Blame trade policies

Wednesday, the Dow closed down 800 points, a full 3 percent—a session low and the largest point drop of the year. The selloff was total—all 30 stocks in the industrial average were down and the others indices were red as well.

And just as the White House gets to gloat when the numbers are good, they get the brickbats on the downside.

The proximate cause seems a bond-market phenomenon called an “inverted yield curve” impacting 10year Treasury notes— historically a reliable predictor of recessions.

This market rout is almost inarguably sparked by the Trump administration’s disastrous trade policies. On Tuesday, even Trump indicated he recognized the damage, postponing planned tariffs on $300 billion worth of China products until Dec. 15, thus reducing their impact on American consumers during the critical post-Thanksgiving shopping season.

And yet, in typical Trump fashion, he blames market chaos on the Federal Reserve’s having slightly raised interest rates during the booming economy (as it should have) and its hesitancy to cut sooner (the Fed eventually cut the prime interest rate earlier this month, in the face of trade fears).

The business cycle has ups and downs and can’t be controlled. Selfinflicted wounds are another matter. Recall that in March 2018, Trump boasted, “Trade wars are good, and easy to win,” cheering tariffs against China. Seventeen months later, those words ring hollow, as the American economy may be the biggest loser in this war.