Trump's tariff wars...long post.

[martthebass]

2 hours ago, prowla said:

Trump's steel and aluminium 25% tariffs impacts approx £350m of UK trade.

https://news.sky.com/story/trump-trade-war-expands-globally-as-25-tariffs-take-effect-13326268

I think the new special operation is at odds with the special relationship.

Indeed, I work for a company that produces steel for aerospace - not good news.  

[SumOne]

If I were to charge my kids a 50% 'tariff' at the door on Lego they order online and I happen to have a business that sells plastic to Lego who have a factory on an industrial estate, then what benefit is there in the industrial estate owner charging Lego a tit-for-tat 50% for plastic going in? 

 

Just let the USA companies/consumers pay the tariffs (taxes they pay by importing) that their government choose to set. No need for retaliation and adding costs for consumers elsewhere. That seems to have been the UK response so far.

 

Trump loves to go on about tariffs like they are collected from other countries. It is a domestic tax on American importers, largely passed onto American consumers. If the UK raised, say, Alcohol tax for UK consumers and France sell the UK a lot of wine then France wouldn't react by raising tax for their consumers on UK products.

Edited 8 hours ago by SumOne

[TimR]

@SumOne look at it differently.

 

If you own a business in the UK supplying lego to the US. And the US put a tarriff on everything you're selling to them. What will happen to demand? 

 

Would you expect our government to say to you - tough luck - you'll just have to sell less or sell somewhere else instead. Is that an outcome you'd support, and next election, are you going to vote for that government again?

[Obrienp]

Yep and the USA is the biggest market for a lot of UK produced luxury goods. Take that market away and it will be very difficult to replace.

[BigRedX]

Maybe Trump is doing us all a favour and the UK and Europe can finally wean themselves off American-made crap.

[Mrbigstuff]

On 10/03/2025 at 19:02, Burns-bass said:

Looking at the shocking rise in mental health problems among the young (and the young-ish) I’m not sure it’s that the oldies really are struggling with the modern world as much as is made out.

I think there is just less of a stigma around seeking help for younger people than that of older generations. I was brought up on the “just get on with it” school of thought.

Edited 7 hours ago by Mrbigstuff

[SumOne]

48 minutes ago, TimR said:

@SumOne look at it differently.

 

If you own a business in the UK supplying lego to the US. And the US put a tarriff on everything you're selling to them. What will happen to demand? 

 

Would you expect our government to say to you - tough luck - you'll just have to sell less or sell somewhere else instead. Is that an outcome you'd support, and next election, are you going to vote for that government again?

 

But how does the UK then charging people who import from USA to the UK (hence UK consumers) more money for US goods help my business that is affected by selling to the US? Might as well just let them add their import tax that their consumers pay and leave UK importers/consumers out of it.

[Si600]

5 minutes ago, SumOne said:

 

But how does the UK then charging people who import from USA to the UK (hence UK consumers) more money for US goods help my business that is affected by selling to the US? Might as well just let them add their import tax that their consumers pay and leave UK importers/consumers out of it.

As I understand it, it doesn't.  But if your market is closed off by no-one buying your product because it's suddenly 25% more expensive, then if your government aren't seen to be taking reciprocal action they are seen as weak in global trade.  It's basically willy-waving and all about the optics at the end of the day.  The importer/consumer are at the very bottom of the importance hierarchy.

[tegs07]

9 minutes ago, SumOne said:

 

But how does the UK then charging people who import from USA to the UK (hence UK consumers) more money for US goods help my business that is affected by selling to the US? Might as well just let them add their import tax that their consumers pay and leave UK importers/consumers out of it.

It doesn’t 

In the same way as if someone parked their van across your factory gates, letting the tyres down on their van wouldn’t help your business. It might make the person think twice about leaving their van blocking your deliveries though.

Edited 7 hours ago by tegs07

[BigRedX]

Surely tariffs only work if you are trying to protect locally produced items or those being imported from countries you don't have a problem with?

 

Since the US doesn't currently have the capabilities to produce a lot of what is being affected themselves, and Trump seems to have a problem with everyone, I really can't see it working even in the long term.

[TimR]

8 minutes ago, Si600 said:

As I understand it, it doesn't.  But if your market is closed off by no-one buying your product because it's suddenly 25% more expensive, then if your government aren't seen to be taking reciprocal action they are seen as weak in global trade.  It's basically willy-waving and all about the optics at the end of the day.  The importer/consumer are at the very bottom of the importance hierarchy.

 

And this why the back and forth between Canadian power and US Tarrifs. 

 

The US put Tariffs on, Canada threaten to increase cost of electricity. That will be really unpopular with the American public, so Trump backs off on the Tarrifs.

 

This will basically go backwards and forwards until someone blinks. 

 

[Count Bassy]

3 hours ago, martthebass said:

Indeed, I work for a company that produces steel for aerospace - not good news.  

If you are producing specialist steels , which the US cannot produce by flicking a switch, then  you might be OK in the short term, they will simply have to pay the extra.

The cost of aeroplanes might go up though!

 

[Count Bassy]

1 minute ago, TimR said:

 

And this why the back and forth between Canadian power and US Tarrifs. 

 

The US put Tariffs on, Canada threaten to increase cost of electricity. That will be really unpopular with the American public, so Trump backs off on the Tarrifs.

 

This will basically go backwards and forwards until someone blinks. 

 

Trump just makes it up as he goes along. Doubles tariffs on Canada one day, changes his mind the next day. Comes with dementia I suppose. (note that I've learnt the proper spelling!)

[Al Krow]

Starmer continues to impress, which is an unexpected and welcome surprise for me!

 

Making the most of the freedom the UK now has to set our own trade policy, not dictated by anyone else, to negotiate a trade agreement with the US, and also taking the moral high ground by not lashing out with immediate retaliatory tariffs is very well done. 

[martthebass]

8 minutes ago, Count Bassy said:

If you are producing specialist steels , which the US cannot produce by flicking a switch, then  you might be OK in the short term, they will simply have to pay the extra.

The cost of aeroplanes might go up though!

 

The qualification period on these grades is long and difficult as you would expect but I'm not holding my breath that we won't be affected.

[tegs07]

3 minutes ago, Al Krow said:

Starmer continues to impress, which is an unexpected and welcome surprise for me!

 

Making the most of the freedom the UK now has to set our own trade policy, not dictated by anyone else, to negotiate a trade agreement with the US, and also taking the moral high ground by not lashing out with immediate retaliatory tariffs is very well done. 

Looking at what the impact is on Canada I am not sure how much faith can be put into any “agreement” between the UK and Trumps America. One day it will be free trade, the next 25% tariffs. No market can operate successfully with this kind of uncertainty.

 

Im not saying negotiations are a bad thing but I would put very little faith in anything signed off. This for me is the real long term legacy of Trump’s tariffs.

[tegs07]

If anyone is interested the US CPI figures (for February) came in lower than expected at 2.8%

 

It takes a while for inflation to be measured and by association if policy is working. To my knowledge this is sn indicator for two things:

1. The Biden administration had got a grip on inflation and was bringing down the cost of living.

2. Team Trump now have leverage to apply on the FED to lower interest rates.

 

Part 2 is the most interesting as this leverage is based on pre-tariff, calm waters. 

Edited 6 hours ago by tegs07

[prowla]

13 minutes ago, tegs07 said:

Looking at what the impact is on Canada I am not sure how much faith can be put into any “agreement” between the UK and Trumps America. One day it will be free trade, the next 25% tariffs. No market can operate successfully with this kind of uncertainty.

 

Im not saying negotiations are a bad thing but I would put very little faith in anything signed off. This for me is the real long term legacy of Trump’s tariffs.

 

Yep - Trump can turn on a dime.

(Though presumably not in his new Tesla!)

[TimR]

19 minutes ago, Count Bassy said:

Trump just makes it up as he goes along. Doubles tariffs on Canada one day, changes his mind the next day. Comes with dementia I suppose. (note that I've learnt the proper spelling!)

 

It's the way he deals. Makes big bold statements, see how the other side reacts, change statement, wait a bit, go hard again.

 

It meant he eventually ran out of people to deal with in the real estate and building game. Especailly as he then rowed back on a lot of deals and never paid them.

 

He could run out of people a lot quicker in the international trade game. 

[Steve Browning]

25 minutes ago, Count Bassy said:

Trump just makes it up as he goes along. Doubles tariffs on Canada one day, changes his mind the next day. Comes with dementia I suppose. (note that I've learnt the proper spelling!)

 Learned, surely!! 🙂

[Steve Browning]

4 minutes ago, prowla said:

 

Yep - Trump can turn on a dime.

(Though presumably not in his new Tesla!)

 

and not his own dime.

[Crusoe]

45 minutes ago, BigRedX said:

Surely tariffs only work if you are trying to protect locally produced items or those being imported from countries you don't have a problem with?

 

Since the US doesn't currently have the capabilities to produce a lot of what is being affected themselves, and Trump seems to have a problem with everyone, I really can't see it working even in the long term.

The problem is if you apply tariffs to goods which you don't have the capacity to produce locally. Canada seem to be applying tariffs to stuff that Canadians are happy to do without in the short term, such as Jack Daniels whiskey, but will affect American businesses.

[prowla]

2 hours ago, SumOne said:

If I were to charge my kids a 50% 'tariff' at the door on Lego they order online and I happen to have a business that sells plastic to Lego who have a factory on an industrial estate, then what benefit is there in the industrial estate owner charging Lego a tit-for-tat 50% for plastic going in? 

 

Just let the USA companies/consumers pay the tariffs (taxes they pay by importing) that their government choose to set. No need for retaliation and adding costs for consumers elsewhere. That seems to have been the UK response so far.

 

Trump loves to go on about tariffs like they are collected from other countries. It is a domestic tax on American importers, largely passed onto American consumers. If the UK raised, say, Alcohol tax for UK consumers and France sell the UK a lot of wine then France wouldn't react by raising tax for their consumers on UK products.

 

You're right that it is a tax on consumers, but it is one which impacts trade.

 

The gist of it is that Trump wants to make the US (steel) companies more viable, so increasing the cost of their competitors products by 25% might do that.

If the US producers can bring their product in at less than that actual+25% then they may get the business.

Then, over time, the companies may be sufficiently active as to reduce their costs and so become genuinely competitive.

The background though is that China was dumping steel onto the global market at below cost, so even being able to meet that +25% cost might be tricky.

 

The reason for retaliation is simply if a country is blocking sales of your products into their markets but you aren't reciprocating, then you're accepting an impact on your exports whilst welcoming their imports.

For example, the UK sells a lot of luxury cars into the US and they've suddenly got 25% more expensive; therefore sales will go down.

Meanwhile, the US sells Teslas into the UK but their price stays the same, so no impact on sales (bar by personal choice).

Result = a negative impact on the balance of trade.

Now, if the UK imposes a 25% tariff on the US cars, then they suddenly jump by 25% and so people at home are more likely to buy the UK-made ones.

 

Net result is tariffs are a form of protectionism which can boost home trade.

 

[chris_b]

51 minutes ago, TimR said:

 

The US put Tariffs on, Canada threaten to increase cost of electricity. That will be really unpopular with the American public, so Trump backs off on the Tarrifs.

 

 

Trump'll just blame Biden for the recession.

[martthebass]

The most interesting aspect, I find is the human factor.  The Canadians in particular are showing that they will suffer economic hardship and choice by boycotting US goods, whether this is sustainable in the longer term is debatable but I'm not sure if the Trump administration has bargained on a strong response from individuals in those countries he is directly targetting.  From a personal point of view, at the moment if I really wanted an EBMM would I buy a Status instead.....probably not but the situation is sufficient to make me delay my decision to buy which still affects cash flow to the US.