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Trump temporarily drops tariffs to 10% for most countries
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Re: Trump temporarily drops tariffs to 10% for most countries
#522Earlier quoted context omitted.
It also makes it easy for Chinese manufactures to circumvent tariffs. Completely pointless theater for the MAGA crowd.
Chinese manufacturers don't pay US tariffs, the entities importing the goods do.
They will still play games to access a large-but-protectionist market at a discount.
Re: Trump temporarily drops tariffs to 10% for most countries
#523Is it just the historical legacy of international trade that tariffs apply only to physical goods, but not to something like software-as-a-service subscriptions, digital media, or intellectual property? As the latter categories are more representative of US exports, it would surely be an interesting escalation if other countries were to start including them in their “retaliatory” tariffs.
Much harder to enforce against services.
Physical goods you can hold until tariffs are paid.
Services are paid for by invoices between two corporate entities whose legal domicile may have nothing to do with the real country of origin of the services.
Lots of European SaaS providers invoice US customers from their US subsidiary - impossible to distinguish the transaction in order to put a tariff on it.
Re: Trump temporarily drops tariffs to 10% for most countries
#524"It’s the T-bills wot dun it." That’s my read on why the U.S. just paused the global tariff hike to 10%. From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury. Why? Because Uncle Sam has to refinance a mountain of debt this year, and the cost of that depends heavily on Treasury yields — especially the 10-year. That’s the rate that sets the tone for every…
Donald is weak. He was always going to fold. Once China and the EU called his bluff and retaliated, he was done. Lasted less than 24 hours.
Re: Trump temporarily drops tariffs to 10% for most countries
#525So we're all in for another ride like this in 3 months? How are businesses supposed to plan anything in this environment? As nice as this surge is, I'm more focused on upping my cash reserves and bracing myself for a recession.
I'd say you should brace yourself for rides like this for the next 45 months.
What makes you think OP will die in 45 months?
Rides like this have happened regularly for longer than I can remember. The details always change, but there is nothing new.
Re: Trump temporarily drops tariffs to 10% for most countries
#526Earlier quoted context omitted.
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Permanent damage has been done to our relationships with countries that have always been our allies. Permanent damage has to our economic markets, since everyone now knows that everything can change on the whim of a single man. Permanent damage has been done to any reputation we've had as a supporter of democracy worldwide now that we've abandoned our support of Ukraine. Permanent damage has been done to our own fait…
> Permanent damage has been done to our own faith in our country. Any pride I had in our values and democracy has slipped away, now that I know that they were illusions.
I understand this feeling but this quote has been helpful to me.
“Patriotism is supporting your country all the time, and your government when it deserves it" - Mark Twain
This is a dark time for America. But we shouldn’t turn our backs. The next few years will be painful. As patriots we need to work toward making it better. Take care of your neighbors. Work toward seeing the change you want in the midterms. Demand accountability from your representatives.
Re: Trump temporarily drops tariffs to 10% for most countries
#527"It’s the T-bills wot dun it." That’s my read on why the U.S. just paused the global tariff hike to 10%. From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury. Why? Because Uncle Sam has to refinance a mountain of debt this year, and the cost of that depends heavily on Treasury yields — especially the 10-year. That’s the rate that sets the tone for every…
> But then something flipped.
The bond market is always the adult in the room. The UK PM lasted like 44 days when the bond market pushed her out [1]. In this case, the flip was that all the chaos led to people leaving behind the USD completely. Trumps view of the US/World is ~30+ years out of date. There are other stable places to put money now where it used to only be USD.
[1] https://www.cnbc.com/2022/10/20/uk-prime-minister-liz-truss-...
Re: Trump temporarily drops tariffs to 10% for most countries
#528It's not like the tariffs are gone. It's still 10% for everyone but China. That only seems small in comparison to what was being proposed before. I wonder will EU and others wait out 90 days while negotiating or match the 10% in kind
If USA keeps 10% tariffs for everyone equally, why should we interfere? Serious question. I believe that Trump is shaking things off, but his goal is to introduce a fixed "tariff" like a soft VAT. He is just testing (and profiting with $$$$$) what happens when you do things like 30% there, 24% there, etc. But his long term goal is a fixed tax. In that context, who are we to judge them? We also have VAT on imports.
There a lot to be said for ignoring other countries tariffs and just having free trade. Hong Kong and Singapore basically did that for decades and grew fast and became wealthy. Tariffs mostly hurt the countries introducing them.
There are some exceptions. Sudden changes can be painful if you built a factory to service some market and they block the sales all of a sudden. But a 10% across the board tariff may not make it worth retaliating.
Re: Trump temporarily drops tariffs to 10% for most countries
#529"It’s the T-bills wot dun it." That’s my read on why the U.S. just paused the global tariff hike to 10%. From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury. Why? Because Uncle Sam has to refinance a mountain of debt this year, and the cost of that depends heavily on Treasury yields — especially the 10-year. That’s the rate that sets the tone for every…
Genuinely wondering why so many people are still giving the Trump administration this much benefit of the doubt that their moves are strategically sound? We're really still doing the whole "3D chess" thing with this guy after he has shown over and over again that he mostly just acts on impulse and the primary qualification for his advisors is loyalty over any type of intelligence or expertise?
A lot of this stuff is on a YouTube education level, not even a degree. I would be shocked if the US does not have a bunch of economic advisors who tell them what problems there are and what should be done. They've probably mapped out all the next steps. Most US presidents are Harvard-level smart, but the White House has been around long enough to find a way to deliver reports to the simpler ones.
There's a lot of obvious big problems - confidence in the USD, debt rising faster than GDP can catch up, military overextension, China's rise outpacing US, inequality, inaccessible education and health care, opioid crisis, etc.
Trump has a good eye for identifying this - that's why he won the election despite all his weaknesses. It's clear he knows some of this but doesn't understand it - his comments on a BRICS currency, for example. Yes, a "BRICS currency" would threaten Pax Americana but it's on literally nobody's mind.
I feel like, if anything, he's an overplanner. A smarter leader would think, these moves will have unplanned side effects. Trump makes a lot of roundabout moves like DOGE. These moves have a target, but he hasn't thought about the side effects. And when a crisis like COVID hits, it disrupts the complex plans, which is why he reacts so poorly to them.
Re: Trump temporarily drops tariffs to 10% for most countries
#530Is it just the historical legacy of international trade that tariffs apply only to physical goods, but not to something like software-as-a-service subscriptions, digital media, or intellectual property? As the latter categories are more representative of US exports, it would surely be an interesting escalation if other countries were to start including them in their “retaliatory” tariffs.
I'm curious what sort of "as a service" things you would have applied this to in the past? Seems like a simple answer of "yes" as to whether how we collected taxes in the past were largely a legacy of how trade happened?