I Won’t Ride the Trump Train into a Trade War

– by Murray Sawyer, J.D., President and CEO

At Westover, our clients often share articles with us on topics that engage and inspire, or from time to time, challenge or support our best thinking. We believe this dialogue and discussion better inform all of us as thinkers, decision-makers, and stewards of our client’s financial resources.

Recently, a client shared an opinion piece from the Wall Street Journal, “I Won’t Ride the Trump Train into a Trade War.” The article reinforces some of our own opinions about the Trump economic agenda; specifically, that corporate and individual tax reforms, along with the elimination of burdensome regulations, have been tremendous positive forces for U.S. job growth, increased corporate earnings, and expansion of Gross Domestic Product (GDP).

As we’ve mentioned many times and as economic history has shown, these “beggar-thy-neighbor” protectionist policies do not work and often lead to escalating, retaliatory tariffs that can spill over into economic recession.

Westover Capital - Thoughts on a Potential Trade War

However, recent trade and tariff policy initially thought to be de minimis both in its size and scope has grown and felt more like a device used to fulfill election campaign promises rather than sound economic practices. As we’ve mentioned many times and as economic history has shown, these “beggar-thy-neighbor” protectionist policies do not work and often lead to escalating, retaliatory tariffs that can spill over into economic recession.

In our opinion, the Trump administration is reverting to a policy that is dangerous for the U.S. economy and the international commerce system. We continue to monitor the short and long-term effects of these policies on U.S. and global markets as well as on our client portfolios. We welcome your questions and thoughts.

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