Stocks Tank On "Trade War" 📉

Mark Lennihan / AP

Mark Lennihan / AP

Dowwwouch!

Yesterday, the Dow Jones fell by 617 points (-2.4%). The big drop is being attributed to the ongoing trade negotiations between the US and China, which aren’t making much progress. Hint: more tariffs on both sides. One side is blaming Trump for starting a trade war, while the other believes China had this coming.

Why cause a trade war?

US and China are big trade partners. China forces foreign companies to give up their intellectual property, while heavily subsidizing their own industries - something we don’t like. Trump believes adding more tariffs on China will break their economy before it does ours.


CHINA'S FAULT:

The Hill: The trade deal failed because Beijing hasn't earned our trust

Fox News: Steve Hilton: Trump has been right about China for decades while the entire establishment got it wrong

Those who blame China believe they will be far more impacted than the US. They believe China’s economy is vulnerable and exports currently account for 20% of China’s economy. Plus they believe China deserves this for all of the intellectual property that's stolen from US companies.

TRUMP'S FAULT:

CNN: Farmers get impatient with Trump's trade war: 'This can't go on'

USA Today: Why did the Dow just plunge 617 points? Look at Trump's trade war with China

Those who blame Trump believe he has started a trade war that will doom the US economy. They focus on the legalities by pointing out that what he’s doing can only be done by Congress. They also want to highlight farmers who are turning on Trump as a bad sign for him.


Where’s the common ground?

Both sides agree that we need a new trade relationship defined with China. However, they disagree on what course of action we should take. Some believe Trump’s stern approach will yield the best results, while others see this as damaging to the US-China relationship.

The silver lining 

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