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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

#51

Post by jliptzin »

ViktorRay wrote: post #22
beloch wrote: post #8

This 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 a…

Trump himself has said the tariffs are to raise revenue in order to get rid of income and corporate taxes. But now they’re also a negotiating tool to eventually remove all tariffs with our trade partners? That makes no sense

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#52

Post by xh-dude »

jarym wrote: post #7

It is interesting that tech (Nasdaq) is the hardest hit here. The real engine of US exports for recent decades and likely to be a casualty as other countries plan their trade-war retaliation. And that's not even taking into consideration what might happen in the domestic market should there be a real recession - consumers will cut down their consumption and that'll filter back to lower corporate earnings. In previous…

Petulantly, I’d observe Trump hates or doesn’t believe in knowledge economies. He’s delivering pain to a lot of people in my circles.

For all that, a strategic goal of ensuring trade is sustainable is probably worth sane discussion.

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#53

Post by colechristensen »

lreeves wrote: post #10

You 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…

The "4D Chess" is that some powerful internal people doing a lot of manipulation want America to be an isolated very independent fascist state, and some powerful external people want to destabilize America and reduce its foreign influence. They're both making solid progress towards their goals.

The majority of the American people who voted for the current regime are being taken advantage of but like many they'll progressively more and more identify with wanting whatever outcome "their" team achieves.

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#54

Post by irrational »

beloch wrote: post #8

This 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’m pretty sure the only ones it will be good for are the rich. Make the rich richer. They will be able to buy stocks cheaply. They will be able to buy homes cheaply as people lose their jobs and foreclose. They will make the USA into a nation of renters. They will increase inflation and prices of everything so most people will be on the cusp of insolvency so they have to work multiple jobs for lower wages and can never retire. They will decrease education so people won’t be able to recognize the propaganda for what it is. They will disappear dissidents. They will make abortion illegal so people churn out the next generation of wage slaves. They will create false enemies (Canadians, gays, liberals, atheists, Jews, Muslims, anyone not white, etc.) to distract people from the real villains.

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#55

Post by Centigonal »

walterbell wrote: post #23

2024 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 beco…

> As global GDP grows, it becomes increasingly burdensome for the United States to finance the provision of reserve assets and the defense umbrella

I don't understand. US share of global GDP is around where it was in 1980, and in 1995[1]. Is Miran arguing that America's "exorbitant privilege" of being the source of the world's reserve currency, literally being able to buy goods from any country in the world with money printed out of thin air, is actually a liability?

[1] Page 8 of his paper

EDIT after reading through Chapter 2 of the paper: Thank you for sharing this. I don't agree with many of the arguments Miran is throwing out so far, but at least it's self consistent.

He is saying:

1. If the US's global share of GDP decreases, then a set of global economic factors will cause the US to keep having to take on deficits to fund the rest of the world's desire for USD (because that is the world's reserve currency). If the US becomes small enough relative to the world economy, then this pressure will cause the US to risk defaulting on its debt.

2. The US's status as the reserve currency issuer means US dollars are artificially expensive. This means that low margin, high-labor industries like manufacturing can't thrive in the US. This is a national security risk because China/Russia can make lots of tanks/drones/etc and we can't.

3. The US benefits from being the reserve currency issuer because it can use that power to project force worldwide and maintain national security.

4. (He doesn't say this, but implies it in that coy way that people who read The New Criterion like to do) #1 is an unacceptable risk for America, and the US should employ a range of unilateral or multilateral measures to reshape the global financial system in a way that devalues the US Dollar, strengthens US manufacturing, and forces US trading partners (esp. other liberal democracies) to subsidize the US's status as the reserve currency issuer, since the US provides a global hegemony that is beneficial to them.

Also, having read portions of the Project 2025 "Mandate for America," it's really interesting to me how all of these right wing thinktank writers (Russ Vought, Max Primorac, and now Miran) seem to share the same writing style.

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#56

Post by wtcactus »

jarym wrote: post #7

It is interesting that tech (Nasdaq) is the hardest hit here. The real engine of US exports for recent decades and likely to be a casualty as other countries plan their trade-war retaliation. And that's not even taking into consideration what might happen in the domestic market should there be a real recession - consumers will cut down their consumption and that'll filter back to lower corporate earnings. In previous…

This all tariff imbecility created solely by Trump it’s atrocious, still, if EU response is to hit the main players in Nasdaq - where there are a lot of chip producers necessary for the ongoing AI revolution - we are just shooting ourselves majorly in the foot.

Surely there are much better companies for the EU to apply directed tariffs. EU absolutely has their weaknesses, but giving blunt responses (like China just did and put tariffs on everything) is not really our way. Expect EU answer to be well crafted and directed at very specific areas.

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#57

Post by Spooky23 »

csense wrote: post #12

So 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?

The dollar may devalue, but Apple just did.

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#58

Post by mathfailure »

beloch wrote: post #8

This 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 think this might be a move to stop a world war (between Russia and NATO/Europe). If U.S. also leaves NATO any time soon - the chances for a world war would decrease greatly.

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#59

Post by WorkerBee28474 »

lwansbrough wrote: post #6

So where is the bottom? I don’t actually believe there is one, I’m just curious to hear what other people think.

It could be down another 50%, it could already have passed. Historically, troughs in P/E ratios have occurred all over the place.

https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...

Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout

#60

Post by antiquark »

lreeves wrote: post #10

You 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…

This could lead to the largest "free trade zone" in the world... everyone but the USA.
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