Genius move. Set the trap (massive global tariffs that seem irrational) and wait for target (china) to retaliate. Once the bait is taken, alienate china and take the pressure off everyone else. New reality still departure from previous order but feels better and gives everyone 90 days to figure it out. Meanwhile china is trapped and isolated.
Trump temporarily drops tariffs to 10% for most countries
681–690 of 1001 posts
Re: Trump temporarily drops tariffs to 10% for most countries
#682"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…
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Re: Trump temporarily drops tariffs to 10% for most countries
#683Earlier quoted context omitted.
I still wonder why this was not done instantly by EU. US has an imbalance on goods that was used to calculate the tariff amount, but it has the opposite imbalance on service from what I've read
It would be a just a hefty fee for most EU companies and not much more. From what I've seen Azure is pretty popular in most bigger companies and smaller shops and websites use often AWS or Google cloud. Microsoft Windows and Office is also everywhere - it would be a tax on European business with little effects on the USA because moving away from big clouds won't happen because there is no realistic alternative. Last…
Yeah sure but then you do promote EU alternatives out of necessity.
On the long term this can really make EU more sovereign, less dependent and it's not a crazy thing.
I have never understood the argument of "yeah tariff would hurt us because we are dependent on foreign tech". Yeah that's precisely a problem at a country level. Promoting local alternative is best than winner takes all.
There's also a price in not looking tough when you're getting bullied sometimes.
Re: Trump temporarily drops tariffs to 10% for most countries
#684"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…
I don’t think this checks out. They didn’t walk any tariffs back until after the auction saw strong demand. It went opposite the way one would think setting the fall in bond prices the previous night.
Re: Trump temporarily drops tariffs to 10% for most countries
#685Earlier quoted context omitted.
I still wonder why this was not done instantly by EU. US has an imbalance on goods that was used to calculate the tariff amount, but it has the opposite imbalance on service from what I've read
Easy: because next to 100% of EU government computers run Windows and MS Office.
It's Ubuntu time !
Re: Trump temporarily drops tariffs to 10% for most countries
#686Earlier quoted context omitted.
I still wonder why this was not done instantly by EU. US has an imbalance on goods that was used to calculate the tariff amount, but it has the opposite imbalance on service from what I've read
The EU effectively backdoors tariffs against US software vendors via fines and the occasional if ineffective subsidy for local competitors in the local language.
=> subsidy for local competitors in the local language
I'd like to know if you know what's you're talking about. In france the local subsidies are really low and the inversely the big rebates like "Tax Credit For Research & Dev" are for everybody, US companies like EU ones.
Re: Trump temporarily drops tariffs to 10% for most countries
#687> “This was his strategy all along,” Bessent said at the White House, where officials, including him, had denied for days that the tariffs would be suspended. And why should we believe them? If it was the strategy, you could have made the tariff announcement into an acrostic or something.
Not 24 hours ago he said the tariffs were non negotiable, now he says this was always the plan. There's no reason to believe a word he says.
Re: Trump temporarily drops tariffs to 10% for most countries
#688Why does the market like this? Tariffs are in place and unpredictability is now the norm. Tomorrow something new crazy will come out and then the next day and the next day. Even if US markets like this right now, the long term damage has been done. Betting on the medium-long term seems questionable at best.
Dead cat bounce.
Re: Trump temporarily drops tariffs to 10% for most countries
#689Earlier quoted context omitted.
> Instead of being seen as a safe haven, U.S. debt itself started to look shaky There's also a more basic answer to why US debt got more expensive. There is no such thing as a "trade deficit". You cannot import something without exporting something else. That something else, in almost 100% of the situations, is dollars. What do you do with dollars, if there's nothing you want to buy? You buy debt. So, every trade def…
> You cannot import something without exporting something else. This is incorrect when your national currency happens to be the global reserve currency. All it requires is for the other country to be willing to accept dollars in payment. [ EDIT: even that's wrong. All it requires is someone being willing to accept dollars, either in payment or as part of a currency exchange. ]
Exporting dollars is exporting something. Combine a constantly depreciating dollar with constant rates of trade and you could end up in a steady state.
However, we define trade deficits to exclude financial transactions for various reasons.
Re: Trump temporarily drops tariffs to 10% for most countries
#690"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…
The T-Bill auction today went off without issue and that was before this announcement. https://www.barrons.com/articles/treasury-bond-auction-today...
so the uncertainty in the market drove investors to T-Bills, driving up their price and lowering their yield, effectively making servicing the national debt marginally cheaper. By 0.03%, which I imagine stacks up with trillions of dollars compounding.