what does tariff war mean ..?

Let's review what's going on in recent history ... worldwide int. rates have been low in last 20 years .. countries worldwide are incurring huge debt while spending more & selling goods to each other more than ever

both China and India have shown enormous growth is last decade or so .. with access to easy capital and advancement of technology, each country in the world is in mode of forever growth ... there hasn't been a recession since 2008 besides Corona which was overcome by huge introduction of capital & ended with more consumption .. but this growth can't last forever.. and we are at a point, when the world is producing so much that the consumption is not matching ...like the roaring 1920s ..isn't it funny that we are in 2020s - just 100 years later ..!

 

a key difference is that the Tariff Act of 1930 which was enacted to protect US industries end up elongating the depression, but this time it will become the cause .. 

 

hence the reasoning behind tariffs and protection  ... US is producing so much of oil and agriculture products that they need consumers .. while China & India - the biggest consumers are becoming more self-reliant & coming closer to US GDP every day - which US doesn't like  .. Trump wants to bring production to US, but to whom he would sell the products .. China and India... really ?

and that's the crux of the problem. 

so what's the outcome/effect ... & these are applicable for each and every country in the world  .. not just US, India or China ...

The world wide production as well as consumption must go down ... & will go down .. which is starting with tariff war and its impact will show in India, China & every other country ... and this time it will he hard to find new funding as the rates will go up .. not only the old debt needs to be retired at higher rates .. the new one will be hard as other countries will stop funding even increasing US debt ... which is 120% of GDP at present

 

as a result USD has gone down about 10% YTD, at the same time INR is going down in ref of USD  - a cascading effect ..! 

 

this is proven by the latest news, last week US had two treasury auctions - 10 years and 30 years.. neither went well .. Trump signing an EO to allow Private equity in 401K ac ie. credit credit & more credit since US debt is not enough ..!

 

so be prepared to tighten your belts ... the road ahead is curvy and there is a downgrade .. more to come ..!