Every single time there is an announcement of new tariff here, there is (at least one) highly upvoted post with hundreds of comments talking about how this is the start of a trade war and the economy is going to crash. Here is some actual data on the impact of the "trade war" (from the US Census Bureau HS State Data Series as of April 2018):
US and China Trade Activity
- 2018 Total United States Exports to China: $42.3B (up +7.83% YTD)
- 2018 Total United States Imports from China: $161.3B (up +10.66% YTD)
All US Trade Activity
- 2018 Total United States Exports to All Countries: $540.2B (up +8.82% YTD)
- 2018 Total United States Imports to All Countries: $804.5B (up +9.39% YTD)
Even if you believe trade took a total dive in May and June (spoiler: it did not, they are up YTD and month over month), those kinds of YTD positive percentages mean this is not the apocalypse everyone seems to think it is. But how can this be? Every day all we see is talk of tariffs and how the economy is going to start circling the drain!
Because the tariffs are relatively small given the overall trade volume, mostly targeted, and highly symbolic. Unless you have piled all your cash into a single industry (e.g. own 100% stocks of only Kentucky bourbon or pork manufacturers), this just isn't a big deal.
I get it, r/investing. I am not a fan of the current political environment, and I understand the desire to link political moves to economic outcomes. It makes us feel validated about our political beliefs. But the reality is politics is sometimes just that - politics. It is symbolic. No matter how much you want to believe otherwise, all the data show right now that the tariffs are a non-event.
Submitted July 06, 2018 at 09:22AM by thejourney2016 https://ift.tt/2KFvJqn
