Trump's tariff wars...long post.

[Owen]

6 hours ago, mcnach said:

 

No, I didn't miss it, but the guy is as reliable as a Scottish Summer

That is not fair. You know exactly what to expect from a Scottish summer. 

Edited 15 hours ago by Owen
because of the spelling. Always because of the spelling.

[Downunderwonder]

6 hours ago, tegs07 said:

Indeed but you missed the second part which is having decided that he is doing the opposite but against his allies. The weird thing is that with all the various conspiracy theorists there doesn’t seem to be a conspiracy that Trump is a fully bought up and paid for Russian asset. I don’t believe that by the way. I prefer the simple explanation that he is a buffoon.

Search Trump Russian sleeper agent

 

2 hours ago, PaulWarning said:

the USA are very proud of their democracy, land of the free and all that, there's no way free elections won't happen in the future

That Gerry Mander bloke has a lot to answer for. He plays on both sides but Republicans really fed him the ball last time.

[tauzero]

3 hours ago, chris_b said:

Trump's main job is to end the Constitution and declare martial law. After that he's expendable because there won't be any more elections.

 

He'll be well advised to keep to the ground floor of Trump Towers.

[SteveXFR]

I wouldn't wish death on anyone, even Trump but I would wish sniper assassins success in their missions, whatever they may be.

[Geek99]

33 minutes ago, SteveXFR said:

I wouldn't wish death on anyone, even Trump but I would wish sniper assassins success in their missions, whatever they may be.

I just wish they were better at it. He is a total Cnut. He was averagely bad last time, but off the scale of insane this time 

if Joe was too old, so is trump 

[tauzero]

I await the civil war and Canada's subsequent annexation of the USA with interest.

[tegs07]

Rather dull point with my limited economic knowledge being put to the test. Let’s suppose that the ultimate aim of tariffs is to tackle the trade deficit. This would in theory boost domestic demand and favour local producers. The secondary effects would be to reduce the amount of $ flowing overseas and by association the volume of overseas investment (aka foreign ownership of infrastructure and treasuries). 

The theory long term is sound. The issue I don’t understand is who bridges the gap in the short to mid term?

China, one of the biggest purchases of US treasury debt is unloading at unprecedented levels and diversifying its holdings particularly in gold.

Will this drop in demand increase yields?  If demand drops yield increases and with this so does the cost of borrowing and servicing debt.

 

Investment from internal US stakeholders in theory will replace foreign ownership of capital (treasuries and physical assets) BUT if the cost of borrowing is increasing, inflation is also increasing how do you persuade the billionaires to embrace the risk of short term volatility (including the possibility of recession) and not to invest in the pretty much guaranteed return offered by inflation proof assets like gold?

 

Interesting times for the US consumer and borrower who I suspect are in for a shock.

Edited 4 hours ago by tegs07
clarity

[SteveXFR]

Just wondering, do Mexican made Fenders come here directly from Mexico or do they travel via the US (with tariffs added)?

Tariffs could make a Mexican Fender expensive.

[tegs07]

2 minutes ago, SteveXFR said:

Just wondering, do Mexican made Fenders come here directly from Mexico or do they travel via the US (with tariffs added)?

Tariffs could make a Mexican Fender expensive.

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.

[prowla]

9 minutes ago, tegs07 said:

Rather dull point with my limited economic knowledge being put to the test. Let’s suppose that the ultimate aim of tariffs is to tackle the trade deficit. This would in theory boost domestic demand and favour local producers. The secondary effects would be to reduce the amount of $ flowing overseas and by association the volume of overseas investment (aka foreign ownership of infrastructure and treasuries). 

The theory long term is sound. The issue I don’t understand is who bridges the gap in the short to mid term?

China, one of the biggest purchases of US treasury debt is unloading at unprecedented levels and diversifying its holdings particularly in gold.

Will this drop in demand increase yields and if so does the cost of borrowing increase?

Investment from internal US stakeholders in theory will replace foreign ownership of capital (treasuries and physical assets) BUT if the cost of borrowing is increasing, inflation is also increasing how do you persuade the billionaires to embrace the risk of short term volatility (including the possibility of recession) and not to invest in the pretty much guaranteed return offered by inflation proof assets like gold?

 

Interesting times for the US consumer and borrower who I suspect are in for a shock.

Yep - the problem is that, having built up a reliance on imports, the domestic suppliers simply don't have the capacity to meet current demand.

Therefore the consumers will pay the tariff-based price increases.

It will likely reduce demand and imports, but will also impact exports due to reciprocal actions (eg. Canada's response) at the government level and personal choices by buyers (eg. I've decided not to buy a couple of US-produced/owned items this past week - small potatoes, but maybe indicative).

Further, the decision to withdraw support to Ukraine will impact the US companies who have been producing the equipment which was being manufactured to go there; presumably there'll be associated lay-offs (or stockpiling to offset the issue).

Trumpinomics is coming across a bit like Trussinomics: seems great, if you're living in a fantasy world.

[Agent 00Soul]

14 hours ago, chris_b said:

 

As above. If everything goes to plan, 2024 was the last US election. 

 

 

14 hours ago, peteb said:

 

I don't think that is really the plan. I think it is more to establish a political structure (Project 25) to serve the oligarchy that makes elections irrelevant. 

 

The aim is for the USA to become what Hungary under Orban is. I think Orban himself called it “illiberal democracy” or something. Whatever it’s called, the modern Hungarian state is the model. It’s ironic that such Europhobes as the MAGA Republicans are quite open in their desire to copy a European country and EU member. 

[SteveXFR]

The future is not bright.

[Buddster]

1 hour ago, tegs07 said:

Let’s suppose that the ultimate aim of tariffs is to tackle the trade deficit

Or maybe the ultimate aim is to cause chaos in the infrastructure of the political system across US and EU, which is the ideology behind trumps liberation backers and money suppliers to brexit. 

[bass_dinger]

I am enjoying this thread, and am learning a lot from it. Mostly, I am learning that there is no single correct answer - and that people are impeccably polite when debating their points. 

 

One minor plea, however.  Rather than saying "we" or "our", or "here", where necessary for context, can people say what countries they are referring too? 

 

So, not "our importers here have already seen that we don't want to pay more for their products ", but "Canadian importers here have already seen that we don't want to pay more for American products"

 

Otherwise, I am finding that I am having to look at people's profile to see where they live, to fully understand their point!

 

Yours, with a big map, bass_dinger. 

[tegs07]

58 minutes ago, Buddster said:

Or maybe the ultimate aim is to cause chaos in the infrastructure of the political system across US and EU, which is the ideology behind trumps liberation backers and money suppliers to brexit. 

I honestly don’t know what the ultimate goal is. I can see some logic behind the usual flack, bombast and smokescreen but the problem with theory (particularly in inter-dependent economies) is that there are so many different variables sticking to a straight course of action is extremely difficult even with a determined steady hand on the rudder. When you constantly change direction then theory mutates to chaos which (if it’s a master plan rather than a consequence maybe potentially crippling in the short term. I would not like to be holding sizeable debts or be in a vulnerable job in the USA right now.

[peteb]

4 minutes ago, tegs07 said:

I honestly don’t know what the ultimate goal is. I can see some logic behind the usual flack, bombast and smokescreen but the problem with theory (particularly in inter-dependent economies) is that there are so many different variables sticking to a straight course of action is extremely difficult even with a determined steady hand on the rudder. When you constantly change direction then theory mutates to chaos which (if it’s a master plan rather than a consequence maybe potentially crippling in the short term. I would not like to be holding sizeable debts or be in a vulnerable job in the USA right now.

 

The ultimate goal is political rather than economic and that is Project 25. Whether that is a burning issue with Trump, or just what he had to sign up to for the backing to get elected is another thing. 

 

The point of the tariffs seems to be a bit of political posturing and an attempt to sow chaos and confusion. This hurts everyone, but in every scenario, the USA comes out of it worse and will ultimately be politically unpopular. I assume that this is why he keeps backing down every time the tariffs are due to come into effect. 

 

[Buddster]

6 minutes ago, peteb said:

The ultimate goal is political rather than economic and that is Project 25. Whether that is a burning issue with Trump, or just what he had to sign up to for the backing to get elected is another thing. 

 

Very much agree peteb. 

trump isn't the spearhead of all this. He's a blunt tool, the Bez to get the MAGA clan going. 

 

It's a long read, and although from 2017, this article is very interesting. Follow the money... 

 

https://www.newyorker.com/magazine/2017/03/27/the-reclusive-hedge-fund-tycoon-behind-the-trump-presidency

[Russ]

3 hours ago, SteveXFR said:

Just wondering, do Mexican made Fenders come here directly from Mexico or do they travel via the US (with tariffs added)?

Tariffs could make a Mexican Fender expensive.

If they work the same way as my employer (a big, well known and long-established acoustic guitar manufacturer with operations in the US and Mexico), once the Mexican-made guitars are ready, they get shipped back up to the US and distributed from there, hence attracting the tariff. 

 

There’s been talk of how to sidestep them, possibly by setting up an international shipping department in Mexico to ship the Mexican-made stuff directly to dealers outside the US, but, right now, that’s a longer-term plan and we’re probably just going to have to raise our prices, both on the Mexican-made guitars and on the (much more expensive) US-made ones.  

[Beer of the Bass]

I can make bass strings last a long time, so the strings I buy and change most often are my acoustic guitar strings. Currently I like Martin Retros, made in Mexico for a US company, and it seems like buying those in the UK might be quite badly hit by the tariff arrangements. I might start looking at Newtone again...

[Russ]

26 minutes ago, Beer of the Bass said:

I can make bass strings last a long time, so the strings I buy and change most often are my acoustic guitar strings. Currently I like Martin Retros, made in Mexico for a US company, and it seems like buying those in the UK might be quite badly hit by the tariff arrangements. I might start looking at Newtone again...

There’ll be some new coated strings from that particular company soon, so you might have to change them less often.  

If there ends up being a change to how distribution from the Navajoa factory works, ie, they start shipping internationally directly, I’ll let you know…