Page 25 - ARUBA TODAY

BUSINESS Monday 9 July 2018
A25

Trump’s economic gamble: Solid job gains vs. risky trade war

By JOSH BOAK
Associated Press
WASHINGTON (AP) — From
the safety of a resilient U.S.
economy, President Don-
ald Trump lit the fuse Friday
on a high-risk trade war
with China.
History suggests that a cy-
cle of tariffs and retaliations
can eventually choke eco-
nomic growth. But for now,
employers, investors and
U.S. consumers are weigh-
ing the perils of a prolonged
rift between the world’s two
largest economies against
a far more positive back-
drop: America’s healthiest
job market in years.
Evidently confident despite
the risks ahead, U.S. em-
ployers have added jobs
this year at a robust month-
ly average of 214,500.
Many businesses say
they’ve reached the point
where they can’t even find
enough people to fill jobs.
Unemployment is at a low 4
percent.
All that hiring is occurring In this Thursday, Nov. 2, 2017, photo, a recruiter in the shale gas industry, left, speaks with an attendee of a job fair in Cheswick, Pa.
Associated Press
in an economic expan-
sion that is entering its 10th Helping propel growth, crushing hit. But the pain broke ground on an alu- wants better deals.”
year — the second-longest business and consumers could intensify. Trump has minum mill near Ashland, Bill Adams, a senior econo-
streak on record. The U.S. fi- have received a $136 bil- threatened a 20 percent Kentucky. It says it’s already mist at PNC Financial Ser-
nancial markets, while wary lion stimulus this year from tariff on roughly $50 billion sold twice the plant’s ca- vices, said that a truly de-
of the trade fights Trump tax cuts. Quarterly eco- of auto imports from the pacity for the first seven structive trade war is “still
has pursued, have swung nomic growth is on track European Union. Those tar- years of production after not our base case expecta-
this year between modest to be the strongest since iffs could lead to reciprocal actions by the U.S. govern- tion, but it is less farfetched
gains and losses but have 2014. Housing starts are up taxes from other countries ment to protect America’s than it seemed” earlier this
avoided any sustained 11 percent so far this year. that could hurt U.S. auto- aluminum industry. year.
panic. From this position of makers and lead to layoffs. Craig Bouchard, Braidy’s A calamitous trade war
“The robustness of the strength, President Donald Trump has warned that he CEO, said an expansion would likely be the “result of
economy — and it’s stron- Trump is gambling that he may eventually impose of U.S. tariffs on imported miscalculation or unintend-
ger than it has been in can deploy tariffs to his ad- tariffs on more than $500 aluminum is helping to al- ed consequences, rather
decades — inoculates vantage even though they billion of Chinese imports. low for the 600 mill jobs he’s than an explicit goal,” Ad-
Trump’s trade policy moves will inflict some pain on He said in a speech in Mon- adding in Appalachia and ams added.
from closer scrutiny,” said businesses and consumers tana last week that other the thousands of jobs in- If it happened, the Trump-
Daniel Ikenson, director for that backed him in 2016. countries will agree to his directly supported by the led economy could even-
trade policy studies at the The Trump team’s calcu- terms — “and if they don’t, plant. tually buckle under the
libertarian Cato Institute. lation appears to be that we’ll actually do better.” “It’s 10,000 families resting weight of protectionist
Most employers see the foreign countries have no “Our allies, in many cases, on my shoulders,” he said. trade policies.
economy as having choice but to trade with were worse than our en- So far, most economists “The longer tariffs last and
achieved a comfortable the world’s largest econo- emies,” the president said. view Trump as jockeying the wider they become,
cruising speed and have my and will ultimately have “We opened our country to for more favorable trade the more they will dampen
kept hiring. In surveys of to yield. their goods, but they put up rules rather than welcom- hiring and investment by
business sentiment, they The president hopes to ex- massive barriers to keep our ing a prolonged conflict U.S. businesses engaged in
have expressed concerns tract concessions not only products and our goods with America’s trading global value chains,” Ad-
about the tariffs, but their from China but also from the hell out of their country partners. Administration of- ams said.q
wariness has yet to disrupt such long-standing allies as because they didn’t want ficials have encouraged
their business plans. the European Union, Cana- that competition.” this view.
The United States added da and Mexico. His stated From soybean farmers and “He’s going to deliver bet-
213,000 jobs in June, and goal is to reduce U.S. trade pork producers to the mo- ter deals,” Kevin Hassett,
an influx of new jobseekers, imbalances and create torcycle manufacturer Har- chairman of the White
seemingly optimistic about more U.S. manufacturing ley Davidson, numerous House Council of Economic
their prospects but not find- jobs. American exporters are Advisers, said on FOX Busi-
ing work right away, lifted So far, the economy can facing upheavals from the ness Network. “He’s called
the unemployment rate absorb the costs of the new tariffs. the bluff of other countries
from 3.8 percent to 4 per- tariffs, including separate Still, some U.S. companies that have basically been
cent, the government re- steel and aluminum import are benefiting. Braidy In- abusing ... our workers for
ported Friday. taxes, without suffering a dustries, for example, just a long time and — but he