The current stock market correction of 10 % of the main US indices DJIA, S&P 500 and Nasdaq Composite is influenced by the hard-action tariffs implemented by the US President Donald Trump against Canada, Mexico, China, The European Unions and various other countries.
Basically, the US presidential administration is waging 'thermo-nuclear' economic war against its recent closes allies trying to beat them, force them to their knee whereby the USA gets excellent deal for its exports.
This goes through a weaker US dollar, contrary to the US presidential administration rhetoric. In theory, a weaker USD would spell rising US stock markets.
The US caused trade tariffs potential disruptions are too great, however. In a trade war, in the short-term both sides lose, according to economic theory. The US can hardly produce bananas or avocados, for example. In addition, the USA lacks sufficient rare earths minerals, which are vital for its economy. What is more, due to the sheer size of the US economy, the US needs commodities like iron ore, copper, nickel, cobalt, managanese, oil, gas, corn, wheat, etc. which it cannot produce in enough quantities to fulfil its economic needs on its own.
In the long-run, even if the USA wins the trade wars it has started, the short-term disruptions will continue for 2-3 more moths at least, according to Wolfteam Ltd.’s projections and estimates.
So the us 🇺🇸 stock markets will recover in the mid-term, but there could be more short-term US stock market 📉 pain, in Wolfteam Ltd.’s view.
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