When the term “trade war” is mentioned, many people are quick to remember the 1930s Economical Depression, which is the most elaborate effect of a trade war to date. The Trump administration has, of late, revised tariffs against nations like China, citing arbitrary trade policies that have been in place for many years. HCR Wealth Advisors notes that Trumps proposed $100 billion in planned tariffs on goods coming from China. The Chinese government has responded to the Trump issued tariffs and announced vindictive strategies of their own. HCR Wealth Advisors, which is a registered investment advisory firm that provides investment strategies to their clients, says that there is still time for arbitrary action as the tariffs will legally not be effective until August.
Effects on US GDP
According to the firm, the tariffs, if implemented at the recommended rates, will translate to no more than 0.5% of the Gross Domestic Product of the United States. This is a small percentage but the prospects of the trade war that might result from these measures are more worrying and have serious ramifications. The trade hostility between two of the world’s largest economies is tied to a lot of uncertainties and investors will be forced to withhold planned investments as they wait to see how the market will react to the new situation. HCR Wealth Advisors says that the faster China and the US mediate on these strategies and come to a logical conclusion, more negative consequences will be avoided in the future.
HCR Wealth Advisors is, however, positive that the trade talks between the two nations will be successful. Considering what is at stake if a trade war between the two nations results, the two administrations will have a lot to ponder on before taking such drastic measures. With this in mind, investors should maintain a positive outlook and not let the hostility affect their long-term strategies because it is more likely that the disagreement between the two nations will be short-lived.
More about HCR Wealth Advisors
HCR Wealth Advisors is a registered investment advisory firm which was founded in 1988 by Greg Heller. The firm services individuals and organizations and have grown their clientele internationally into the hundreds of thousands. The firm is dedicated to educating their clients on investment strategies and creating personalized financial strategies. It does this by establishing long-term relationships with clients through education, trust, and service.
HCR Wealth Advisors is not affiliated with this website.