Economist EJ Antoni breaks down the U.S. trade deal with China, a massive $2 trillion investment influx from the Middle East, record-setting market gains, and a sharp decline in inflation. What does this all signal for the nation's financial future? Get the facts first on Morning Wire.
Chapter 1: What historical trade deal was reached with China?
It was a historic week of dealmaking and positive economic news. President Trump and his team hammered out details of a trade truce with China, secured nearly $2 trillion in investment from Saudi Arabia and Qatar, and the stock market surged and inflation hit its lowest levels in years.
Chapter 2: Who is E.J. Antoni and what is his perspective?
In this episode, we speak to public finance economist and senior fellow at Heritage, E.J. Antoni, for some perspective on those sweeping investments and the health of the U.S. economy. I'm Daily Wire executive editor John Bickley with Georgia Howe. It's Saturday, May 17th, and this is a weekend edition of Morning Wire. Joining us now is economist E.J. Antoni.
Chapter 3: What are the implications of the tariffs on the U.S. economy?
E.J., thank you so much for coming on. My pleasure. Thank you for having me. So, look, we saw this week how tariffs, the stock market, inflation are all interconnected. A really dramatic fashion this week with all these trade deals, inflation numbers. Let's look at these separately at first. The first thing we saw is the big trade deal with China hammered out by Treasury Secretary Scott Besant.
Chapter 4: Is the U.S.-China trade deal beneficial?
What did we see there? Is this a good deal for the United States? Well, I would say it's a step in the right direction.
Chapter 5: What investments are coming from the Middle East?
Honestly, it feels a bit of an overreach to call it a deal. This is basically rolling back some but not all of the escalation in terms of tariff rates that we've seen for the last several weeks since April 2nd. And it essentially is an agreement not so much to do anything concrete but to continue talking. So, again, that's a step in the right direction.
Chapter 6: How do stock market gains relate to inflation?
I don't mean to poo-poo it and say this represents no progress whatsoever. I just don't want to overstate the case and make people think that this is somehow tremendous progress and we have anywhere near the same kind of deal that we do with the UK, for example.
Chapter 7: What factors are influencing current inflation rates?
So more of a truce than anything else.
Chapter 8: Will government spending affect future inflation?
Yeah, I think that's a very good way to put it.
Well, that said, I mean, is this good news for the United States to have rolled back these really exorbitant tariffs?
Well, it's certainly going to be good for the consumer in the short run. But when we talk to producers, in other words, when we talk to businesses, what we find, Regardless whether they're small or large businesses, the exact same thing. They're all really struggling with the volatility that tariffs have created.
And it's not simply that we're having a discussion about tariffs or that tariffs were put in place. It's that the tariff rates have not been consistent. They have not been steady. They've gone up. They've gone down. So this on-again, off-again movement has essentially made it impossible for a lot of folks to do business. So that's created, unfortunately, again, a lot of turmoil.
And we hope to have that resolved in the coming weeks as we get concrete deals and then as we get them ratified in the Senate.
Now, more concrete are the deals from the Middle East. We saw $2 trillion worth of arrangements there. What is happening there? Again, is this good news for the United States?
Yeah, this is actually particularly good news, what we're seeing with a lot of these nations in the Middle East, where they are essentially going to be pouring investment into this country. This is where we've got to remember the capital surplus is the flip side of the trade deficit.
For literally every year except for seven from colonial times through 1870, that was the arrangement that the United States essentially had with the rest of the world, where we were buying more from abroad than they bought from us, but they were investing much more here than we were investing abroad.
And that not only created those investments, that is, here in the United States, not only created revenue streams, in other words, future income for foreigners, but it also created future income for folks here in the United States, whether that was an American investor or the American worker.
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