Economy Slows Along With Global Trade

Trump's trade war & Brexit aren’t helping.

Andrew C. Teel, Writer

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Factories across the world are slowing production, people are losing jobs, and the world economy is slowing. 

In the past year or so, Donald Trump has been imposing tariffs on multiple U.S. trade partners. Whether it’s due to a “threat to national security” or things such as solar panel imports hurting utility suppliers, these tariffs have been slowing trade. Therefore, our projected trade growth for the year has cut down to a 1.2% expansion.

Although Trump has imposed many tariffs, he is not the only one. China has retaliated with import tariffs as well, just increasing the stagnation. China was accused of stealing intellectual property from the U.S. China keeps trying to one-up our tariffs and increase theirs accordingly. Even India has put retaliatory tariffs in place after the steel & aluminum tariffs. 

Europe is contributing its fair share of problematic lawmaking as well. Trade has greatly decreased due to the potentially rough exit of the U.K. from the E.U.. Commerce across the English Channel is at risk. “Certainly, you can make a strong case that the risk of a global recession has increased in the last few months,” Oxford global economist Ben May says. 

In fact, the risk of recession has skyrocketed to over 30%. An American manufacturing gauge displayed that most factories in America have slowed down production for the second month in a row. ISM’s manufacturing index is the lowest since 2009 right now. After this was found, stocks plummeted and investors are nervous.

Another contributor to the economic struggle is the value of the American currency. Recently, the U.S. Dollar’s value had been raised significantly compared to other countries’ currency. The dollar being of higher value causes U.S. goods to be a higher price in other countries. Donald Trump recognizes the value issue and has been using social media as an outlet to speak on it “As I predicted, Jay Powell and the Federal Reserve have allowed the dollar to get so strong, especially relative to ALL other currencies, that our manufacturers are being negatively affected.” Trump tweeted. 

Additionally, interest rates in the country are at a high point as well. “Fed rate too high. They are their own worst enemies, they don’t have a clue. Pathetic!” Donald Trump pronounced. In the past year, the fed has raised interest rates four times and lowered them twice. Even though they’ve been lowered, Trump is still not satisfied with the interest rates. 

Trade conflicts and the economy is an unstable topic and could change at almost any moment. Projected growth for next year is at about 2.7% still below average. The economy is weakening and global tensions are high.

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