Ironies of the Liberation Day: Paras from Artemis Anand highlights the strategic vacuum behind Trumps Trade War

In his latest analysis for IFA magazine, Paras anand (photo), cio d'ArtemisThink about the deep ironies of the “Liberation Day”, stating a sharp comparison between the President The interventionist economic agenda and the style of centralized policy of Chinas Xi Jinping. For financial advisers, the Anands message is clear: political decisions seem more and more shaped by ideology rather than by the economic rationalization of important implications for global markets, the feeling of investors and the orientation of trade relations.

Type XI trumps
The great irony of the Liberation Day is that Trump behaves as if he was president of China as the head of a country without obstacle by democracy and for whom periods of interior disorders constitute little threat.
The degree of economic intervention it offers is akin to the radical stages that we have seen from XI and Politburo in recent years. Cynics could argue that there was more reflection in the autocratic countryside of Beijing to fight against speculation on goods and reshape the Chinese economy.

Broken hypotheses
Even in the face of recent market volatility and an evaporation of animal spirits that followed the election of Trumps, there were a handful of hypotheses that supported most of the analysis on prospects for the United States, the world economy and the markets.

Many have seen Trump as a transactional rather than strategic. This meant that his pricing threats were melodramatic starting positions designed to intimidate the concessions of business partners and that his bark would be worse than his bite. Beyond that, analysts have agreed that, although he has control of the Congress and the Senate and the Supreme Court, he is ultimately a businessman and the opinion of the market would serve as politics.

An ideological pivot
The Liberation Day has undermined all of these hypotheses. The scope and extent of the prices suggest a real belief in their ability to rebalance and relaunch American manufacturing. This despite the lessons of economic history; Despite the voting machine on the market; And despite the underlying economic data suggesting that the real confidence in business and consumers has dropped in recent weeks.

He suggests that politics is more shaped by ideology than economic logic. You just have to examine Brexit to see the consequences of the development of ideological policies. If there are advantages of this act of economic autumutilation, it took them for many years. Maybe the 10% price on the United Kingdom against 20% for Europe is finally our reward? So how long before the United States came a return on investment? And what is the price in the meantime?

The limits of populism
It has always been estimated that Trump lives in the odds and popularity of approval, but unless we see a net reversal, short -term of liberation day prices, we will attend an extended period of economic and geopolitical friction which cannot be good for the world economy, the US economy or the US dollar.
Three tectonic plates come into force here American populism, the fragile economic cycle and geopolitics. It is a rare and worrying alignment. The defect or overhaul of decades of globalization is an extensive process.

The second irony: reversal of the belt and the road
And that brings us to a second irony. One of the largest initiatives in rule XIS was the belt and the road. In the soul, it is a strategy for establishing beneficial trade relations beyond the United States with emerging and neighboring economies.

If Trump behaves like Xi, we also have to, but in the sense of the belt and the road. The commercial partners of the Americas will have to forge new relationships. This could even bring many of them closer to China.

Collateral damage: the example of Vietnam
The lack of serious reflection behind these prices is perhaps better seen in the example of Vietnam. The United States has gone to war in Vietnam to limit the influence of Chinas. Vietnam has a small indoor economy, but in recent years it has become a large exporter for the United States so as not to violate and loot the American economy, but because, with bipartite approval, American manufacturers have established their relations there to divert their supply chains away from China.

Now this strategy seems to be torn with tatters. Vietnam will have to find a new house for its goods. Adidas and the rest will have to reconfigure their supply chains. And these Walmart Americans who voted for Trump will find their clothes that cost much more.