Dow Teeters on Knife’s Edge as Trump’s Trade Crusade Hits Japan
The Dow Jones teeters dangerously on the precipace of the knife’s edge as Donald Trump heads to Japan for high-stakes trade negotiations with Japan. | Source: AP Photo / Evan Vucci
The maverick president’s erratic approach to international trade has taken a significant bite out of the Dow Jones (DJIA) over the last few weeks.
Bulls will be desperate to see Trump’s bromance with Japanese PM Shinzo Abe survive the weekend, lest the US find itself plunged into another brutal trade conflict.
Dow Risks Severe Backlash if US-Japan Trade Talks Sour
— The White House (@WhiteHouse) May 25, 2019
The US-China trade war dominates the global stock market outlook because they are the largest economies in the world, as well as two of the most interlinked. However, the Trump administration’s disputes with key allies like Japan also threaten the Dow Jones and other major indices.
Japan is a vast economy in its own right, and there is a significant US military presence in the country. The talks between Abe and Trump will likely focus heavily on defense spending.
The elephant in the room, however, is the auto industry.
Global Stocks Will Recoil if Trump Launches New Offensive in Trade Crusade
Trump knows that struggling US auto-workers form a crucial component of his blue-collar base.