Pars Today- Although Trump’s tariffs were ratified with the aim of pressuring trade rivals, what happened in practice was the fall of markets and decrease of the income of American household.
After President Donald Trump’s announcement of imposing heavy tariffs on imports, the value of American stock market dropped trillions of dollars. According to Pars Today, quoting from Fars news agency, this decision left an immediate and negative impact on the global indexes. Nikkei of Japan and DAX of Germany were among the indexes which collapsed due to the damage afflicted on the global trade after this decision.
Although markets were gradually improving on Wednesday after Donald Trump’s announcement of 90-day suspension of tariffs against 10 countries, they declined again on Thursday.
Trump has said that he is negotiating with countries such as Japan and South Korea to achieve what his press secretary, Karoline Leavitt, called as, “special and targeted trade deals”.
Nevertheless, Fox website posed the question in an analytical report as how fast these deals can yield an outcome without causing turmoil in financial markets?
Real losers: Americans, not just the rich
According to this report, there is a common thought that the stock market performance affects only the rich. This view is not baseless. According to the data of the American Central Bank (Federal Reserve) in 2023, %10 of the American richest owned %93 of the total US stock. But, Fox stressed that the issue is not that simple. A great part of the American people has also invested in the stock market, too. Therefore, decrease of the market value will have a prevalent and, at times, more painful effect on low-income strata.
The retired and the most vulnerable groups
Those who are on the verge of retirement or have just been retired don’t have enough time to compensate for the losses caused with the market decline, and this issue can severely decrease the value of their retirement properties. As a result, they will be forced to reduce their investments or decrease their expenses.
On the other hand, the middle class in the US seems to be the main loser of the economic repercussions of Trump tariffs; the policies which have urged many economists to take into consideration the likelihood of a serious recession more than ever. These repercussions are not limited only to decrease of properties. Rather, many families may face the rise of prices and a tougher job market. In addition, companies might be forced to fire their staff to reduce expenses which will result in the rise of unemployment.
Promise contradicting with reality
In sum, Fox report concludes that Donald Trump trade tariffs may act in contrast to his declared goals (making Americans richer) and, in practice, will result in reduction of financial welfare of Americans, increase of economic inequality and rise of instability in markets.
RM/ME
