Trade Wars: with President Trump’s tariffs in place, Stansberry Research recommends that you buy U.S. bonds now

The U.S. steel and aluminum industries have suffered for decades. According to reports from Maryland-based investment research publication company Stansberry Research, their situations are about to get worse.

Thanks to tariffs imposed on steel and aluminum by the Trump administration, the costs of steel and aluminum will rise by 25% and 10%, respectively. The tariffs are targeted towards Chinese imported steel and aluminum, but it applies to every nation except Mexico and Canada. At the time the tariffs were announced, Stansberry Research Editor Justin Hill predicted that the move could lead to retaliation not only from China, but also from other nations. He unfortunately proved to be correct. Not only has China already retaliated with similar tariffs on American imports like soybeans, the European Union has likewise imposed a 25% tax on U.S. consumer goods like whiskey. Worse, President Trump has threatened China with expansion of such tariffs towards other industries, which will escalate an already tenuous situation (Americasjubilee).

As Hill explains in his analysis, there are two reasons this is dangerous; first, the cost of goods for the average consumer will rise due to increased costs for manufacturers who rely on such imports. Second, China produces much of the U.S.’s consumer goods, and it holds an enormous portion of U.S. debt. This finding, combined with Stansberry Research’s studies other budget decisions made by the Trump Administration, leads to Hill’s conclusion that the federal deficit is expected to soar very soon. The U.S. Government relies on selling U.S. Treasury bonds to finance such deficits; the Chinese government is a rabid customer of such bonds. Based on the current trade situation, it may prove wise for investors in the U.S. to consider purchasing some soon as well.

For more information, consider subscribing to Stansberry Research. Subscription to their services includes a large archive of expertise written by analysts well-versed in various industries involved in international trade. Stansberry Research also boasts a large library of publications ranging from books on retirement advice to periodicals that cater to all investment styles.

 

This entry was posted in Current News. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *