Big Blue Huddle

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 Economy
Tariffs—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:

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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.

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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.

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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.

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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.

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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.