Trump keeps trying to come up with ideas that make us feel like he’s achieving a historic accomplishment. Now he has decided again to impose increased tariffs on countries that tax American exports. This means he’s entering a new trade war as if we didn’t have enough tension in the global economy.
At the same time, he’s saying Congress will pass the largest tax reduction bill in American history, describing it as a "rocket" that will boost growth. These tax cuts look good on paper; they will increase corporate profits and give the market a short-term boost, but the problem is that when you combine them with protectionist policies and tariffs, it creates a terrifying uncertainty among international investors.
So we might see increases in the American stock market in the short term due to industrial optimism, but in the medium and long term, the trade war will create headaches in supply chains and increase production costs, which will lead to rising inflation rates.
As for cryptocurrencies, any state of economic concern or chaos makes people flee to Bitcoin and others as a hedge against inflation and loss of confidence in traditional monetary policies, but at the same time, if the market collapses, liquidity will decrease and there will be a downturn even in crypto.
What Trump is doing is not a growth rocket; it’s a rocket that could blow up the global economy. Stay aware of the risks and prepare your plans for all scenarios
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