Trump's tariff wars...long post.

[tauzero]

9 hours ago, tegs07 said:

The way I understand supply chains in the USA raw materials cross the border (mexico and canada) multiple times before the finished product is shipped. This was the brown trousers moment for the automotive sector and I suspect it will be similar for other industries.

 

AIUI the maple used in MIA Fenders comes from Canada, so that's an additional raw materials cost for MIAs.

[Phil Starr]

15 hours ago, Al Krow said:

 

Nice post about Japan - very interesting, thanks Phil.

 

I'm not so sure it's going to be plain sailing at all for the US: tariffs are very likely to be inflationary and make the average US worker poorer in the short and medium term. And in the long run...well we're all dead anyway (Keynes).

Steel is a good example. Tariffs up will play well with the 200,000 US steel workers, for sure. But the for the millions who work in US manufacturing, when one of their key raw materials goes up in price and either the US consumer picks up the tab or they can no longer compete with overseas goods (more tariffs?), how is that going to help? Either way it's inflationary and a key election pledge Trump made was to deal with the cost of living. He's currently doing the opposite.

 

And, for the first time, starting to get flak from who would have believed it... the likes of Fox News, over his tariff grandstanding.

 

Don't get me wrong, I don't think Trump's policies are likely to get very far in practice. We all know how powerful the lobbyists are in the US and I can only imagine how the likes Of Raytheon, Lockheed Martin, Boeing and the rest of the military industrial complex are responding to this, hit by tariffs and ultimately losing sales as America becomes an unreliable military ally. My thoughts on this were to ask myself could the USA survive an isolationist/protectionist stance. In practice there are far too many powerful forces that would become losers however well thought out the restructuring might be. I'm now asking myself how Europe would look in a world of extensive trade wars.

 

For me the hardest thing to calculate is where global capital might find a home if Trump de-stabilises the dollar as a result of his mismanagement. He does have a point that trade with China has resulted in a huge transfer of wealth from the USA to it's increasingly aggressive rival.What would be the effects of an all out trade war on currencies, investment decisions and so on. We can see disinvestment in UK manufacturing due to us being outside the trade barriers, how would that play if the USA were the other side of much higher trade barriers and even more uncertainty. Could the US face a Truss moment? Do I buy a lettuce now?

[tegs07]

30 minutes ago, Phil Starr said:

He does have a point that trade with China has resulted in a huge transfer of wealth from the USA to it's increasingly aggressive rival

He does indeed but the question for me is who facilitated and profited from this huge transfer of wealth? If we take the so called magnificent 7 how much of their wealth was generated by offshoring the manufacturing and service sector of their products?

 

The US consumer (like its western counterparts) got hooked on cheap debt and cheap products that were totally dependent on ultra low interest rates and low yields that were a byproduct of China’s economic policies*

 

So we have Musk in the white house with his MAGA cap on carrying out orders from a president elected by a population desperate to return to a low interest rate, cheap debt economy. Slight paradox?
 

*China was happy to purchase treasuries with very low yields (loss making margins) as the last thing they wanted was a weak dollar and strong local currency which would scupper their export market.

 

Edit: I would also add that the most successful US brands be they tech, automotive, military, fashion, food and beverages, entertainment rely heavily upon a global market!

For some (tech) it’s difficult to find an alternative for others brand image is everything.

 

Edited yesterday at 08:37 by tegs07

[prowla]

55 minutes ago, Phil Starr said:

Don't get me wrong, I don't think Trump's policies are likely to get very far in practice. We all know how powerful the lobbyists are in the US and I can only imagine how the likes Of Raytheon, Lockheed Martin, Boeing and the rest of the military industrial complex are responding to this, hit by tariffs and ultimately losing sales as America becomes an unreliable military ally. My thoughts on this were to ask myself could the USA survive an isolationist/protectionist stance. In practice there are far too many powerful forces that would become losers however well thought out the restructuring might be. I'm now asking myself how Europe would look in a world of extensive trade wars.

 

For me the hardest thing to calculate is where global capital might find a home if Trump de-stabilises the dollar as a result of his mismanagement. He does have a point that trade with China has resulted in a huge transfer of wealth from the USA to it's increasingly aggressive rival.What would be the effects of an all out trade war on currencies, investment decisions and so on. We can see disinvestment in UK manufacturing due to us being outside the trade barriers, how would that play if the USA were the other side of much higher trade barriers and even more uncertainty. Could the US face a Truss moment? Do I buy a lettuce now?

I have to say I have been wondering about the lettuce.

The point about the US's standing in the world and the dollar is something I've been considering: if the US goes isolationist and stops trading, then the international money will go elsewhere.

OTOH, I don't see how the US can be trade/financial isolationist and still consider itself to be the Worlds police force.

[TimR]

The international money can't go elsewhere. Huge amounts of it is debt repayments. That are not going to be cleared anytime soon.

 

Trump realises all this debt is in the hands of private investors and banks and it's not personally available to him. 

[tegs07]

8 minutes ago, prowla said:

I have to say I have been wondering about the lettuce.

The point about the US's standing in the world and the dollar is something I've been considering: if the US goes isolationist and stops trading, then the international money will go elsewhere.

OTOH, I don't see how the US can be trade/financial isolationist and still consider itself to be the Worlds police force.

IMO it can’t. What is more likely is the baton is handed over to China.

[tegs07]

23 minutes ago, TimR said:

The international money can't go elsewhere. Huge amounts of it is debt repayments. That are not going to be cleared anytime soon.

 

Trump realises all this debt is in the hands of private investors and banks and it's not personally available to him. 

It can and it is. China are offloading treasuries at a record rate. 

 

Edit: For clarity:

 

Putting my limited knowledge to use again. China has been one of the biggest markets for US debt (in the form of treasuries). 

When the debt matures China was buying new issues and also using a proportion in the repo market (swapping for cash on a promise to re purchase later). Essentially recycling their holdings of US debt.

They are now actively offloading this debt at unprecedented levels (last year it was in the region of $56 billion). This means selling (usually at a loss on the secondary market) and not buying new treasuries. The slack needs to be taken up elsewhere. Whether this is domestic demand (eg pensions companies) or foreign investment is tricky to determine.

Edited yesterday at 09:33 by tegs07

[chris_b]

We're all trying to think this situation through logically, but all Trump wants is money and power. It's no more complicated  than that. He'll do anything for those and it doesn't matter to him how many countries he screws over, including the USA. There is no other logic and very little planning. The on-off tariffs prove that. 90% of what he's said since becoming 47 has probably been put there by someone else. He hasn't the intelligence or ability to think any of this stuff up himself, well maybe the Gaza bit!!

[SteveXFR]

I'm wondering how this thread has bypassed the no politics rule. Is it because its foreign? Or because its fairly civilised discussion so far?

[tegs07]

1 minute ago, SteveXFR said:

I'm wondering how this thread has bypassed the no politics rule. Is it because its foreign? Or because its fairly civilised discussion so far?

I would hope that the changes we living through and the potential massive changes to geopolitical and trade relations would make a sensible discussion absolutely necessary.

There is enough censorship of the free press and disinformation going on already.

[Downunderwonder]

4 minutes ago, SteveXFR said:

I'm wondering how this thread has bypassed the no politics rule. Is it because its foreign? Or because its fairly civilised discussion so far?

Bit of both I think. Long live BassChat prevailing civility.

[PaulWarning]

1 hour ago, SteveXFR said:

I'm wondering how this thread has bypassed the no politics rule. Is it because its foreign? Or because its fairly civilised discussion so far?

probably because everybody is in broad agreement, so it's stayed civil

[JoeEvans]

I guess also international trade rules are very relevant to discussions about bass guitars, which are an international product with a lot of US customers and manufacturers.

[SteveXFR]

52 minutes ago, PaulWarning said:

probably because everybody is in broad agreement, so it's stayed civil

 

I heard that Trump said anyone who uses a pick isn't a real bassist. Musk added that more than 4 strings is just unnecessary. JD Vance agreed with both and added that a 500% tariff will be added to all non relic'd guitars and basses and freedom of speech does not mean that bassists should be heard in a mix.

[tegs07]

15 minutes ago, SteveXFR said:

 

I heard that Trump said anyone who uses a pick isn't a real bassist. Musk added that more than 4 strings is just unnecessary. JD Vance agreed with both and added that a 500% tariff will be added to all non relic'd guitars and basses and freedom of speech does not mean that bassists should be heard in a mix.

Fake news!

Trump actually said that bass guitar and rock and roll were un-American and any true patriot would play a polka on a Balalaika. Vance called bass players cnuts and urged repentance. Musk quietly picked both their pockets while they were distracted.

[SteveXFR]

Musk launched the X-bass and banned all other basses from the US.

Edited yesterday at 12:48 by SteveXFR

[Buddster]

trump has just announced there's no such thing as tone wood. 

[SteveXFR]

27 minutes ago, Buddster said:

trump has just announced there's no such thing as tone wood. 

 

More evidence that he's a stable genius 

[prowla]

Trump's American guitar is made from Chinese parts.

[SteveXFR]

Make American Guitars Again

 

(Basses sold separately through Bass-X).

[Agent 00Soul]

This just in: the USA to shut down all European basses!
 

Sorry; someone had to fall on their sword and say it. 

[tauzero]

30 minutes ago, Agent 00Soul said:

This just in: the USA to shut down all European basses!
 

Sorry; someone had to fall on their sword and say it. 

 

All your bass are belong to US.

Edited yesterday at 14:29 by tauzero

[Si600]

Back to T'arriff briefly. I asked about thirty pages ago what the point of tit-for-tat tariffs was.  If I as, say America, say I'm going to put 25% extra on all steel imports, what happens if you, as say, the UK, say, OK, it's going to cost you more than us so we're going ignore your willy-waving and carry on with our own lives?

 

Is that seen as political weakness, not joining the bandwagon of tariff stuff or does it have an actual impact on your steel export to me?

 

Simply put, I don't understand the need to put a tariff on something you export to me simply because you are tariffing (sic) something I export to you.

[tegs07]

28 minutes ago, Si600 said:

Simply put, I don't understand the need to put a tariff on something you export to me simply because you are tariffing (sic) something I export to you.

The purpose of tariffs is to make your competitors products more expensive and less likely to be bought. The long term aim being that consumers will no longer buy them and choose home grown products instead. In the case of Canada where cross border trade is in the hundreds or billions of dollars this situation could impact the livelihoods of thousands of workers and potentially put many other businesses out of action due to disrupted supply chains.

 

Generally this is not favourable for voters who don’t want to see their elected leaders shrug and let it happen without a fight.

 

Edit: There’s also a perception of injustice going on. Trump claims that the trade deficit with Canada is due to Canada taking advantage of the USA and the economic ineptness of the Biden administration. The trade deficit has been growing over the last decade, BUT when oil is taken out of the equation (the US imports a lot of crude from Canada for refining) then the US actually has a positive balance. It exports more than it imports!

 

The price of oil has risen in recent years largely due to a certain war….

Edited yesterday at 15:45 by tegs07

[Si600]

On 08/03/2025 at 17:09, Count Bassy said:

Having seen Trump over that last few days, constant changing of his mind, stumbling over his word, repeating phrases etc.  I can't see him lasting the four years. Depend how much dementure they will tolerate.

Unfornately when he goes we get Vance, which could be even worse.

 

PS: I am not qualified to diagnose dementure.

Neither am I, but I saw a clip of him answering questions on the plane on the way back from his golfing holiday (or to it, I don't know which way it was going) and he dropped out into standby mode and then seemed to ask "Why, what has Poo-tin done?"  It was just a clip, and may have been chosen to show him in as bad a light as possible, but it didn't look like he was all there.