This is the payout difference between perato optimal and minmax solutions. Trust is gone so the sum value to all players is lower overall than it was before. The only thing is the rest of the world still has trust with each other so the ultimate looser is just the US. I just wish that the devastation this is causing could only impact those that caused it but the reality is that those responsible, those that voted for this, won't admit or learn from this, or the hundreds of other devastating acts going on, and will keep inflicting this type of pain. We really did have it all.
Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
191–200 of 777 posts
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#192Earlier quoted context omitted.
China is isolationist and they seem to be growing. The problem is the USA is a consumer economy which isn’t sustainable. We could get away with it as a tech leader, but with China stepping ahead (Deepseek) china will be a tech leader and manufacturing leader. What will the USA have?
In what plane of reality is China isolationist
They are the least isolationist they have to sell their goods, often by building the roads that carry them.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#193This 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…
Donald J. Trump lost an auction in 1988 for a 58-key piano used in the classic film “Casablanca” to a Japanese trading company representing a collector. While he brushed off being outbid, it was a firsthand reminder of Japan’s growing wealth, and the following year, Mr. Trump went on television to call for a 15 percent to 20 percent tax on imports from Japan.
“I believe very strongly in tariffs,” Mr. Trump, at the time a Manhattan real estate developer with fledgling political instincts, told the journalist Diane Sawyer, before criticizing Japan, West Germany, Saudi Arabia and South Korea for their trade practices. “America is being ripped off,” he said. “We’re a debtor nation, and we have to tax, we have to tariff, we have to protect this country.” [1]
We're in an Emperor With No Clothes situation and all of his aids have no clothes either.
[1] https://www.nytimes.com/2019/05/15/us/politics/china-trade-d...
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#194Earlier quoted context omitted.
This. There is no reason why any country should trust us anymore if entire trade relations can be destroyed by a presidential whim. Even if Trump fell out of a window today and we got a pro-trade president tomorrow, we’re not fixing this damage for a very long time. We probably would have to amend the constitution to insulate foreign policy from the whims of a single person if we want any chance of fixing this in our…
It's already there in the Constitution - Article II, Section 2, Clause 2. Unfortunately other countries chose not to require things in writing and were happy with pinky promises that could be reneged.
I mean, most of international law and deals are basically pinky promises. But grown-ups are supposed to keep those pinky promises
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#195Earlier quoted context omitted.
I think that those in command are also waiting for the next President to undo all that but it is going to have a tremendous effect for a decade or more. Hopefully for the US they won't go in a similar crisis like the UK is going through... Cutting off countries like Japan or Taiwan like that when we know their geopolitical situation with China and how critical their economy is to the US is quite crazy.
The next president is going to be Trump. If people don't think that's at least a serious possibity they are extremely deluded about the situation the country is in right now.
We have repeatedly seen Trump say something that sounds ridiculous, and his supporters say "that won't actually happen, and if it does I won't support it", and then he does it and his supporters support it. He has recently said he may try for another term as president, and confirmed "No, no I'm not joking".
If you don't take his threats seriously by now, and the willingness of the GOP to get behind whatever he wants, then you are not paying attention - it has happened over, and over, and over.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#1962024 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…
I know that a quotation is not necessarily an endorsement, but this is a fantastically short-sighted idea. > it becomes increasingly burdensome for the United States to finance the provision of reserve assets How dare countries want pictures of dead Presidents so badly that... they're willing to send real goods to the United States for its consumption, with no expectation of reciprocation. > and the defense umbrella…
You’re right about all you say. But the US has struggled to implement even the simplest forms of industrial policy because other countries are so extremely price-competitive, and our markets so unbridled, that our “elites” have eroded our industrial base to drive shareholder returns.
If not through tariffs, how else do you force reindustrialization? Industrial policy will always fail if it’s driven by a chimeric political system where both sides are incentivized to grow “The Economy” by eroding domestic capacity.
The CHIPS Act is too little, too late (when you’re competing with a fast-accelerating rival that is simultaneously your largest debt-holder and main industrial base).
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#197Not going to comment on the politics, but I'd point out that recession odds on Kalshi are currently 64% and 58% on Polymarket [1,2]. In other words, recession in 2025 is more likely than not -- though far from guaranteed. My thought relevant to HN is that either way this is likely to decimate venture capital and startups, at least in the short run. Venture capital funds come from limited partners like pensions and en…
Anyone who's played cards or an MMO know those are insanely good odds -- virtually guaranteed!
X-Com: Enemy Known, where you're forced to play with a certain squad leader who is always either out of Time Units, panicking, or mind-controlled, and a 99% hit chance is not really 99%.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#198This 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…
To lay out my own biases
- I voted for Trump but do not consider myself a strong supporter (I saw it much more of a vote for who you dislike less sort of situation)
- I don't understand and am not supportive of the approach on Tariffs
- I am an active participate in what most here would consider right wing politics although I don't find myself aligning on every topic (e.g. I am supportive of the abortion laws in California) so I tend to hear a lot of the chatter "from the other side"
- When manufacturing moved out of the US to low cost of living countries, this hurt towns which relied on manufacturing (e.g. the rust belt). Cost is the primary reason why manufacturing moved. Raising the cost on overseas manufacturing may make domestic manufacturing cost competitive. Although economics tells us this will still be a net loss there may be externalities which are not priced into the trade (e.g. the towns falling apart and people becoming despondent / drug addicted might not be factored into corporate profit models)
- Being overly dependent on China or more broadly "foreign powers" for manufacturing represents a national security risk.
- In theory this could be posturing to provide an opening for the US to negotiate more favorable trade agreements. For example Israel, Vietnam, and Argentina have made some statements about reducing trade barriers on US companies.
- In theory it could be beneficial to shift the revenue model of the US towards raising revenue with tariffs while reducing interest rates and other tax rates (e.g. "no taxes on overtime and tips")Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#199It 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…
The other side of it is the lost trust in American tech. That’s most prominent in the military debates around whether other countries can rely on their expensive hardware working if they run afoul of American policy, or if the president is looking for leverage to extort a mineral deal, but it’s also highly relevant for the civilian side. For pretty much as long as we’ve had computers, most other countries have trusted hardware made by American companies running operating systems and applications made by American companies. Now everyone has to wonder what kind of espionage or sabotage would be possible if those companies were pressured – or whether the guys standing on stage would even need to be pressured. Suddenly, giving Google the ability to push code onto most of the devices in the world looks less like a security win and more like a risk - and it’s famously hard to establish trust without the rule of law as the foundation. Snowden started it but most allied governments were confident that there were limits in a way which is a lot harder to believe now.
I am expecting that 2024 will be seen as the peak for American tech companies: the longer this goes on, the more competition they’ll have with advantages they can’t match in foreign markets – especially if many of the immigrants who worked at those companies decide to start companies after leaving.
Re: Trump's Tariffs Wipe Out over $6T on Wall Street in Epic Two-Day Rout
#200Earlier quoted context omitted.
> Trump is crashing the T-note yield to refinance $9T (which is how much US debt is going to mature in 2025) at a lower rate Even if this were intended (unlikely), destroying $6T of notional stock market value so far to save $270b/yr of interest (if 10-year yields drop by 3%, which hasn't happened yet ) is a bad trade.
Stock is easy to goose back up via QE and/or lower prime rate. Once you lock in those interest rates on debt, though, there's nothing you can do about them. You're also ignoring trade barriers that other countries have, and the fact that we've been offshoring manufacturing capacity for over three decades. What Trump is doing today is what Bernie was advocating in the 00's.
Interest rates are lowered when inflation is low. Inflation is low when supply is high. Tariffs cause supply shortages. Inflation expectations are up. Interest rates will be up.
You're crazy if you think that the trade barriers are over _thirty percent globally_.
Net FDI = trade deficit is an accounting identity. Reshoring and the trade deficit aren't necessarily complementary.
Who cares what Bernie was advocating?