Big Blue Huddle

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/

This thread is fascinating and we shall see if the tariffs pay off or not.

I believe our economy will thrive once the one big beautiful bill is passed and the tax cuts are continued

Can someone explain why Russia, Cuba, North Korea, and Belarus weren't among the 180 nations Trump is taxing goods imported to us?

Before you say sanctions, you will need to explain why Iran and Syria (tariffs of 10% and 40%) were on the list.

Quote from: Trench on April 02, 2025, 05:35:42 PMThis thread is fascinating and we shall see if the tariffs pay off or not.

I believe our economy will thrive once the one big beautiful bill is passed and the tax cuts are continued

Tax cut?  We just suffered the biggest tax increase in American history

Quote from: MightyGiants on April 02, 2025, 08:10:34 PMCan someone explain why Russia, Cuba, North Korea, and Belarus weren't among the 180 nations Trump is taxing goods imported to us?

Before you say sanctions, you will need to explain why Iran and Syria (tariffs of 10% and 40%) were on the list.

No.

There are already sanctions in place that severely limit trade between the US and these nations. We also have a trade surplus with some of them, including Iran. In some cases, there is little or nothing to place a tarriff on. Objectively and collectively, the omission of Russia and its allies is curious and would appear to be politically motivated.

Quote from: MightyGiants on Today at 05:40:20 AMTax cut?  We just suffered the biggest tax increase in American history

Stop listening to whatever you're listening to and listen to something else. Or read some history. Bob

Quote from: MightyGiants on Today at 05:40:20 AMTax cut?  We just suffered the biggest tax increase in American history

Yes, regardless of what anyone thinks of tariffs, there is no getting around the fact that the cost of living for the American people will increase due to their effects. Each dollar I earn will be worth less as a result of the tariffs imposed that were levied to improve the country. That is, by definition, a tax.

Quote from: Bob In PA on Today at 07:29:21 AMStop listening to whatever you're listening to and listen to something else. Or read some history. Bob

History is on his side. The revisionist history of the effects of the McKinley Tariff Act being spouted by some is pathetic.

Quote from: bamagiantfan on Today at 07:42:09 AMHistory is on his side. The revisionist history of the McKinley Tariff Act being spouted by some is pathetic.

Yes, in more than one respect... in addition to what you're referring to, there is also the economic results he achieved (with tariffs and otherwise) during the non-COVID years of his first term. Bob

Quote from: Bob In PA on Today at 07:29:21 AMStop listening to whatever you're listening to and listen to something else. Or read some history. Bob

So I shouldn't listen to conservative experts?


"It's an extraordinary tax increase," said Douglas Holtz-Eakin, a conservative economist with the American Action Forum and formerly the director of the Congressional Budget Office.

Quote from: bamagiantfan on Today at 07:38:51 AMYes, regardless of what anyone thinks of tariffs, there is no getting around the fact that the cost of living for the American people will increase due to their effects. Each dollar I earn will be worth less as a result of the tariffs imposed that were levied to improve the country. That is, by definition, a tax.

Agreed, the tariff taxes are going to hit the working class and poor the hardest.   Of course, the tax cuts that @Trench talked about being renewed overwhelmingly benefit the wealthy.   What we are witnessing is a change of philosophy.  The US always had a philosophy of taxing proportionate to one's ability to pay (and also how much they have benefited from the US economically).  Now the philosophy is to push the tax burden to the middle and lower classes to benefit the upper-income earners.

It's like what @Bob In PA described about the Rust Belt.  They have been hurting due to the loss of industry in that region. They were convinced to vote for more pain for themselves only to see any gains from that pain going to the Sun Belt.

Looking at the financial pages, I see markets worldwide are not happy with this latest salvo in the one-sided trade wars.   That includes US markets which are down 3% to 5% (depending on the index).  The only reason it's not worse is the markets have been tanking for the last month or so in anticipation of these killer tax tariffs.

Quote from: MightyGiants on Today at 07:51:10 AMSo I shouldn't listen to conservative experts?


"It's an extraordinary tax increase," said Douglas Holtz-Eakin, a conservative economist with the American Action Forum and formerly the director of the Congressional Budget Office.

I'll broaden your statement for clarity. You shouldn't listen to anyone who says tariffs are a tax on the populace of the country imposing the tariffs.  The correct statement is something like this (off the top of my head... I'm certainly no economist..."With the wrong tax policy and other erroneous economic and fiscal policies like overspending by the government, it is possible that tariffs can raise prices"). Bob

Quote from: Bob In PA on Today at 07:45:11 AMYes, in more than one respect... in addition to what you're referring to, there is also the economic results he achieved (with tariffs and otherwise) during the non-COVID years of his first term. Bob

In Trump's first term, he inherited a thriving economy.  He hurt that economy a bit with his tariffs. However, his deficit spending and deregulation more than offset that negative, and the economy continued to chug along.  Even the tax cuts, while boosting the deficit, served to juice up the economy.

Sadly, millions voted for a repeat of what happened in term one, only to suffer the biggest bait and switch in American history.

Regardless of whether one is for or against these new economic policies, I have a big concern that they appear to be implemented solely by executive action. They can be undone by the next President in a day, which would further complicate our economic direction in the eyes of the world. Reciprocal tariffs being imposed by some other nations may not be so easily removed, especially if the US economic policy is viewed as transient, now subject to the whims of the latest President. That includes any President who had a change of heart after championing his policies in earlier years.

"The period of exclusiveness is past... commercial wars are unprofitable. Reciprocity treaties are in harmony with the spirit of the times; measures of retaliation are not." - President William McKinley, 1901.

Quote from: Bob In PA on Today at 08:10:46 AMI'll broaden your statement for clarity. You shouldn't listen to anyone who says tariffs are a tax on the populace of the country imposing the tariffs.  The correct statement is something like this (off the top of my head... I'm certainly no economist..."With the wrong tax policy and other erroneous fiscal policies like overspending by the government, it is possible that tariffs can raise prices"). Bob

See, this is a prime example of what I mean when I talk about political-style thinking seeping into finance and economics.  We shouldn't be seeking out sources that tell us what we want to hear (as you appear to be suggesting).  Instead, we should be seeking out (and listening to) the views of economists and other financial experts. 

I was listening to an investing podcast this morning.  They weren't completely down on the idea of tariffs (if anything, I would say they were lukewarm to the President's moves).  Yet, even they were adamant that this is a tax on the American people and that prices will go up.

It's like the illegal budget cuts that harmed me and millions of my fellow Americans.  One can debate the wisdom of targeting cutting while continuing to seek bigger tax cuts for the wealthy, but the chainsaw rather than hacksaw approach has caused massive and needless damage.

The same goes for tariffs.  The ends that are being claimed as justification for these new taxes on the American people could have been done in a targeted and restrained way, which would have boosted domestic manufacturing without causing so much harm to the American people.