Donald Trump's Economic Policies and Their Impact on the Financial Market
The economy can be impacted by government policies, international crises and trade wars, as seen in the case of the tariffs imposed by Donald Trump. To minimize the impact of a possible recession and protect your finances, consider the following strategies:
1. Diversify Your Investments
Don’t rely solely on the stock market. Invest in diversified assets, such as real estate, government bonds and even gold, which tend to be more stable in times of crisis.
2. Have an Emergency Fund
Keeping an emergency fund with at least six months of expenses can be essential to cover unexpected costs and avoid debt in times of recession.
3. Reduce Debt and Avoid High Interest Rates
Avoid high-cost loans and prioritize paying off debt, especially those with high interest rates, such as credit cards. In times of crisis, banks can increase interest rates, making debt even more expensive.
4. Protect Your Job and Find Additional Sources of Income
Economic uncertainty can result in layoffs and pay cuts. Learning new skills, finding new sources of income, and even considering remote or freelance work can help maintain your financial stability.
5. Monitor the Market and Plan Ahead
Stay alert to changes in the economy and adjust your financial planning as needed. In times of crisis, avoiding unnecessary expenses and maintaining an organized budget can make all the difference.
Taking these steps can help protect your assets and ensure greater financial security in the face of economic downturns.
If you thought Donald Trump’s economic policies couldn’t get any worse, think again. In just 48 hours, the Dow Jones Industrial Average, one of the most important stock market indexes, dropped 1,300 points because Donald Trump decided to once again set the economy on fire with his disastrous trade war.
Now, I’m going to dive into more detail about why this affects the average worker. There’s a false notion that because publicly traded stocks are disproportionately held by the wealthy and corporations, which is true, the stock market and its swings don’t really matter to the average worker. I don’t believe that’s true, and I’ll explain why.
The Impact of Trump’s Trade Tariffs
The Measures and Their Effects
Donald Trump has imposed tariffs of 25% on Mexico, 25% on Canada and a 20% increase on China. In response, these countries immediately retaliated with retaliatory tariffs on the United States, sending markets into panic:
The Dow Jones fell 1.55% on Tuesday, adding to Monday’s 650-point drop.
The S&P 500 erased all of its post-election gains.
Companies in sectors as diverse as automakers, banks and retailers are suffering major losses.
Major companies such as Target and Best Buy warn that consumer prices will rise.
But Trump tells us not to worry, as there will only be short-term pain.
Trump’s Response and His Economic Ignorance
Trump insists that this situation is “going to be worth it,” downplaying the effects of his own trade war. But the reality is that he is destroying the economy while his billionaire allies take advantage to buy up depreciated assets and profit in the future.
The Immediate Economic Consequences
Real Cases of Impact
The effects of Trump’s policies are already being felt:
Canada canceled a deal with Elon Musk’s Starlink.
The Liquor Control Board of Ontario, the world’s largest buyer of alcohol, decided to stop selling American products.
Canadian Prime Minister Justin Trudeau called this trade war “very stupid.”
But it’s not just about the tariffs. Donald Trump’s entire economic approach is a disaster.
Tax Cuts and the Growing Deficit
Trump’s tax cuts for the rich have exploded the public deficit. Now, he wants to double down, justifying himself with supposed savings.
The Myth of Found “Savings”
Trump and his allies claim to have found $500 billion in savings, but these “savings” include programs that were simply canceled under Joe Biden or that had their values artificially inflated.
The goal of this is to justify a new tax cut for the wealthy, claiming that it has already been “paid for” with these false savings.
Market Uncertainty and Its Effects on the Economy
The Attack on the Federal Reserve
Trump’s attacks on the Federal Reserve create an environment of economic uncertainty, scaring investors and worsening the situation in the financial markets.
How This Affects the Population
Unemployment: Companies cut costs, resulting in layoffs and hiring freezes.
Lower wages: The fall in the markets impacts salary renegotiation and reduces promotions.
Rising cost of living: Imported products become more expensive due to tariffs.
Pensions hit: People with 401k, IRA or pension funds are seeing their money shrink.
Real estate downturn: Difficulty selling properties is causing depreciation and rising bank interest rates.
Billionaires’ Opportunity During Crises
Oligarchs love recessions because they can buy up depreciated stocks and properties and sell them later for a big profit. With Trump promising such a crisis, many big investors were prepared to cash in.
Conclusion
Donald Trump’s trade war, coupled with his irresponsible tax cuts, is creating an environment of economic chaos. Ordinary workers are not just spectators of this crisis: they are directly feeling the impacts on their jobs, salaries, pensions and cost of living. Meanwhile, billionaires who support Trump continue to benefit, buying depreciated assets and profiting in the future.
The market is already reacting, and the forecasts are not encouraging. History shows that whenever protectionist policies are implemented aggressively, the effects are recession, unemployment and financial crisis. And this time, it will be no different.
