Trump / Musk (other than DOGE)

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During Trump’s first administration I think he shocked the “establishment” leadership around the world. They didn’t really know how to react to him. Of course, then Covid hit and it upended everything.

Unfortunately, I am pretty confident that the other economic powers know their competitor now. I am afraid that the US is getting ready to find out.

“Craziness” works until it doesn’t.
 
ChileG said:
I’m assuming that you are being sarcastic.
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Even if serious, he is onto something — it is quite possible that this is a performative threat that can be solved by making performative genuflection to Trump before he is inaugurated. Trump will happily pretend he’s proven who's the boss and stopped fentanyl and government backed immigration to the U.S. of Canada and Mexico just say they are doing something.

OTOH, I don’t think Trump can put blanket tariffs on Mexico or Canada anyway under the USMCA. That is a feature of the amended version of NAFTA that he loves to promote as some great improvement over NAFTA (though it was really the same deal with a few tweaks and the exemptions from tariffs was also a feature of NAFTA).
 
nycfan said:
Even if serious, he is onto something — it is quite possible that this is a performative threat that can be solved by making performative genuflection to Trump before he is inaugurated. Trump will happily pretend he’s proven who's the boss and stopped fentanyl and government backed immigration to the U.S. of Canada and Mexico just say they are doing something.

OTOH, I don’t think Trump can put blanket tariffs on Mexico or Canada anyway under the USMCA. That is a feature of the amended version of NAFTA that he loves to promote as some great improvement over NAFTA (though it was really the same deal with a few tweaks and the exemptions from tariffs was also a feature of NAFTA).
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I agree with the performative part, because it seems unlikely to me that illegal immigration and the fentanyl problems are going to be solved in 60 days.
And I think it is likely that Trump will claim a victory (and his acolytes will celebrate it) whatever the outcome of yesterday’s announcement is.
 
By no means do I think that Trump is some 5D chess-playing master tactician- I don’t, and he’s not, not by a longshot- but I do tend to think that those tariff announcements yesterday were performative, mainly because I don’t think that even the folks (well, the folks who aren’t Elon Musk) around Donald Trump are stupid enough to purposefully tank the economy and send inflation skyrocketing. We shall see.
 


But the guy who bankrupted his own casino, failed at selling steaks, collapsed his own scam university, and is so broke that he has to huckster guitars and gold sneakers, is such a bigly business genius and masterful negotiator!!!!! There’s no way those idiot Canadians and Mexicans could ever see right through his bluster and bullshit!
 
CFordUNC said:
Yeah, thank goodness we are going to finally put an end to the scourge of…. check notes… Canadians pouring across the northern border into the United States.
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Well you know how people up here hate their lower costs drugs and medical care that doesn't cripple them financially for life.
 
I don't think the Administration will resort to across the boards tariffs. I agree that would tank the economy. There is a benefit to having an unpredictable President issuing threats against our neighbors. I guarantee you it will get their attention and they'll act accordingly. It's unconventional but I predict it works.

This also demonstrates that the center of world power currently resides in Mar Lago and not DC.
 
Ramrouser said:
I don't think the Administration will resort to across the boards tariffs. I agree that would tank the economy. There is a benefit to having an unpredictable President issuing threats against our neighbors. I guarantee you it will get their attention and they'll act accordingly. It's unconventional but I predict it works.

This also demonstrates that the center of world power currently resides in Mar Lago and not DC.
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The unpredictable part has its "merits" perhaps . Tearing apart our relationships with our neighbors and presumably with out European allies is the really scary part
 
Ramrouser said:
I don't think the Administration will resort to across the boards tariffs. I agree that would tank the economy. There is a benefit to having an unpredictable President issuing threats against our neighbors. I guarantee you it will get their attention and they'll act accordingly. It's unconventional but I predict it works.

This also demonstrates that the center of world power currently resides in Mar Lago and not DC.
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Ramrouser said:
I don't think the Administration will resort to across the boards tariffs. I agree that would tank the economy. There is a benefit to having an unpredictable President issuing threats against our neighbors. I guarantee you it will get their attention and they'll act accordingly. It's unconventional but I predict it works.

This also demonstrates that the center of world power currently resides in Mar Lago and not DC.
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Ok, but let's consider the possible outcomes. What if, hypothetically, it doesn't work? What if Canada and Mexico call his bluff?

What does he do then? He's got to respond in some way, or the whole world will follow suit. So, how does he respond?

Trump is the antithesis of Teddy Roosevelt's "Speak softly and carry a big stick." At some point, if he keeps going, however, he is going to have to pull out whatever stick he has. Because "being unpredictable issuing threats against our neighbors" only works for so long, without following through on said threats.

At best, unpredictability is a short term solution. But, when dealing with unpredictability, one has to also factor in what can go wrong vs. what can go right. Keep in mind, Trump has had the last four years to form his plan for this administration. But, so has the world. And, based on who Trump has around him in his cabinet, there is a good chance that the world can out-maneuver him. So, when things don't go his way, again, how does he respond, and what is the impact on all of us when that occurs?
 
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If you view tariffs as a form of low-level warfare against other Countries, they have no choice but to respond. It quickly becomes tit for tat. By now, these other Countries should be ready. Sounds like Mexico is:

If Trump carries out his tariff threat, Mexico should retaliate, leveling tariffs on U.S. corn growers, milk and pork exporters and other sectors that are among the president-elect’s most important supporters, said Ildefonso Guajardo, who served as economy minister and led Mexico’s negotiations for the creation of the USMCA.

In 2018, Mexico responded to U.S. tariffs on its steel exports by imposing matching tariffs on U.S. steel. It was also among the first countries to target key Republican districts in retaliation to Trump’s tariffs by slapping import duties on other U.S. goods including pork, cheese, apples and Bourbon.

“Trump said he negotiated a North America trade treaty that was the best in history,” said Guajardo. “I would use his treaty to retaliate in the same magnitude against his most important backers if he tries to hurt Mexican exports.”

 
Ramrouser said:
I don't think the Administration will resort to across the boards tariffs. I agree that would tank the economy. There is a benefit to having an unpredictable President issuing threats against our neighbors. I guarantee you it will get their attention and they'll act accordingly. It's unconventional but I predict it works.

This also demonstrates that the center of world power currently resides in Mar Lago and not DC.
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I mean, I don’t think they can do across the board tariffs without violating the USMCA and triggering all kinds of repercussions. For instance, Mexico is the leading supplier of auto parts to U.S. assembly plants now — this harebrained scheme could cripple Detroit (if implemented).

But, USMCA has a 6-year sunset that has to be reauthorized during the upcoming Trump term. That provides some leverage to the Trump Administration to threaten to walk away (though the long term impact could be disastrous to our free trade if we did so). There is supposed to be a 10-year wind down of USMCA is not re-urbanized but I assume Trump would say fuck that, so sue me and ignore the wind down if he got a mind to do so.
 
If Trump gets his way, we will have huge inflation.

I will give an example from my industry, Electric Utilities. Our meters are made in Mexico, and their electronic modules are made in the US. So modules shipped to Mexico will have a 25% tariff going in, and then the entire assembly will get a 25% tariff coming back. So a $100 meter will now cost ~$140.
 
p5mmr9 said:
but fuck it - let's get the arsonist back in so he can burn it all down.
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This is the part that is so crazy to me. Elon and Trump are basically saying they want to do for the US what Javier Milei did for Argentina. But the two situations aren't remotely similar! Milei took over in Argentina in a time of hyperinflation, with annual inflation of hundreds (if not thousands) percentage points. He's basically thrown the emergency break to cool inflation, throwing the economy into depression and most of the country into poverty. Opinions vary on whether his program is a good idea - way too early for him to be claiming victory, for sure - but the only reason something drastic was worth considering is because the economy was in shambles. But the US economy not only isn't in shambles, it's the best in the world! So we should be trying to make minor tweaks to address the problems we do have. Instead, Musk et al are ushing the idea that we're in some sort of crisis that requires drastic action. It's one thing to throw the emergency brake when you're careening off a cliff, and another thing entirely to throw it while you're cruising down the middle of the highway.

I still fear that this is Musk/Thiel trying to intentionally tank the US economy to weaken the dollar and push Bitcoin as the world's new reserve currency. Because it's hard to make it make sense otherwise.
 
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