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Spread Too Thin ?

06/21/2018

Long ago, when I was living in Texas, I read a short book, whose name is now long lost inside my memory.  It speculated on how America would be different if Hitler had won World War II.  Not surprisingly, it described a dystopian America as merely a state of the Ayran Nation.  There would be no Blacks, no Hispanics, no Asians and no American Indians.  America would be lily-white.  There would be no churches, no Catholics, no Jews, and no Protestants.  He predicted a socialist nirvana, even comparing it to an idealized North Korea, under Kim Jung On’s grandfather.

Obviously, he has been wrong, but he was trying to show how much hangs in the balance on major strategic decisions.  His argument was that it only took one wrong strategic decision by Hitler to save everything we hold dear.  That one decision was to open war with Russia, forcing him to fight a two-front war.

I worry that President Trump is fighting the current trade war on too many fronts.  First, he killed TPP before it even started.  Then, he threatened  NAPFA, fighting with Mexico and Canada, before declaring war on the Eurozone.  Now, he has declared war on China.  How many wars can we fight?

Yes, a trade war has a lower body-count that a military war, but trade wars have often led to military wars.  Make no mistake – trade wars are deadly serious!

Successfully concluding any one trade negotiation first would provide a useful template for future negotiations.  Instead, we are manufacturing maximum uncertainty, and we all know how much the stock market hates uncertainty.  As uncertainty rises, the stock market declines.

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