Trump protectionism remains the biggest risk to the US economy

Patrick Armstrong, Chief Information Officer of Plurimi Investment Managers, shared the opinion of a large number of market participants, saying Trump's protectionist policies were the main problem for the US markets in 2018.

Armstrong's comments came after the "suggestion" of the administration to the AT&T wireless operator to terminate its commercial ties with China Huawei smartphone industry leader. In response to these actions, Trump administration has expressed concern about the country's security in view of Huawei growing market share. Because of the same concerns, the administration is blocking the pickup of Money Gram by Chinese Ant Financial.

The US has taken a more protectionist approach since President Trump's appointment, citing international partners as the cause of its trade deficit. Data released last week showed that China's surplus in the US reached a record high in 2017. from $275.81 billion compared to $260.8 billion in 2015.

Restructuring the US Tax Code - the largest in 30 years - reduces corporate tax to 21% from 35%. Companies, including Fiat Chrysler and Foxconn, have announced investments in the US for billions of dollars to take advantage of lower taxes.

However, reforms have not turned the US into a tax haven, so benefits also depend on how open the world's largest economy is.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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