EUR/USD. Donald Trump – the "destroyer" of the American economy

The year 2020 has become one of the most memorable in the last few decades. The year is not over yet, and the Internet is full of various funny pictures hinting at new surprises this year. Unfortunately, all the surprises that this year has presented are not festive. The global economy has suffered huge losses. The "coronavirus" epidemic continues to hold all States of the world in fear and slow down the recovery of economies. In some countries, it was not possible to suppress the spread of the COVID-2019 virus. Many countries remain under quarantine. In general, chaos. However, in this article, we will once again focus on the figure of Donald Trump. We believe that Trump can be considered 50% to blame for the troubles of the United States, which they have faced in the last year or two. Moreover, we remind you that the "coronavirus" and its consequences for the country and its economy are not the only bad things that have happened to America recently.

It all started with a trade war with China. Donald Trump considered that trade with Beijing is unfair since China sells many more goods in the United States than it buys. According to the American President, China should buy goods for an amount equal to exports to America. How logical and reasonable is this idea? By and large, if you follow this principle of Trump, absolutely any country in the world can make similar claims to any other country in the world since there are hardly any countries that have a trade balance of zero. Thus, these accusations against China were already absurd. However, this was the main reason for the introduction of duties on imports from China. It is clear that in addition to trade claims, the United States dumped a whole list of other charges on Beijing, including theft of intellectual property, collection of data on American users and consumers through Chinese digital companies, and much more. However, as usual, Washington did not present any evidence of Beijing's guilt in all mortal sins. There is also no need to prove a negative trade balance with China since these are official figures that are available to almost everyone interested.

Now, the trade war has begun. It began in 2018 and without going into all the details, we can say that there was no particular point in starting this trade war. If you look at the chart of the US trade balance over the past 5 years, you can see that since 2016, when Donald Trump came to power, the balance has only been decreasing. In 2016, the monthly trade deficit was approximately $ 40 billion. In 2017, it was $ 43-45 billion. In 2018, it was $ 50 billion. In 2019, it was $ 45-50 billion. In 2020, the deficit collapsed to $ 63.6 billion in July. Thus, the overall trade balance under Trump only got worse. Now let's look at a similar indicator in China. In 2020, when the whole world was faced with the "Chinese virus" and is experiencing extreme economic problems, China recorded the maximum trade surplus in 5 years, which amounted to $ 60 billion. And this is although the trade deal with the United States meant just an increase in purchases of agricultural products by several tens of billions of dollars. In other words, the trade balance between China and the United States may have improved in favor of the United States. However, the overall trade balance in the United States has become worse in recent years, and China – better.

Further, Donald Trump promised before the 2016 election to return the production of American companies to the United States. Or at least start the process. We understand that it is extremely difficult to bring back entire factories from China and other countries with cheap labor in just a few months or even years. However, this process has not even started. And now, with two months to go until a new election, Trump has begun to again promise to return the factories of American companies to the United States. Now Trump is threatening the companies themselves with high taxes on their products, "since they create jobs in China and work for its economy" and the cancellation of government orders if they do not return voluntarily. Thus, if President Trump is re-elected for a second term, we may see new wars with American manufacturers.

Well, let's not forget about the "coronavirus" that broke out of China and hit America most of all. There are also several million cases in India and Brazil. According to many experts, the "coronavirus crisis" has changed the balance of power in the international arena between its major players. China has strengthened its position, while America has weakened its own. Thus, China struck back at the States. Of course, we do not undertake to blame Beijing for the fact that the COVID-2019 virus broke free for a reason. However, if we do not take this factor into account, it turns out that China "responded" to America. The United States recorded a record 32% GDP collapse during the second quarter. This has not happened since the Great Depression.

Thus, it becomes clear that Trump should go. He has been a billionaire for a long time and has achieved everything in life that one could wish for. Therefore, at his age and with his achievements, probably the last thing you can want is the power to rule the world. It seems that this desire is what drives Trump. But will Americans go to vote for Trump on November 3, who promises to put even more pressure on China and almost completely abandon doing business and trade with it? We have already wondered, does it matter to ordinary Americans with whom Trump conflicts? Ordinary Americans are interested in work, wages, and stability in the country, and not in the international feuds that the president himself provokes.

Trading recommendations for the EUR/USD pair:

The technical picture of the EUR/USD pair shows that the price continues to trade in the side channel of $ 1.17 - $ 1.19, occasionally making attempts to exit it. A slight upward bias is present, however, this is not a trend. The Bollinger bands clearly show that a flat is currently occurring on the 24-hour timeframe. Thus, you can trade between the upper and lower bands.

The material has been provided by InstaForex Company - www.instaforex.com