In an economic model of Donald Trump’s trade proposals, bond credit rating business Moody’s has found that the billionaire Republican frontrunner’s economic platform would cost the US more than 7 million jobs - and push the unemployment rate to nearly twice its current level.
“This is a pretty ugly scenario,” said Mark Zandi, chief economist for Moody’s Analytics, who prepared the model for the Washington Post, “one that I think any rational person would want to avoid.”
The biggest culprit would be Trump’s proposed trade war with China and Mexico, two of the nation’s largest trade partners. Tariffs proposed by Trump would raise prices on good imported from China and Mexico, reducing spending power for American consumers. While the tariffs could doom both targets to recession, if China and Mexico chose to retaliate in kind, it would lower US exports and trigger job losses for American firms that depend on customers on those countries.
In an interview with the New York Times released this morning, Trump insisted that he would only use the threat of a trade war as a negotiating tactic. “I would use trade to negotiate. Would I go to war? Look, let me just tell you. There’s a question I wouldn’t want to answer. Because I don’t want to say I won’t or I will... But I will tell you this. This is the one aspect I can tell you. I would use trade, absolutely, as a bargaining chip.”
“This is a pretty ugly scenario,” said Mark Zandi, chief economist for Moody’s Analytics, who prepared the model for the Washington Post, “one that I think any rational person would want to avoid.”
The biggest culprit would be Trump’s proposed trade war with China and Mexico, two of the nation’s largest trade partners. Tariffs proposed by Trump would raise prices on good imported from China and Mexico, reducing spending power for American consumers. While the tariffs could doom both targets to recession, if China and Mexico chose to retaliate in kind, it would lower US exports and trigger job losses for American firms that depend on customers on those countries.
In an interview with the New York Times released this morning, Trump insisted that he would only use the threat of a trade war as a negotiating tactic. “I would use trade to negotiate. Would I go to war? Look, let me just tell you. There’s a question I wouldn’t want to answer. Because I don’t want to say I won’t or I will... But I will tell you this. This is the one aspect I can tell you. I would use trade, absolutely, as a bargaining chip.”
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