Tariffs Catch-All

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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.
 
UNCatTech said:
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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1. Your second sentence is correct.
2. Your first sentence is also correct. I will expound just a little. I've said it before on the board but maybe not everyone saw it.

Tariff levels are set by worldwide negotiation. All the countries in the world got together for seven different multi-year marathon negotiating sessions and agreed to cut tariffs on each others' goods.

During those negotiations, the US did not push for developing world countries to lower their tariff levels. Why? Because we don't sell much to those countries. Why? Because they are poor!

3. I know this is hard for Americans sometimes to understand, but countries set trade policies based on their entire economic situation, not just their relationship with the US. And because of the principle of MFN status -- which Trump has just destroyed -- everyone has to get the best tariff rate. Meaning that if a country wants to tariff its small neighbor, the tariff will hit the US too. But the US doesn't really -- or shouldn't really -- care, because they are poor countries.

For instance, why did Bangladesh have a 100% tariff on textile products until very recently? It wasn't because it was scared of US companies coming in and undercutting the Bengali firms (indeed, most of the Bengali textile producers have contracts with American companies). It's because they are worried about Vietnam undercutting their firms, or one of the stans, etc. Or India. The point is, those tariffs exist for reasons that have nothing to do with the US. And again, the US doesn't really care because making textiles is a low-paying job in a low-margin industry.
 
Here's another way of looking at it that might appeal to MAGAs.

The US economy used to produce textiles. We don't anymore. That's because we graduated from textiles! We moved up in the world. Let the low-paying, low-margin production go to other countries while we focus on high-value, high-productivity products to make us rich.

It's like when a rich investment banker takes his car to the mechanic to get the oil changed. The banker could do it -- but it's not worth the time. In the time it takes the banker to change the oil, s/he could make $10K. So instead s/he pays someone else $100 and smokes cigars.

And in this example, the US is the rich investment banker. Even the MAGAs! Bangladesh is like the mechanic changing our oil.

By the way, that rich banker runs a huge trade deficit with the mechanic. It's very one-sided. The banker transmits to the mechanic a few hundred dollars per year, and the mechanic transmits nothing in return. By Trump logic, the mechanic is ripping the banker off.
 
heelinhell said:
I was half asleep this morning and saw the Dow futures down only 200 points. I thought to myself, well the markets don't seem to be reacting too much to the Trump tariffs...

Then I looked again saw the Dow futures are down over 1,200 points :(

NASDAQ down 720 points and the S&P down 200 points.

Today may become known as Bloody Thursday:cry:
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Is this the boom trump was talking about?
 
UNCatTech said:
Better than the average MAGA who would respond with " what does that mean?"
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You hang out with different MAGAs than I do.

The MAGAs I know would never ask a question like that. They don't care about the answer and they think the question makes them weak and/or uninformed (which they are, but that's a different story).
 
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