Is Trump Crashing the Economy on Purpose?
The market crash will cost consumers money and jobs and make a few people very rich
Better World Tomorrow
In a brazen display of economic malpractice, the US best brain, Donald “The Apprentice” Trump, has imposed random tariffs on imports from Canada, Mexico, and China—25% on goods from his North American friends and 10% on his enemy China. We can only assume that he wants to thank China for reminding him that their technology is better than his.
On the surface, he and his buddy Muskolini are pretending that tariffs are all about trade deficits with these countries. And fentanyl—for some reason, that’s hard to grasp, as only 1% of Fentanyl consumed in the US comes through the Canadian border. The Canadians only recently allocated a significant amount of money to stop even that amount in the future.
Trump probably doesn’t know any of this because he refused to take calls from Canada before implementing his tariffs. Instead, he preferred to spend his weekend golfing at Mar-a-Lago. He’s probably the only person who creates more problems when he’s not working than when he’s working.
Since he has chosen to do this despite all the advice sane people have given him for months, we can only assume that he is intentionally trying to crash the economy.
Why would he do this, you ask? I’ll explain, but first, let’s look at the issues that Trump’s tariffs will cause.
An assault on consumers
Analysts and economists are deeply concerned about Trump’s random decision to start an unnecessary trade war. The National Retail Federation has been vocal in its opposition, highlighting that these tariffs will increase consumer prices and hurt the economy.
To anyone who has bothered to look up what tariffs are, it is abundantly clear that tariffs don’t just target the country they’re aimed at. They’re not the ones paying the tariffs. The person or organization importing goods from these countries will pay the tariff to the US government. And since they aren’t charities, they’ll recoup the money they paid from the people they’re selling the goods to.
The consumers.
Because yes, despite Trump repeating over and over again like a demented broken record that tariffs are his most potent weapon to achieve US supremacy, tariffs are a direct tax on the consumer.
Essential everyday items—groceries, electronics, vehicles—will become more expensive for everyone. Not that he will notice. He and his circle of oligarchs have enough money to insulate themselves from the fallout of his decisions. In fact, they’ll likely benefit from the pain they’re about to inflict on all of you.
Yes, pain, he said so himself.
The “Chicken Wars”
Tariffs are a blunt tool of trade protectionism. They’ve never been super effective and often remain in place long after everyone has forgotten why they were created.
Or do you remember the “Chicken Wars?”
In the early 1960s, European countries, especially Germany, were concerned about the inexpensive U.S. chickens their citizens ate. By 1961, U.S. chicken had captured nearly half of the imported European chicken market, and per capita U.S. chicken consumption in West Germany rose by 23%.
German farmers didn’t like that. They wanted Germans to eat the more expensive German chickens. So, they got their government to help create a tariff on U.S. chickens. This led to an estimated loss of $26 million in American poultry exports to West Germany alone.
In retaliation, President Lyndon B. Johnson enacted a 25% tariff on select goods, including light trucks—a measure that became known as the "Chicken Tax."
That was in 1964. A long time ago. But, while the tariffs on items like potato starch, dextrin, and brandy were eventually lifted, the 25% tariff on light trucks remains in effect today.
As expected, the tariffs led to German customers paying more for their chickens and Americans paying more for their light trucks. A lose-lose situation for all consumers.
The real beneficiaries
While the average American will face escalating costs, certain industries stand to gain—industries with ties to Trump's inner circle.
Like in 2018, domestic steel and aluminum producers will experience artificial price inflations due to reduced competition. It's no secret that executives and investors within these sectors have been staunch supporters of Trump's political endeavors. The steel industry, in particular, has seen significant benefits from the tariffs, with some companies reporting increased profits.
Everyone who needs steel, on the other hand, will pay the price. After Trump created tariffs for steel and aluminum during his first presidency, jobs in the automotive industry were lost, and car prices rose. General Motors and Ford experienced stock declines and laid off thousands of workers to compensate for the increased steel prices.
We can expect to see more of these trickle-down disadvantages this time around. Even more industries will be affected as the tariffs are on basically everything that is imported from Canada, Mexico, and China.
And let’s not forget he’s already threatening the EU with tariffs, too.
A predictable backlash
In a move that could have been anticipated by anyone with a modicum of economic understanding, Canada and Mexico have immediately announced retaliatory tariffs on American goods.
This tit-for-tat escalation threatens to spiral into a full-blown trade war.
The tariffs will make American exporters’ products less competitive in key international markets. Industries are already bracing for the fallout. Postponing investments, halting projects and hunkering down as they anticipate decreased revenue and potential job losses at home.
This isn't the first time we've seen Trump make the dumb choice. He is not a great businessman. For reasons unexplained, he thinks the US was at its greatest at the turn of the previous century, and this was due to tariffs. Why would anyone compare the situation from nearly 120 years ago with a global digital economy? That is anyone’s best guess, but he has seen this fail before, hasn’t he?
The official rationale behind these tariffs is to protect American jobs and reduce trade deficits. However, protectionist measures backfire. By disrupting supply chains and increasing the costs of raw materials, these tariffs will again lead to job losses and price hikes.
As mentioned, Trump’s tariffs on steel and aluminum imports increased production costs for American manufacturers and strained relationships with key allies. He seems to have forgotten or enjoyed the situation so much that he decided to repeat it. Robert Reich believes that Trump is a malignant narcissist who likes to see people suffer and inflict pain. I don’t know if that’s true, but it would explain a lot.
Gambling on markets crashing
Why would someone follow a strategy that is so obviously going to cost the American public, including Trump’s voters, a lot of money, jobs or even their entire livelihood?
Sure, Trump doesn’t care for his voters. He has shown that over and over again. But they love him like toddlers love their abusive parents. And some of them will likely do so even when they’re thrown into destitution and can’t get any federal aid because Trump canceled it.
But wouldn’t it be impossible for Trump to keep the majority in the Houses in the midterms if people realize he doesn’t do anything for them?
Wouldn’t that make it hard for him to keep ruling with an iron fist?
Yes, most likely. But I don’t think he cares. What we know - and this is the promised explanation - is that there has been increased gambling on the market crashing. Short-selling activities have increased suspiciously over the past months.
Two days ago, Goldman Sachs reported a sharp increase in shorts against US Stocks, indicating that there is an expectation that markets will crash in the near future.
In my opinion, this is planned. Some people want the market to crash as hard as possible. If Trump continues down this path, they will make a shit-ton of money.
If you’re uncertain how short selling works, let me quickly explain:
Short selling is an investment strategy where an individual bets on a decline in the price of an asset, usually a stock.
Short sellers borrow shares of the asset (stock) from a broker and immediately sell them at the current market price. They then repurchase the same number of shares later at a lower price, return them to the lender, and pocket the difference as profit.
Of course, this only works if the stock or asset price falls, and Trump is currently working very efficiently to achieve this. The further the market falls, the more money is made.
That’s it. That’s what they’re doing while Trump keeps everyone distracted with insane executive orders. Orders he knows will be blocked and disputed anyway. But while people are scrambling to stop the madness, a bunch of people are currently getting even richer than they already are.
And it’s already working; the Dow Jones dropped 600 points today due to the tariff announcement.
There is no proof that Trump is in on this scheme and isn’t just being his usual incompetent self. Maybe, just maybe, the people around him are using him as a useful sock puppet to do their bidding and make them richer. But it’s not like he’s ever made much money doing legitimate business, has he?
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Yes. Go listen to or read his niece, Mary Trump. He is a nihilist who doesn’t think anyone else actually exists.