Apolitically, a large component of the
quarterly 4.1 GDP growth was a result of China shifting its purchase of soybeans from the US to Brazil. They announced the impending retaliatory tariffs back in March, so farmers expedited product out to a China and when China shut down the imports and soaked up Brazil’s supply, US product got moved to Thailand, Scandinavia, and other importers in a mad dash to get ahead of trade wars. Great for the last couple of months, but sustainable long term impact on GDP? Not so much. Presently soybean farmers are looking at 2009 levels for future contracts. It’s what happens when a customer who bought 60% of your goods goes to your competitor.
Consumer spending is going to your biggest driver of the economy. Q1 GDP numbers were revised down upon review of consumer spending trends. Some estimate they are at five year lows. If one wants to be rosy and look instead at GDI, great, but that number reflects corporate profits reflective of the tax cuts. Proponents of supply-side economics (looks
@ziravan) will argue that this is the beginning of corporation spending which will in turn spur economic growth in wages, etc. But until a corporate tax cut bucks the historical reality, tax cuts for corporations don’t increase people’s wages. Which won’t boost consumer spending.
Unless of course you count corporations as people.
Oh no he di’n’t just go there.