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The stock market is throwing tantrums at Trump's tariffs. The beatdown could get worse as President Donald Trump is expected to announce another import duties on Wednesday.
The liberal media and Democrats in Congress (who once supported tariffs) are giving flames. They hate Trump and want to see him fail. But is the downgrade of American companies' markets to a 10% tone, a reasonable response to Trump's trade restrictions?
I'm an economist rather than a wise man in the stock market, but it's worth reminding me that despite the higher tariffs Trump imposed in his first term, it caused temporary stock sales, but their effects were truly temporary. The market has since surged monthly. On average, stocks have grown by around 60% over four years. It's not a bad return.
Trump's “Liberation Day” helps to create a new golden age for American workers
Here's why I think we can see history repeating itself: Trump is the most pro-president of 40 years, and his agenda is positive for the economy and investors apart from tariffs.
1. Deregulation
The story of the headline from the Wall Street Journal on March 29 says, “Trump is a guide to a 'new high watermark' for deregulation.”
The story details 31 regulations rollbacks that reduce costs and increase the efficiency of “power plants, oil and gas industries, electric vehicles and wastewater.”
The private sector added 155K jobs in March, exceeding expectations, ADP says
The Securities and Exchange Commission (SEC) and the Federal Trade Commission have repeated Byzantine anti-merger rules that have handcuffed economically important mergers and acquisition industries. Savings can be hundreds of millions of dollars. These productivity savings alone can cost you a dollar in tariffs.
2. Tax reduction
Trump's tax cuts continue to decline as they continue to reduce the $4 trillion tax-cut bomb, which is expected to explode on January 1st.
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3. Government downsizing
Elon Musk and his team of Doge efficiency experts have projected an increase in government costs of up to $1 trillion by ending federal corruption and waste. Preventing theft and fraud is a major economic stimulus.
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4. Foreign Direct Investment
Trump has been fascinated by a new foreign direct investment in the United States of about $500 billion since the start of the year.
5. “Drill, baby, drill.”
Some estimates show that the United States sits on treasure chests of more than $10 trillion in key oil, gas and mineral resources, mainly in Western Mountain states.
Just the backside calculations show that the overall economic benefits of these growth-inducing initiatives are multiple times the potential costs of Trump's tariffs. Free trade is important, but imports account for only about 16% of the economy.
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Wall Street also appears to have overlooked the fact that Trump's mutual tariffs have the desirable effect of lowering trade barriers to US products.
When I'm looking at the economic and political landscapes now, it's the best time to buy America, rather than sell it.
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