US President Donald Trump’s economic cheerleaders were out in force yesterday trying to convince American voters that all is hunky-dory with the US economy and the escalating trade war with China.
“There is no recession in sight,” White House economist Larry Kudlow insisted, after 1,500 points was wiped off the Dow Jones in recent weeks amid fear surrounding inverted yield curves that often precede a contraction in GDP. Trade adviser Peter Navarro went further, arguing that the curves were not inverted but in fact flat – a positive sign, he said.
Trump is gambling on the economy holding up sufficiently well over the next year to convince the US electorate to return him to office, with plans for further tax cuts to entice Republican voters who are starting to wobble.
A sharp downturn could prove a severe hit to Trump’s chances of re-election, even though the White House continues to work on its back-up plan under such an eventuality – blaming everything on the Federal Reserve. Kudlow banged that drum again yesterday, arguing that the Fed had imposed “very severe monetary restraint” on the economy.
The danger for Kudlow, Navarro and their boss is that Trump’s maniacally-repeated hardline messages appear to be pushing a large number of people in the opposite direction to that intended.
A poll published in the US yesterday showed a sharp increase in support for free trade in the past four years. In 2015, just over half of respondents said free trade was good for America, with more than 40 per cent disagreeing.
Today, 64 per cent of Americans say it is good, and just 27 per cent disagree. Support for free trade has jumped seven per cent in the past two years, according to the survey for NBC and the Wall Street Journal.
Separate polls show a rise in the balance of Americans saying that immigration is good for the country. After the electoral shocks of recent years (on both sides of the pond) one needs nerves of steel to predict a Democratic victory in 2020.
However, Trump’s net approval rating has slumped to its lowest level in 16 months and his attempts to turn Americans away from core liberal ideas seem to be floundering.
His team is increasingly dependent on economic growth and the incumbent’s advantage, a fact that becomes more obvious with every interview and every tweet.
Main image credit: Getty