Improv

FIRST PERSON

- ALEX MAGNO

The global markets are in shambles. We are looking at the greatest self-inflicted wealth destruction ever. No one knows how this will end.

The US stock market alone has shed trillions of dollars in value. Among the biggest losers are the billionaires who thought they could constitute an oligarchy under a Trump presidency.

Stock exchanges are, by far, the most efficient mechanisms for allocating capital and creating wealth. Many years of wealth creation have been demolished by the extreme uncertainty of the past week.

China, the world's second largest economy, stood up to the "reciprocal" tariffs Trump imposed. That piqued the American president, who ordered additional tariffs imposed on Chinese exports to the US.

China now faces a 104 percent tariff wall. While other nations seem willing to negotiate with Trump, Beijing has set a firm tone. The Asian superpower is not playing the bully's game.

Ironically, it is China that stands to gain the most in the long run. The country, ruled by the Communist Party, is bound to be the rallying point for all nations seeking free trade. If the global economic order is reconfigured, China emerges stronger.

China actually creates products — a lasting advantage that cannot be easily replicated. At the end of this episode, China will still be the manufacturing giant that it is. The rest of the world will still buy those products — although American consumers, thanks to Trump's insane trade war, will pay substantially more than anyone else.