Trump's tariff wars...long post.

[Burns-bass]

43 minutes ago, TimR said:

Well all these foreign companies that are going to go down in value because they can't trade with the US will have 'someone' buying them up.

 

And then when Trump releases he's made a mistake and removes the tariffs, their value will rise, and those investors will have made a ton of money.

 

Although I'm not sure Trump is really that clever to have masterminded that process. Might be something he read in a book somewhere about Disaster Politics. 😆

 

I think I'm giving that conspiracy theory far too much legs. 😆

Could happen, but more likely this is a temporary move to get trading partners to offer concessions to the USA.

 

Isn’t it interesting how Elon Musk, an entrepreneur with a huge global manufacturing operation, has stepped back today?

 

Always assumed the US was effectively the winner in globalisation, but free markets have accelerated the growth of China and others threatening the US hegemony. It’s not a show of strength but of weakness.

 

Anyway, I’m going to avoid looking at my SIPP for a few months…

 

 

 

 

Edited 22 hours ago by Burns-bass

[SumOne]

Looks to me like it could be good news for the UK.

 

If every country in the world had a 10% USA tariff then it'd be a level playing field - possibly lose some business to USA companies or USA consumers buying less, but probably not much difference in the short term until they get their manufacturing going. However, almost all of the rest of the world has more than 10%, so the UK goods are going to be more attractively priced - suddenly, something made in the UK is more expensive in the USA, but so is every import, and is now it is 10% cheaper comparted to the EU goods.

 

And if China with 34% tariffs doesn't sell so much to the USA then there will be more supply available = lower prices for the UK. That Chinese made Bass now costs 34% extra in the USA, (or Indonesian one 32% more) that'll reduce sales and they'll have a lot of stock - I'd assume they will try and make up for that by selling more to the UK and elsewhere by reducing prices a bit - rather than reducing them in the USA by 34%.  The world might be going to hell, but at least I might be able to save few quid on a new Ibanez!

Edited 18 hours ago by SumOne
Corrected %

[Beer of the Bass]

1 hour ago, Burns-bass said:

 

 

Isn’t it interesting how Elon Musk, an entrepreneur with a huge global manufacturing operation, has stepped back today?

 

Has he? There's a news story from un-named "insiders" that both the White House and Musk dismiss, though the "special government employee" status he's nominally working under has a limit of 130 days, on paper at least. So I'm not seeing that anything about the Trump admin/Musk arrangement has materially changed this week.

Edited 21 hours ago by Beer of the Bass

[Wombat]

Genuine question as I’ve not been able to google it….

Why is the Tangerine Dream saying “reciprocal tariffs”? The UK doesn’t charge tariffs on goods from America?

[Woodinblack]

3 minutes ago, Wombat said:

Genuine question as I’ve not been able to google it….

Why is the Tangerine Dream saying “reciprocal tariffs”? The UK doesn’t charge tariffs on goods from America?

 

He counts VAT as a tarrif

[Beer of the Bass]

8 minutes ago, Wombat said:

Genuine question as I’ve not been able to google it….

Why is the Tangerine Dream saying “reciprocal tariffs”? The UK doesn’t charge tariffs on goods from America?

 

Yes, they've calculated a figure from other numbers entirely and presented it as a tariff. While their internal logic is unknown at this point, people have pointed out that each country's US trade deficit divided by their exports to the US expressed as a percentage comes up with figures very close to the ones they've used. Where there's a surplus they've just set it to 10% arbitrarily, it would appear.

Edited 20 hours ago by Beer of the Bass

[edstraker123]

3 minutes ago, Woodinblack said:

He counts VAT as a tarrif

He can count  ?  You'll be saying he can read as well next.

[Dad3353]

22 minutes ago, Wombat said:

Genuine question as I’ve not been able to google it….

Why is the Tangerine Dream saying “reciprocal tariffs”? The UK doesn’t charge tariffs on goods from America?

 

There is VAT (counted as a 'tariff' by some...), and a tariff, depending on the nature of the goods and where it's imported from. For 'Drums, musical', for instance, from the US, the tariff is 2%. For frozen oysters, it's 8%. Here's a gumment list of all Goods and how much import duty is due...

 

UK Integrated Online Tariff Look-up ...

 

These tariffs are not aimed at the US of A, they are applied to all countries that don't have a specific alternative agreement. US of A is not singled out, it's the same for imports from every country.

Edited 20 hours ago by Dad3353

[tauzero]

8 minutes ago, Woodinblack said:

 

He counts VAT as a tarrif

 

But apparently US sales tax doesn't count in the opposite direction. Maybe the excuse is that it's not charged at federal level.

[JoeEvans]

20 minutes ago, Wombat said:

Genuine question as I’ve not been able to google it….

Why is the Tangerine Dream saying “reciprocal tariffs”? The UK doesn’t charge tariffs on goods from America?

I think he's basically lied about how the US tariffs were calculated, claiming that they are 50% of what other nations charge on US imports when they are no such thing.

But the true explanation - that they are calculated by looking at the ratio of the import and export value then adding a random number pulled out of his arse - is sufficiently complicated that his core supporters will glaze over any time anyone tries to explain it, preferring to trust the simple lie told by their Orange Overlord.

[Woodinblack]

10 minutes ago, tauzero said:

 

But apparently US sales tax doesn't count in the opposite direction. Maybe the excuse is that it's not charged at federal level.

 

Yes, that is a state and city tax, so that doesn't count, it isn't put there by him.

[Burns-bass]

32 minutes ago, Beer of the Bass said:

Has he? There's a news story from un-named "insiders" that both the White House and Musk dismiss, though the "special government employee" status he's nominally working under has a limit of 130 days, on paper at least. So I'm not seeing that anything about the Trump admin/Musk arrangement has materially changed this week.

The old “unnamed source”.

 

More to do with Tesla’s poor sales figures, Tesla being over taken by BYD as the world biggest electric car manufacturer and the slide of its shares.

 

But maybe his principles of cutting waste and reshaping the US economy go beyond the shallow ambition of accumulating wealth. I’m sure they do…

 

 

[Woodinblack]

I think regardless of the current rumours going around about musk, it was always going to have a short time span, as they both really suffer from needing to be the 'Main Character', and you cant have two main characters.

Also yesterdays result of musk actually bribing voters with large sums of money (not sure how that is legal, I guess it doesn't matter in america) failing to win their guy in wisconsin wouldn't have helped.

[Woodinblack]

1 hour ago, SumOne said:

However, almost all of the rest of the world has more than 10%, so the UK goods are going to be more attractively priced - suddenly, something made in the UK is 15% cheaper than the same EU goods for USA.

 

And if China with 67% tariffs can't sell so much to the USA then there will be more supply available for a smaller market = lower prices for the UK.

 

Problem is we have stuck tarrifs on ourself to europe that more than cancels out any win to the US, so it is more expensive for an EU country to be here in the first place, so the tarrif difference isn't going to make as much difference.

 

China isn't 67%, that is the other column, its 30 something, the 67% is trumps made up figure on chinas tarrifs on the US (I am guessiing, I don't know what chinas tarrifs on the US are - I probably know as little as trump on this!)

[tegs07]

I wonder who is in charge of calculating all the import costs?

It must be a hugely onerous process that requires adjustment as frequently as Trump changes his nappy.

[Beer of the Bass]

4 minutes ago, Woodinblack said:

 

Problem is we have stuck tarrifs on ourself to europe that more than cancels out any win to the US, so it is more expensive for an EU country to be here in the first place, so the tarrif difference isn't going to make as much difference.

 

China isn't 67%, that is the other column, its 30 something, the 67% is trumps made up figure on chinas tarrifs on the US (I am guessiing, I don't know what chinas tarrifs on the US are - I probably know as little as trump on this!)

 

It's the old "post-truth" tactic again, I reckon. We understand the word tariff to have a specific meaning that can be objectively used, but the Trump administration are applying it in a subjective and vibes-based way when it suits them (yet still rigid when it's in their interests).

[Wombat]

22 minutes ago, JoeEvans said:

I think he's basically lied about how the US tariffs were calculated, claiming that they are 50% of what other nations charge on US imports when they are no such thing.

But the true explanation - that they are calculated by looking at the ratio of the import and export value then adding a random number pulled out of his arse - is sufficiently complicated that his core supporters will glaze over any time anyone tries to explain it, preferring to trust the simple lie told by their Orange Overlord.

Thanks, but even putting the lies to one side (as usual 🙄) even a child wouldn't describe that as a tariff. So he could impose an actual tariff. 

Why is no one calling him on this? 

And poor old Cory Booker barely got a mention in the press!

[Downunderwonder]

How stupid would we have to be to allow imported stuff to be sold without sales tax while charging sales tax on domestic product? Idiotic does not cover it.

[Woodinblack]

17 minutes ago, Wombat said:

Why is no one calling him on this?

 

Everyone has been calling him on this, except fox, but what difference does it make.

The wierd thing I saw was him in the rose garden with american autoworkers thanking him for saving their jobs with tarrifs, with one guy doing a speech about how great it is. Would like a follow up with that guy in 5 years to see how his job is going!

[Steve Browning]

Personally, I read tariff to mean import Duty. It's wrong to extend that to include any domestic sales taxes imposed upon import but, as we have said, that seems not to matter in the US (at present).

 

The whole US tax system seems weird to a UK 'sales tax' person. The US is pretty much unique in how they charge sales (and use) taxes. They have toyed with the idea of changing to a system akin to VAT but discussions never got anywhere.

[tegs07]

i would love someone to explain to me how this all works. So the concept is to use tariffs not to protect fledgling industries or security critical industries but to raise taxes, increase the cost of imports and encourage americans to buy american produced goods. OK all good so far.

The next phase is to get rid of income tax as it won’t be needed with all the billions raised from tariffs. OK I can see a bit of contradiction going on here but lets roll with it.

So we have companies priced out of exporting to the us so they set up shop in the us. erm okay nice concept but do they bring their own energy supply, cheap labour and raw materials with them? Manufacturing is fairly dirty. Which states get the pollution and how do they get around the fact that china controls much of the rare earth and manufacturing technology for metal production etc

once they are all in the us what happens to the tariff revenue lost and how do they compete with the rest of the world who are still using global supply chains.

 

the concept is not insane. the timeframe and lack of joined up thinking is though.

 

 

Edited 19 hours ago by tegs07

[Woodinblack]

20 minutes ago, tegs07 said:

the concept is not insane. the timeframe and lack of joined up thinking is though.

 

The concept is not insane as part of a set of measures. So you decide there is an industry you want, like Biden wanted semiconductors being made in the US, which makes sense, so he made a chips act which gave bonuses to companies for making chips in the US, you give preferencial deals on land for those factories, where people want tehm, then when you have those factories, you put tarrifs on other countries chips so that your chips, which obviously cost more as you haven't ramped up production, so people buy yours, you ramp up production, it gets cheaper, hey presto you have an industry.

 

But it can't work by just slapping tarrifs on it and hoping that someone will make a factory to make it, especially as these things take years to ramp up, and who is going to trust that trumps decision now will be the same next week? I mean it is good for telly, but not good for long term planning.

[asingardenof]

12 hours ago, Woodinblack said:

 

To where? The semiconductors are made in Taiwan, there is not a hope that they can be made in the US any time soon, could be possible to do something in mexico but obviously that is no use, so they will just have to accept that semiconductors from now cost 30% more

It's amusing the US has recognised Taiwan as a country independent from China

[asingardenof]

9 hours ago, TimR said:

He's basing it on trade defects. The greater the imbalance between imports and exports, the greater the tarrif.

Not sure how the US has a trade deficit with uninhabited islands (apart from penguins!) and those that only host US military bases. It's almost like they just got a list of territories from the internet and just scattergunned it without any kind of thought...

[LukeFRC]

6 minutes ago, Woodinblack said:

The concept is not insane as part of a set of measures. So you decide there is an industry you want, like Biden wanted semiconductors being made in the US, which makes sense, so he made a chips act which gave bonuses to companies for making chips in the US, you give preferencial deals on land for those factories, where people want tehm, then when you have those factories, you put tarrifs on other countries chips so that your chips, which obviously cost more as you haven't ramped up production, so people buy yours, you ramp up production, it gets cheaper, hey presto you have an industry.

 

But it can't work by just slapping tarrifs on it and hoping that someone will make a factory to make it, especially as these things take years to ramp up, and who is going to trust that trumps decision now will be the same next week? I mean it is good for telly, but not good for long term planning.

This

I get kinda the theory behind it but I think you've hit the nail on the head. 
"Come build a factory in the US, we'll make it financially good for you, and our power means you will always be able to export" makes sense - especially as we're over reliant on Taiwan for semiconductors.

 

But this feels mad. 
If I were the EU/UK I would be going, offering the same deal but promising free trade with markets in china/brazil and india so you can make the chips cheaply and export easily.... It might cost the host country a bit, and not raise much in taxes, but you'ld gain the semiconductor manufacturing capabilities....