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Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
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Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#22This is an inherently political subject, but I would appreciate a dispassionate argument explaining how this could be even remotely good for the U.S.'s economy in a way that is light on MAGA ideology and doesn't simply claim the overwhelming majority of economists are dumb. I'm simply not seeing even a glimmer of a possible upside right now. I see even less possibility of an upside for those of us North of the border…
In the long run it could lead to more fair trade deals.
Today’s episode of Newshour at the BBC World Service had a conversation between a BBC journalist and a German CDU politician where they talked about how the tariffs on cars from Germany entering America has historically been lower than the tariffs on cars from America entering Germany. The CDU politician was telling the BBC that he hoped maybe a resolution for all of this would be both America and Europe lowering their tariffs to zero.
That was the hope of that politician in the long run though. In the short run the politician was in a sad mood because he felt things economically are going to be bad for everybody.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#232024 paper (40 pages) by Stephen Miran, current chair of the Council of Economic Advisers, which has influenced tariff policy, https://www.hudsonbaycapital.com/documents/FG/hudsonbay/rese...
The root of the economic imbalances lies in persistent dollar overvaluation that prevents the balancing of international trade, and this overvaluation is driven by inelastic demand for reserve assets. As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defense umbrella, as the manufacturing and tradeable sectors bear the brunt of the costs... Tariffs provide revenue, and if offset by currency adjustments, present minimal inflationary or otherwise adverse side effects.. Finally, I discuss a variety of financial market consequences of these policy tools, and possible sequencing.
> One of the core tenets of the document is the deliberate devaluation of the US dollar in order to make US exports favorable again.. a country which holds the world’s reserve currency faces a significant dilemma.. to keep its currency as reserve status—and reap all the geopolitical benefits this creates—the country must hamstring its own economic output by running a huge trade deficit, which means the country imports far more than it exports, which hurts—or in the case of the US, kills—domestic manufacturing.
>... if a French person buys a $50K Ford truck and imports it to France, that’s $50K USD that leaves France and goes back to the US, lowering France’s dollar holdings. If an American buys a $50K French Peugeot to import it to the US, he sends his $50K USD to France, which increases its dollar holdings.. to maintain the dollar’s reserve status.. US dollars are constantly flooding the world.. running a massive trade deficit where imports of foreign goods (outflow of USD) far outweigh exports of domestic goods (inflow of USD).
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#24On the bright side, this may be a good opportunity to convert 401(K) or IRA funds into a ROTH account.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#25So honest question: A bunch of people who currently own stock are deciding they'd rather have cash instead -- that much is obvious. But what exactly are they doing with the cash? Don't want to hold onto it, everyone says devaluation and inflation is coming. Bitcoin and gold are kinda flat. I expected them to shoot up as uncertainty hedges. What gives?
I don't know, but us stocks aren't the only options, they could just be transferring to european stocks.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#26This is an inherently political subject, but I would appreciate a dispassionate argument explaining how this could be even remotely good for the U.S.'s economy in a way that is light on MAGA ideology and doesn't simply claim the overwhelming majority of economists are dumb. I'm simply not seeing even a glimmer of a possible upside right now. I see even less possibility of an upside for those of us North of the border…
If you want someone talking intellectually about the global trade situation, Oren Cass’ interview with Jon Stewart was pretty good.
https://www.youtube.com/watch?v=vgEQeLR-M0g
But I do think that a logical assessment undervalues the notion that this is an emotional/intuitive. I don’t think Oren Cass’ very interesting intellectualization of the problem will actually help you predict what Trump will do.
But in the emotional piece - He’s talked endlessly about how America is getting screwed, and his tariff calculation was based pretty directly on trade deficit calculations.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#27This is an inherently political subject, but I would appreciate a dispassionate argument explaining how this could be even remotely good for the U.S.'s economy in a way that is light on MAGA ideology and doesn't simply claim the overwhelming majority of economists are dumb. I'm simply not seeing even a glimmer of a possible upside right now. I see even less possibility of an upside for those of us North of the border…
I wouldn't say its good for anyone, but it is probably worse for many of our trading partners so they would, in theory, make moves to negotiate with the US to skirt the tariffs. I don't think it will ultimately have been worth it in the end but time will tell.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#28You know the craziest thing about watching this as an outsider in Canada is that we as a nation are losing one reliable trading partner (and obviously losing an ally but that's another conversation). Germany - losing a trade partner. Japan? And so on. But the US has lost 180 reliable trading partners. You're already seeing in the first week burgeoning trade alliances between nations who wouldn't have cooperated befor…
I think less 4d chess and more Erlich Bachman school of negotiation. Bullying people in inferior bargaining positions has somehow worked thus far.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#29You know the craziest thing about watching this as an outsider in Canada is that we as a nation are losing one reliable trading partner (and obviously losing an ally but that's another conversation). Germany - losing a trade partner. Japan? And so on. But the US has lost 180 reliable trading partners. You're already seeing in the first week burgeoning trade alliances between nations who wouldn't have cooperated befor…
Leopards eating a lot of American faces.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#30This is an inherently political subject, but I would appreciate a dispassionate argument explaining how this could be even remotely good for the U.S.'s economy in a way that is light on MAGA ideology and doesn't simply claim the overwhelming majority of economists are dumb. I'm simply not seeing even a glimmer of a possible upside right now. I see even less possibility of an upside for those of us North of the border…
My best understanding of the administration's psyche is that they're determined to have more manufacturing happen in the US - regardless of the economic impact.
It still doesn't make sense though - there's a reason sneaker makers like to have kids in places like Vietnam make shoes for a few cents per hour. It's because no one in the US would work gruelling hours for such little pay!
POTUS wants to 'level the field' but I'm not convinced it's dawned on him that as leader of one of the wealthiest nations on Earth, 'levelling' will mean the US getting poorer.