Tariff - The Official Tariff Thread

[harrybarracuda]

And let's remind Looper that America is just a massive consumer and the rest of the world does not owe its citizens a fucking living.

[BLD]

Out of greens David, cmon Looper all that exotic pussy has fucked with your thought process. You are an engineer? Educated? I'm a ditch digger but this Trump guy is giving me the heeby jeebys. Something Ain't right.

[Shutree]

And let's remind Looper that America is just a massive consumer and the rest of the world does not owe its citizens a fucking living.

Exactly. America is the richest country in the world, so it buys more stuff. Like any consumer, it buys the best price/quality it can get. This bit is not hard.
And, America got to be the richest country in the post-WW2 era, despite the inevitable trade defecit from being richer than others.
It has been ripped off, on occasion - and the argument can be made that it has used its size to benefit by ripping off others.

[Shutree]

The BBC has come up with a list of 5 goals

I think there is more to it. Behind the man child playing with his toys there are some smart people who do have ideas. Probably one of their goals is to lower interest rates, another might be to reduce the USD exchange rate. Who knows? Both of these results could, probably, support the US economy.
It's all a guessing game at the moment.

[harrybarracuda]

I think it's as simple as him and the rest of the junta manipulating the market and using advance knowledge to profit from it.

[harrybarracuda]

Exactly. America is the richest country in the world, so it buys more stuff. Like any consumer, it buys the best price/quality it can get. This bit is not hard.
And, America got to be the richest country in the post-WW2 era, despite the inevitable trade defecit from being richer than others.
It has been ripped off, on occasion - and the argument can be made that it has used its size to benefit by ripping off others.

Precisely. Want to import less food? Stop eating so much, you fat fucks.

[Shutree]

I think it's as simple as him and the rest of the junta manipulating the market and using advance knowledge to profit from it.

It seems that the NYSE saw some big margin trades minutes before Trump publicly back-tracked on tariffs.
Whoodathunkit?
Who is left in the DoJ to make enquiries?
Then what is the point if Scumbag-in-Chief can pardon all his billionaire buddies?

[harrybarracuda]

FP has such a nice way of putting things.

"When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with,” U.S. President Donald Trump famously tweeted in 2018, “trade wars are good, and easy to win.” This week, when the Trump administration imposed tariffs of more than 100 percent on U.S. imports from China, setting off a new and even more dangerous trade war, U.S. Treasury Secretary Scott Bessent offered a similar justification: “I think it was a big mistake, this Chinese escalation, because they’re playing with a pair of twos. What do we lose by the Chinese raising tariffs on us? We export one-fifth to them of what they export to us, so that is a losing hand for them.”


In short, the Trump administration believes it has what game theorists call escalation dominance over China and any other economy with which it has a bilateral trade deficit. Escalation dominance, in the words of a report by the RAND Corporation, means that “a combatant has the ability to escalate a conflict in ways that will be disadvantageous or costly to the adversary while the adversary cannot do the same in return.” If the administration’s logic is correct, then China, Canada, and any other country that retaliates against U.S. tariffs is indeed playing a losing hand.


But this logic is wrong: it is China that has escalation dominance in this trade war. The United States gets vital goods from China that cannot be replaced any time soon or made at home at anything less than prohibitive cost. Reducing such dependence on China may be a reason for action, but fighting the current war before doing so is a recipe for almost certain defeat, at enormous cost. Or to put it in Bessent’s terms: Washington, not Beijing, is betting all in on a losing hand.


The administration’s claims are off base on two counts. For one thing, both sides get hurt in a trade war, because both lose access to things their economies want and need and that their people and companies are willing to pay for. Like launching an actual war, a trade war is an act of destruction that puts the attacker’s own forces and home front at risk, as well: if the defending side did not believe it could retaliate in a way that would harm the attacker, it would surrender.


Bessent’s poker analogy is misleading because poker is a zero-sum game: I win only if you lose; you win only if I lose. Trade, by contrast, is positive-sum: in most situations, the better you do, the better I do, and vice versa. In poker, you get nothing back for what you put in the pot unless you win; in trade, you get it back immediately, in the form of the goods and services you buy.


The Trump administration believes that the more you import, the less you have at stake—that because the United States has a trade deficit with China, importing more Chinese goods and services than China does U.S. goods and services, it is less vulnerable. This is factually wrong, not a matter of opinion. Blocking trade reduces a nation’s real income and purchasing power; countries export in order to earn the money to buy things they do not have or are too expensive to make at home.


What’s more, even if you focus solely on the bilateral trade balance, as the Trump administration does, it bodes poorly for the United States in a trade war with China. In 2024, U.S. exports of goods and services to China were $199.2 billion, and imports from China were $462.5 billion, resulting in a trade deficit of $263.3 billion. To the degree that the bilateral trade balance predicts which side will “win” in a trade war, the advantage lies with the surplus economy, not the deficit one. China, the surplus country, is giving up sales, which is solely money; the United States, the deficit country, is giving up goods and services it does not produce competitively or at all at home. Money is fungible: if you lose income, you can cut back spending, find sales elsewhere, spread the burden across the country, or draw down savings (say, by doing fiscal stimulus). China, like most countries with overall trade surpluses, saves more than it invests—meaning that it, in a sense, has too much savings. The adjustment would be relatively easy. There would be no critical shortages, and it could replace much of what it normally sold to the United States with sales domestically or to others.


Countries with overall trade deficits, like the United States, spend more than they save. In trade wars, they give up or reduce the supply of things they need (since the tariffs make them cost more), and these are not nearly as fungible or easily substituted for as money. Consequently, the impact is felt in specific industries, locations, or households that face shortages, sometimes of necessary items, some of which are irreplaceable in the short term. Deficit countries also import capital—which makes the United States more vulnerable to shifts in sentiment about the reliability of its government and about its attractiveness as a place to do business. When the Trump administration makes capricious decisions to impose an enormous tax increase and great uncertainty on manufacturers’ supply chains, the result will be reduced investment into the United States, raising interest rates on its debt.


n short, the U.S. economy will suffer enormously in a large-scale trade war with China, which the current levels of Trump-imposed tariffs, at more than 100 percent, surely constitute if left in place. In fact, the U.S. economy will suffer more than the Chinese economy will, and the suffering will only increase if the United States escalates. The Trump administration may think it’s acting tough, but it’s in fact putting the U.S. economy at the mercy of Chinese escalation.


The United States will face shortages of critical inputs ranging from basic ingredients of most pharmaceuticals to inexpensive semiconductors used in cars and home appliances to critical minerals for industrial processes including weapons production. The supply shock from drastically reducing or zeroing out imports from China, as Trump purports to want to achieve, would mean stagflation, the macroeconomic nightmare seen in the 1970s and during the COVID pandemic, when the economy shrank and inflation rose simultaneously. In such a situation, which may be closer at hand than many think, the Federal Reserve and fiscal policymakers are left with only terrible options and little chance of staving off unemployment except by further raising inflation.


When it comes to real war, if you have reason to be afraid of being invaded, it would be suicidal to provoke your adversary before you’ve armed yourself. That is essentially what Trump’s economic attack risks: given that the U.S. economy is entirely dependent on Chinese sources for vital goods (pharmaceutical stocks, cheap electronic chips, critical minerals), it is wildly reckless not to ensure alternate suppliers or adequate domestic production before cutting off trade. By doing it the other way around, the administration is inviting exactly the kind of damage it says it wants to prevent.


This could all be intended as just a negotiating tactic, Trump’s and Bessent’s repeated statements and actions notwithstanding. But even on those terms, the strategy will do more harm than good. As I warned in Foreign Affairs last October, the fundamental problem with Trump’s economic approach is that it would need to carry out enough self-harming threats to be credible, which means that markets and households would expect ongoing uncertainty. Americans and foreigners alike would invest less rather than more in the U.S. economy, and they would no longer trust the U.S. government to live up to any deal, making a negotiated settlement or agreement to deescalate difficult to achieve. As a result, U.S. productive capacity would decline rather than improve, which would only increase the leverage that China and others have over the United States.


The Trump administration is embarking on an economic equivalent of the Vietnam War—a war of choice that will soon result in a quagmire, undermining faith at home and abroad in both the trustworthiness and the competence of the United States—and we all know how that turned out.



Trade Wars Are Easy to Lose: Beijing Has Escalation Dominance in the U.S.-China Tariff Fight

[Looper]

But this logic is wrong: it is China that has escalation dominance in this trade war. The United States gets vital goods from China that cannot be replaced any time soon or made at home at anything less than prohibitive cost

Like what?

The west has its own car industries.

Korean and Japanese TVs and white goods are only slightly more expensive than the Chinese equivalents.

Low tech goods like clothing and basic manufacturing and construction supplies can be switched to other more democratic cheap labour economies like India without a huge amount of upskilling.

This feels to me like an opportunity to defeat China without firing a shot if their manufacturing revenue tap can be stemmed.

An economic war may not be pretty but if it helps us to avoid in the 21st century the kind of haemoclysms we faced in the 20th century it may be a road worth travelling.

Until China tones down its bellicose rhetoric and moderates its political system it remains the West's number 1 enemy.

[harrybarracuda]

Like what?

The west has its own car industries.

Korean and Japanese TVs and white goods are only slightly more expensive than the Chinese equivalents.

Low tech goods like clothing and basic manufacturing and construction supplies can be switched to other more democratic cheap labour economies like India without a huge amount of upskilling.

This feels to me like an opportunity to defeat China without firing a shot if their manufacturing revenue tap can be stemmed.

An economic war may not be pretty but if it helps us to avoid in the 21st century the kind of haemoclysms we faced in the 20th century it may be a road worth travelling.

Until China tones down its bellicose rhetoric and moderates its political system it remains the West's number 1 enemy.

I would suggest reading the FP article I posted. You clearly don't have a clue how much China provides to foreign manufacturers, and it can't be replaced overnight.

[harrybarracuda]

Meanwhile, the orange turd wakes up to find Mr. Shithole has sent a big "Fuck You, orange turd".

As the rest of the world received a 90-day respite, Trump escalated tariffs on China, saying the US will now charge an extra 145% on all Chinese goods that arrive in the US. In response, Beijing ratcheted up its own tariffs on American goods Friday to 125%, and the country’s leader — who Trump is urgently working to engage — warned China was “not afraid” of a prolonged trade conflict.
In private discussions hours before China announced new retaliatory tariffs, the Trump administration warned Chinese officials against such a move, according to a source familiar with the discussions.
The Chinese were also told – once again – that Chinese President Xi Jinping should request a call with US President Donald Trump.
Instead, US officials woke up to news of increased Chinese tariffs and no request for a leader level call. Xi also made comments that only dug him in further.
“For over 70 years, China’s development has relied on self-reliance and hard work — never on handouts from others, and it is not afraid of any unjust suppression,” Xi said according to state broadcaster CCTV during his meeting with the Spanish prime minister.

[bsnub]

To his credit, Trump has shown willingness to respond to the market and walk back many of the tariffs

You really are a clown. It is not a willingness at all, it is a reaction akin to what happens when you run a ship aground and try to reverse course. You really need to pull your head out of that fat orange asshole.

[harrybarracuda]

Rupert Murdoch’s Wall Street Journal flamed Donald Trump in yet another critical editorial, this time accusing him of “making it up as he goes,” with his tariff decisions hurting the United States and its allies.

“You almost have to smile” when the president claims the shuddering economy is “all going according to plan,” scoffed the editorial Thursday.

The “reality is that Mr. Trump is making it up as he goes, and it would help if he had an actual strategy to deal with China.,” the newspaper added.

Instead, Trump is “outright punishing the allies he needs for a coherent China strategy. He’s imposed tariffs on Canada and Mexico and insulted Canadian national pride. He’s hit Japan with 24 percent tariffs, South Korea with 25 percent, and Europe with 20 percent. He’s hit Vietnam with 46 percent — though the boom in that country’s exports to the U.S. since his first-term tariffs has come at China’s expense,” The Journal noted.

He has imposed a gargantuan 145 percent tariff on products from China, while pausing most of his other global tariffs for 90 days, the newspaper acknowledged.

But at the same time, Trump is doing Chinese President Xi Jinping “a favor by refusing to enforce a law passed by Congress” demanding the sale of TikTok by Chinese-controlled owner ByteDance, argued the paper. Last week he extended the deadline for a TikTok sale by “another 75 days after China walked away” from a near-deal, The Journal added.

Trump is also refusing to impose sanctions on Chinese firms that buy oil from Russia and “thus help Moscow’s war machine,” noted the newspaper.

Trump’s “ad hoc, scattershot tariff policy won’t solve” the trading imbalance with China, The Journal added. “So far he’s hurting his own cause and country more than he’s hurting the Chinese Communist Party.”

Trump is ‘making is up as he goes ,” hurting US and allies, charges Wall Street Journal | The Independent

[harrybarracuda]

A reminder that it was the orange turd that shit on an attempt at building a trade alternative to Chinkystan.

...the idea of building an allied front to try to modify China’s trade practices is such a good idea, it’s a wonder no one thought of it before.
They did. And Trump shut it down.
On the first day of his first term in 2017, Trump withdrew from the Trans-Pacific Partnership, a group of 12 nations, including allies like Mexico, Canada, Japan, and Australia, as well as Japan, that did not include China. The president also shut down a Transatlantic Trade and Investment Partnership that would have linked the world’s two largest markets.
The question now is whether Trump has so alienated America’s friends that they won’t take his calls.
“The US right now is an incredibly unreliable partner to anyone in the world, and I don’t know how we are going to get back to being reliable,” Jason Furman, who chaired the Council of Economic Advisers in the Obama administration, told CNN on Thursday.

Why Trump wants allies to take on China in a trade war | CNN

[Looper]

The “reality is that Mr. Trump is making it up as he goes

He does like to sow chaos as part of his policy style. It often seems to end up working to his advantage at the end of the day but it can be a nerve-wracking ride and it seems unlikely to be a reliable tactic in the long term

it would help if he had an actual strategy to deal with China .... Trump is “outright punishing the allies he needs for a coherent China strategy.

Very much agree with this. It would be nice to feel a more coherent strategy for dealing with China; hopefully, moving them into a position where their economy is weakened.

Trump is doing Chinese President Xi Jinping “a favor by refusing to enforce a law passed by Congress” demanding the sale of TikTok by Chinese-controlled owner ByteDance

This odd obstruction is disappointing. I would loveto see Tik Tok divested from Chinese control.

Trump is also refusing to impose sanctions on Chinese firms that buy oil from Russia and “thus help Moscow’s war machine,”

His stance on Russia is disappointing but he seems to want to keep Russia onside to have the option of separating them from China for a future economic assault.

[harrybarracuda]

You are genuinely a bit soft in the head.

He's a fucking mental case tinkering with the markets so his pals can trouser cash, and has no fucking idea of the consequences.

[david44]

Looper there is no precedent of tariff wars having winners ,Serious economists can explain that to you but cannot make you understand.

A US-China trade war could be catastrophic. What is Trump’s endgame strategy? | CNN Politics

What would a US-China trade war do to the world economy?

No need for a crystal ball when you can read history the basic conclusions drawn from the theory and history of trade wars. Lessons from history. In most cases, those who start a trade dispute suffer more from the subsequent retaliation. The Hawley-Smoot Tariff Act is a prime example.In addition uncertainty and recession sinks everyone, incresed trade floats all boats.

[BLD]

You seem like a nice bloke Looper but you are off with the fairies. Will you still think Trumps ok when your superannuation account goes to shit. Because of one deranged orange monkey? Or are you just trolling? The Boston tea party was just a storm in a tea cup. This shits serious dontcha know

[david44]

You seem like a nice bloke Looper but you are off with the fairies. Will you still think Trumps ok when your superannuation account goes to shit. Because of one deranged orange monkey? Or are you just trolling? The Boston tea party was just a storm in a tea cup. This shits serious dontcha know

I have seldom read so much wisdom from a recovering Beer Lao Thinker, cheers and sobering, perhaps members may change their position once International intercourse is restricted.

Oh and hoppy New Year

[Looper]

Looper there is no precedent of tariff wars having winners ,Serious economists can explain that to you but cannot make you understand.

I have no illusions that tariffs are anything other than detrimental to total net economic benefit.

But the harm done can be asymmetrical.

I think if Trump's tariff war could be done in coordination with other democracies who also seek to weaken the geo-political threat of an assertive China (rather than by baiting and attacking those democracies), then it could have a better chance of bearing fruit.

Will you still think Trumps ok when your superannuation account goes to shit.

I hear ya Lao and my super did indeed shit itself last week, but has since recovered.

All confrontations cost something, but some confrontations are simply unavoidable at some point. The West is going to have to face down an aggressive China at some point. If this can be done through economic attrition rather than in a kinetic confrontation, I think that would bode well for the world, in the long term.

so his pals can trouser cash

I don't really buy that cynical theory. Trump is no saint but causing market chaos for shorting/buying opportunities seems unlikely to me.

[david44]

I don't really buy that cynical theory. Trump is no saint but causing market chaos for shorting/buying opportunities seems unlikely to me

Brother Loopy from the land of love, I fear you are too trusting.

MTG scooped up plummeting stocks during market chaos sparked by Trump tariffs



The Georgia congresswoman not only bought stocks last week, but also took on some of the markets’ biggest losers.



MTG scooped up plummeting stocks during market chaos sparked by Trump tariffs | The Independent


[/COLOR]

[Looper]

The link quotes Trump as saying

On Wednesday morning, the president posted on his social media site truth Social: “NOW IS A GREAT TIME TO BUY!!”

That does not sound like 'insider trading' when the advice was telegraphed out nationwide to the great unwashed in Trumps customary ALL CAPS!!

[Troy]

The west has its own car industries.

The car industries of the West are reliant on Chinese imports. During Covid, Audi was putting thousands of cars to pasture because they lacked vital electronics that are sourced from China. The supply chain was so so severely reduced that even the CEO of Audi did not have his new car completed before he left for the ME. The US car industry is no different, it probably sources even more parts from CHina.

My view is that Trump is running with a hald idea that simply hasn't been fully thought through. His advisers are worried that if they go against his ideas they will be sacked, so they are taking the money and keeping quiet.

[Looper]

The car industries of the West are reliant on Chinese imports

Until China dials down its bellicose rhetoric and liberalises its political system it remains enemy number 1 for the West.

If western industry is too heavily reliant on China then we need to start thinking clearly about how to re-strategise our relationship with the middle kingdom.

The defeat of China, be it economic or kinetic, is our number 1 priority over the next 2 or 3 decades. Supply chains need to be divested to more democratic low wage economies.

It would be nice if this had been in place before the tariffs went into effect but maybe the tariffs are the necessary force that will cause the market to respond to the supply chain restructuring that we need to make to send China the message that it needs to hear.

[harrybarracuda]

The link quotes Trump as saying



That does not sound like 'insider trading' when the advice was telegraphed out nationwide to the great unwashed in Trumps customary ALL CAPS!!

You're right.

It's great cover for insider trading, because no-one in the public can take it seriously but he can claim he meant it.

You really are as dumb as a box of rocks.