One of my greatest regrets is that in becoming an economist I never did psychology. Each month, surveys ask me for what the RBA would do with rates, and yep, I got it right last Tuesday with my “no change” call. But working out Donald Trump has become a challenge that defies my amateur shrink insights.
Logic tells me that Donald can’t afford a trade war that creates a global recession, a stock market crash and an end to the Trump era, with next year’s US Presidential poll. Mind you, China can’t afford such a disastrous outcome but we learnt on Saturday morning that trade talks on Friday, US time, ended without agreement.
Chinese goods to the value of $US200 billion that used to have a 10% tariff are now being slugged 25%. This is trade war stuff I didn’t think was possible.