One might speculate that the principal reasons for Trump to renegotiate terms of trade might be to restore the dollar's primacy and to maintain the stranglehold on advanced technologies. By launching a trade war with China, Trump presumes that China might buckle under pressure without much harm to US.

In normal circumstances, any country that merrily prints its currency faces the prospect of inflation but not US. Given the preponderance of the dollar in international trade, US can keep printing greenbacks to fund its insatiable appetite for goods and services. China runs up surpluses in billions by receiving dollars and then pumps it right back into US Treasuries. China has made initial forays into inserting renmimbi into global trading but is dwarfed by the omnipresent dollar. Trump plans to stymie the growth of renmimbi by pushing China on the back foot. However, Trump's plans are likely to backfire with China determined to accelerate the use of its currency in international trade.

Similarly, by raising tariff walls and non tariff barriers, Trump seeks to secure US' near monopoly on cutting edge technology. With the protectionist measures unleashed on China and US' allies, Trump hopes to deter any moves by these countries to acquire these technologies.

There is a lag effect of tariff increases and one might have bad news emanating from China shortly. China has seen a secular decline in growth and a rare deficit. Come November, the world is likely to witness trend reversal across world markets. The Iran sanctions take effect which might force Iran to react, in ways unknown as of now. If it goes ahead with action in the Straits of Hormuz, one could expect a spike in oil prices. China has stopped imports of US oil while it plans to continue to import from Iran. Hence, US would be unable to take advantage of the oil price rise. A seasonal uptick in oil demand would add to oil's woes. Also Trump faces his first real battle as the nation goes to polls.

Therefore, one foresees significant headwinds ahead even while US celebrates its rosy economic performance.