Tariffs Catch-All

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Calheel said:
That is an incredibly naive, ahistorical hope by the white house. The domestic politics of every other country will not allow those leaders to "sit back and take it." The local population will demand retaliatory tariffs -- just as happened in every country throughout history.
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Well, there will be some who have no option but to take it. This has long been a problem in the global trading system: small countries have no real ability to discipline the powerful countries because the economic asymmetries. Do you think Vietnam will impose tariffs on the US? It won't make a damn bit of difference to the US, but would potentially hurt Vietnam.

This is a) why the WTO was created and b) why countries are going to need to form trading blocs to coordinate their responses like the EU. We're already seeing some of that in Asia.

South Korea and Japan are kind of fucked because they are worried that Trump will pull military support. When they get nukes in three to four years, it will be different.

But Europe is going to swing back and swing hard. No idea about the UK. The UK is still fucked from its own MAGA movement.
 
www.theguardian.com

Trump’s ‘idiotic’ and flawed tariff calculations stun economists

‘Willing sycophants’ came up with simplistic formula that has thrown global economy into disarray
www.theguardian.com www.theguardian.com

Waving a big chart as a prop in the White House Rose Garden, Donald Trump suggested his new tariff plan was simple: “Reciprocal – that means they do it to us, and we do it to them. Very simple. Can’t get simpler than that.”

Perhaps a bit too simple. The method used to calculate the most important numbers in international trade, politics and economics has left some of the world’s leading experts shocked.


For each country, the White House looked up its trade in goods deficit for 2024, then divided that by the total value of imports. Trump, to be “kind”, said he would, however, offer a discount, so halved that figure. The calculation was even distilled into a formula.

For example, take the figures for China:

  • Goods trade deficit: $291.9bn
  • Total goods imports: $438.9bn
  • Those figures divided = 0.67, or 67%
  • And halved = 34%
For countries without a large deficit, the White House applied a 10% baseline, ensuring tariffs would be applied regardless. This was the case for the UK, which the US Census Bureau reckons had an almost-$12bn surplus in 2024.

“[It is] quite an extraordinary calculation after months of work behind the scenes,” said Jim Reid, the global head of macro research at Deutsche Bank. “[It] didn’t add much confidence on there being an in-depth strategic implementation plan.”
 
China cozying up to traditional US allies too.

www.ft.com

China ‘optimistic’ about deeper UK financial co-operation

Vice-minister Liao Min speaking as renminbi green bond launched in London
www.ft.com www.ft.com

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China ‘optimistic’ about deeper UK financial co-operation

China’s vice-minister of finance has said Sino-British government relations have faced “ups and downs”, but he is “optimistic” about deeper financial co-operation between the nations, as the first renminbi sovereign green bonds were issued in London.Liao Min said that financial co-operation between the two nations had been strong during the past four decades since China began “opening up” to the world.The vice-minister attended a green bond issuance ceremony as trading opened at the London Stock Exchange on Thursday, accompanied by UK City minister Emma Reynolds.Liao’s visit marked the latest trip in a flurry of high level exchanges between the two nations. Sir Keir Starmer has sought to step up diplomatic engagement since coming to power last summer, following a period of frostier relations under the Conservatives.Asked about the warmer tone of bilateral relations, Liao said: “There is always ups and downs.“Both sides can work together closely,” he told the Financial Times. “This is a very sort of ‘win-win’ situation for both sides. I’m quite optimistic about our co-operation in economic, financial areas.”
 
Looks like UK will bend over and take it.
Canada and the remainder of the free, industrialized world may just band together and move on without the US. Both in trade and militarily.
ETA China to that list
 
nycfan said:

Trump’s Tariffs Were Supposed to Boost the Dollar. Why the Opposite Happened.​

Worries that long-term U.S. growth will fade could matter more for the currency than the mechanical impact of tariffs​


GIFT LINK 🎁 —> https://www.wsj.com/finance/currenc...c9?st=WHng9m&reflink=mobilewebshare_permalink

“While President Trump has always claimed to want a weaker dollar, the consensus among investors was that his policies would strengthen it.

Turns out he was right, but perhaps in the worst way.

… What was more unexpected is that the U.S. dollar tumbled against most major currencies. The WSJ Dollar Index, an indicator based on a basket of currencies, has now lost more than 5% this year and is below where it was on Nov. 5, before its postelection rally.

This is making Wall Street analysts look pretty bad: Most were telling investors, even up to the very moment in which tariffs were announced Wednesday, that protectionist policies would push up the currency.

The idea was that fewer purchases of overseas goods would narrow the trade deficit and mechanically reduce U.S. demand for foreign exchange. Also, U.S. growth is outpacing the eurozone’s, which has historically been dollar-positive.

Instead, speculators have swung to betting heavily against the greenback, Commodity Futures Trading Commission derivatives data shows.

… The sudden unwind can’t truly be about tariffs increasing the risk of recession. The dollar usually strengthens during busts as well as booms because investors seek refuge in it—creating the famous “dollar smile.”

Why did the market get it wrong? Perhaps the greenback is at such expensive inflation-adjusted levels that it was primed to fall. Or, as some investors argue, U.S. economic aggression against allies is eroding the dollar’s “global reserve” status. …”
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It's a bit early to decide what the effects of these tariffs are going to be on the dollar.

I think an underrated factor here is the possibility of mass consumer boycotts against the US. Tariffs are supposed to push up the dollar -- assuming constant export volume by the US. But if exports fall, it changes. And one wonders if retaliatory tariffs are going to be the biggest factor; what if people in other countries just stop buying American stuff? That is, American exports could fall more than imports -- i.e. the trade deficit will increase -- and then what?
 
Silence Dogood said:
Are there any positives to increasing tariffs? Any similarities between increasing taxes on corporations and increasing tariffs?
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Are you reading anything about tariffs?

I've read that they are basically being misused and they will never generate the revenues trump claims.

But, even if they did, if they work to bring back manufacturing, then the need for imports should decrease, which would equate to less revenue from tariffs.

You should also read a little about manufacturing jobs, employment, and technology. These manufacturing jobs, if the come to be, are not going to bring the labor returns that he's claiming or the increases in pay.
 
Silence Dogood said:
Yes, more revenue, increases in domestic production, more jobs, lower taxes for individuals etc
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Those increases in domestic production come with cost, it's not like a factory can be erected overnight at no cost. Additionally there's the automation. From what I've read the Chinese SUV factory employees almost no one, it's all robots.
 
www.politico.eu

EU ‘prepared’ to retaliate against Trump’s 20 percent tariffs

“We are now preparing for further countermeasures,” says European Commission President Ursula von der Leyen.
www.politico.eu www.politico.eu

Von der Leyen said Trump’s tariffs would have dire consequences for consumers and businesses that have prospered through trade with the United States since World War Two. The European Union, the world’s largest single market, must also defend itself against profound disruptions to global commerce that would result from Trump’s isolation of the United States.
“There seems to be no order in the disorder. No clear path through the complexity and chaos that is being created, as all U.S. trading partners will be hit,” she said in a televised statement.

The EU chief executive said the bloc would ready countermeasures against Trump’s latest tariff broadside, in addition to a €26 billion package responding to tariffs he has already imposed on steel and aluminum. At the same time, she vowed, Brussels will work to protect the industries most exposed.

“We are already finalizing the first package of countermeasures in response to tariffs on steel, and we are now preparing for further countermeasures to protect our interests and our businesses if negotiations fail,” von der Leyen said from Samarkand, Uzbekistan, where she was attending a summit.

“We will also be watching closely what indirect effects these tariffs could have. Because we cannot absorb global overcut capacity, nor will we accept dumping on our markets,” von der Leyen said, as the bloc braces for a flood of cheaper exports coming from China and elsewhere that will be shut out of the U.S. market.
 
p5mmr9 said:
It's unlikely we see a proportional increase in domestic production and even less likely we see an significant increase in employment opportunities.
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Manufacturing employment represents under 10% of US employment. If manufacturing were to explode it's not going to significantly increase that number.

Additionally, most software and tech service jobs, which were increasing in the US pay on average

Manufacturing isn't the score it's being sold as.
 
globalnews.ca

U.S. companies say Canadian retailers are turning away products - National | Globalnews.ca

Amid the "Buy Canadian" movement, some U.S. companies say retailers in Canada have been turning away their products or halting planned deals.
globalnews.ca globalnews.ca
The “Buy Canadian” movement is sending new ripples of concern through the executive offices of U.S.-based consumer companies that banked on selling their products on Canadian retail shelves.

California-based diaper maker Parasol Co had been working since January with a distributor to expand the sale of its diapers and baby wipes to new retailers in Canada, including convenience stores, CEO Jessica Hung said.

But, in early March the distributor, who Hung declined to name, halted work on the deal, she said, because of growing anti-American sentiment in  Canada.

“They were instructed by a retailer to pause any American brand launch,” Hung said, referring to the distributor. “They told us they would re-evaluate when market conditions allow.”

“That’s the kind of disruption we would never expect,” said Hung. “I never heard of this happening until now. It’s definitely quite a bit of headwinds.”

A dramatic reshuffling of Canada’s retail shelves illustrates the impact of patriotic consumerism in Canada, which imported nearly US$350 billion of products from the United States in 2024, making it its largest trading partner.

...

The Buy Canadian movement is not just hampering one diaper business but also drinks and citrus fruit from the U.S., companies say. In early March, Jack Daniel’s maker Brown Forman BFb.Ncalled the removal of American bourbon and whiskey from Canadian liquor stores worse than Canada’s retaliatory tariffs and a disproportionate response to Trump’s levies.

A source familiar with California’s citrus fruit exports told Reuters in early March that Canadian retailers have canceled their orders.

GT’s Living Foods, based in Los Angeles, California, and known for its Synergy kombucha products, said retailers in Canada, including Walmart, have been placing orders for fewer products because of tariff uncertainty.

“The distributors for Walmart Canada, Loblaw’s, Metro and Sobey’s told us they will buy one truck instead of two trucks of products, because retailers are being cautious and they are waiting to see how this (tariff situation) will play out,” said Daniel Bukowski, who managed the accounts of these retailers for GT’s Living Foods and was senior vice president of sales until mid-March.
 
Silence Dogood said:
Do you think their would be any employment opportunities if foreign companies manufactured in America?
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We already have most foreign auto makers in the US.

At my company I've seen projects go overseas because even with the additional cost and taxes, it's less expensive.
 
p5mmr9 said:
It can even be more catastrophic...as US trade deficits diminish - the incentive to utilize the US Dollar as the global reserve currency declines. This is the waning of American economic, military, and cultural power. It's hard to overstate how destructive our current path is.
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I've read several economist that say if this happens then we are basically fucked. So many issues with this from ability to get loans, servicing our debt, inflation, etc.
 
Silence Dogood said:
Why are other countries allowed to have higher tariffs on our goods than we do for theirs?
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There's so much more to international trade than tit for tat tariff battles.

Tariffs to stop China from dumping super cheap solar panels and basically collapsing our solar panel industry is different than blanket tariffs on everyone.
 
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