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The era of US "economic surrender" is over

| Posted by: Paul Donovan | Tags: Paul Donovan

  • The data calendar is a global barren wasteland of nothingness today. There are PMI sentiment opinion polls out to keep journalists entertained, but these do not relieve the lack of proper information for economists to work with.
  • The Trump Twitter Feed declared that the era of "economic surrender" is over. "Economic surrender" apparently occurs when Americans buy things that they want to buy, even if those things are partially made outside of the US. It seems as if US President Trump wants to instruct American consumers what they should buy (and tax them if they do not agree).
  • The emphasis on "made in America" rather emphasizes the sense of US isolationism and a policy that is almost autarky (complete self-sufficiency). The rest of the world continues to trade nicely with one another under the multilateral system. The risk for the US is that its multinational exporters will find it easier than ever before to move production and jobs offshore.
  • China has offered more domestic stimulus. Additional tax cuts and infrastructure spending were offered to counter "uncertainty". There is no signal as to whether the Chinese government will instruct its citizens on how to spend their money.