The latest news has more symbolic importance than strictly economic: On July 21, the Trump administration ordered China’s consulate in Houston to close to “protect American intellectual property and Americans’ private information,” according to US State Department spokeswoman Morgan Ortagus. She did not elaborate on specifically what data was in question. Chinese officials in the consulate responded to the closure by burning confidential documents, with smoke visibly rising from the building. 

Five days later, China retaliated by closing the American consulate in the city of Chengdu in condemnation of America’s move. The Houston and Chengdu consulates aren’t the biggest or most important, but their closings are a definitive sign that U.S./China relations are only worsening. 

What’s a trade war, and why is this happening?

A trade war is when one country increases or implements taxes called “tariffs” on imports and occasionally exports from a particular nation. When that nation retaliates with tariffs of their own, we consider this a trade war. 

The Trump Administration began the trade war in 2018 because it believes China isn’t playing by the rules on the global market. For example, the Chinese government partially subsidizes some private companies, which allows those companies to produce goods at a lower selling point than their competitors and secure a valuable, lasting foothold in the market. China has also been accused of spying and stealing private data, most recently in the form of coronavirus vaccine developments. 

The Trump administration doesn’t want to rely so heavily on a global power it can’t trust or control. But instead of going through the World Trade Organization to solve its problems, it chose to start a trade war. 

President Trump also ran on an “America First” platform, which aims to advance the interests of U.S. manufacturers, in part by withdrawing from trade treaties and prior trade agreements. In the past few years, the U.S. has put tariffs on foreign steel and aluminum, not only from China but also Canada and Mexico. It has also taxed solar panels and washing machines, primarily from Asia.

Who does trade war affect in the U.S.?

This directly affects farmers, steel workers, and manufacturers who would typically ship their goods to China, but due to high tariffs, have lost clients there. Soybean farmers were an example of this, and the Trump Administration even bailed them out to the tune of $12 billion in 2018. In fact, the U.S./China soybean market was so disrupted that China made a soybean exemption last September. 

The trade war also affects anyone who imports goods or products from China. Due to the increased tariffs, they’ve been paying more for their supplies, and/or have to make due with different, less-than-ideal products from somewhere else. One third of American small businesses may have been negatively affected by the trade war. And all together, American companies’ stock prices may have lost as much as $1.7 trillion due to this trade war. 

Finally, the trade war affects American consumers, since businesses need to increase prices to pay for tariffs. In 2018 and 2019, the average cost to American households was an extra $650 per year, according to Chief U.S. Financial Economist for Oxford University Kathy Bostjancic. With additional sanctions added in 2020, that number has jumped to $2031 per year, according to the National Foundation for American Policy. 

Sorry to say: It’s unknown. So far, China has been comfortable retaliating in kind to The Trump Administration’s penalties, but not escalating them. Relations are at a low point now, but this could change based on upcoming presidential election results, and/or a change in strategy from either side. 

The post How the Trade War With China Can Cost You appeared first on Stash Learn.

Whether we like it or not, platforms like Twitter, Facebook and Instagram are instrumental in spreading ideas that inspire action. Because of this, who and what is censored, flagged, blocked and removed on these sites is of the utmost importance. Recently, Twitter flagged several of President Trump’s tweets for being false, and Trump retaliated by calling the labels censorship, and issuing an executive order that would attempt to hold Twitter responsible for his libel. 

Confused? Don’t be! At issue is a law from 1996, called Section 230 of the Communications Decency Act, which says: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

That essentially means an interactive computer service–such as Facebook, Twitter, WhatsApp, and Instagram— cannot be held responsible if users post libelous or derogatory material. (Good to know: Libel is a false claim or statement made to  hurt another person’s reputation. It is similar to something called defamation.)

But the law also stipulates that the sites would have “good faith” power to remove content they believe to be objectionable. “Without 230, the Internet we have today wouldn’t exist,” says Mark Grabowski, associate professor specializing in internet law and digital ethics at Adelphi University, based in New York.

Trump’s executive order essentially asks the Federal Communications Commission, the agency that regulates interstate and international communications,  to reexamine the law with an eye to changing it, making social media platforms more like publishers, and therefore open to libel suits and other legal actions.

Here’s a quick timeline of what’s been going on, and what the implications are for the future of Twitter and social media. 

July 26, 2018: On Twitter, President Trump accuses Twitter of “shadow banning, or  suppressing, the tweet reach of  prominent Republicans, and vows to look into it.  At issue, according to Trump, is whether Twitter and other social media companies discriminate against conservatives, by making their tweets and posts less visible. Social media companies have been adamant that their algorithms prevent that kind of blocking.

May 26, 2020: Twitter puts a warning label under two of President Trump’s tweets. The Tweets read: “there is NO WAY (ZERO!) that Mail-In Ballots will be anything less than substantially fraudulent,” and “The will be a Rigged Election.” 

The warning label says “Get the facts about mail-in ballots.” The label links to a Twitter statement, as well as news stories and statistics pointing to Trump’s claims as false. 

May 28, 2020: President Trump issues an executive order stating that if such a site goes beyond their “good faith” abilities to censor its content, they are no longer exempt from lawsuits. If this executive order were to pass, it could mean that any instance of libel on a site such as Twitter would be the legal responsibility of both the writer and the medium.  “This executive order would fundamentally shift the balance of power in such a way as to chill first amendment rights of social media companies,” says business attorney David Reischer, based in New York.

May 29, 2020: Twitter flags another Trump tweet, this time for glorifying violence, an act exercising the media giant’s right to flag or remove offensive materials in “good faith.”The flag says the Tweet will remain accessible for the public interest. The tweet reads: 

“These THUGS are dishonoring the memory of George Floyd, and I won’t let that happen. Just spoke to Governor Tim Walz and told him that the Military is with him all the way. Any difficulty and we will assume control but, when the looting starts, the shooting starts. Thank you!”

What’s Next: “Trump’s executive order to end Section 230 protections doesn’t have any immediate effect,” Grabowski says. “The Federal Communications Commission, which promulgates rules for the Telecommunications Act, must decide whether and how to implement Trump’s order in a way that’s compatible with the law. There is, perhaps, enough ambiguity and wiggle room in the law’s requirement that platforms act ‘in good faith’ that the FCC could make some changes to appease Trump.” 

But FCC Chairman Ajit Pai hasn’t landed on any changes. As of now, the FCC commissioners are debating. The debates will be followed by public hearings. And, Grabowski notes, any restrictive changes will likely then be challenged in court by the social media companies. Following that, if Congress can get a two thirds vote, they could veto any changes.  

And the Long Term?: The FCC and Congress have the power to amend Section 230, and according to legal experts, they just might. “I think it’s important to realize that Section 230 was enacted in 1996 to protect startups now these are some of the most valuable companies in the world,” says Todd A. Spodek, an attorney in New York. 

Grabowski says that Congress wants to make sure these tech giants stay in check, but Democrats and Republicans can’t agree on how. 

If changes to Section 230 prevent social media companies from flagging  threatening and offensive language and false claims, social media platforms could devolve into spreading more hate and lies than they already do, legal experts say. But if these changes give more authority to social media platforms, essentially turning them into publishers, the platforms could dictate more of the national and international conversation by promoting content that aligns with their interests. 

For now, the long-term future of censorship, libel, and who’s legally responsible for it on social media platforms, remains to be seen.

The post What Trump’s Twitter War Means for Social Media appeared first on Stash Learn.

Update: On February 11, 2020 California tech entrepreneur Andrew Yang ended his presidential bid , after failing to win any Iowa delegates.

Update: On January 13, 2020 Senator Cory Booker (D-N.J.) announced he will drop out of the race due to low polling numbers and inadequate funding, according to the New York Times.

The 2020 presidential election is just around the corner.

And whether you pay attention to politics or not, each candidate has an individual plan for economic policy as part of his or her campaign. Those policies can have an impact on your financial life, from how much you pay in taxes and for health care, to the cost of gas and groceries, even how much you’ll pay for a college education.

So as part of our 2020 coverage on Stash Learn, we’re providing you with information about each candidate.

While the field is still pretty crowded, we’ve pared the list of presidential hopefuls down to current President Donald Trump, the Republican candidate, and eight of the Democratic candidates who hope to become the official nominees for their party. These eight candidates are polling at or above 1.8%, according to Real Clear Politics, which creates an average from dozens of national polls.

Here are financial highlights for each of these nine candidates.

Republican candidate

Donald Trump
Current president of the U.S.

• Supports reducing taxes for individual taxpayers and businesses, and rolling back regulations for U.S. companies.
• In 2017, Trump presided over the biggest tax cut in a generation, which reduced the top ordinary income rate to 37% from 39%, doubled the standard deduction for ordinary taxpayers, and slashed corporate tax rates.
• The cost of the tax cut is expected to add $3 trillion to the federal deficit over the next decade.
• His “America First” trade agenda aims to return manufacturing to the U.S, in part by exiting international trade agreements such as the Trans-Pacific Partnership and reworking older deals such as NAFTA.
• Trump entered into a trade war with China and other countries starting in 2018. The trade war with China particularly, where both countries have added tariffs on billions of dollars worth of goods, might be a drag on business and the economy in 2020 and beyond, according to experts.

Democratic candidates

Ranked from highest to lowest according to polling data.

Joe Biden
Former vice president of the U.S.

• Hopes to invest $1.3 trillion over ten years in national infrastructure, including the construction of a high-speed rail network and the repair of highways, roads, bridges, and airports, according to his campaign website.
• Plans to roll back President Trump’s 2017 tax cuts, crack down on tax evasion, and increase corporate taxes.
• Potentially funnel billions of dollars to economically distressed cities for development, according to his
• Would encourage the purchase and use of electric vehicles by building 500,000 public charging stations for electric cars.
• Supports the Green New Deal, a ten-year plan to infuse environmental policy into trade policy, foreign policy, and economic policy by reducing carbon emissions and bolstering sustainable energy. The deal could reverse the effects of climate change, and could potentially create millions of jobs, proponents say.
• Would expand the Affordable Care Act of the Obama administration.
• Supports a minimum wage of $15 per hour.
• Biden’s plans could cost $3.4 trillion over a decade, according to Bloomberg.

Bernie Sanders
Senator (Vermont)

• Sanders would increase taxes on people who make $32 million or more annually, the top 0.1% of Americans. With this tax, Sanders hopes to raise $4.35 trillion over ten years and would reportedly decrease the wealth of billionaires by 50% over 15 years, according to his campaign website.
• Backs the Green New Deal and would invest $200 billion in the Green Climate Fund, to help developing countries combat climate change.
• Supports Medicare for all, which would expand Medicare nationally to every American, free at the point of service. This plan could cost $34 trillion, according to The Atlantic.
• Would reduce the size of America’s biggest banks and reinstate the Glass-Steagall Act, which would separate commercial banking and investment banking.
• Hopes to cancel $1.6 trillion worth of student loan debt and to cap interest rates for student loans at 1.88%. Sanders would also make public college and trade-school free for everyone.
• Raise the federal minimum wage to $15

Elizabeth Warren
Senator (Massachusetts)

• Warren plans to impose an “Ultra-Millionaire Tax” on the wealthiest 75,000 households. This plan would place a 2% tax on net worth greater than $50 million and a 6% tax on net worth greater than $1 billion, according to her campaign website.
• The introduction of a “real corporate profits tax,” a tax of 7% on corporate profit greater than $100 million. (Corporations had their taxes cut nearly in half under the Republican tax plan of 2017.)
• Would cancel some student loan debt.
• Supports Medicare for all, a plan that could cost trillions to enact.
• Backs universal child care.
• Has supported the Green New Deal to potentially address climate change and create jobs and has also introduced a Blue New Deal to restore ocean habitat.
• Would hold private equity firms accountable for companies that they buy.
• Like Bernie Sanders, Warren plans to re-enact the Glass-Stegall Act, with increased scrutiny on big banks.
• Aims to break up big tech companies such as Facebook and Amazon by appointing regulators to challenge mergers that reduce competition, according to her campaign website.
• Elizabeth Warren’s plans could cost $29.8 trillion over a decade, according to CQ Roll Call.

Pete Buttigieg
Mayor (South Bend, Indiana)

• Plans to make paid sick leave and paid family leave a federal policy, according to his campaign website.
• Supports the Green New Deal and would push to see an end to subsidies for fossil fuel companies and preventing new fossil leases on public lands. Buttigieg also announced that he would spend $500 million of federal money to create jobs and stimulate small businesses in rural communities.
• Would invest $50 billion over the course of ten years in research and development in agriculture.
• Backs a $15 federal minimum wage
• Voiced support for Medicare for All Who Want It, a plan that would create a public healthcare option, a plan that is less far-reaching than Sanders’ and Warren’s plans.
• Hopes to reverse President Trump’s tax cuts for the wealthiest earners, and levy a tax on the sale of capital assets, also known as a capital gains tax, on the top 1%, according to IndyStar.
• His economic proposals have a $5.7 trillion price tag, according to the IndyStar.

Michael Bloomberg
Former mayor (New York)

• Although he has outlined only a few potential policies so far, he has discussed plans to include an expansion on gun control that could cost the government $300 million.
• Historically, Bloomberg has prioritized the environment, having founded Beyond Carbon, which works towards energy reform.
• Bloomberg has suggested that he would expand Obama’s signature healthcare legislation, the Affordable Care Act.
• Proposes a federal minimum wage of $15, according to his campaign website.

Andrew Yang
Businessman (California)

• Hopes to create a universal basic income which he calls the Freedom Dividend, a government stipend of $1,000 per month for every U.S. citizen over the age of 18, a plan which would cost $2.8 trillion per year, according to The Tax Foundation.
• Would allow welfare recipients to choose between the Freedom Dividend and traditional welfare benefits.
• Plans to impose a Value Added Tax, or a 10% tax on production, on corporations which he has suggested would generate $800 billion to pay for the Freedom Dividend.
• Would increase taxes on top earners, according to his campaign website.
• Promotes the idea of “human-centered capitalism”, a philosophy that places human interests and welfare above the profit motive of capitalism.
• Supports Medicare for all and the Green New Deal.
• Plans to leave minimum wage levels to the states.

Amy Klobuchar
Senator (Minnesota)

• Klobuchar would raise taxes on the two highest income brackets and would require people making more than $1 million to pay a minimum tax rate of 20%, according to Politico.
• Hopes to reduce childhood poverty by 50% in ten years and eliminate childhood poverty in a generation.
• Would expand crop insurance programs for farmers, which provide protection for crops through the Department of Agriculture, and would build a commission to solve the financial problems facing dairy farmers as part of her “Plan for the Heartland.”
• Spend $1 trillion to revitalize American infrastructure, including rural communities.
• Supports the Green New Deal and an expansion of the Affordable Care Act over Medicare for all, according to her campaign website.
• Plans to expand student loan forgiveness and would make one and two-year community college degrees free.
• Supports a $15 per hour federal minimum wage increase.

Cory Booker
Senator (New Jersey)

• Supports legislation for “Baby Bonds,”  a program to address the income inequality gap in the U.S.. It would give every child $1,000 at birth in an interest-earning account, according to his campaign website.
• Would raise estate and capital gains taxes, according to Politico.
• Supports the Green New Deal and Medicare for all.
• Plans to invest $100 Billion in historically black colleges and universities and minority-serving institutions.
• Would work towards free college for everyone, and would increase vocational programs, while reforming the student loan application process.
• Platform includes raising the federal minimum wage to $15 per hour.

Whoever you decide to support in the 2020 election, it’s important to stay informed about the issues and the candidates, which you can do by reviewing their campaign websites. And it’s important to vote!

The post Get Ready for Election 2020 appeared first on Stash Learn.

The World Economic Forum (WEF) is an international organization of world leaders and executives. For fifty years, the forum has held an exclusive meeting in Davos for executives, elected officials, and even celebrities to hear from experts about the biggest issues facing the world and to brainstorm solutions. The meeting has a theme each year and the theme this year is “Stakeholders for a Cohesive and Sustainable World.” Participants are focused on building a more sustainable future in the face of climate change.

Climate Change at Davos

Given the WEF’s focus on sustainability for 2020, climate change has been a major talking point at the conference. Sixteen-year-old Swedish climate activist Greta Thunberg attended the meeting. Thunberg delivered a speech in which she claimed that world leaders are not doing enough to reduce carbon emissions and that the continued inaction of world leaders and companies will allow climate change to accelerate.

Klaus Schwab, the German economics and engineering professor who founded the World Economic Forum, also urged participating companies to aim for net-zero carbon emissions by 2050. Some executives took the opportunity at the meeting in Davos to speak about how their companies plan to reduce their carbon footprints and increase their sustainability efforts.

Leadership at British-Dutch consumer goods conglomerate Unilever promised to reduce unsustainable packaging by 14% by 2025, while Nestlé pledged that it would spend $2 billion on the development of more sustainable packaging, according to Reuters. Meanwhile, Russian aluminum producer En+ said it would spend $850 million revitalizing plants to reduce their carbon footprint. Starbucks CEO Kevin Johnson also promised that the coffee company would cut its carbon emissions in half by 2030.

Investment manager BlackRock also announced its partnership with the Climate Finance Partnership, which hopes to raise $500 million for the development of renewable energy. This announcement came after BlackRock’s chairman and CEO Larry Fink sent a letter to CEOs warning them about how the advancement of climate change might significantly shift the world of finance.

Donald Trump Takes a Different Tone

Despite the theme of this year’s meeting in Davos, President Donald Trump made a speech in which he claimed that climate change is not the immediate threat that scientists and climate experts have asserted that it is. While company leaders outlined their plans for reducing carbon emissions, President Trump spoke in support of America’s position as the biggest producer of oil and gas in the world.

Energy-Conscious Investing

If the theme of this year’s Davos is any indication, confronting climate change is becoming a priority for companies and consumers. You can be climate-conscious in how you invest. Stash offers ETFs that include clean energy companies and companies that are working to reduce their carbon footprints.

When you invest, remember to follow the Stash Way, which includes regular investing, diversification, and planning for the long term.

The post Let’s Dive into Davos appeared first on Stash Learn.

In fact, President Trump expanded the economic battle to other countries this week, by slapping new tariffs on Argentina, Brazil, and France.

This week, Trump said he plans to impose new tariffs on industrial aluminum and steel from Argentina and Brazil. He said he’d also ramp up tariffs on a variety of popular French imports to the U.S.

By increasing tariffs on imported goods such as steel, the president hopes to make good on his 2016 promise to invigorate American companies, according to Fortune. However, steel companies are struggling, with U.S. Steel reporting a third-quarter loss of $35 million.

The trade war goes global

President Trump announced by tweet on December 2, 2019, that the United States would impose a 25% tariff on steel and a 10% tariff on aluminum from Argentina and Brazil as well as a 100% tariff on $2.4 billion worth of French foods and products.

Argentina and Brazil had previously been excluded from steel and aluminum tariffs in 2018 when the U.S.  reportedly imported $2.6 billion of steel from Brazil and $700 million of steel from Argentina.

President Trump alleged in the Twitter thread that both countries manipulate their currencies, hurting the American economy. Experts have disputed this allegation, claiming that Argentina and Brazil are actually trying to strengthen their currencies against the dollar. Instead, the president could be taxing Argentina and Brazil because they’ve sold billions of dollars worth of soybeans to China, which has halved its soybean purchases from the U.S. according to Bloomberg.

France has also been caught up in the trade war. In July, 2019, France passed a law placing a 3% tax called the Digital Services Tax on big American tech companies that operate in France such as Facebook, Amazon, and Google.

Responding to this tech tariff at the NATO summit this week, the Trump administration suggested that it would tax $2.4 billion worth of French goods at 100%, which could double the price of French favorites like wine, cheese, and cookware in the U.S.

The French Economy Minister Bruno Le Maire alleged that this 100% tariff would elicit a strong response from the entire European Union. The European Union on the whole recently became subject to American tariffs on $7.5 billion worth of European products.

South Korea too

In January, 2018, the Trump administration imposed a 50% tariff on washing machines from South Korea and a 30% tariff on solar panels from China. The move followed a push by domestic manufacturers of both products to get U.S. trade officials to impose taxes on imports, as a way to protect them from international competitors.  

The trade war’s impact on the U.S. economy

The trade war is reportedly costing American consumers. With the current tariffs in place, American households will spend an extra $2,031 per year, according to the National Foundation for American Policy.

Additionally, though Trump’s steel tariffs initially boosted the industry in 2018 with the creation of jobs and an increase in steel prices, the manufacturing sector remained slow for the fourth consecutive quarter as of December 2019.

Farmers say they are struggling because of the trade war as well. Countries such as China are raising tariffs on American agricultural products in response to the United States’ increased tariffs on Chinese goods, which some agricultural experts say may cost American farmers.  For example, China bought 5.9 million tons of soybeans from the United States during the first half of 2019, less than half of the 13.4 million tons that China purchased in the first half of 2018.

Background on the Trade War

• A trade war is when countries start waging an economic battle with each other using tariffs. One country will put tariffs on another’s goods, and the other will retaliate in kind.
• Over the last 30 years, the U.S. has signed numerous trade treaties to avoid trade wars, including the North American Free Trade Agreement (NAFTA).
• Agreements like this reduced the threat of trade wars, in part by eliminating many tariffs on exported and imported products.
• The Trump administration has been able to raise tariffs because of Section 301 of the Trade Act of 1974. Section 301 states that the United States can raise tariffs on countries that violate trade agreements or demonstrate unfair trade practices.
• Since 2018, the United States and China have notably been taking turns raising tariffs on each other’s exports. In May 2019, the United States doubled tariffs on $250 billion of Chinese products and China responded by announcing tariffs on $60 billion of American products. Steel, soybeans, whiskey, lumber, and other products have been caught in the crossfire of the trade war.

The post The Trade War Isn’t Just About China appeared first on Stash Learn.

• Following European Union (EU) parliamentary approval, the UK officially left the EU on Friday, January 31, 2020. There will be an 11-month transition period, during which the UK will adhere to previous EU trading rules and regulations as the new relationship gets ironed out, according to reports.
• On Thursday, December 12, Boris Johnshon’s conservative party won the majority of votes in a general election. Johnson’s victory is likely to pave the way for the U.K.’s departure from the European Union.

Brexit has hit the rocks again.

Over the weekend, British members of parliament rejected Prime Minister Boris Johnson’s plan to remove the United Kingdom (UK) from the European Union by the end of October, and they have asked for an extension to attempt a solution.

Brexit has consumed the UK for nearly three years, as the country and its governing representatives have been unable to agree on exact terms for its departure from the single European market, which could mean a big shakeup for one of the world’s largest economies, and possibly markets around the world.

If you’re confused about what Brexit is, or why it matters, read on.

What’s the European Union?

The European Union (EU) is a group of 28 countries that function as a single trading bloc. Ratified in 1993, the union has its roots following the calamity of World War II.

Its purpose is to foster economic and political partnership. The hope?  Countries that trade together will be less likely to declare war on each other.

The EU functions as a single market, which means goods (like refrigerators and eggs) can be shipped without paying tariffs and duties. Citizens of the individual countries and visitors to the region are allowed to move around all the countries as though it was one gigantic country.

Think about the border between Oklahoma and Texas—the highway patrol may change, but there are no customs or border security and people can move from Norman to Austin whenever they want.

The EU has its own parliament in Brussels and puts its stamp on rules that affect the nations under its umbrella. These rules can affect prices on trade, environmental policy, and how people can travel from country to country.

Many countries in the EU have abandoned their currency and adopted the euro. Great Britain chose not to and continues to use the pound sterling.

What’s Brexit?

The movement to leave the EU is known as Brexit, short for “British Exit.”

On June 23, 2016, the people of the United Kingdom voted on a referendum. The question? To stay in or leave the EU. The decision? The results surprised the world (and many people in the UK). Experts predicted that the UK would overwhelmingly vote to stay in the EU. But the experts were wrong.

The UK voted to leave the EU by a tiny margin.

The reasons why are complicated. What many people saw in Great Britain as a positive, such as ease of travel and citizenship from country to country, others saw as a negative, including increased immigration, globalization, and loss of native culture.

And not everyone in Great Britain likes taking orders from Brussels. Many who voted to leave the EU have said they think that U.K. decisions should be left to the U.K. and that it should have control over its own borders, and its own economy.

Brexiteers also point to costs: Britain pays 13 billion pounds annually to belong to the bloc, for which it also gets about 4 billion pounds in spending.

Politicians have struggled for years to make the Brexit deal a reality. Theresa May, the prime minister prior to Johnson, was unable to convince parliament to vote for a deal she had painstakingly worked out with the EU. She stepped down as prime minister in May 2019.

Johnson has also struggled, going as far as shutting down parliament so he could complete Brexit without further legislative debate by the October 31 deadline.

One of the most complicated sticking points relates to the border with the Republic of Ireland, which will remain in the EU, while Northern Ireland will depart in Brexit. Questions linger over whether Northern Ireland will continue to be subject to EU trading rules, and where to put a customs border.

As an FYI: The UK includes England, Wales, and Scotland, as well as Northern Ireland. The Republic of Ireland, on the same land mass as Northern Ireland, is an independent country.  Tensions between the UK and Ireland have run high for centuries.

Brexit, the UK economy, and world markets

With a GDP of nearly $3 trillion, as of 2018, the U.K.’s economy is currently the fifth-largest in the world. It’s also connected to many others in the region and around the globe.

London, for example, is one of the biggest financial centers in the world, and it is often seen as an entryway to markets in the rest of Europe. That status may change after Brexit, according to some experts.

Britain’s trading border with the EU is currently wide open, and approximately 50% of its exports go to the EU. Following Brexit, its trading businesses would suddenly be subject to tariffs and other trade impediments.

Similarly, its trading partners in the EU would also be subject to new tariffs and other potential financial burdens with a separated UK.

You may have heard the term no-deal Brexit. That’s the possibility that the UK could leave without any deal with the EU in place. Some economists and other market watchers say this could cause huge financial problems, including a recession in the UK, and problems for markets around the world.

Follow the Stash Way

Markets can be volatile, and sometimes what happens in other parts of the globe can affect what goes on in our own economy. That’s why Stash recommends following the Stash Way, which includes investing for the long term, regular investing, and diversification.

You can learn more about the Stash Way here.

The post What You Need to Know About Brexit appeared first on Stash Learn.

The tweet was reportedly meant to show support for protesters in Hong Kong, where hundreds of thousands of people have demonstrated for weeks against mainland China, asking for greater access to democracy and political representation.

Instead, it has caused an ongoing backlash in China, where some of the nation’s biggest businesses have reportedly withdrawn their sponsorship of the NBA over the controversy.

The NBA’s commissioner has defended Morey’s right to freedom of expression, but the NBA also issued an apology to China, which itself is the subject of controversy. Some critics have said it shows the NBA appears to be more concerned with its profitable relationship in China than the political freedoms of the country’s citizens.

Companies often need to walk a fine line when it comes to politics, and business relationships with China can be complex. China is one of the largest economies in the world, but it also has an authoritarian government, and numerous other U.S. companies have reportedly walked back political statements challenging China in recent months, or bowed to government censorship in other ways, to continue doing business there.

Here’s an explainer:

China and the NBA

The NBA is a huge moneymaker, with annual revenue of about $8 billion, according to Forbes. However, China accounts for nearly 10% of the NBA’s total revenue, an amount that’s expected to increase to 20% in the next decade according to reports. China is also the basketball league’s largest market outside of the U.S.

China, which has a population of 1.4  billion, has the second-largest economy in the world after the U.S., valued at about $14 trillion. And it’s an important market for U.S. businesses of all kinds.

While China’s economy has operated with free-market principles for decades, the country’s government is communist and authoritarian. Although its businesses have tended to operate freely for decades, they have come under growing government supervision and control, according to experts. Increasingly, U.S. businesses have encountered free-speech issues operating there.

In reaction to the Morey’s tweet, the NBA’s Chinese sponsors have reportedly pulled their support for the league, including media conglomerate Tencent, which claims to have 500 million customers to whom it live streams NBA games, as well as China Central Television, smartphone maker Vivo, numerous large Chinese retailers, and a Nissan partnership in China.

Additionally, the Chinese Basketball Association reportedly severed all ties with the NBA.

Not just the NBA

• Facing media criticism in China, Apple reportedly recently disabled an app that helped Hong Kong demonstrators track the whereabouts of police.
• Search engine company Google, which has been banned from operating in China for years, has been working on a censored version of its search engine to operate there, according to reports.
• Gaming company Activision Blizzard suspended a Hearthstone champion who voiced support for Hong Kong demonstrators and revoked a $10,000 prize he’d earned playing the game.
• American Airlines, Delta Air Lines, and United Airlines no longer refer to Taiwan as a separate country on their booking websites. Taiwan has asserted its independence from China since the 1940s.
• Marriott fired an employee in Omaha, Nebraska in 2018 for liking a Tweet that commended the hotel chain for listing Tibet as an independent country. China claims that Tibet is under its sovereignty, and Marriott later apologized to China and changed the listing status of Tibet, according to the Washington Post. (China had allegedly threatened to shut down Marriott’s website in China.)
• In order to tap the huge Chinese market, various film studios in Hollywood have adapted scripts so they pass scrutiny with Chinese censors.

More about Hong Kong

Hong Kong reverted back to Chinese rule in 1997, after nearly 100 years as a colony of Great Britain. Protestors there have demonstrated for greater freedom from mainland China, and have gone as far as to shut down the airport on the island, which is one of the busiest in the world. The protests began this summer over a law that would allow mainland China to extradite Hong Kong citizens, meaning they could be sent there to stand trial.

The trade war with China

The U.S. and China are also engaged in a trade war, and rhetoric between the two countries has gotten heated.

• Trade talks between China and the U.S. have repeatedly broken down, which has caused some market turmoil in the U.S.
• The Trump administration has threatened tariffs on $550 billion of Chinese imports.
• In response, China has called for a halt to purchases of American agricultural products.
• Over the summer, China let the value of its currency, called the yuan,  fall. Very generally, China pegs its currency to the dollar. So that means every yuan exchanged equals a fixed amount of dollars, and that fluctuates with the value of the dollar. By letting its currency devalue, or fall below its current value, China made its own goods and services cheaper in export markets.

Comic relief

The cartoon South Park, often raunchy and controversial, has also ventured into the fracas. A recent episode criticized censorship in China. China then banned the cartoon from its airwaves. Last week cartoon creators Trey Parker and Matt Stone tweeted in response:

Watch the full episode – https://t.co/oktKSJdI9i@THR article – https://t.co/nXrtmnwCJB pic.twitter.com/Xj5a1yE2eL

— South Park (@SouthPark) October 7, 2019

*By tapping on the link above, you are going to a website not managed by Stash which is subject to a different privacy policy and terms of use.

Remember the Stash Way

Investing can be scary and confusing, especially when markets are volatile.

That’s why we’ve boiled down our investing philosophy into three basic principles that we hope can help guide you as you make your first investing decisions. We call our approach the Stash Way. Here are its three pillars:

• Invest for the long-term
• Invest regularly
• Diversify

You can learn more about the Stash Way here.

The post All About the NBA’s China Dilemma appeared first on Stash Learn.

That’s the news from the latest National Climate Assessment study, which came out last week. It’s produced by the National Oceanic and Atmospheric Administration, a division of the U.S. Department of Commerce. The climate report comes out every four years.

“Without substantial and sustained global mitigation and regional adaptation efforts, climate change is expected to cause growing losses to American infrastructure and property and impede the rate of economic growth over this century,” the report says.

Here are some key takeaways from the report:

• By 2050, the average annual temperature of the U.S. could increase by 2.3 degrees.
• The U.S. economy could shrink as much as 10% by the end of the century, losing hundreds of billions of dollars in national and overseas trade, not to mention health costs and disaster relief. Farming and other agriculture will be harmed, through the declining health of livestock, reduced crop yields, and threats to food security, among other things.
• Aging national infrastructure could be further harmed by extreme weather such as flooding, heat waves, and wildfires, leading to threats to the economy, national security, and human health.

What’s causing the problems?

Environmental scientists consider carbon trapping gases, such as those emitted by car exhaust, agricultural, and coal-based manufacturing processes to be the primary culprit. These emissions are sometimes called greenhouse gas.

These gases increase something called global warming. Global temperatures have increased by 2 degrees over the last 115 years, and are expected to continue increasing at a faster rate going forward.

Global warming has also been linked to rising seas levels, which in turn leads to more flooding on the coasts. Warming sea temperatures have also been linked to the increasing ferocity of hurricanes, as well as the growing severity of droughts and catastrophic forest fires in the Western states in recent years.

What can be done?

Here are some things the report suggests:

• Reduce the release of carbon into the atmosphere.
• Switch to alternative energy, such as wind and solar, that doesn’t produce carbon gas.
• Drive energy efficient automobiles that pollute less, and switch away from coal-based energy.
• Adapt to climate change with new resilient systems in farming, construction, and transportation.

Why is there controversy?

The 1,600 page report stands in contrasts to the messaging of the Trump administration. In June 2017, the US withdrew from an international accord to fight global warming, and has since taken measures to roll back regulations restricting emissions of greenhouse gases and easing standards for pollution.

The post What Does Climate Change Have to Do With the Economy? appeared first on Stash Learn.

For many Americans, this has led to, and perhaps been exacerbated by, a relentless wave of political news and discussion piercing our personal bubbles. It’s in our social media news feeds, a constant on cable news, and discussed, with regularity, around the water cooler at work.

And the rift is real between red and blue America. Democrats, Republicans, and the independents around the country seem to be speaking completely different languages. We can’t agree on anything: Is the president doing a good job? Is ending net neutrality a positive thing for the country? Are Kim Jong-un and Vladimir Putin our friends now?

The answers largely depend on who you ask. But there is one thing most people—no matter what their political beliefs are—can agree on: The typical investment portfolio is in pretty good shape, considering that the market has been on a decade-long bull-run.

Red states vs. blue states: Stash digs in

Stash’s data team analyzed data from more than 805,000 users’ investment portfolios to see if investors in “red” states differ in any significant way from their “blue” counterparts.

As it turns out, Americans invest mostly the same way. Here is the comparison of the largest portfolio allocations, on average, of Stashers in blue, red, and swing states:

For this analysis, “red” states are states that were carried by the Republicans in the 2004, 2008, 2012 and 2016 presidential elections, and “blue” states are states that were carried by the Democrats during those elections. Swing states are states not overwhelmingly carried by either party during those elections.

What we found

• The average blue, red, and swing-state investor are very similar. Among the top holdings in blue, red, and swing states, there were few differences.
• Amazon is popular, despite being politically contentious. Amazon is the only single stock that appeared in the top ten in each category. It may be a surprise to find that it’s even a hit in red states, as the company has become a favorite target of President Trump.
• Everyone likes marijuana, but investors in red states buy it the most. The Corporate Cannabis ETF is a top holding among investors in all states, but investors in red states hold an edge in terms of overall portfolio allocation dedicated to marijuana investments.
• Also, every state that has legalized marijuana, so far, is a blue state with the exception of Alaska. So, even though pot legalization is almost entirely a blue-state phenomenon, red-state investors are taking advantage.
• Blue states do the right thing. The Do The Right Thing ETF—which tracks companies with a high ESG (environmental, social and governance) score and socially responsible investments—ranks in the top ten investments for blue and swing states, but not in red states.

The key takeaway from the Stash data team is that despite a polarized political atmosphere, investors are finding some common ground. That may or may not make you feel better about the current political climate, but it may be a topic that helps break the ice with politically-opposed relatives on Thanksgiving.

Methodology:

Surveyed 6,759 Americans via SurveyMonkey:

Age Demographics
Under 18 – 0.03%
18-24 – 10.31%
25-34 – 31.69%
35-44 – 25.88%
45-54 – 17.84%
55-64 – 10.99%
65+ – 3.25%

Gender Demographics
Male – 62.09%
Female – 37.56%
Other – 0.34%

The post Yes, We Can All Get Along: Investors in Red States vs. Blue States appeared first on Stash Learn.

We’re nearly a decade into an economic recovery since the financial crisis, and people are beginning to feel it. Unemployment is at a 50-year low, wages are rising, and apart from some recent stock market stumbles, the economy seems strong.

So we figured it was a good time to check in with Stashers to find out how they’re doing. In mid-September 2018 we polled 6,759 users across the U.S., using Survey Monkey, to ask them exactly how they felt about their financial prospects, prior to the midterm elections, and beyond. (Note: The survey sample was 62% men and 38% women.)

Here’s what we found out:

About 40% of Stash users said their financial picture had brightened since President Trump won the election in 2016. Forty-four percent said their financial picture stayed the same.

About 20% of those polled said their financial prospects have gotten worse since 2016. For these respondents, one-third said times have been tough because their wages showed little or no increases; 16% said it was because the cost of housing had increased, and 17% cited the rising cost of health care.

Looking ahead to the midterm elections, more than two-thirds of those polled said they felt either the same or more fearful about their financial prospects than they did the previous year. One-third said they were more hopeful.

The gender factor

And the results are different by gender. One-quarter of the women surveyed said their financial picture had improved since Trump became president, compared to 44% of men.

Broken down by age, nearly twice as many millennial men said their finances had improved, compared to women the same age.

Similarly, when respondents considered more recent financial opportunities before the midterms, nearly half of women felt more fearful about their financial prospects compared to 30% of men.

How people plan to invest

When it comes to investing, about 85% of respondents said they plan to invest the same or more money in U.S.-based investments.

Similarly, by age, double the number of 18 to 24-year-old men said they are interested in American-focused investments, compared to women who are the same age.

About a quarter of those polled said they feel less trusting of large U.S. tech companies including Facebook, Amazon, Apple, Netflix, and Google.

Meanwhile, 30% said they were less inclined to invest in European stocks, and 25% said they were less inclined to invest in the stocks of companies in Asia.

And by gender, 40% of men said they plan to invest more in U.S.-based companies in the coming year, compared to 25% of women.

When it comes to tech, 22% of men said they were more trusting of tech company investments than they did before Trump took office, compared to 14% of women.

2018 Stash Political Report

Download the full report

Methodology:

Surveyed 6,759 Americans via SurveyMonkey:

Age Demographics
Under 18 – 0.03%
18-24 – 10.31%
25-34 – 31.69%
35-44 – 25.88%
45-54 – 17.84%
55-64 – 10.99%
65+ – 3.25%

Gender Demographics
Male – 62.09%
Female – 37.56%
Other – 0.34%

The post Stash’s Midterm Survey: The Results Are In appeared first on Stash Learn.

The Canadian government took a giant leap toward legalizing marijuana and is poised to become the second country in the world to end cannabis prohibition on a national scale.

Bill-45, the Cannabis Act, has completed its journey after more than a year of working its way through Canada’s legislature. The effort is supported by Canada’s Liberal party and Prime Minister Justin Trudeau, and was also a key part of Trudeau’s campaign platform in 2015.

Uruguay became the first country to legalize marijuana for recreational use in 2013, and many other countries have decriminalized it, though bar sales. In the U.S., nine states have legalized marijuana for recreational use, though it remains illegal under federal law.

Canada will become the first G7 country to cross the reefer Rubicon.

Canada gives legalization the green light

Under the new legal framework, Canada’s new regulations will allow people ages 18 and over to purchase marijuana from licensed stores. They will also be able to grow their own at home, except where prohibited by local laws. Stores selling cannabis for recreational consumption could open as soon as August or September.

Ultimately, how and when those stores open to the public will be up to individual provinces and territories.

But possible dangers to public health are on the government’s radar, too. It’s expected that the Canadian government will set up marketing and public-relations campaigns to educate and inform about the effects of marijuana use—similar to what you might see in the U.S. concerning tobacco.

Seeing green

Proponents of legalization in Canada look at the potential financial benefits—specifically, that recreational sales could generate revenues of more than $4 billion per year, according to a report from professional services firm Deloitte.

All told, it could be an economic boon for Canada. Entrepreneurs should get the chance to jump into a once-blacklisted market, thousands of jobs will likely be created, and the government should reap the benefits of increased tax revenues.

In the U.S., legal marijuana has created more than 123,000 jobs, according to industry data.

And as far as taxation, government officials hope to levy a 10% sales tax, or roughly $1 per every gram sold—whichever is greater.

How you can capitalize

A G7 country fully legalizing cannabis is a first, and will likely act as a shot in the arm for the fledgling marijuana industry. A number of companies, some publicly-traded, already work in and around the industry, but they’re still considered to be treading on risky ground; as has investing in those companies.

Examples include Cronos Group (CRON), Aurora Cannabis (ACB), and GW Pharmaceuticals (GWPH).

In the U.S., for example, marijuana companies operating in states where cannabis is legal are still largely shut out of the traditional banking system, and are under threat of shutdown from the federal government.

But some of the world’s largest companies operate out of Canada, where laws were more lax even before legalization. Now, with an end to national prohibition, companies and investors have a safe space, legally speaking, in which they can conduct business.

Though the industry is still on shaky ground and therefore, somewhat risky, you can invest in the marijuana industry on Stash.

The post In Canada, Marijuana Prohibition is About to Go Up in Smoke appeared first on Stash Learn.

Despite looming trade wars and a debt crisis in Italy, among other things, the world’s economy is set to grow more than 3% this year, according to a new forecast from the World Bank.

That’s on par with what the bank forecast earlier this year, and roughly equal to its prediction for growth in 2017.

What is the World Bank?

The World Bank is an international financial institution. It provides loans and financing, primarily to developing countries, in an effort to reduce poverty worldwide. Headquartered in Washington, D.C., it was founded in 1944 at the Bretton Woods Conference by a delegation of international economists and policymakers in an effort to help poor countries secure loans.

The World Bank issues semiannual reports on global economic growth. The latest report, the June 2018 Global Economic Prospectus, provides reasons for optimism–cautious optimism, that is.

What does the latest report say?

The headline is that the world economy is set to match expectations in 2018, growing 3.1%, and then an additional 3% in 2019, according to the report.

Domestically, the U.S. economy is expected to grow 2.7%, a bump from the 2.5% the World Bank forecast in its January report. Next year, it’s estimating 2.5% growth.

The rest of the report, though largely positive, is more of a mixed bag.

The good news

Roughly half of the world’s economies are growing, with China leading the pack. China, the world’s second-largest economy after the U.S., is expected to expand 6.5% in 2018, according to the report.

“All the consensus forecasts for 2018 and 2019 reflect optimism,” Shantayanan Devarajan, acting chief economist for the World Bank Group said in the report.

The upgraded forecasts for both the U.S. and the global economy may come as a reassurance as an avalanche of political and financial news has worried investors and thrown markets into disarray over the past several months.

The report says that economic growth should remain “robust” for the next year or two.

“This synchronized recovery may lead to even faster growth in the near term, as stronger growth in, say, China or the United States spills over to other parts of the world,” Devarajan said.

Curb your enthusiasm

“Protectionist threats cast a dark cloud over future growth. If these threats lead to trade wars, the consequences could be devastating.” – Shantayanan Devarajan, acting chief economist for the World Bank Group

The bad news is that economic growth is expected to slow by 2020, mostly because the world’s economies should be firing on all cylinders.

That rosy outcome is threatened by the possibility of escalating trade wars.

“Protectionist threats cast a dark cloud over future growth. If these threats lead to trade wars, the consequences could be devastating,” Devarajan said. “Even if they do not, uncertainty about economic policy dampens investor sentiment.”

Tariffs could pummel the global economy to a degree not seen since the financial crisis in 2008 and 2009, the report says.

With uncertainty surrounding the trade negotiations involving the U.S. and China—and with new trade barriers recently announced between the U.S. and Canada, Mexico, and the E.U.—it’s unclear how things will shake out.

The U.S. also has increasing budget deficits to consider. A deficit is a shortfall between a government’s expenditures and revenues, which tends to increase the national debt. Following last year’s tax cuts, the budget deficit in the U.S. could reach 5% of GDP over the next decade, which could lead to inflation, experts say.

Looming interest rate hikes in the U.S. could also upend the World Bank’s forecasts.

The post The World Bank Has Some Good News, and Some Bad News appeared first on Stash Learn.

Howard Schultz, executive chairman of Starbucks, announced that he will leave the Seattle-based company on June 26. Schultz has been with the company for decades, serving two tenures as its CEO—from 1986 until 2000, and from 2008 until 2017, when he moved to the executive chairman role.

“For some time now, I have been deeply concerned about our country—the growing division at home and our standing in the world,” he told the New York Times, regarding his retirement.

He added that he plans to find a way to that he can give back, but that he’s “not exactly sure what that means yet.”

Roasting the competition

Schultz, who has worked for Starbucks since the early 1980s, and has a net worth of more than $3 billion.

Under Schultz, Starbucks grew into an international corporate powerhouse, with more than 24,000 stores around the world, according to company data.

Coffee and politics

Starbucks became a leader in corporate social responsibility under Schultz, instituting programs meant to balance profitability with societal well-being. Examples include a tuition reimbursement program, minimizing the company’s environmental footprint, and even closing stores for special training sessions.

The company has also been caught up in a number of controversies, some political, involving labor disputes, the “War on Christmas”, and a request from Schultz in 2013 that customers don’t bring guns into Starbucks stores.

Most recently, the company came under fire following the arrest of two black men in a Philadelphia store after a manager called the police when the men didn’t place an order while waiting for a friend.

A 2020 presidential contender?

“Let’s just see what happens.” – Howard Schultz

Schultz isn’t denying that he has presidential ambitions, but is still being vague about his future plans. He has been a constant and vocal critic of President Donald Trump, another businessman-turned-politician, wading into the political discourse more so than most other CEOs.

But he’s remained mum on the topic, telling CNBC: “Let’s just see what happens.”

Other business leaders that have speculated about running for president include Disney CEO Robert Iger, JPMorgan Chase CEO Jamie Dimon, and Mark Cuban, owner of the NBA’s Dallas Mavericks.

Another businessman, Mitt Romney, was the Republican nominee during the 2012 presidential election and served as the CEO of Bain Capital.

The post Starbucks’ Howard Schultz Steps Down. Is there a Presidential Run Brewing? appeared first on Stash Learn.

A handful of headlines drove the Dow Jones down by as much as 500 points. The apparent cause? Banks, tariffs, and political woes in Italy.

So what does this all have to do with your portfolio?

Let’s start with the news first.

Bank losses

JP Morgan and Morgan Stanley both saw their share values fall on Tuesday, dragging many other stocks down with them.

Morgan Stanley shares fell by more than 6% after an executive said that the company’s wealth management division was looking at challenging business conditions in the second quarter. The comments spooked investors enough to send the share prices spiraling for its worst day in two years.

JP Morgan’s shares also fell after remarks from an executive, as the company’s co-president Daniel Pinto said that trading revenues were expected to be flat in the second quarter.

Other banks had a bad day as well. Goldman Sachs, Citigroup, and Bank of America shares all fell by more than 3%.

(More) Chinese tariffs and North Korea

While the on-again, off-again White House summit with North Korea appears to be on again, the biggest ripples coming out of Washington D.C. had to do with additional tariffs levied on China.

The White House announced that it will release a list of $50 billion in Chinese goods in June that will be subject to a 25% tariff. The Trump administration also said it would be implementing investment and export restrictions in an attempt to curb theft of intellectual property theft from U.S. companies.

The announcement follows previous rounds of tug-of-war with China regarding trade, which also caused the markets to tank.

Italy: The next Greece?

The Italian economy continues to struggle a decade after the Great Recession, and the country’s still wracked with debt. Fears are that Italy could enter a deep recession, much like what happened to Greece.

What has the markets even more on-edge is the fact that Italy’s economy is ten times bigger than Greece’s, and Italy’s turbulent political environment that hasn’t produced a plan to right the ship.

Italy is the third-largest economy in the European Union, and its economic troubles could create a backlash affecting the entire eurozone and markets around the world.

Other fears: Will Italy exit the EU? Analysts worry about another Brexit situation and its effect on the global economy.

What should you do?

Take your finger off the “sell” button. It’s easy to start panicking when the numbers seem to be going the wrong way.

When you sell, you’re effectively locking in any gain or loss you’ve made. Stay strong, don’t let your jitters get the best of you.

Take a deep breath and take the long view. On average, if you look at the last 100 years, markets have grown a little over 8% a year. Going forward, many experts predict a long-term expected annual return for US large cap stocks (i.e., the S&P 500) of 5.9%.”

Here’s the hard truth: There are years where the market is strong and some years where the market struggles. You can’t sweat day to day market ups and downs when you’re investing for a lifetime.

We have a saying at Stash. It’s all about “time in the market, not trying to time the market.”

Stay strong. Stay the course. Stay diversified. It’s the Stash Way.

The post Why Did the Market Drop 500 Points? appeared first on Stash Learn.

The accord, which waived economic sanctions on Iran in exchange for a halt to its nuclear weapons program, was originally put into place by the Obama administration in 2015.

Under the deal, Iran agreed to concessions, most notably reducing its uranium stockpile, and allowing inspectors from the International Atomic Energy Agency to monitor its declared nuclear sites.

Trump, however, has decided to reverse course and withdraw the U.S. from the agreement, while also reinstating sanctions on Iran.

What’s a sanction?

A sanction is a type of penalty, typically levied by one nation or group of nations on another in an effort to deter or punish certain behavior.

In this case, Iran was sanctioned by the U.S. for attempting to build a nuclear weapon. Those economic sanctions–which are commercial or financial in nature–were meant to put pressure on the Iranian government by hurting the country’s economy through blocked trade and transactions.

In pulling out of the nuclear pact, Trump announced that the U.S. will reinstate sanctions previously lifted under the deal.

American allies, including leaders from France, the U.K., and Germany, unsuccessfully tried to pressure Trump into recertifying the deal.

Why is Trump pulling out of the deal?

There isn’t a clear answer, though Trump has said that he wants an agreement that sticks tougher restraints on Iran, including limits on its nuclear fuel production. He also opposes the current deal’s sunset provision, which allows Iran to resume its nuclear program after 2030.

Trump has called the accord, in its current form, the “worst deal” and “an embarrassment.”

Trump has also claimed that Iran was cheating or not sticking to the terms of the deal; A claim to which he has provided no evidence, and that his own intelligence agencies have refuted.

The immediate fallout

The immediate effects of Trump’s decision are that American allies–notably countries in the European Union–will be alienated, and strain already tense relationships.

“France, Germany, and the UK regret the U.S. decision to leave the JCPOA,” French President Emmanuel Macron tweeted following Trump’s announcement. “The nuclear non-proliferation regime is at stake.”

Iran, taking America’s cue, could also decide to violate the terms of the deal and ramp up nuclear activities.

Iranian leaders have, however, said they’re willing to continue working within the accord’s framework with its co-signers for the time being.

Business and the economy

There are also many business dealings–between both American and European companies–in the works involving Iran. Boeing, for example, could lose $20 billion in aircraft sales to Iran as a result of Trump’s decision. General Electric, also, had deals in place to supply Iran’s oil and gas sector with equipment, which could now be threatened.

Another company, Volkswagen, returned to Iran after 17 years once the nuclear deal was signed and sanctions were lifted. Now that the deal is off, it may need to once again pull out of the country.

French aerospace company Airbus, like Boeing, may also need to scuttle its plans to sell planes in IranAir, Iran’s national carrier.

As the reinstatement of sanctions all but puts a stop to those deals and more, it could also create stock market volatility and have other economic effects.

Trump’s decision also increases the possibility of military action in the future–assuming Iran resumes work toward building a nuclear weapon.

What you should prepare for

For the average American,  the single biggest–or at least most noticeable–consequence of Trump’s decision is likely to be rising fuel prices.

Gas prices have already been on the rise over the past year, and reinstating economic sanctions on Iran, the world’s fifth-largest oil producer, could result in higher prices at the pump.

The terms of the nuclear deal allowed Iran to export oil to other countries. But with sanctions reinstated, it will no longer be able to export, and as a result, the global oil supply will get smaller. Lower supply can lead to higher gas and home heating prices.

Aside from costlier commodities, your portfolio could also be in for a wild ride as the markets react.

For example, the markets dropped considerably after Trump announced tariffs on Chinese goods, stoking fears of a trade war. The markets could act similarly regarding Iran.

There’s also a strong possibility that defense and aerospace stocks could rise or drop if the U.S. considers military action. The same could be true for domestic oil companies if world oil supplies shrink.

The post Trump Scrapped the Iran Nuclear Deal, and Here’s How It Could Affect You appeared first on Stash Learn.