intelligence-sharing, Pompeo has said, while participating in Beijing’s Belt and Road infrastructure bonanza was sanctioning “debt traps” and predatory business practices.

Add in fresh curbs on U.S. visas for Chinese scholars and heightened rhetoric over Beijing’s disputed territorial claims in the South China Sea, and the points of conflict now run well beyond tariffs and soybeans.

No matter what happens over the next few days, relations with China are going to get worse.

A lot worse.

Even though most Americans don’t realize it, this is a major turning point.

Begun, the trade war has, and the pain will ultimately be felt by every man, woman and child on the entire planet.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

If The Stock Market Is Falling This Much Already, What Is Going To Happen If There Is No Trade Deal With China By Friday?

If negotiations between the Trump administration and the Chinese government do not produce a trade deal by Friday, it is going to be absolutely catastrophic for Wall Street.  On Tuesday, trade fears pushed the Dow Jones Industrial Average down 473 points.  It was the second-worst trading day of 2019 so far, and at one point during the trading session the Dow had fallen as much as 648 points.  But most of the experts are assuring investors that a trade deal with China will be finalized before Trump’s new tariffs go into effect on Friday.  We are being told that the Chinese will almost certainly cave in on some of their most important demands and that Trump will get the favorable trade deal with China that he has been seeking.

But what if it doesn’t happen after all?

If the Chinese give in now, they will look exceedingly weak, and any trade deal will be hailed as a great victory for the Trump administration.

To me, it seems exceedingly unlikely that the Chinese would want to make any sort of a deal under such circumstances.

The Trump administration has essentially pointed a loaded gun at their heads and has told them that they better agree to a trade deal by Friday or else.

There are some countries with which such an approach would work, but China is definitely not one of them.

And I may not have as much “foreign policy experience” as John Bolton, but even I know that if you want to make a deal with China it is probably not a good idea to antagonize them with warships in the South China Sea at the same time you are trying to negotiate with them.

Perhaps I will be proven wrong, but it seems to me that trying to bully China could backfire spectacularly.

And at this point, the Trump administration better deliver a trade deal with China by Friday, because if they don’t there are going to be very serious consequences.

First of all, once investors realize that a trade deal with China is dead we are going to see a violent downturn in the stock market.  According to one expert quoted by USA Today, “the market could go down another 10% plus”…

“The biggest threat to this market is the U.S.-China trade issues,” Ives said. “If China and the U.S. dig in on trade, it’s time to put on the hard hat because the market could go down another 10% plus.”

And in a CNBC article entitled “WORST CASE SCENARIO: Here’s what it looks like if Trump starts a trade war with China”, a figure of “10%” was also thrown around…

The worst-case outcome there, say experts, is a fight that sends the S&P 500 into a correction — which would be 10% off that key indicator. The companies likely to be hardest hit, say the experts, are likely Boeing, Apple and Caterpillar. They are all down about 5% this week already.

Then the pain ripples into the metals, mining and automobiles sectors.

Unfortunately, a decline of 10 percent is definitely not the “worst case scenario” that we could be facing.

As I have explained repeatedly, stock prices would need to decline by 40 or 50 percent just to get key valuation ratios back to their long-term averages.

And valuation ratios always return to their long-term averages eventually.

At this moment, we are still in the greatest stock market bubble of all time.  Companies that have been losing mountains of money for years are supposedly worth billions of dollars, and it is just a matter of time before this giant charade ends.

Just consider the case of a company called Beyond Meat.  The following comes from Wolf Richter

Just how silly this market has gotten is exemplified by Beyond Meat, a 10-year old company whose fake burgers – combining the worst of terrible burgers and unrecognizable industrially processed plant substances – have been sold for years, and whose shares following the IPO have skyrocketed to give the company a market capitalization of $4.6 billion though it has persistently lost money on its fake burgers and had sales in 2018 of only $56 million.

It’s apparently easier to sell stocks in this environment than it is to sell fake burgers. So the company is now valued at 83 times revenues. This is nuts.

We are so ripe for a major stock market crash, and a full-blown trade war with China could potentially be the trigger.

In addition, a full-blown trade war with China would be absolutely crippling for companies all across America.  Here is just one example

Phil Page, the CEO of Missouri-based Cap America, estimates that his company has more than $1 million worth of baseball hats already ordered that will now be hit with the higher tariff.

“It’s very difficult to understand what the President is going to do by a business perspective. To spring it on us all at once like this is a very poor judgment on his part,” Page said.

“I thought this thing was going to be worked out this week,” he added.

Overall, one survey found that approximately 75 percent of all good-producing companies in the entire country would be negatively impacted by tariffs

About 75% of good-producing firms recently surveyed by the National Association for Business Economics said the tariffs have had a negative impact on their business.

Yes, China has been taking unfair advantage of us for a very long time, and this is something that I have written about extensively.

But these things must be handled with great diplomacy.

If there is no trade deal, this could be the moment when our relations with the Chinese enter a tailspin from which they never recover.  A trade war would be extremely destructive for the U.S. economy, and history has shown us that trade wars have a tendency to eventually turn into shooting wars.

We will see what happens the rest of the week.

This is a critical turning point, and the Trump administration cannot afford to fail.

In closing, let me share with you this quote which I found earlier today in a CNBC article

“To paraphrase Lenin: there are decades where nothing happens and there are weeks when decades happen…and then there is a single week in the Trump Presidency. What a time to be alive.”

This is a make or break moment for the Trump administration, and it is a make or break moment for the entire U.S. economy.

By Friday, we shall know the outcome.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The Dow Made A Miraculous 400 Point Recovery, But Now Renewed Trade Fears Are Sending Markets Plunging Once Again

If your head is spinning from the wild fluctuations that have shaken global financial markets, you are definitely not alone.  On Sunday, President Trump angrily threatened to hit China with enormous new tariffs, and it looked like hopes for a trade deal between the United States and China had collapsed.  Overnight, Chinese stocks had their worst session in three years, and many expected U.S. stocks to experience a similar plunge.  But then on Monday we learned that the Chinese had decided to move forward with trade talks this week anyway, and global financial markets started rebounding in a major way.  In fact, the Dow Jones Industrial Average rebounded more than 400 points

The Dow closed just 66 points lower on Monday, recovering from a plunge of as much as 471 points. The S&P 500 and Nasdaq also erased their sharp losses, ending just 0.5% lower.

The comeback signals investors don’t believe President Donald Trump’s surprise threat to impose higher tariffs on China will spark a painful deepening of the trade war. Optimists are even hoping an historic trade deal will still be reached.

Crisis averted, right?

Well, it certainly looked like smooth sailing was ahead until U.S. Trade Representative Robert Lighthizer told the press that new tariffs will still be imposed on Chinese goods on Friday.  The following comes from Zero Hedge

While a Chinese delegation is still scheduled to visit Washington as planned this week, with talks to take place Thursday and Friday, U.S. Trade Representative Robert Lighthizer told reporters Monday that the Trump administration plans to increase duties on Chinese imports at 12:01 a.m. on Friday, accusing Beijing of backpedaling on commitments it made during negotiations.

U.S. and China had been making substantial progress on a trade deal, but in the past week China has reneged on some of its promises:

“We felt we were on track to get somewhere. Over the course of last week we have seen an erosion of commitments by China,” Lighthizer said, adding that significant issues remain unresolved, including whether tariffs will remain in place.

The result, more than half of the intraday gains have been erased already…

This is a huge gamble by the Trump administration.

As I explained yesterday, the Chinese have been dragging their feet because they really don’t want a trade deal with Trump unless somehow they were able to miraculously get everything that they wanted.  They would very much prefer to negotiate with whoever follows Trump in the White House, and they have been using trade negotiations as a delaying tactic to keep Trump from imposing more tariffs on them.

Of course eventually Trump was going to figure out that he was being played, and so now Trump is going to impose new tariffs anyway, and he is hoping that this will be enough leverage to force the Chinese into an agreement.

But there is also the possibility that the entire process could blow up and the Chinese could walk away from negotiations permanently.

And if the Chinese do walk away, it is going to be a disaster for global financial markets.

To me, it seems quite foolish to try to push China around.  The Chinese are very, very proud people, and they don’t take threats very well at all.  If they feel like they have been disrespected, it is something that they will remember for a very, very long time.

But many in Congress seem to approve of Trump’s approach.  In fact, Democrat Chuck Schumer is encouraging Trump to “hang tough on China”

Hang tough on China, President . Don’t back down. Strength is the only way to win with China.

Schumer absolutely hates Trump and would love to see him removed from office, so why the encouraging words?

To me, this smells like a trap.  Schumer understands that if negotiations fail it will be a huge blow to the U.S. economy, and if the economy tanks that will be a huge plus for Democrats in 2020.

Over in China, they are officially freaking out over the Trump administration’s latest moves.  In fact, an article in the South China Morning Post just compared Trump to Thanos…

The tweets roiled markets in China and Hong Kong, leading one analyst to compare Trump to Thanos – the character from the box office smash Avengers who wiped out half of all life in the universe with a snap of his fingers.

“He snapped his fingers and rattled the market,” said Sheng Liugang, director of the trade and development research programme at the Chinese University of Hong Kong, adding that the move would add to pressure on the Chinese economy, which outperformed expectations in the first quarter of the year, largely due to stimulus measures from Beijing.

We’ll see what happens when U.S. and Chinese officials meet this week.

If the Trump administration is able to strong-arm the Chinese into a deal, Trump will be hailed as a master negotiator and global financial markets will rejoice.

But if a deal is not reached and the Chinese walk away, global financial markets will tank and it could push us into the next economic crisis.  According to Warren Buffett, a full-fledged trade war between the United States and China “would be bad for the whole world”…

If we actually have a trade war, it would be bad for the whole world. It could be very bad depending on the extent of it,” Buffett told CNBC.

He added that China and the United States are playing a “dangerous game.”

The stakes are exceedingly high, and the outcome of these negotiations could go either way.

By the end of the week things should be much clearer, and if a deal is not reached we could see events start to spiral out of control pretty rapidly.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The Trade Deficit Continues To Explode, Factories Continue To Be Closed, And U.S. Jobs Continue To Be Sent Overseas

The long-term trends that are gutting the U.S. economy continue to get even worse.  As you will see below, our goods trade deficit with the rest of the world hit a brand new record high in 2018, and most Americans simply do not understand why this is such a massive problem.  Every year, we buy far more from the rest of the world than they buy from us, and that means that the amount of money going out of the country far surpasses the amount that is coming in.  This constant outflow of cash is one of the reasons why we are unable to pay our bills, and so we have to keep begging the rest of the world to lend us our money back.  Needless to say, this is one of the big factors that has fueled our 22 trillion dollar national debt.  In addition, when we run absolutely massive trade deficits we lose factories and workers to other countries.  Since China joined the WTO in 2001, the United States has lost more than 60,000 factories.  As factories keep closing down, community after community is being gutted all across America, and without a doubt this is truly a major national crisis.

Many had been hoping that we could start to turn things around, but instead last year was an absolute disaster.

According to the Commerce Department, our goods trade deficit with the rest of the world was 891.3 billion dollars in 2018.  That was a 12.4 percent increase from the year before, and it represented a brand new all-time record high.

If we stay on this path, it is a recipe for national economic suicide.  We will continue to be unable to pay our bills, we will continue to have to beg the rest of the world for increasing amounts of money, and our national debt will continue to explode.

And of course countless numbers of factories will continue to shut down and countless numbers of workers will continue to lose their jobs.

We can see this happening all around us, but most Americans are not mentally connecting the factory closings and the layoffs to our horrific trade deficit.  On Wednesday, the very last vehicle rolled off the assembly line at the GM plant in Lordstown, Ohio

General Motors is ending production at its Lordstown, Ohio plant Wednesday — two days earlier than previously expected.

A GM (GM) spokesperson said that’s when the plant will churn out its last Chevy Cruze sedan. At that point, the factory will be unallocated, which means no vehicles will be assigned to that facility.

That factory is just the first of four U.S. factories that GM is shutting down this year.

Needless to say, a lot of those workers don’t know what they are going to do next.  One worker that had worked at the plant for 17 years said that seeing that last car roll off the assembly line “was a kick in the gut”

Signs with sayings such as ‘Save this Plant’ were scattered outside the plant where about 100 workers gathered to say goodbye in the cold.

‘It’s frustrating,’ said Jeff Nance, who has worked at Lordstown for 17 years. ‘I’m angry and bitter. Watching that last car go by was a kick in the gut.’

In the end, Lordstown is probably destined to become another rotting, decaying shell of a town just like we have seen happen to so many other formerly great communities in the Rust Belt.

Of course it isn’t just big corporations like GM that are cutting jobs.

Right now, small businesses are getting rid of workers at the fastest pace that we have seen in more than five years.  A major economic slowdown is here, but most Americans still don’t seem to realize what is happening.

In recent days, there had been some optimism that a new trade deal with China would soon bring some positive momentum to the economy, but the status of that deal is very much up in the air.

And the U.S. military seriously angered China this week when they flew two B-52 bombers over disputed airspace in the South and East China Seas…

Two US Air Force B-52H Stratofortress long-range bombers, based in Guam, participated in “routine training missions” on Monday by flying through the disputed airspaces over the South and East China Seas. As one bomber “conducted training in the vicinity of the South China Sea,” the other practiced off the coast of Japan in “coordination with the US Navy and alongside our Japanese air force,” US Pacific Air Forces said in a statement.

Meanwhile, the trade war between Canada and China continues to escalate as well

Canada’s largest grain processor said Tuesday that Beijing has canceled its registration to ship canola seed to China, fueled by the arrest of a top executive for the Chinese tech giant Huawei, The Wall Street Journal reported.

The move suggests that rising diplomatic tensions between China and Canada are damaging commerce between the two countries. Tensions have already crushed hopes that senior officials in Ottawa and Beijing would develop further trade ties.

As long as the U.S. and Canada are holding Huawei CFO Meng Wanzhou, relations with China are going to continue to deteriorate.

And the truth is that the U.S. and Canada are not going to let her go.

Meanwhile, the U.S. economy continues to slide toward a new recession, and even the president of the New York Fed is now warning that economic conditions are likely to slow down “considerably” this year…

The US economy should slow “considerably” in 2019 as the boost from last year’s economic stimulus fades, the president of the New York Federal Reserve Bank said Wednesday.

Amid economic uncertainty, the Federal Reserve could “wait” before raising interest rates again, John Williams said in remarks to the Economic Club of New York.

There is a reason why everyone seems so pessimistic about the economy right now.  All of the numbers say that another recession is coming, and it may arrive a lot sooner than most people had anticipated.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Trade War Causing Severe Pain As Farm Bankruptcies Surge Way Past The Level From The Last Recession

Farmers all across the middle part of the country are going bankrupt at an astounding rate, and over half of all farms in America are now losing money.  The trade war with China has been the most devastating crisis to hit the U.S. farming community in decades, and at this point there is no end in sight.  Farm after farm is being financially wiped out, and we haven’t seen this kind of economic pain for farmers since the Great Depression of the 1930s.  In fact, it is being reported that bankruptcies in the key farming regions of the country are way above the level that we witnessed during the last recession.  The following comes from Zero Hedge

Bankruptcies in three regions covering major farm states last year rose to the highest level in at least 10 years. The Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, had double the bankruptcies in 2018 compared with 2008. In the Eighth Circuit, which includes states from North Dakota to Arkansas, bankruptcies swelled 96%. The 10th Circuit, which covers Kansas and other states, last year had 59% more bankruptcies than a decade earlier.

There has been a lot of debate about whether or not the U.S. economy as a whole is heading into a recession in the near future, but the farming industry is already very, very deep into a major downturn, and this downturn has been caused by the trade war

Trade disputes under the Trump administration with major buyers of U.S. farm goods, such as China and Mexico, have further roiled agricultural markets and pressured farmers’ incomes. Prices for soybeans and hogs plummeted after those countries retaliated against U.S. steel and aluminum tariffs by imposing duties on U.S. products like oilseeds and pork, slashing shipments to big buyers.

Low milk prices are driving dairy farmers out of business in a market that’s also struggling with retaliatory tariffs on U.S. cheese from Mexico and China. Tariffs on U.S. pork have helped contribute to a record buildup in U.S. meat supplies, leading to lower prices for beef and chicken.

In addition, it is also being reported that more than half of all U.S. farms are now losing money even though they continue to operate.  Needless to say, this is not sustainable, and many more farms will go out of business if this current crisis persists.

This could be the final nail in the coffin for America’s family farms.  After this crisis is over, if it ever actually ends, we may be left with only giant corporate farms and farms owned by foreign interests.

As I noted in my article yesterday, over 27 million acres of U.S. farmland is now owned by foreigners.  This should have never been allowed to happen, because it is a major national security risk.

If a trade agreement with China is reached soon, that would greatly ease the suffering of America’s farmers.  But as long as the U.S. and Canada continue to hold Huawei CFO Meng Wanzhou, that is not going to happen.  Instead, the Chinese are going to attempt to buy time by trying to get the U.S. to agree to suspend the implementation of additional tariffs as “negotiations” continue.

And on Friday, we got word that a new trade war between the United States and Europe may be about to begin

With little apparent progress in U.S.-China trade talks, the Trump administration could be about to open up a new front in the trade wars by taking on the European auto industry — and that could spook markets.

Global financial markets have bounced back a bit in recent weeks, but more trade chaos could easily send them tumbling once again

Some strategists fear investors are keenly focused on China, and expect a resolution, but could be surprised by ramped-up trade friction with Europe.

“The market would tank,” said Peter Boocvkar, chief investment officer at Bleakley Advisory Group. “The market has spoken loud and clear that it’s had enough of these tariffs… The market is fed up with this. Global growth is slowing dramatically because of trade. You want to put another bullet in it’s head?

Meanwhile, we continue to get more indications that the global economy is slowing down substantially.

For example, we just learned that German industrial production plummeted dramatically for the second month in a row in December

“Unexpectedly,” German industrial production fell 3.9% in December 2018 compared to December 2017, after having fallen by a revised 4.0% in November, according to German statistics agency Destatis Thursday morning. These two drops were steepest year-over-year drops since 2009.

Even during the European Debt Crisis in 2011 and 2012 – it hit Germany’s industry hard as many European countries weaved in and out of a recession, with some countries sinking into a depression — German industrial production never fell as fast on a year-over-year basis as in November and December

And here in the United States, General Motors has begun giving out pink slips to thousands of workers

General Motors on Monday said it was starting to hand pink slips to about 4,000 salaried workers in the latest round of a restructuring announced in late November that will ultimately shrink its white-collar workforce in North America by 15 percent out of 54,000.

Two people briefed on the cuts said GM is cutting hundreds of jobs at its information technology centers in Texas, Georgia, Arizona and Michigan and more than 1,000 jobs at its Warren, Michigan Tech Center. GM is filing new required mass layoff notices with state agencies and disclosed the cuts to lawmakers.

Needless to say, General Motors would not be doing this if the U.S. economy really was “booming”.

A global economic downturn has arrived, and it looks like it is only going to escalate as we move deeper into 2019.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters.  His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.  From there, his articles are republished on dozens of other prominent websites all over the nation.  If you would like to republish his articles, please feel free to do so.  The more people that see this information the better, and we need to wake more people up while there is still time.

Wild And Unprecedented Price Fluctuations Are Causing Financial Chaos For U.S. Businesses

In every war there is a high price to pay, and this trade war will not be any different.  The normal flow of goods and services around the globe is being severely disrupted, and even though this trade war has barely just begun, it is already having an enormous impact on the U.S. economy.  Even if we ultimately win this trade war and the Trump administration is able to achieve all of the goals that it is targeting, there will still be a great cost in the short-term.  We are going to see businesses fail, we are going to see workers get laid off, and global economic activity will inevitably contract.  Heck, at this point even Fox News is calling this trade war “economic suicide”.  We live at a time when a delicately balanced formula of economic factors allows us to live a debt-fueled standard of living that is far beyond what we actually deserve.  Now we are messing with that formula, and the consequences are likely to be far more severe than most Americans are anticipating.

Let’s start by talking about steel and aluminum.  One of the chief goals of the tariffs was to help the steel and aluminum industries, and thanks to those tariffs we have seen the price of U.S. steel rise 36 percent since the beginning of 2018…

For instance, US steel and aluminum prices have soared since the imposition of tariffs. US midwest hot-rolled coil steel price, the US steel price benchmark, soared 36% between the start of the year and the start of July. This in turn causes prices of goods made with the metal to rise.

That is good news for the U.S. economy, right?

Actually, it isn’t.

Every product that uses steel and aluminum is now going to cost more.

In many cases, a lot more.

For instance, one grill company is reporting that they have had to raise prices “by almost $350 per grill”

Middleby Residential, a California-based company that makes Lynx grills, told the Dallas Morning News that even though the company uses US steel, the recent price pressures have driven up costs by almost $350 per grill.

Do you want to pay an extra $350 for your next grill?

Retail prices for washer and dryers are surging as well.  They have increased by 20 percent compared to a year ago, and that is because prices for raw materials are skyrocketing

Whirlpool Corp trimmed its full-year profit outlook as it booked a large charge on its European operations and said it wouldn’t be able to offset the effect of steel tariffs with higher prices for consumers.

The company said Monday it now expects to pay about $350 million more this year from rising raw-material costs as it faces “a very challenging cost environment.”

Anybody that purchases any products that contain steel and/or aluminum will be feeling these prices increases.

And any business that uses steel and/or aluminum on a regular basis is going to be feeling an enormous amount of pain.  For example, the largest nail company in America is already laying off workers

When President Trump imposed a 25 percent tariff on steel imports last month, America’s largest nail manufacturer had little choice but to raise its prices. Mid Continent Nail Corporation quickly lost 50 percent of its orders as customers opted for cheaper suppliers. Within weeks, the firm had to lay off 60 workers. Up to 200 more might lose their jobs by the end of this month.

All over the country, companies are going to be forced to either raise prices, fire workers or move production facilities out of the United States.

Meanwhile, farmers all over America are facing a different problem.  Thanks to a massive decline in demand from China (thanks to tariffs that they have hit us with), prices are plummeting and warehouses are filling up with food that doesn’t have anywhere to go.

Every year, the U.S. usually imports about 14 billion dollars worth of soybeans to China, and I covered the plight of soybean farmers in a previous article.  But of course soybean farmers are far from alone.  It is being reported that more than 2.5 billion pounds of meat and poultry products that have been produced by our farmers is being stockpiled in cold-storage warehouses.  To help the agricultural community, President Trump announced 12 billion dollars in aid to farmers on Tuesday

As President Donald Trump embarks on a multistate tour through parts of the country hit heavily by trade battles, his administration said Tuesday it will direct $12 billion to farmers whose harvests have been hurt by tariffs.

But the idea faced immediate criticism from Republicans on Capitol Hill.

Responding to farm groups and the Republican discontent, administration officials said they have been working since April on a short-term plan to shore up slipping prices for soybeans, pork and other crops hit with retaliatory tariffs from China.

Sure, this will help farmers get through the trade war in the short-term, but isn’t this exactly the kind of big government socialism that we are always railing against?

And who is going to bail out the real estate industry?

CNBC is reporting that home sales fell a whopping 11.8 percent year over year in southern California last month…

Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.

And do you know who has been fueling the extremely hot real estate market on the west coast?

The Chinese.

At one time they were buying up everything in sight, but now they have become net sellers of U.S. real estate.

And there are rumblings that we could soon see some sort of “national boycott” of American goods in China.  The following comes from Zero Hedge

The survey found that 54 percent of 2,000 respondents in 300 cities across China would “probably” or “definitely” stop buying US-branded goods “in the event of a trade war”. Just 13 percent said they would not.

The remaining 33 percent said they were unsure or did not at present buy US branded goods, according to the survey, conducted for FT Confidential Research (FTCR), a research unit at the Financial Times.

The survey was carried out between June 27 and July 10, mostly before the US imposed 25 percent tariffs on $34bn of Chinese goods on July 6. The move elicited an immediate tit-for-tat response from Beijing.

Of course something similar could be tried in the United States, but most Americans simply do not care if a product comes from China or not.  They are simply going to buy the cheapest stuff no matter what anyone tells them to do.

Look, I very much understand that we have been sending businesses and jobs overseas for a very long time.  I have been writing about this for years, and something had to be done.

But trying to fight trade wars with virtually everyone else on the planet simultaneously is madness, and the consequences for the U.S. economy are going to cause all of us an immense amount of pain.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Trade War Is Already Having A Huge Impact On The U.S. Economy

The trade war has barely just begun, and yet significant ripple effects are already being felt all across the U.S. economy.  Once thriving businesses are on the verge of failure, workers are being laid off, and some sectors of the economy are witnessing enormous price hikes.  Right now the mainstream media is absolutely fixated on the drama surrounding the recently concluded Trump-Putin summit meeting, but the consequences of this trade war will ultimately be far more important for the lives of most ordinary Americans.  As more tariffs continue to be implemented, this will perhaps be the biggest disruption to the global economic system that we have seen in decades.  Perhaps you have not been affected personally yet, but for many Americans this trade war has changed everything.  For example, just consider the plight of soybean farmer Tim Bardole

The U.S. is China’s second-biggest source of soybeans at 34% of the imports, after Brazil, which ships 53%. The staple is used to make cooking oil and seasoning, and soybean meal is found in pig feed.

Now the tariffs have taken the bottom out of U.S. soybean prices, delivering a gut punch to farmers like Tim Bardole. He was already $100,000 in the red last year due to a yearslong slump in cereal prices, and the current predicament has driven him into a corner.

“I’m not sure if I can get a loan from the bank to finance our next year’s crop,” said Bardole.

If this trade war had not happened, perhaps Bardole would have been able to eventually get out of debt.  But now he is facing financial ruin and the potential loss of his entire farm.

Switching gears, U.S. consumers will soon discover that common electronics such as phones and computers cost a lot more.  The following comes from CBS News

Buyers in the U.S. will soon see price hikes on computers, phones, thermostats and “everyday items,” according to the Information Technology Industry Council, a group that represents tech companies.

Hundreds of Chinese components that the Trump administration penalized are used to make everything from LEDs to sensors to printer and scanner components. When manufacturers pay more for their parts, the costs are typically passed on to consumers, the ITI said.

Are you ready to pay 50 dollars for your next phone to support this trade war?

Maybe.

50 dollars is ultimately not that big of a deal.

But what about paying $9,000 more for your next house?

Tariffs on lumber coming from the evil Canadians are adding about $9,000 to the cost of a new house, according to the National Association of Home Builders.

Washing machine prices have jumped some 15% this year, the fastest increase ever recorded by the Bureau of Labor Statistics.

Are you starting to understand why starting trade wars with all of our major trading partners simultaneously was a really bad idea?

We are about to see major price hikes in just about every sector of the economy.  According to the Alliance of Automobile Manufacturers, the average American could pay over $5,000 more for their next vehicle

Consumers may see an average price increase of $5,800 if a 25 percent import tariff that Mr. Trump has threatened goes into effect, according to estimates cited by the Alliance of Automobile Manufacturers (AAM), a lobbying group for carmakers.

That’s a “$45 billion tax on consumers,” the group said, citing an analysis of Commerce Department data.

U.S. consumers are already stretched to the max, and they will not be able to easily absorb these price increases.

Meanwhile, farm incomes all across the interior of the country are going to be absolutely devastated by this trade war.  Just check out these numbers

The American Farm Bureau says it expects farm incomes to drop to a 12-year low this year, largely because of the trade war.

An agricultural economist at Purdue University, Christopher Hurt, added that 1,000 acres of corn and soybeans would have made a farmer a $42,000 profit on June 1. Now, it could net him a $126,000 loss.

And as I mentioned above, many businesses all over the United States that rely heavily on exports are already struggling so mightily that they have to lay off workers.  The following comes from USA Today

In Poplar Bluff, Missouri, Mid-Continent Nail, the nation’s largest nail maker, laid off 60 workers last month. Sales plunged 70 percent after Trump placed a 25 percent tariff on steel from Mexico and Canada. When the company boosted its prices, customers defected. Now, Mid-Continent is strongly considering a second round of 200 layoffs, company spokeswoman Elizabeth Heaton says, and all 500 employees could be axed by Labor Day.

Yes, we desperately needed to do something about China and other trade partners that were taking advantage of us.  But there is a right way to handle things and a wrong way to handle things, and starting a trade war with everyone at the same time is a really, really bad idea.

I think that a recent piece by Thomas Grennes, a professor of economics at North Carolina State University, made this point quite well

The Trump administration has said that tariffs are a negotiating technique that need not be implemented. Now that tariffs are in place, they say other countries will soon back down. However, trading partners have not backed down, and, in fact, retaliatory tariffs against U.S. exports are already in place. Foreign officials have expressed confusion about exactly what concessions the US government wants. Currently, no formal negotiations are taking place. Higher future tariffs are being announced regularly. There are no signs of an end to this tariff war. When will both sides recognize that interfering with voluntary trade is harmful to both parties? Trade wars are lose-lose propositions.

Unfortunately, I don’t think that most Americans have any idea how exceedingly painful this trade war could potentially become.

The longer it lasts, the worse things will get, and ultimately it could tip the U.S. economy into the worst recession that any of us have ever experienced.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

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