As a marketing soundbite, it is ingenious. Make America great again. But what happens when one nation decides it is the nation that is to be great and to hell with any knock-on effects?
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the time of his election, Trump said trade wars were easy to win. However, last week he proclaimed he had never said trade war with China would be easy. Now there is discussion being had in regard to expanding the tariff war with its northern neighbour.
Canada had acted in the past to reduce the number of dairy farms due to an oversupply of milk at that time. They set up a tightly regulated market in which supply is limited to expected demand. So now exporting milk from the US into Canada incurs high tariffs and the US dairy industry is demanding the president act. In Wisconsin he recently targeted Canada's dairy industry as unfair to America's farmers.
We are witnessing a knock-on effect of the tariff wars being waged. Globally, trade is shrinking, causing the downgrading of projected economic growth, global and individual nations. This in turn has fuelled fears of recession and reserve banks around the globe reacting by lowering interest rates — in many cases to zero or below.
Around one third of government bonds are now offered with negative interest rates. Two weeks ago, Bloomberg reported negative-yielding bonds were valued worldwide at US$15 trillion.
Late last week that had grown to US$17 trillion. It has spilled over into retail banking with Denmark's third largest bank offering a 10-year mortgage rate at -0.5 per cent last week.
Pension funds, insurance companies and big banks are among those buying the negative-yielding bonds. All those investors will receive less money than they had originally invested.