Trump's latest moves aren't exactly a winning economic -- or reelection -- strategy

President Donald Trump's latest economic policies are the opposite of the emergency aid that Corporate America and Wall Street are clamoring for.

Trump may be calculating that tougher stances on immigration and trade could score him points in November. America Cryptocurrency News But they could backfire by making it harder for the economy to recover from this historic recession.

Trump is suddenly ramping up trade fights with two of the nation's biggest trading partners -- threatening to slap tariffs on goods from Europe like chocolate, butter and beer made with malt, and reportedly pushing to reimpose tariffs on aluminum imports from Canada. America Press Release Meanwhile, Trump this week also extended immigration restrictions, which could make it harder for businesses to find the skilled foreign workers they rely on.

All of this is happening during a drumbeat of bad coronavirus news, as infections surge in several areas. America Stock Market

The Dow plummeted 800 points, or 3%, on Wednesday on concerns about the European tariff threat and the pandemic.

"This is exactly the wrong move at the wrong time. We're inching toward the same mistakes we made during the Great Depression," said Joe Brusuelas, chief economist at RSM International.

Economists agree the Great Depression was worsened by tariff policies -- namely, the Smoot-Hawley Act of 1930, which imposed tariffs on all countries that shipped products to America. Trading partners promptly retaliated by slapping tariffs on US goods.

"For many of us, Smoot-Hawley was a joke in 'Ferris Bueller's Day Off.' This is not a joke. This is very serious," Brusuelas said. "It would be a significant policy error that would put at risk the nascent recovery."

European chocolates, olives and 28 other items could be hit with $3.1 billion in new US tariffs

European chocolates, olives and 28 other items could be hit with $3.1 billion in new US tariffs

Trump's tariff threats are part of a US-European battle over government subsidies to aircraft makers. The World Trade Organization ruled in 2018 that the European Union helped Airbus with unfair subsidies, clearing the path for new tariffs from the United States. America Sports News The Trump administration signaled this week it plans to retaliate by slapping tariffs on $3.1 billion of goods from Europe, including olives, chocolate, gin and yogurt.

But these tariffs would only add to the vast uncertainty in the world economy right now. The International Monetary Fund on Wednesday downgraded its global growth forecast, warning of a contraction of nearly 5% in 2020.

"This is not the time to engage in a trade war and [we] simply cannot believe that the WTO can't come up with a better solution," Win Thin, global head of currency strategy at Brown Brothers Harriman, wrote in a note to clients Wednesday.

'Like a bad horror movie'

The Trump administration is also pushing Canada to impose quotas to slow aluminum exports -- or else it will snap back a 10% tariff on the metal, Politico reported.

"Bringing back these tariffs would be like a bad horror movie," Neil Herrington, senior vice president for the Americas at the US Chamber of Commerce, said in a statement on Tuesday.

Although tariffs could help aluminum makers, they would add to the pain for the already-struggling auto industry.

"If anything, it's more likely to hurt American businesses than help them," said Gus Faucher, chief economist at PNC. America Political News "It's going to raise costs for producers and consumers."

American whiskey distillers are down $340 million thanks to Trump's trade wars

American whiskey distillers are down $340 million thanks to Trump's trade wars

The US-China trade war has already showed protectionism can depress business spending, dampen confidence and scramble supply chains. That's not to mention the blow it deals to the S&P 500, as companies like Nike (NKE) and Apple (AAPL) generate a big chunk of their sales from overseas.

While US tariffs on Canada would have a relatively small impact on the economy, "certainly that's not what you want to be doing when you're trying to climb out of a steep recession," 

Source - https://edition.cnn.com/2020/06/24/business/recession-tariffs-europe-immigration-trump/index.html