For anyone interested in seeing who imposes tariffs, and at what percentage level.
It's a bit simplified, but accurate. There are more "details" than shown for each country, but the general number shown is accurate, even including the details.
Let me know if it doesn't display properly. There is a slider on the right-hand side so you can see the entire chart, which for most people will be larger than the screen.
Bob
https://flo.uri.sh/visualisation/21560786/embed?auto=1
Here is a good primer on tariffs, that is worth reading
https://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp
On an unrelated note, the stock markets are crashing, unemployment is up, and all my finance podcasts are talking about how to deal with stagflation
Quote from: MightyGiants on March 09, 2025, 10:31:31 AMOn an unrelated note, the stock markets are crashing, unemployment is up, and all my finance podcasts are talking about how to deal with stagflation
Rich: Temporary stagflation is a possibility. The tariff picture should be sufficiently cleared up by April 2 to enable predicting with a far greater degree of certainty than today what's in store for the remainder of this year. Bob
Quote from: Bob In PA on March 09, 2025, 11:11:30 AMRich: Temporary stagflation is a possibility. The tariff picture should be sufficiently cleared up by April 2 to enable predicting with a far greater degree of certainty than today what's in store for the remainder of this year. Bob
You would hope that is the case. To this point, we have had anything but clarity on tariffs from this administration. First Trump states that 25% tariffs would go into place on Canada and Mexico on Feb 1st. Then he confuses everyone by extending that to March 4th. Then on March 4th they actually do go into effect, but then a day or so later he suspends them again, and this time extends them to April 2nd. What does this do for an administration's credibility?
Meanwhile US multinational companies have no idea what the rules are or what their supply chains look like and hence are paralyzed and can't do anything. Meanwhile you have major discord within the administration. Is it any wonder stocks are struggling right now?
Markets hate uncertainty. And right now, to say things are uncertain would be a huge understatement.
Quote from: DaveBrown74 on March 09, 2025, 11:59:24 AMMarkets hate uncertainty. And right now, to say things are uncertain would be a huge understatement.
All excellent points, but especially the part I cited above. Two things to remember:
(1) being good for the stock market was not among Trump's numerous promises - he won by appealing to middle-class working voters (i.e., traditional Democrats who are much more worried about paying tomorrow's bills than the stock market) and young voters (i.e., people with keen interest in, but no money to put into, the stock market).
(2) notwithstanding paragraph (1), in his first term, Trump was good for the stock market (minus covid) and his advisors and appointees this time (in key economic positions) are hell bent on growing manufacturing in the U.S. (which IMO will be more than good for the stock market).
The issue is whether they can get it "done" in time to avoid recession. That is why they're moving so fast. Stagflation is a lesser worry, IMO.
Bob
ignoring economic reality has never worked
How Tariffs Hurt an EconomyTariffs—taxes imposed on imported goods—are often used to protect domestic industries, reduce trade deficits, or respond to foreign policies. However, while they can offer short-term benefits to certain industries, they often
hurt an economy in the long run. Here's how:
1. Higher Consumer Prices- Tariffs increase the cost of imported goods, and businesses often pass these costs on to consumers.
- Even if domestic producers don't face tariffs, they may raise their prices because competition from cheaper imports is reduced.
- Example: When the U.S. imposed tariffs on steel and aluminum, American manufacturers that used these materials paid higher prices, which increased costs for cars, appliances, and construction materials.
Economic Impact:- Consumers have less disposable income due to higher costs of goods.
- Inflationary pressures increase the overall cost of living.
2. Retaliation Hurts Exports- When one country imposes tariffs, others retaliate with their own tariffs on exports.
- This makes it harder for domestic producers to sell abroad, reducing revenue and potentially leading to job losses in exporting industries.
- Example: After the U.S. imposed tariffs on Chinese goods, China retaliated with tariffs on American soybeans, pork, and automobiles, severely hurting U.S. farmers.
Economic Impact:- Export-dependent industries lose foreign customers.
- Trade wars slow down global economic growth.
3. Inefficiency and Reduced Competition- Tariffs protect less competitive domestic industries, allowing them to survive even if they are inefficient.
- Without competition, companies have less incentive to innovate, improve productivity, or lower prices.
- Example: If the U.S. heavily tariffs foreign cars, domestic car manufacturers might become less competitive globally due to reduced pressure to improve quality or efficiency.
Economic Impact:- Domestic industries become less innovative.
- Consumers have fewer choices and lower-quality products.
4. Supply Chain Disruptions- Many industries rely on global supply chains for parts and raw materials.
- Tariffs increase costs for manufacturers that import components (e.g., microchips, metals).
- Example: U.S. tariffs on Chinese imports disrupted electronics, auto, and machinery supply chains, causing higher costs and production delays.
Economic Impact:- Higher costs lead to lower business investment and productivity.
- Delays in production hurt economic growth.
5. Job Losses in Other Sectors- While tariffs protect some domestic jobs, they eliminate others.
- Industries that rely on imports (e.g., retail, manufacturing) cut jobs when costs rise.
- Example: U.S. steel tariffs helped steelworkers but hurt automakers and construction workers who rely on cheap steel.
Economic Impact:- More jobs are lost than gained.
- Businesses that depend on trade downsize or shut down.
6. Slower Economic Growth
- Tariffs distort market efficiency, leading to misallocation of resources.
- Businesses scale back expansion due to uncertainty.
- Reduced trade weakens overall economic activity.
- Example: The Smoot-Hawley Tariff Act of 1930 worsened the Great Depression by triggering a global trade collapse.
Economic Impact:
- Lower GDP growth.
- Increased economic uncertainty and volatility.
Conclusion
Tariffs hurt an economy by increasing consumer prices, disrupting trade, reducing competitiveness, and slowing growth. While they may protect certain industries in the short term, they often cause greater long-term harm by stifling competition, triggering retaliation, and weakening overall economic efficiency.
Quote from: MightyGiants on March 10, 2025, 08:01:04 AMignoring economic reality has never worked
Rich: Did tariffs "succeed" or "fail" in the first Trump administration? Bob
Quote from: Bob In PA on March 10, 2025, 08:19:02 AMRich: Did tariffs "succeed" or "fail" in the first Trump administration? Bob
They didn't "work," they were small enough as to not significantly damage the thriving economy the person in question inherited. Things that helped the economy were his deficit spending and deregulation. Plus during the term all the non-stop commercial trying to get people to put all their money in gold stopped (it's not helpful to the economy when people invest in precious metals, or cryptocurrency).
I'm no expert on tariffs, but some of the things I've heard make sense. Apparently, after WWII, the U.S. agreed to European tariffs in order for them to rebuild their devastated homeland. But after 80 years, European countries continue to impose the exact same tariffs agreed to after WWII as if they are still rebuilding. Many think it's time for Europe to bring their tariffs on the U.S. back to equal footing
I think that most people don't realize that all kinds of countries doing business with the U.S. market have exploited America because of its wealth and economic stability (relative to their own). And a fair-minded U.S. seeking globalization and equity, has simply bent over and accepted it as their fate. But with today's global economy, modern countries with excellent manufacturing capabilities should work towards zero tariffs across the board if they truly want an equitable and seamless global economy with the U.S.
I've read that Nixon allowed adverse tariffs in order to make peace with Mao and get China up to speed in globalization. And of course, they are no longer behind the eight-ball when it comes to manufacturing and modernization, but the tariffs they impose on America have never been questioned until now
Truth is, I am no expert by any stretch of the imagination, but I believe tariffs have been a part of international business for decades, and mostly because less modern and less wealthy (or militarily devastated) countries are trying to get back on their feet, and a mindset of a "One World Order", has been the goal of politicians in America for decades. But once countries get up to speed, they simply keep the tariffs because no one says anything because they don't even notice (or care) :-??
Quote from: MightyGiants on March 10, 2025, 08:23:34 AMThey didn't "work," they were small enough as to not significantly damage the thriving economy the person in question inherited. Things that helped the economy were his deficit spending and deregulation. Plus during the term all the non-stop commercial trying to get people to put all their money in gold stopped (it's not helpful to the economy when people invest in precious metals, or cryptocurrency).
Rich: Two things about your reply:
(1) the words "stock market" are nowhere to be found (not a critique, merely and observation); and
(2) I agree about precious metals and cryptocurrency, but don't get the connection with tariffs.
Since you mentioned it, IMO it's ok for the U.S. to have a crypto reserve (or whatever they call it) but in case I'm not around when it happens, NEVER EVER EVER allow the gov't to build their own digital money. That would be a disaster waiting to happen.
Bob
Trade deficits and surpluses occur for a variety of reasons such as interest rates, relative value of currency, demand for particular products, quality differential of products, geolocational demand or lack of demand, protectionist legislation/barriers to entry, etc. To think we have a trade deficit with every country because of protectionist legislation/barriers to entry is simply wrong. To think that the way to get what you want is to threaten everyone is idiotic. To think that you threaten a tariff on Monday then delay it on Tuesday, then threaten it again then back off completely then threaten it again is reckless, stupid and insane. The world needs to wake up each day and feel a sense of stability, not schizophrenic behavior.
The reality is that instead of threatening tariffs with every country, find the one or two countries where it really matters and study the reason why and focus on solutions with those two countries.
In the 1970s we ran trade deficits with Japan because they produced better cars than the U.S. and Americans bought them. It was not until the U.S. auto industry improved their quality that it began to change.
Quote from: Philosophers on March 10, 2025, 12:46:52 PMTrade deficits and surpluses occur for a variety of reasons such as interest rates, relative value of currency, demand for particular products, quality differential of products, geolocational demand or lack of demand, protectionist legislation/barriers to entry, etc. To think we have a trade deficit with every country because of protectionist legislation/barriers to entry is simply wrong. To think that the way to get what you want is to threaten everyone is idiotic. To think that you threaten a tariff on Monday then delay it on Tuesday, then threaten it again then back off completely then threaten it again is reckless, stupid and insane. The world needs to wake up each day and feel a sense of stability, not schizophrenic behavior.
The reality is that instead of threatening tariffs with every country, find the one or two countries where it really matters and study the reason why and focus on solutions with those two countries.
In the 1970s we ran trade deficits with Japan because they produced better cars than the U.S. and Americans bought them. It was not until the U.S. auto industry improved their quality that it began to change.
Phil: Your reactions are not only rational, they are (as I attempt to show below) to be EXPECTED.
Imagine you're the head of a country that has a trade surplus with us. Add in direct financial aid and any other "benefits" your country receives that are unrelated to the trade deficit (one example would be "protection" against attack by an enemy; another would be medical aid to developing countries). If the leader of that country is reacting as you are, then IMO the objective of threatening every country has been achieved. As you know from studying the NFL, the best deals usually occur as a result of YOUR phone ringing, rather than as a result of you making the first call.
Also, what (if anything) is the downside to threatening every country? Reciprocal tariffs are going to be calculated individually for each country (finalization and release of the results is currently set to occur on April 2). There has been nothing to indicate that individual countries cannot negotiate the results. In fact, the recent machinations relating to Mexico and Canada show that our government has every intention of treating countries as individual entities, provided they make the first call.
Bob
There will be no stability while Administrations change every four years and policies are light years apart. It's become evident to the rest of the world that there will be no long-term commitments with the United States while either party is unwilling to honor prior commitments. It's a tug of war that will have no winners. The irony is that we're a Nation primarily of moderates that move with which ever way the wind blows.
Quote from: Bob In PA on March 10, 2025, 12:32:55 PMRich: Two things about your reply:
(1) the words "stock market" are nowhere to be found (not a critique, merely and observation); and
(2) I agree about precious metals and cryptocurrency, but don't get the connection with tariffs.
Since you mentioned it, IMO it's ok for the U.S. to have a crypto reserve (or whatever they call it) but in case I'm not around when it happens, NEVER EVER EVER allow the gov't to build their own digital money. That would be a disaster waiting to happen.
Bob
The stock market is but one way to measure the economy (along with GDP and employment). When the economy is thriving, business thrives and that pushed up the stock market.
When you make your friends, your enemy, no matter how, that simply is not 'good for business'.
Our leader feels only he can place tariffs and the other party will suffer and bend, but the other party can retaliate and then it just becomes who can out last the other or who will blink first.
Just a ridiculous policy, especially to your neighbors and friends.
Quote from: LennG on March 10, 2025, 03:51:23 PMWhen you make your friends, your enemy, no matter how, that simply is not 'good for business'.
Our leader feels only he can place tariffs and the other party will suffer and bend, but the other party can retaliate and then it just becomes who can out last the other or who will blink first.
Just a ridiculous policy, especially to your neighbors and friends.
Len,
I never believed that we would be at war with Canada. I mean it's only a trade war, but still, it's not what I thought would happen to our neighbor and closest ally
Bob
Do you believe putting tariffs on anything coming out of Canada, because of some silly Fetenol excuse, is a good thing?
I can understand Mexico in that they want the Mexicans to get tough with immigration and all those drug cartels, but Canada?
Quote from: Ed Vette on March 10, 2025, 01:15:40 PMThere will be no stability while Administrations change every four years and policies are light years apart. It's become evident to the rest of the world that there will be no long-term commitments with the United States while either party is unwilling to honor prior commitments. It's a tug of war that will have no winners. The irony is that we're a Nation primarily of moderates that move with which ever way the wind blows.
Ed: This is true unless a substantial number of executive orders are codified into law. Bob
The stock market cratered yesterday. It continues its downward plunge today
I subscribe to Barron's (which is owned by the Wall Street Journal). Here is today's report on why the markets are dropping:
Stocks Are Falling Again After Big Market Selloff
By
Connor Smith
The stock market was struggling to shake off its worst day of the year so far as Wall Street continued to worry about the economy.
The Dow Jones Industrial Average was down 150 points, or 0.4%. The S&P 500 was flat. The Nasdaq Composite was up 0.4% after marking its largest percent decline since Sept. 13, 2022.
"The market's main concern up until this point has been that the deteriorating levels of confidence on the part of consumers and businesses would translate into actual declines in activity," writes Bespoke Investment Group co-founder Paul Hickey. "That remains to be seen in actual data, but Delta (DAL) may be showing hints of that effect starting to happen as the company cut guidance last night noting 'the recent reduction in consumer and corporate confidence caused by increased macro uncertainty.'"
Even small businesses owners—a key constituency in President Donald Trump's base—are starting to express concerns. The NFIB small business optimism index, which spiked after the 2024 election, marked its biggest monthly decline since the Covid-19 pandemic in April 2020.
"Uncertainty is high and rising on Main Street, and for many reasons," said NFIB Chief Economist Bill Dunkelberg. "Those small business owners expecting better business conditions in the next six months dropped and the percent viewing the current period as a good time to expand fell, but remains well above where it was in the fall. Inflation remains a major problem, ranked second behind the top problem, labor quality."
Andrew Brenner, head of international fixed income at NatAlliance Securities, points out that S&P 500 futures overnight were down 10% from their high of 6178. The S&P 500 would need to close below 5529.74 to mark an official close in correction territory; the Nasdaq entered correction last week.
"The Mag 7 are the culprits, this is the problem of indexing, when it goes up it is great, when it reverses, it is painful," Brenner writes. "7 stocks were responsible for 54% drop of the S+P yesterday...meanwhile the losses on the Nasdaq totaled over [$]1.1 trillion , a truly ugly day."
Quote from: LennG on March 10, 2025, 04:30:46 PMBob
Do you believe putting tariffs on anything coming out of Canada, because of some silly Fetenol excuse, is a good thing?
I can understand Mexico in that they want the Mexicans to get tough with immigration and all those drug cartels, but Canada?
Lenn: My best guess - they want to treat both countries as similarly as possible, so ALL of the reasons applicable to one must at least appear to be being made applicable to both.
The Fentanyl thing is not "silly" (I know you well enough to realize you didn't mean the issue is silly, but it's a poor excuse for imposing a tariff - I probably disagree about that).
In any event, don't forget that Canada imposes tariffs on us. One that's particularly noteworthy is the tax on milk, which is killing the dairy business of mid-western states that border Canada. The dairy business is a very large part of the economy of those states (and Pennsylvania - not many people know that fact).
Bob
PS. Tariffs must be viewed in the context in which they being imposed, according to the administration, which is "making things fair." It's over my pay-grade to determine what's "fair" and the Canadians will soon have an election (this fall) that could change the entire landscape. The recent news of changing Prime Ministers only applies until that election, when the new Prime Minister's party will face opposition from Canada's conservative party. Right now, bottom line... too many variables (and too little knowledge on my part to try to answer your question with something other than the above cursory overview).
Quote from: Bob In PA on March 11, 2025, 11:06:44 AMThe Fentanyl thing is not "silly" (I know you well enough to realize you didn't mean the issue is silly, but it's a poor excuse for imposing a tariff - I probably disagree about that).
It is silly when you consider that roughly 90% of the fentanyl smuggled into the country is done so by American citizens.
Quote from: MightyGiants on March 11, 2025, 10:51:39 AMI subscribe to Barron's (which is owned by the Wall Street Journal). Here is today's report on why the markets are dropping:
Stocks Are Falling Again After Big Market Selloff
By
Connor Smith
Rich: I really appreciate your posting that. With due respect to Connor Smith, who knows a heck of a lot more than I do about markets, his attempt to sum things up as he did (the final paragraph), while true regarding yesterday, is far too simple to explain what right now is a very complex stock market. Bob
Quote from: MightyGiants on March 11, 2025, 11:08:54 AMIt is silly when you consider that roughly 90% of the fentanyl smuggled into the country is done so by American citizens.
Rich: That's why the emphasis so far (regarding fentanyl) has been on both the border/immigration aspect and the public safety angle (arresting/prosecuting criminals, no matter where they were born). Bob
Quote from: Bob In PA on March 11, 2025, 11:14:19 AMRich: That's why the emphasis so far (regarding fentanyl) has been on both the border/immigration aspect and the public safety angle (arresting/prosecuting criminals, no matter where they were born). Bob
Yet, hitting Canada with tariffs because they are not doing enough to stop American citizens from smuggling illegal drugs into America is the epitome of silly.
Quote from: MightyGiants on March 10, 2025, 03:44:04 PMThe stock market is but one way to measure the economy (along with GDP and employment). When the economy is thriving, business thrives and that pushed up the stock market.
Rich: I may remind your of that "As Time Goes By". lol
Quote from: MightyGiants on March 10, 2025, 03:52:57 PMLen,
I never believed that we would be at war with Canada. I mean it's only a trade war, but still, it's not what I thought would happen to our neighbor and closest ally
Rich: You guys... short memories... think back to events that preceded signing the USMCA. Bob
Quote from: Bob In PA on March 11, 2025, 11:29:08 AMRich: You guys... short memories... think back to events that preceded signing the USMCA. Bob
Only one trade war, I could find
https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_trade_relations
The stock market is like a jittery girlfriend with schizophrenia, and you never know what event is going to trigger an unsightly episode. The market will bounce back hard...that is, until the next episode. Most traders are like sheep...when they see someone else selling, they all sell like crazy, afraid of losing their paper wealth...and when they see others buying, they buy with abandon, hoping to ride the next wave to more paper wealth. Although, in this era, it's more like digital wealth than paper wealth. Day trading is not for the faint of heart...some call that the "heart-attack lane". Why live to be 90 when you can die at 60 with a large portfolio of digital wealth
Quote from: MightyGiants on March 11, 2025, 11:32:53 AMOnly one trade war, I could find
https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_trade_relations
Rich: Who decides when relations/negotiations become a trade war? I'm not an expert, just an observer. Bob
Quote from: Bob In PA on March 11, 2025, 12:18:10 PMRich: Who decides when relations/negotiations become a trade war? I'm not an expert, just an observer. Bob
I think most would agree that when there are tariffs and retaliatory tariffs, you are in a trade war.
I don't want to turn this into a political thread as it is heading that way. BUT, our President doesn't know how to 'back-off' if you know what I mean. He can never just see that MAYBE this was the wrong way to go. He always needs to feel he has gotten the upper hand.
That is why I said what I did before in that this will go on and see who blinks first.
Quote from: MightyGiants on March 11, 2025, 12:31:35 PMI think most would agree that when there are tariffs and retaliatory tariffs, you are in a trade war.
Rich: Here's why I disagree. We all know these tariffs are posturing. Canada (and everyone else) also knows. So, if I were Canada, I'd determine (in the best interests of my country) that I should "deal with this guy" in a language he understands, by matching him tit-for-tat, using the same modus operandi. My point: it's not a war when both sides are posturing and both sides know the other guy is posturing. Bob
Quote from: LennG on March 11, 2025, 12:57:37 PMI don't want to turn this into a political thread as it is heading that way. BUT, our President doesn't know how to 'back-off' if you know what I mean. He can never just see that MAYBE this was the wrong way to go. He always needs to feel he has gotten the upper hand.
That is why I said what I did before in that this will go on and see who blinks first.
I agree this could get political, which I don't want. IMO, the President likes to force people to come to the table and negotiate. He gets their attention by doing something radical to get their attention. Once to the table, a compromise is usually worked out that satisfies neither, but is fairer in the long run. It's all in his book, "Art of the Deal". He believes in talking to the opposition and throwing something bizarre out in the wind, so both parties have to sit down and hammer things out
One thing I have noticed is the successful investors keep politics and the logical fallacies employed there out of their investment work. The same nonsense that can be used to fool the American people will only make you go broke when you start investing (Because the truth and reality matters). In that light, I found this interesting:
JIM CRAMER: If we have a recession, banks are the worst stocks. I don't think we'll have a recession–. Like I said, it's manufactured. It's manufactured.
CARL QUINTANILLA: Well. That doesn't mean there won't be. I'm not sure I understand, you–.
JIM CRAMER: Oh no, manufactured could easily caused recession. Absolutely. I don't, you know, I'm not I'm not saying that manufactured means it's not going to happen.
CARL QUINTANILLA: Right.
JIM CRAMER: I'm saying manufacturing is that you can make it happen. And when you get angry and when you you kind of lose your temper and you get mad instead of, like, the way Sheinbaum handle it in Mexico, it gets people nervous and upset.
They want the president to be a little happier. They want, you know, there's nothing wrong with being happy. You can be tough as nails and be happy.
But right now it just feels like, oh, we're going to just screw every– you know, people be screwing us for years and we're going to fight back, which is true. It's absolutely true.
But you got to explain it very calmly and empirically how we're being hurt by an Italy.
CARL QUINTANILLA: Yes.
JIM CRAMER: How we're being hurt by German. And this is going to stop and we're going to make it stop. And then don't scream at those countries.
It doesn't work! It doesn't work. It doesn't work because they know that they can stand their ground. You tell them, look, I am going to scream you at you. Help us, help us, and we'll help.
CARL QUINTANILLA: That's still the. The process of retaliation is starting to come into full effect. We heard the comments yesterday from Canada about electricity, taxes and.
JIM CRAMER: Oh, I know–.
CARL QUINTANILLA: Doug Ford. I'll gladly shut it off completely if I have to.
JIM CRAMER: Smoot-Hawley 60% increase in tariffs. There isn't anyone in any history book. I know the president reads history. There's anyone in any history book that doesn't say that wasn't considered–.
That was a considered reason why we had the Great Depression. There isn't a soul who's ever said that. You look. Go read Galbraith's book. It's really quick. It was a direct cause of the of the depression, not the recession.
CARL QUINTANILLA: So it–. It is playing with fire. You think?
JIM CRAMER: Absolutely. But is it arson?
CARL QUINTANILLA: Meaning that you can contain the blaze, is trhat what you're saying–
JIM CRAMER: No, meaning that you're doing it–. Maybe it's deliberate!
CARL QUINTANILLA: Right.
JIM CRAMER: And it doesn't make any sense that you don't want people to be laid off because of what you said.
People are scared, Carl. You don't scare people. You don't scare–. It's just. It's a wrong call. It's all message. People are scared!
Come out with a little bit of humor. Come out and say, listen, I'm going over to Germany. You know it's going to be different for the Germans going forward. Not like, you know, I hate Germany. I mean, come on. They were our allies
CARL QUINTANILLA: Now you're going–
JIM CRAMER: — until about fifteen minutes ago.
CARL QUINTANILLA: Now, the Fundstrat raised this question yesterday. Do you think the president is willing to watch the German and Chinese stock markets go to the moon while ours craters on?
JIM CRAMER: This weekend I did a piece and I said, everyone keeps thinking about the Dow.
I think that the president is competitive versus other countries. And he could very quickly say, look, you know, he's distinguished himself as not caring about the stock market.
Well, how about their stock markets? They're crushing us!
Are we really going to let the Italian stock market beat us? Is Spain going to– Spain?!? Spain?!? I mean, are you kidding me?!?
Here is what the Gipper thought about tariffs:
https://x.com/NickKnudsenUS/status/1899452523402150263
I'm a fan of equality across the board. Whatever one nation charges me, I believe we should charge them the same, not a penny more and vice versa. Nothing more nothing less.
I was listening to the news this morning (I limit myself to the time it takes to shower, get dressed and get ready for work). They were talking about the massive groundswell of anti-American sentiment growing among nations that used to be our friends and allies.
All the nonsense with tariffs and the threats to conquer Greenland and Canada (along with failing to support Ukraine) has created massive hatred for our nation around the world. The Danish (along with much of Europe and Canada) are trying to find alternatives to their favorite American products.
This will not benefit our economy (the massive drop in export demand) and is damage that is not easily fixed.
As I said, the same logical biases and propaganda that work to fool people into voting for the wrong people don't work in the real world. Economics doesn't care what you feel (or mistakenly believe); it only functions as an economy's function. That's why, in all my years of listening to podcasts (and reading books and articles) on investing and economics, political nonsense is never injected into the conversation.
I (and many people I know) saw this coming since the summer; it was the proverbial slow-motion train wreck, and we would almost all suffer, but there was nothing we could do about it. :(
Quote from: MightyGiants on March 18, 2025, 08:03:44 AMI was listening to the news this morning (I limit myself to the time it takes to shower, get dressed and get ready for work). They were talking about the massive groundswell of anti-American sentiment growing among nations that used to be our friends and allies.
Rich: Why should we care about countries that only SAY they're our friends? Money talks, b.s. walks.
Nearly all of our "friends" depend on US (U.S.) to protect them from Russia, China, et al. and repay us with (in many cases) heave tariffs virtually prohibiting us from doing business in their countries. Japan and rice comes to mind, off-hand. You know, WE grow rice too. Just one of many examples. Sorry, but I'm sick and tired of losing on BOTH ends of our relationships with our "friends." If that's the only reason why they're our friends, let them be "friends" with Russia and China and they'll soon see the error in that line of thinking.
It's nice (and desirable) to have friends, but what "value" do we get from most of the relationships? Fond best-wishes? Great, but I honestly do not see a true benefit to having friends (other than a tiny group of countries who are highly desirable) and mere handful of others who are not a a net pain-in-the-rear-end.
Bob
Quote from: Bob In PA on March 18, 2025, 02:41:07 PMMoney talks, b.s. walks.
That is the key takeaway from your post.
To that end, here is what the "money" has to say since the tariffs
US Markets
S&P 500 - declined by over 7%,
NASDAQ- declined by more than 11%
European Markets
Euro Stoxx 50 Index- up approximately 12%
FTSE 100 Index- Gains of 5% and 7 %
Asian Markets
Hang Seng Index- up 23%
Hang Seng Tech Index- up 37%
It's almost like there is real world consequences to ignoring experts and the science
Quote from: MightyGiants on March 18, 2025, 03:04:42 PMThat is the key takeaway from your post.
To that end, here is what the "money" has to say since the tariffs
US Markets
S&P 500 - declined by over 7%,
NASDAQ- declined by more than 11%
European Markets
Euro Stoxx 50 Index- up approximately 12%
FTSE 100 Index- Gains of 5% and 7 %
Asian Markets
Hang Seng Index- up 23%
Hang Seng Tech Index- up 37%
It's almost like there is real world consequences to ignoring experts and the science
So what? A meaningless snapshot in time. See me in a few weeks for the next snapshot. Bob
Quote from: Bob In PA on March 18, 2025, 03:42:29 PMSo what? A meaningless snapshot in time. See me in a few weeks for the next snapshot. Bob
(https://substackcdn.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2Fdf7e27a8-91c5-4e5d-8d70-cf796f023c1f_620x518.jpeg)
Canadians made an estimated 20.4 million visits to the U.S. last year, a number expected to rise by more than a million in 2025, according to the U.S. Travel Association. But the industry group warned last month that even a 10% drop in those visits would cost $2.1 billion in lost spending and 14,000 jobs. Already, Canada's statistical agency reported a 23% drop in Canadian car trips to the U.S. last month compared with February 2024 and a 2.4% dip in residents' round-trip air travel.
https://www.nbcnews.com/business/travel/canadian-tourism-boycotts-trump-rcna196136
Excellent thread and discussion guys. It's encouraging to me to see that there can be a discussion about current events on the Front Porch that is civil and respectful, even if people have differing views. It's great to hear everyone's opinion on an important, topical subject that affects the lives of all Americans.
I will say that as a firm baseline rule, I am no fan of tariffs. I never have been. I am a free market guy, and I don't like anything that stifles competition and, potentially, innovation. So as a base case on this overall topic, I am more with Rich on this subject of tariffs. I think they do more harm than good.
However, I don't have zero sympathy for Bob's points. While I would not say I blanketly agree that longstanding alliances of ours should not be important to us if we don't "get value" out of them, I do think it is a bit tricky to come up with a convincing argument against the concept of reciprocal tariffs with countries who have tariffs on us. If country X is tariffing us 10% on Y widgets, and we currently have zero tariffs on them for the same Y widgets, why is it wrong or a bad idea for us to say "either you bring your 10% down to zero, or we go from zero to 10%"? Why is that not fair?
The reality is there are a lot of complexities to this discussion, and I do get that, but the idea that the US is in the wrong by imposing any tariffs on any countries is not one I automatically agree with (despite generally being no fan of tariffs). We have major trade deficits with a lot of countries, and if that's the case and they have tariffs on our products, why is it wrong to simply say we want it to be an equal playing field? I have a hard time disputing that stance myself.
So while I don't like a lot of what is going on, I am not so binary that I will automatically say anything this administration does is definitively bad. If that were the case, then people should be aggressively criticizing Biden for not removing the tariffs on China for $350b of goods that Trump imposed. He could have gotten rid of those but didn't.
It's not just the tariffs; it's siding with the criminal state of Russia, it's the toxicity, it's the proclaimed expansionist plans, it's the instability. We, the US citizens, are paying a huge price for the last election. Here is a prime example of US business suffering (and there is not quick fixes for this sort of damage)
Portugal Drops Plans for F-35 Citing U.S. Political Uncertainty
In an interview with Portuguese media outlet Público published on Mar. 13, 2025, Portuguese Defense Minister Nuno Melo dismissed the possibility of ordering the fifth-generation fighter, aligning with other European nations reconsidering their defense procurement strategies.
Q. Europe is preparing a significant financial package for defence. If the AD government is re-elected, will it approve the purchase of F-35 aircraft?
"The F-16s are at the end of their cycle and we will have to think about their replacement. However, we cannot ignore the geopolitical environment in our choices. The recent position of the United States, in the context of NATO and in the international geostrategic plan, must make us think about the best options, because the predictability of our allies is a greater asset to take into account. We must believe that, in all circumstances, these allies will be on our side. There are several options that must be considered, particularly in the context of European production and also taking into account the return that these options may have on the Portuguese economy."
Q. The Air Force wants this replacement to be made with F-35s, which are American-made aircraft. What you are saying is that, due to the change in American foreign policy, it is less likely that Portugal will replace the F-16s with an American aircraft?
"The world has already changed. There were elections in the US, there was a position in relation to NATO and the world, stated by the Secretary of Defense and by the US President himself, which must also be taken into account in Europe and in what concerns Portugal. And this ally of ours, which has always been predictable over the decades, could bring limitations to use, maintenance, components, and everything that has to do with ensuring that aircraft will be operational and used in all types of scenarios."
https://theaviationist.com/2025/03/13/portugal-f-35-plans/
Each fighter costs between $80 and a $100+ million plus there is all the repeat part sales.
Fed staff median forecasts call for real gross domestic product growth to be 1.7% by the end of 2025, down from the December forecast's 2.1%, for unemployment to end the year at 4.4%, up from the prior 4.3% and core inflation to conclude 2025 at 2.8%, up from the previous 2.5%.
https://www.forbes.com/sites/dereksaul/2025/03/19/fed-ups-inflation-forecast-and-expects-less-economic-growth-citing-uncertainty/
Americans continue to sour on the US economic outlook as uncertainty around President Donald Trump's policies and higher prices weigh on consumer sentiment.
The latest consumer confidence index reading from the Conference Board was 92.9 in March, below the 100.1 seen in February and the lowest level in more than four years. The expectations index, which is based on consumers' short-term outlook for income, business, and labor market conditions, ticked down to 65.2 from 72.9 and remained below the threshold of 80 — which typically signals recession ahead — for the second straight month.
This marked a 12-year low for the expectations index, which was driven in part by consumer's expectations of their financial situation hitting its lowest level in more than two years.
"One of the most significant developments that we have seen was a decline in financial situation expectations from consumers," Yelena Shulyatyeva, The Conference Board Senior US Economist told Yahoo Finance. "So that seems to suggest that all this uncertainty around economic outlook is really starting to weigh on consumers assessment of how they will fare going forward."
MORE
https://finance.yahoo.com/news/americans-expectations-for-the-economy-hit-their-lowest-level-in-12-years-143308857.html
I believe these tariffs will do wonders for the economy. Already we see numerous big ticket companies committing to building plants in our country which will revitalize areas and create jobs.
If someone charges me 200% tariff then I want to charge them the same 200%.
Time will tell if the policy works or not.
Quote from: Trench on March 25, 2025, 09:28:41 PMAlready we see numerous big ticket companies committing to building plants in our country
How many and which companies?
Quote from: MightyGiants on March 26, 2025, 01:14:25 PMHow many and which companies?
There is a long list on the official White House website not limited to but including the following
OpenAI/Orackle/Softbank- 500 billion
Apple - 500 billion
TSMC - 100 billion
Nvidia - Hundreds of billions
Stellantis - 5 billion
Ely Lilly - 27 billion
CMA - 20 billion
DAMAC - 20 billion
MERK - 8 billion
Hyundai - 20 billion
Quote from: Trench on March 26, 2025, 06:45:06 PMThere is a long list on the official White House website not limited to but including the following
OpenAI/Orackle/Softbank- 500 billion
Apple - 500 billion
TSMC - 100 billion
Nvidia - Hundreds of billions
Stellantis - 5 billion
Ely Lilly - 27 billion
CMA - 20 billion
DAMAC - 20 billion
MERK - 8 billion
Hyundai - 20 billion
And yet
WASHINGTON, April 1(Reuters) - U.S. manufacturing contracted in March after growing for two straight months, while a measure of inflation at the factory gate jumped to the highest level in nearly three years amid rising anxiety over tariffs on imported goods.
The Institute for Supply Management (ISM) said on Tuesday that its manufacturing PMI dropped to 49.0 last month from 50.3 in February. A PMI reading below 50 indicates contraction in the manufacturing sector, which accounts for 10.2% of the economy.
Economists polled by Reuters had forecast the PMI slipping to 49.5. Manufacturing started turning around at the beginning of the year after a lengthy recession triggered by the Federal Reserve's aggressive interest rate hikes in 2022 and 2023 to tame inflation. But the nascent recovery appears to have been snuffed out by President Donald Trump's barrage of tariffs.
https://www.reuters.com/markets/us/us-manufacturing-slips-back-into-contraction-tariffs-angst-mounts-2025-04-01/
Quote from: MightyGiants on April 01, 2025, 11:15:16 AMAnd yet
WASHINGTON, April 1(Reuters) - U.S. manufacturing contracted in March after growing for two straight months, while a measure of inflation at the factory gate jumped to the highest level in nearly three years amid rising anxiety over tariffs on imported goods.
The Institute for Supply Management (ISM) said on Tuesday that its manufacturing PMI dropped to 49.0 last month from 50.3 in February. A PMI reading below 50 indicates contraction in the manufacturing sector, which accounts for 10.2% of the economy.
Economists polled by Reuters had forecast the PMI slipping to 49.5. Manufacturing started turning around at the beginning of the year after a lengthy recession triggered by the Federal Reserve's aggressive interest rate hikes in 2022 and 2023 to tame inflation. But the nascent recovery appears to have been snuffed out by President Donald Trump's barrage of tariffs.
https://www.reuters.com/markets/us/us-manufacturing-slips-back-into-contraction-tariffs-angst-mounts-2025-04-01/
Rich: I also noticed the article today. My first thought was likely NOT whatever you're thinking, but rather how the article is solid evidence we need to do all we can do to invest in restore and rebuild what we used to be - the world's leader in manufacturing. Note: we are STILL the world's leader in manufacturing WITHOUT USING SLAVE LABOR. Bob
Quote from: Bob In PA on April 01, 2025, 01:40:22 PMRich: I also noticed the article today. My first thought was likely NOT whatever you're thinking, but rather how the article is solid evidence we need to do all we can do to invest in restore and rebuild what we used to be - the world's leader in manufacturing. Note: we are STILL the world's leader in manufacturing WITHOUT USING SLAVE LABOR. Bob
Yesterday, Japan and South Korea formed an alliance with China to combat US tariffs and other trade sanctions. I wonder how that alliance will help the US economy or grow manufacturing.
We have seen tariffs raise prices and kill business. What exactly is it about the manufacturing sector that you think is worth blowing up the US economy and potentially triggering another worldwide great depression just to artificially grow it (and pay higher prices for the goods produced)?
Quote from: MightyGiants on April 01, 2025, 01:47:05 PMYesterday, Japan and South Korea formed an alliance with China to combat US tariffs and other trade sanctions. I wonder how that alliance will help the US economy or grow manufacturing.
We have seen tariffs raise prices and kill business. What exactly is it about the manufacturing sector that you think is worth blowing up the US economy and potentially triggering another worldwide great depression just to artificially grow it (and pay higher prices for the goods produced)?
First, we don't give a rat's ass what alliances form. The hard (and immutable) fact is that we have a trade deficit with almost every country of note. They can try to make alliances, but the reciprocal nature of the tariffs will then just be adjusted to (generally speaking) treat all of the member parties of the alliance as a single country in determining what tariff percentage will be charged to ALL of them. Do you see how this counteracts any alliance?
Second, bringing back manufacturing is essentially to undoing all the damage to the rust belt (and other) states that were once "manufacturing-heavy" (and world leaders). THOSE are the people who've been crushed as jobs "migrated" to (for example) Mexico, Canada and China, starting about twenty years ago (generally speaking).
Just look at the groups who used to vote for one party and now vote more so for the other to see who is desperate for help (at least in the financial sense). Let me know if I failed to address your concern fully and completely.
Bob
Quote from: Bob In PA on April 01, 2025, 02:40:15 PMFirst, we don't give a rat's ass what alliances form. The hard (and immutable) fact is that we have a trade deficit with almost every country of note. They can try to make alliances, but the reciprocal nature of the tariffs will then just be adjusted to (generally speaking) treat all of the member parties of the alliance as a single country in determining what tariff percentage will be charged to ALL of them. Do you see how this counteracts any alliance?
Second, bringing back manufacturing is essentially to undoing all the damage to the rust belt (and other) states that were once "manufacturing-heavy" (and world leaders). THOSE are the people who've been crushed as jobs "migrated" to (for example) Mexico, Canada and China, starting about twenty years ago (generally speaking).
Just look at the groups who used to vote for one party and now vote more so for the other to see who is desperate for help (at least in the financial sense). Let me know if I failed to address your concern fully and completely.
Bob
1) When you look at GDP per country, the US can't afford to take on the world. The alliance I spoke of and the EU easily exceeded the US GDP
2) The rust belt is not the site for any of the supposed new manufacturing locations that Trench listed
3) Runaway inflation and unemployment actually hurt people more than it helps. There is no doubt many mistakenly believed the political claims that despite the overwhelming majority of economists saying tariffs are bad and economically damaging, they would be good things.
Sadly (as I said before), our economy can't be fooled by political tactics. The reality is between the economic instability inflicted on our economy, the tariffs, the retaliation, and ill will being created (like how many billions will be lost when Canadians don't vacation in the US this summer), we are going to have a real-world bad impact on our nation and no amount of spin will change that.
Quote from: MightyGiants on April 01, 2025, 02:56:50 PM1) When you look at GDP per country, the US can't afford to take on the world. The alliance I spoke of and the EU easily exceeded the US GDP
2) The rust belt is not the site for any of the supposed new manufacturing locations that Trench listed
3) Runaway inflation and unemployment actually hurt people more than it helps. There is no doubt many mistakenly believed the political claims that despite the overwhelming majority of economists saying tariffs are bad and economically damaging, they would be good things.
Sadly (as I said before), our economy can't be fooled by political tactics. The reality is between the economic instability inflicted on our economy, the tariffs, the retaliation, and ill will being created (like how many billions will be lost when Canadians don't vacation in the US this summer), we are going to have a real-world bad impact on our nation and no amount of spin will change that.
(1) Gross GDP has significance, but trade balance has more. We have deficits with all the major players.
(2) Just because I didn't mention Michigan and Ohio doesn't mean I don't consider them part of the rust belt. It's true, a lot of the "sunny" states are gobbling up the new large manufacturing chunks, but the people who live in Arizona, Texas, Florida, etc., are Americans, too.
(3) Inflation takes time to reverse (must seem like years, but the new policies are only weeks old. I've already addressed unemployment, but I'll add the obvious...building factories takes time. The "overwhelming majority of economists" (as you say, correctly) predicted the doom and gloom in 2017, 2018 and 2019. They were proven to be DEAD WRONG then (talking about the tax cut bill) and the same group of losers is again wrong.
To quote you... "...our economy can't be fooled by political tactics..." I don't know what you're calling political tactics (I truly don't care so don't bother explaining), but we are talking here about economic policy. However, I do promise you I will remember your final paragraph above and remind you that you said it ... when the time is right.
He who laughs last, laughs best.
Bob
Quote from: Bob In PA on April 01, 2025, 03:15:24 PM(1) Gross GDP has significance, but trade balance has more. We have deficits with all the major players.
(2) Just because I didn't mention Michigan and Ohio doesn't mean I don't consider them part of the rust belt. It's true, a lot of the "sunny" states are gobbling up the new large manufacturing chunks, but the people who live in Arizona, Texas, Florida, etc., are Americans, too.
(3) Inflation takes time to reverse (must seem like years, but the new policies are only weeks old. I've already addressed unemployment, but I'll add the obvious...building factories takes time. The "overwhelming majority of economists" (as you say, correctly) predicted the doom and gloom in 2017, 2018 and 2019. They were proven to be DEAD WRONG then (talking about the tax cut bill) and the same group of losers is again wrong.
To quote you... "...our economy can't be fooled by political tactics..." I don't know what you're calling political tactics (I truly don't care so don't bother explaining), but we are talking here about economic policy. However, I do promise you I will remember your final paragraph above and remind you that you said it ... when the time is right.
He who laughs last, laughs best.
Bob
Bob,
We have had a trade deficit for the last 50 years. So why suddenly take drastic and dangerous actions over an issue that hasn't really hurt our number one (by a good margin) economy?
Bob, to your point number two, you specifically said the actions being taken would help the Rust Belt. How does people living in Texas, Florida, and Arizona, being Americans, help the Rust Belt?
Inflation takes time to reverse- it had been reversing most of the past year and is now going in the other direction.
Bob, I know you didn't want an answer, but ignoring economists and economic theory is in the political playbook.
Look, when it comes to investing and the economy, I am a political atheist. In fact, I think it's the pragmatic, fact-based, and critical-thinking nature of finance and investing that attracted me to learn more and enjoy listening to podcasts on the subject (and becoming an investor). It appeals to the logical side of my brain.
Quote from: MightyGiants on April 01, 2025, 03:48:47 PMWe have had a trade deficit for the last 50 years. So why suddenly take drastic and dangerous actions over an issue that hasn't really hurt our number one (by a good margin) economy?
I think you meant to say "after 50 years of AMASSING A MULTI-TRILLION DOLLAR national debt, why take action now? This answers your question. As for "danger," what danger? Danger that we might sell some wine in France? Their tariff on our wine is 800%, and that's just one of thousands of examples. By comparison, 25 percent doesn't appear "drastic" (another word you used).
Quote from: MightyGiants on April 01, 2025, 03:48:47 PMBob, to your point number two, you specifically said the actions being taken would help the Rust Belt. How does people living in Texas, Florida, and Arizona, being Americans, help the Rust Belt?
There is ALSO a goal to reduce the national debt. Just because ONE goal is to help people in the rust belt doesn't rule out helping elsewhere too. It all goes to reduce the national trade imbalance and thereby reduce how much we owe.
Quote from: MightyGiants on April 01, 2025, 03:48:47 PMInflation takes time to reverse- it had been reversing most of the past year and is now going in the other direction.
"Reversing" for most of 2024, yes, but only after increasing wildly for THREE preceding years, all the while, the same group of "expert" economists upon whom you so heavily relied in your prior post, told us inflation was transitory. After a while, when WRONG enough times, experts lose their credibility.
Quote from: MightyGiants on April 01, 2025, 03:48:47 PMBob, I know you didn't want an answer, but ignoring economists and economic theory is in the political playbook.
Sincerely, Rich, that is not a political maneuver. There are (simplifying things dramatically) two schools of economic thought. One is Keynesian economics. The other is monetarism. To save space and hopefully not bore anyone here who deigns to read my dribble, just google "what theory opposes Keynesian economics?" It's not a political thing, and monetarism was proven to work during 2017, 2018, 2019 and would have continued to work in 2020 if not for COVID.
Quote from: MightyGiants on April 01, 2025, 03:48:47 PMLook, when it comes to investing and the economy, I am a political atheist. In fact, I think it's the pragmatic, fact-based, and critical-thinking nature of finance and investing that attracted me to learn more and enjoy listening to podcasts on the subject (and becoming an investor). It appeals to the logical side of my brain.
Excellent. 99 out of 100 for that paragraph. One point deducted because use of the word "political" was unnecessary (and IMO meaningless, in that context). Remove it and you nailed it.
Bob
Sometimes an outsider's perspective is helpful
Donald Trump has achieved his first global peace deal. China, Japan and South Korea have kissed and made up after years of trade quarrels. They have pledged to deepen ties and reorganise the Asian and global trading systems under what amounts to Chinese leadership.
The picture blazoned across Asia's front pages – though barely registering in the US – showed the trade ministers of the three economic powers holding hands in a collective gesture of Asian defiance.
It is one of the most striking economic defeats suffered by America that I have witnessed in more than 40 years covering international affairs. Trump's "liberation day" cuts two ways.
They agreed to forge ahead with free trade agreements but also to flesh out the Regional Comprehensive Economic Partnership (RCEP), the world's largest trade pact on paper and a venture viewed by US hardliners as a Trojan horse for Chinese commercial hegemony.
"For all intents and purposes, the US is now a rogue nation when it comes to trade," said Michael Gasiorek, the director of the UK Trade Policy Observatory at the University of Sussex.
"I don't think there is a global trade war going on. The US is fighting a trade war with everybody but the others are keen to co-operate even more."
https://www.telegraph.co.uk/business/2025/04/01/trump-aggression-unite-formidable-anti-us-economic-alliance/