Trump's tariff wars...long post.

[Russ]

3 hours ago, SteveXFR said:

 

You think he's going to eliminate space programs with Musk in charge of cutting spending? 

They're already talking about a manned mission to Mars within 4 years costing a trillion dollars. 

All space programs will end up going through SpaceX, with Musk creaming off a nice chunk of that government cheese.

 

Musk has more money than he could possibly spend in ten lifetimes. I just don't understand the mindset. What makes someone so unutterably greedy? 

 

Personally, I think if you want to be a billionaire, go for it, but once your net worth hits $1bn, you should get a nice certificate that says, "Contgratulations! You won capitalism!" and everything you end up earning above that gets taxed at 100%.

[mcnach]

3 hours ago, SteveXFR said:

 

You think he's going to eliminate space programs with Musk in charge of cutting spending? 

They're already talking about a manned mission to Mars within 4 years costing a trillion dollars. 

 

And those wads of dough, in whose pockets will are they going to end up? If only Musk had a friend who could provide... oh, wait!

 

[TimR]

7 hours ago, SteveXFR said:

 

You think he's going to eliminate space programs with Musk in charge of cutting spending? 

They're already talking about a manned mission to Mars within 4 years costing a trillion dollars. 

 

It won't be NASA that gets the money.

[tegs07]

A big issue is the myth that Bidenomics caused inflation and Trump will solve this.

 

The era of ultra low inflation and interest rates is over. Despite all the promises prices just keep creeping up and nothing Trump is doing is going to stop this. His policies will make things worse in the short to medium term.

 

Bullying, blaming and bluffing won’t bring inflation down. Tariffs won’t bring inflation down. Strong arm tactics towards the FED won’t bring inflation down. Sacking of thousands government workers won’t bring inflation down.

 

I can’t see much slack for the FED to reduce interest rates (if anything they cut too early, it’s too soon to tell but the latest figures are a red flag).

 

A global recession triggered by a trade war is going to do nothing to help with living costs.

European nation’s whose economies are already suffering from the effects of Russian aggression having to cover the costs of a Trump dictated peace plan and subsequent increase in defence spending is hardly going to help. 

 

The volume of gold being repatriated from London to the USA is another red flag that all is not well. It’s shaping up to be an interesting couple of years.

 

 

 

 

Edited February 14 by tegs07

[SumOne]

Liberals like 'tax and spend', and tariffs are basically a stealth tax (usually passed onto consumers, like a VAT). Trump can claim he's hitting foreign steel producers, but actually it is US importers that mostly pay - passing it onto consumers, and US government that get the extra tax income.

 

....it's not like other countries don't already have tariffs and subsidies. But I guess it is okay when the EU does it, paid by consumers/tax payers to skew the market and favour their farming industries and artificially price out African farmers?

 

 

Edited February 14 by SumOne

[TimR]

57 minutes ago, SumOne said:

But I guess it is okay when the EU does it, paid by consumers/tax payers to skew the market and favour their farming industries and artificially price out African farmers?

 

Haven't all the African tarrifs been removed apart from the deforestation ones?

[SumOne]

40 minutes ago, TimR said:

 

Haven't all the African tarrifs been removed apart from the deforestation ones?

 

I stand corrected - most (but not all) African countries do now have  tariff-free EU access for agriculture,  EU has the flip-side of it though in subsidising farming. And things like the Carbon Border Adjustment Mechanism "CBAM could cause a fall in exports from Africa to the EU of aluminium by up to 13.9%, iron and steel by 8.2%, fertiliser by 3.9% and cement by 3.1%." which is probably a worthwhile scheme, but it is part of the tariff/subsidy trade picture, just not as bluntly put as Trump has.

 

My point wasn't so much about drilling down to specifics though (what Bassschat counter-arguments love!), it is the general idea that many countries and trading blocks have tariffs and subsidies (subsidies basically being the other side of the coin - charging the taxpayer to distort the market). The EU as a trading block distorts markets through tariffs and subsidies to favour the EU. The UK does it (e.g. Steel subsidies - UK tax payers pay to make the price of UK Steel more globally competitive, why shouldn't the US then decide to add an import tariff to that make their US steel more competitive?). China subsidises industries to distort global markets. Most countries and trading blocks do it in some way, it is partly why trading blocks are set up. 

 

I dunno. It's easy to get into an echo chamber of 'Trump = Bad, Tariffs = Bad" which I do generally agree with, but there are other sides to the argument.

 

 

Edited February 14 by SumOne

[Agent 00Soul]

14 hours ago, peteb said:

 

Civil war, breakup of the USA

 

 

 

How could the USA break up?  None of the 50 states, except for possibly Texas, could exist without the others.  California would, except it is beholden to the western states for its water.  As for a proper civil war, that canard has been dangled in front of our eyes for most of my life.  Unless you speaking about random militia or terrorist acts, how could it happen nationally?  The most would be a localised hotspot that I imagine would be somewhat analogous to the former Yugoslavia in 1994, but much smaller.  The US might change into some kind of GOP dictatorship, but it'll probably be mostly bloodless.

[TimR]

11 minutes ago, Agent 00Soul said:

 

How could the USA break up?  None of the 50 states, except for possibly Texas, could exist without the others.  California would, except it is beholden to the western states for its water.  As for a proper civil war, that canard has been dangled in front of our eyes for most of my life.  Unless you speaking about random militia or terrorist acts, how could it happen nationally?  The most would be a localised hotspot that I imagine would be somewhat analogous to the former Yugoslavia in 1994, but much smaller.  The US might change into some kind of GOP dictatorship, but it'll probably be mostly bloodless.

 

 I don't think it would be interstate, although there are predominantly red and blue states, it'll be more the haves vs the have nots.

 

Reports that people previously flying MAGA flags are now taking them down. Although that could be just because they have won the election. 

[JoeEvans]

Personally I'm seeing the Trump presidency as a slow-motion train wreck driven by ego, vanity, greed, elective ignorance and deep, deep stupidity. 

To take just one strand of the story, the appointment of Kennedy, a deluded shyster, to the health post, is going to end very badly. Actual reality still exists, and fantasy and delusion have never been a match for it in the long term.

Likewise with tariffs, the US consumers will be paying the bill. They're going to harm other countries as well, but that won't be much consolation.

Edited February 14 by JoeEvans

[Staggering on]

16 minutes ago, TimR said:

 

 I don't think it would be interstate, although there are predominantly red and blue states, it'll be more the haves vs the have nots.

 

Reports that people previously flying MAGA flags are now taking them down. Although that could be just because they have won the election. 

 

You are right, the basis of the war would be economics not politics and I think it is a real possibility when the general population gets hit with serious money problems as well as social problems due to lack of funding for major things like education and medical care.😟

[chris_b]

It might be difficult for the Blue states to actually cede from the Union, but they can stop paying the Federal Government their taxes. Without the money being distributed from Blue states to Red states, the Red states will quickly go bankrupt.

[SumOne]

54 minutes ago, JoeEvans said:

 

Likewise with tariffs, the US consumers will be paying the bill. They're going to harm other countries as well, but that won't be much consolation.

 

...but US consumers are paying that bill to the US government, it is like a tax, money that can be spent on healthcare etc (if they're lucky). So it only harms/benefits the US in the same way taxes like VAT do.

[tegs07]

14 minutes ago, SumOne said:

 

...but US consumers are paying that bill to the US government, it is like a tax, money that can be spent on healthcare etc (if they're lucky). So it only harms/benefits the US in the same way taxes like VAT do.

I very much doubt that any of the revenue will find its way into healthcare. The last time around some revenue was funnelled into protected industries. Perhaps agriculture could do with a boost? The farmers have already lost a chunk of future revenue due to cuts in USAid.

 

A sizeable chunk of the money going to Ukraine has generated an increase in arms production and replenished last generation hardware. This will be slashed shortly and steel costs will increase.

 

Tariffs have historically generated negative real returns but Trump knows best.

Edited February 14 by tegs07

[SumOne]

9 minutes ago, tegs07 said:

I very much doubt that any of the revenue will find its way into healthcare. The last time around some revenue was funnelled into protected industries. Perhaps agriculture could do with a boost? The farmers have already lost a chunk of future revenue due to cuts in USAid. Tariffs have historically generated negative real returns but Trump knows best.

 

There is the bureaucratic cost of applying tariffs, but if that bureaucracy was efficient and a low-cost exercise then it is basically a tax, a revenue earner for government  - sure, it is mostly paid by consumers, but so are most taxes. Surely most would applaud the US having more of a 'tax and spend' attitude. How they spend the tax is another issue.  I can't see how tariffs are the huge own-goal people are making it out to be. It has the benefit of perhaps some of the government revenue raising being covered by the foreign companies, and it potentially makes US produced goods more of an attractive option for to US consumers.  The whole thing sounds much better to voters than 'we're raising taxes'.

 

 

Edited February 14 by SumOne

[Al Krow]

5 minutes ago, SumOne said:

 

There is the bureaucratic cost of applying tariffs, but that bureaucracy was a cost-free exercise then it is basically a tax, a revenue earner for government  - sure, it is mostly paid by consumers, but so are most taxes. Surely most would applaud the US having more of a 'tax and spend' attitude. How they spend the tax is another issue.  I can't see how tariffs are the huge own-goal people are making it out to be. It has the benefit of perhaps some of the government revenue raising being covered by the foreign companies, and it potentially makes US produced goods more a attractive option for to US consumers. It sounds much better to voters than 'we're raising taxes'.

 

Agreed. Not sure why import tariffs are any different/worse than sales taxes or VAT which, as you rightly point out, are also paid by consumers? As you say, it's just another form of taxation.

Personally I'd tax imports over slapping extra payroll taxes on domestic workers every time.

 

Edited February 14 by Al Krow

[tegs07]

11 minutes ago, SumOne said:

 

There is the bureaucratic cost of applying tariffs, but if that bureaucracy was efficient and a low-cost exercise then it is basically a tax, a revenue earner for government  - sure, it is mostly paid by consumers, but so are most taxes. Surely most would applaud the US having more of a 'tax and spend' attitude. How they spend the tax is another issue.  I can't see how tariffs are the huge own-goal people are making it out to be. It has the benefit of perhaps some of the government revenue raising being covered by the foreign companies, and it potentially makes US produced goods more of an attractive option for to US consumers.  The whole thing sounds much better to voters than 'we're raising taxes'.

 

 

Generally if i walk on a patch of ice, fall over and break my arm I would avoid doing it again. Who knows with special Trump shoes it might turn out differently next time?

 

Edit: For anyone who is interested 

 

https://taxfoundation.org/blog/economic-effects-taxes-tariffs/

Edited February 14 by tegs07

[Agent 00Soul]

1 hour ago, TimR said:

Although that could be just because they have won the election. 

 

That's my impression also.  I've spent multiple visits to the heart of Trumpland and I was quite amazed at how much everyone there worships him like a messiah.  It didn't matter what race, economic strata or sex they were either - it was a vast majority.  I was surprised.  My colleague started calling it Beatlemania.

 

Edited February 14 by Agent 00Soul

[Beedster]

1 hour ago, TimR said:

Reports that people previously flying MAGA flags are now taking them down. Although that could be just because they have won the election. 

 

 Not sure you fully understand MAGA mindset Tim 🤣

[TimR]

1 hour ago, Beedster said:

 

 Not sure you fully understand MAGA mindset Tim 🤣

 

I'm giving the benefit of doubt. Maybe it is because they're suddenly finding out they're wrong and are silently repenting.

[TimR]

1 hour ago, Al Krow said:

 

Agreed. Not sure why import tariffs are any different/worse than sales taxes or VAT which, as you rightly point out, are also paid by consumers? As you say, it's just another form of taxation.

Personally I'd tax imports over slapping extra payroll taxes on domestic workers every time.

 

 

Because VAT is supposedly on luxuries so only affects some things some people buy (obviously what consitiutes a luxury could be debated), Tarrifs cover everything that's imported. So if you're importing Canadian energy or Canadian wheat, you're paying more.

 

And as I wrote upthread, the plan is to remove income tax (that not everyone pays, particularly the poor) and levy it on goods that everyone has to buy (particularly the poor). 

 

It's a way to redistribute the wealth from the consumers to the owners of production. 

[Count Bassy]

1 hour ago, SumOne said:

 

 and it potentially makes US produced goods more of an attractive option for to US consumers.

 

 

This doesn't work for things like steel however, even Trump cannot just flick a switch and increase domestic steel production, these things take years, by which time the Trump "Myth" may be exposed and it will be all change again in Washington.

In the meantime most things using steel in the staes will get more expensive.

[Al Krow]

1 hour ago, TimR said:

 

Because VAT is supposedly on luxuries so only affects some things some people buy (obviously what consitiutes a luxury could be debated), Tarrifs cover everything that's imported. So if you're importing Canadian energy or Canadian wheat, you're paying more.

 

And as I wrote upthread, the plan is to remove income tax (that not everyone pays, particularly the poor) and levy it on goods that everyone has to buy (particularly the poor). 

 

It's a way to redistribute the wealth from the consumers to the owners of production. 

 

Do you count fuel and adult clothing as luxuries? VAT can be quite a regressive tax, and is the second largest source of government income in the UK after income tax and NI.

 

Surely it's up to each nation to sort out their own tax system? 

 

Ireland chooses not to levy much corporation tax on US multinationals, undercutting the rest of Europe. So US multinationals set up shop there.

 

The US has sales taxes and not VAT.

 

The EU actually has huge trade barriers: it exempts exports from VAT but charges VAT on imports. How is that not a tariff in all but name?

Edited February 14 by Al Krow

[Obrienp]

19 minutes ago, Al Krow said:

 

The EU actually has huge trade barriers: it exempts exports from VAT but charges VAT on imports. How is that not a tariff in all but name?

Most countries do that as far as I am aware. It’s the basis of duty free sales. The goods are not being bought in country. If you buy privately, some companies cover the import duty and other sales taxes in your country: e.g. if you buy gear from Thomann, they deal with all of that for you.

[BigRedX]

Just now, Obrienp said:

Most countries do that as far as I am aware. It’s the basis of duty free sales. The goods are not being bought in country. If you buy privately, some companies cover the import duty and other sales taxes in your country: e.g. if you buy gear from Thomann, they deal with all of that for you.

 

You're still paying VAT and import duty though. It's just when buying from someone like Thomann you pay it at time of purchase and not at time of import.