Tariffs Catch-All

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“… President Trump’s start-and-stop expansion of tariffs on major trading partners has no analog in modern history. Yet the past can still be instructive. Previous trade disputes over everything from semiconductors to lumber to chickens have sometimes dragged out for decades, rattling international markets and boosting consumer prices.

None of the presidents who pursued those policies staked his agenda on protectionism to the same extent as Trump. His measures cover an array of products: beer from Mexico, Chinese-made toys and Canadian planes.

Economists fear that Trump’s approach could unleash forces that have unintended consequences extending far beyond his time in office.

“This is the biggest change to tariff policy that we’ve seen in recent history,” Cox said.

Washington has historically had specific goals with previous import taxes, said Douglas Irwin, an economics professor at Dartmouth College. Reagan-era tariffs on Japanese semiconductors aimed to shield the U.S. technology sector from a daunting competitor. President Nixon ended short-lived across-the-board tariffs in 1971 soon after the export juggernauts of West Germany and Japan agreed to boost the value of their currencies.

Contrary to many trade spats of past decades, the Trump White House has offered conflicting rationales for taxing foreign goods now, a sign that the coming trade wars could be open-ended.

“The problem [today] is that it’s not clear what the ask is of other countries,” Irwin said. “It’s a dramatic escalation.”

The uncertainty has already dampened consumer confidence and boosted inflation expectations, with Boston Fed researchers estimating that Trump’s early tariff proposals could add 0.5 to 0.8 percentage point to core inflation depending on the response of U.S. importers. …”
 
nycfan said:


“… President Trump’s start-and-stop expansion of tariffs on major trading partners has no analog in modern history. Yet the past can still be instructive. Previous trade disputes over everything from semiconductors to lumber to chickens have sometimes dragged out for decades, rattling international markets and boosting consumer prices.

None of the presidents who pursued those policies staked his agenda on protectionism to the same extent as Trump. His measures cover an array of products: beer from Mexico, Chinese-made toys and Canadian planes.

Economists fear that Trump’s approach could unleash forces that have unintended consequences extending far beyond his time in office.

“This is the biggest change to tariff policy that we’ve seen in recent history,” Cox said.

Washington has historically had specific goals with previous import taxes, said Douglas Irwin, an economics professor at Dartmouth College. Reagan-era tariffs on Japanese semiconductors aimed to shield the U.S. technology sector from a daunting competitor. President Nixon ended short-lived across-the-board tariffs in 1971 soon after the export juggernauts of West Germany and Japan agreed to boost the value of their currencies.

Contrary to many trade spats of past decades, the Trump White House has offered conflicting rationales for taxing foreign goods now, a sign that the coming trade wars could be open-ended.

“The problem [today] is that it’s not clear what the ask is of other countries,” Irwin said. “It’s a dramatic escalation.”

The uncertainty has already dampened consumer confidence and boosted inflation expectations, with Boston Fed researchers estimating that Trump’s early tariff proposals could add 0.5 to 0.8 percentage point to core inflation depending on the response of U.S. importers. …”
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“… On Wall Street, investors who previously viewed Trump’s trade rhetoric as a negotiating tactic are now grappling with the possibility that there are limited offramps ahead. The stock market has been thrashed over the past month, and the White House’s one-month exemption for many Canadian and Mexican imports on Thursday didn’t stanch the bleeding.

…Trump has likened his approach to a 19th-century paradigm that existed before international supply chains and foreign investment ballooned. In an address to Congress Tuesday, the president described tariffs as a means for protecting American jobs along with “protecting the soul of our country.”

… Economists generally believe Trump’s trade policy was more bark than bite the first time around. Even so, tariffs on commodities and consumer goods ushered in a new era of American protectionism that the Biden administration largely extended.

…
In 2018, import taxes on aluminum, steel and other products aimed to bring manufacturing back home, sometimes successfully. Tariffs on washing machinescreated an estimated 1,800 jobs at firms like Samsung, according to a study in the American Economic Review, but they cost consumers about $1.5 billion annually, or more than $800,000 per job.

The U.S. may be the world’s largest economy, but it isn’t so big that it can force foreign suppliers to eat the cost of import taxes, said Christine McDaniel, a senior research fellow at the Mercatus Center at George Mason University.

“The U.S. absorbed well over half of those tariffs,” she said. “We don’t have as much pricing power as you might think.”

The Biden administration relaxed some Trump-era tariffs on imports from allied countries.

But many China-focused levies remained in place, suggesting that “it is easier to ramp up tariffs than wind them down,” said Jack Zhang, a political-science professor who directs the Trade War Lab at the University of Kansas.

“The lesson of protectionism is that you end up with entrenched interest groups,” he said, adding that the complexity grows when governments retaliate.

In countries on both sides of trade wars, protected industries “will fight like hell to keep tariffs in place.” …”
 
nycfan said:
investors who previously viewed Trump’s trade rhetoric as a negotiating tactic are now grappling with the possibility that there are limited offramps ahead. The stock market has been thrashed over the past month, and the White House’s one-month exemption for many Canadian and Mexican imports on Thursday didn’t stanch the bleeding.
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“Investors” need to view the tariff machinations for what they are - short term market manipulation grifts.
 
JCTarheel82 said:
If tariffs are going to make us all rich then why does he keep delaying them and then toggling them on and off?

It's almost like Trump is just making shit up :unsure:
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Come on man he just needs to run that racket 3 or 4 more times and then he’ll implement the tariffs for sure. His cronies need the money.
JC I have you marked down as tough on cronies and grifting. Pretty sure you won’t be working in this administration.
 
JCTarheel82 said:
If tariffs are going to make us all rich then why does he keep delaying them and then toggling them on and off?

It's almost like Trump is just making shit up :unsure:
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“Just making shit up.” I’d say that hits the nail on the head.
 
incidental and not backed by research, but local Halifax reddit has 2-3 posts a day I'd say asking for local recommendations for sightseeing after the poster cancelled their US trip instead to vacation within Canada. Multiply that by all places in Canada and the fact that most people do not post on reddit and I am guessing there is going to be some US tourism slump showing up in the indicators down the road.
 
altmin said:
incidental and not backed by research, but local Halifax reddit has 2-3 posts a day I'd say asking for local recommendations for sightseeing after the poster cancelled their US trip instead to vacation within Canada. Multiply that by all places in Canada and the fact that most people do not post on reddit and I am guessing there is going to be some US tourism slump showing up in the indicators down the road.
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Old Orchard Beach in Maine (south of Portland) has been popular with Canadians for decades. It might be majority Canadian in July-September. It might suffer this summer.

Vermont ski resorts such as Jay Peak, Stowe, Mad River, and Sugarbush (the northernmost ones) haven’t seen much or any decrease in Canadians so far this season; but, they could have bought passes and packages before Trump’s nonsense officially started.
 
Ontario's premier, the leader of Canada’s most populous province, announced that effective Monday his province is charging 25% more for electricity to 1.5 million Americans in response to U.S. President Donald Trump's trade war.

Ontario provides electricity to Minnesota, New York and Michigan.
 
Nixon tariffs - overcame to the detriment of Carter administration
Reaganomics - recession. Overcame by Clinton administration
Bush II - housing bubble. Overcame by Obama administration.
Trump - mishandling of COVID. Overcame by Biden administration.
Trump II - tariffs and federal govt slashing. Yet again Dems will have to overcome Republican messes to the economy.
 
Link: https://www.wsj.com/opinion/donald-...739a?msockid=3e68779532796aac33d5621a33396b8f

I learned a new word today, thanks to the Wall Street Journal - "afflatus." Actual definition of afflatus: from the Greek for "to blow." It means in English, "a divine creative impulse or inspiration." In relation to St. Donald of Mar-a-Lago's on again/off again tariffs against Canada and Mexico, the WSJ wrote, "It’s doubtful Mr. Trump even has the power to impose these tariffs, and we hope his afflatus gets a legal challenge." When I read that, I, incorrectly, assumed the WSJ was attempting to get a playful dig in at St. Donald's pomposity by substituting "his afflatus" for " the POTUS" or "his eminence." I was wrong. But notwithstanding the actual definition, I still believe the better use of the phrase "his afflatus" is to compare the idiotic ramblings that seemingly spue in a random fashion from St. Donald's mouth to those issuing from a different orifice, probably in equal volume/frequency/offensiveness, by labeling them, "his afflatus."
 
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“… Over the past few weeks, Mr. Trump has threatened, imposed, suspended and resumed tariffs on America’s largest trade partners: Canada, Mexico and China. The dizzying shifts, including last-minute exemptions for some automakers and energy products, have unnerved investors.

… “The market volatility is much less about the bad news of tariffs and much more about the uncertainty of tariffs, especially uncertainty as to what the policy is, where it is headed, how long it will last and what the end result will be,” said David Bahnsen, the chief investment officer at the Bahnsen Group.

On Monday, retaliatory tariffs by China on U.S. agricultural products came into effect. On Wednesday, the Trump administration is set to put in place a 25 percent tariff on all U.S. steel and aluminum imports. Mr. Trump has also threatened to impose “reciprocal tariffs” on all U.S. imports to match other countries’ tariffs and trading policies next month.

The S&P 500 has now erased all the gains it made since Election Day. The Nasdaq has been hit even harder, as a rally in big tech stocks driven by enthusiasm for artificial intelligence reversed course. The index fell into a correction last week, and dropped a further 4 percent on Monday. …”

 
“… As he prepares to introduce new tariffs on foreign metals this week, President Trump has vowed not to grant the types of exclusions and exemptions that were common during his first trade war.

But he has already undercut that tough position on other tariffs. After lobbying from automakers, farmers and other industries, Mr. Trump quickly walked back the sweeping tariffs he had imposed on Tuesday on all imports from Canada and Mexico. By Thursday, he had suspended those tariffs indefinitely for all products that comply with the North American free trade deal, U.S.-Mexico-Canada Agreement, or U.S.M.C.A. — about half of all imports from Mexico and nearly 40 percent of those from Canada.

That has given industries and foreign governments an opening to lobby the administration ahead of the forthcoming metals tariffs, which go into effect at 12:01 a.m. Wednesday, as well as other levies planned for April 2.

… Foreign countries have offered to begin trade negotiations and devoted resources to Mr. Trump’s goals, like strengthening U.S. borders. And that is a power the president may be loath to give up.

“This is what authoritarians do — manipulate public policy and control it with personal decisions and seemingly idiosyncratic decisions, often to get or push for political support in return,” said Rick McGahey, an economist at the New School. …”


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It is not clear that Trump has proper authority for a lot of what he is doing, but I guess we are all getting sucked out to sea in the Trump flood.
 
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