Tariffs Catch-All

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Trump’s New Trade Order Is Fragile​

One-sided deals lack the staying power of past negotiations​


Gift 🎁 —> https://www.wsj.com/economy/trade/t...a?st=68cjZf&reflink=desktopwebshare_permalink

“… Including the deal struck over the weekend with the European Union, the U.S. will impose an effective tariff rate of about 15% on its trading partners, by far the highest since the 1930s, according to JPMorgan Chase. Japan and the EU have together committed to investing $1.15 trillion in the U.S. Europe also agreed to energy and military purchases.

And what did the U.S. give up in return? Nothing.

So Trump has hit his goals, for now. But these deals don’t yet represent a new trade order. They are sort of a way station, more fragile and with less legitimacy than the system they have supplanted.

… Of the major trading partners yet to strike deals, South Korea, Mexico and Canada can likely expect, like the U.K., Japan and the EU, to give up plenty and get nothing in return. China, the only country to have broadly retaliated, might fare differently.

Trump has avoided a trade war, but it remains to be seen if the trade peace will last.

… From 1947 through 2012, the U.S. presided over a steady fall in trade barriers and growing economic integration. It came through painstakingly negotiated pacts.

… By contrast, Irwin said, these latest agreements are “handshake deals” with a president who isn’t legally bound to adhere to the terms.

… Trump acted entirely without Congress. Indeed, one court has already ruled his use of a sanctions law to impose across-the-board tariffs was illegal. Should an appeals court uphold that finding, the legality of those deals would come into doubt. (Trump could turn to a different law that limits tariffs to 15%, for 150 days.)…”
 
nycfan said:

Trump’s New Trade Order Is Fragile​

One-sided deals lack the staying power of past negotiations​


Gift 🎁 —> https://www.wsj.com/economy/trade/t...a?st=68cjZf&reflink=desktopwebshare_permalink

“… Including the deal struck over the weekend with the European Union, the U.S. will impose an effective tariff rate of about 15% on its trading partners, by far the highest since the 1930s, according to JPMorgan Chase. Japan and the EU have together committed to investing $1.15 trillion in the U.S. Europe also agreed to energy and military purchases.

And what did the U.S. give up in return? Nothing.

So Trump has hit his goals, for now. But these deals don’t yet represent a new trade order. They are sort of a way station, more fragile and with less legitimacy than the system they have supplanted.

… Of the major trading partners yet to strike deals, South Korea, Mexico and Canada can likely expect, like the U.K., Japan and the EU, to give up plenty and get nothing in return. China, the only country to have broadly retaliated, might fare differently.

Trump has avoided a trade war, but it remains to be seen if the trade peace will last.

… From 1947 through 2012, the U.S. presided over a steady fall in trade barriers and growing economic integration. It came through painstakingly negotiated pacts.

… By contrast, Irwin said, these latest agreements are “handshake deals” with a president who isn’t legally bound to adhere to the terms.

… Trump acted entirely without Congress. Indeed, one court has already ruled his use of a sanctions law to impose across-the-board tariffs was illegal. Should an appeals court uphold that finding, the legality of those deals would come into doubt. (Trump could turn to a different law that limits tariffs to 15%, for 150 days.)…”
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“… The one-sided nature of these deals also makes them more fragile. Other countries will be less willing to comply with something they don’t think is in their economic interest, especially with so many details unsettled. Already, Japan has cast doubt on Trump’s interpretation of its $550 billion investment commitment, and the Europeans’ $600 billion pledge seems similarly vague.

Deals made under duress are politically unpopular and thus less durable. Especially noteworthy was the negative reaction of far-right populist leaders who are already hostile to the EU and trade deals.

Marine Le Pen, a leader of France’s populist right-wing National Rally, which is slightly favored to win the presidential election in 2027, called the EU deal a “political, economic and moral fiasco.” Alice Weidel, leader of Germany’s far-right Alternative for Germany, wrote on X, “The EU has let itself be brutally ripped off.”

Trump got his deals because of the leverage other countries’ deep economic and security ties gave to the U.S. In coming years, that leverage will wane as those countries cultivate markets elsewhere and build up their own militaries. The resulting international system will be less dependent on the U.S.—and less stable.“
 
China's goal has been to become the world's dominant economic superpower by 2045, 2050 at the latest. Their strategy has been to emulate to some degree what the US did after WW2: 1) massive investment in research, development, education, infrastructure, technology, and 2) get other countries into your ecosuystem by heloing them with the Belt and Road initiative, a variant of the Marshall Plan.
Trump's heavy-handed scorched earth trade policies gives China a chance to accelerate their timetable by a decade if they play it smart. Luckily for US, China is often as heav-hdnaded as Trump. But they have a wide open door to walk through and start remaking thge world ofeder if they play the stratetic long game here IMO
 
heelslegup said:
China's goal has been to become the world's dominant economic superpower by 2045, 2050 at the latest. Their strategy has been to emulate to some degree what the US did after WW2: 1) massive investment in research, development, education, infrastructure, technology, and 2) get other countries into your ecosuystem by heloing them with the Belt and Road initiative, a variant of the Marshall Plan.
Trump's heavy-handed scorched earth trade policies gives China a chance to accelerate their timetable by a decade if they play it smart. Luckily for US, China is often as heav-hdnaded as Trump. But they have a wide open door to walk through and start remaking thge world ofeder if they play the stratetic long game here IMO
Click to expand...
I agree 100% and have posted earlier that Trump is paving the way for China to replace us as the foremost geopolitical superpower.
 
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heelslegup said:
China's goal has been to become the world's dominant economic superpower by 2045, 2050 at the latest. Their strategy has been to emulate to some degree what the US did after WW2: 1) massive investment in research, development, education, infrastructure, technology, and 2) get other countries into your ecosuystem by heloing them with the Belt and Road initiative, a variant of the Marshall Plan.
Trump's heavy-handed scorched earth trade policies gives China a chance to accelerate their timetable by a decade if they play it smart. Luckily for US, China is often as heav-hdnaded as Trump. But they have a wide open door to walk through and start remaking thge world ofeder if they play the stratetic long game here IMO
Click to expand...
And now, thanks to Trump, they will achieve their goal by 2030.
 
heelslegup said:
China's goal has been to become the world's dominant economic superpower by 2045, 2050 at the latest. Their strategy has been to emulate to some degree what the US did after WW2: 1) massive investment in research, development, education, infrastructure, technology, and 2) get other countries into your ecosuystem by heloing them with the Belt and Road initiative, a variant of the Marshall Plan.
Trump's heavy-handed scorched earth trade policies gives China a chance to accelerate their timetable by a decade if they play it smart. Luckily for US, China is often as heav-hdnaded as Trump. But they have a wide open door to walk through and start remaking thge world ofeder if they play the stratetic long game here IMO
Click to expand...
The problem with this analysis is China itself. Very few countries like being in China's orbit or sphere of influence, particularly free Asian countries. It has a centralized, authoritarian government which limits its ability to have true friends in the free world. China has limited soft power (beyond giving developing countries "loans" for development) and limited cultural influence in the West.
 
Ramrouser said:
The problem with this analysis is China itself. Very few countries like being in China's orbit or sphere of influence, particularly free Asian countries. It has a centralized, authoritarian government which limits its ability to have true friends in the free world. China has limited soft power (beyond giving developing countries "loans" for development) and limited cultural influence in the West.
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Well they have one advantage
In the USA our policies change every 2-4 years (elections) Hard to get stuff done
 
The US has significant advantages over
China, primarily through leading qan alliaqndce. Unfortunately, trade policies like those of the current administration squand3er that advantqage over time. The US could be isolating China in Asia but can't because it is treating them as badly as China does. China has alreadt made significan inroads in Africa, Latin Ameriuca, and other third world countries. US is opening the door for them to expand that incluence throughout Eurpe and Asia. But this would require some short-term miltilateralism and often they are as inept at that as President Trump
When you lead an alliance, you re first among equals. In a negotiation you go for 55 or 60%, not 90 or 95. Doing the latter causes alliance members to look elsewhere for better trade relations. If the US is going to treat Europe like an adversary, why not got go and get a better deal from China.
 
Krugman is usually spot on, but I'm not sure why he's referring to loans or loan guarantees as not "real investment." I believe, as he does, that they are mollifying Trump by stamping his name on money flows that would have otherwise happened (e.g. the LNG deal), and this doesn't really affect his larger point which is 100% correct.

But it's still odd to me seeing Paul Krugman, of all people, dissing debt financing like that. I guess old age can diminish even great intellects.
 
Would be amusing if EU countries rejected the final deal.
TAriffs this high and broad will hurt our economy badly later this year anmd in 2026. these are historically jogjh ;eve;s mpt seem somce jte Great Depression
 
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