US Media Warned That Erroneous Trade Policy Will Lead To Recession In The US.

The Wall Street journal issued an editorial on 8 may, warning that the Trump administration's erroneous trade policy could lead to a recession in the US economy.

The editorial entitled "Navarro recession" is criticized by the director of the National Trade Commission of the White House, Peter Navarro. According to media reports, last week, when President Donald Trump threatened to impose new tariffs on China, all the other economic advisers of the president opposed Navarro.

The editorial said that although the Trump administration's earlier deregulation and deregulation policy had boosted US economic growth, the confidence and capital expenditures of American businesses have gradually declined since the US foreign trade friction escalated in 2018 and have begun to have a negative impact on US economic growth. At present, the US economic growth rate has slowed from nearly 3% to 2%, and the average monthly new employment has dropped from 223 thousand in 2018 to 165 thousand this year.

The editorial asked, "has Mr. Trump noticed that the trade deficit has not improved?" this is because the United States has invested more than savings, so it needs to import capital from abroad, while the import capital corresponds to the trade deficit.

"The irony and danger is that Trump does not seem to understand that his trade policy is causing instability in the exchange rate and appreciation of the dollar," the editorial said. The editorial said that tariffs imposed by the United States on China would lead to a decrease in market demand for RMB, while international capital inflows into the US dollar risk assets would also create an appreciation of the US dollar. China has not manipulated its currency exchange rate, and the fluctuation of RMB exchange rate is a reflection of supply and demand relationship.

Editorials warn that economic expansion is almost over because of policy mistakes. Trump's "chaotic trade offensive" may slow down the US economy and worsen the "Navarro recession".

According to an economist survey published on the 8 day of the Wall Street journal, economists estimate that the probability that the US economy will fall into recession in the next 12 months has risen from 30.1% in July to 33.6%, the highest level since 2011.