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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

#901

Post by wqaatwt »

Aurornis wrote: post #517
StormChaser_5 wrote: post #86

It'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

> It's still 10% for everyone but China. There's actually some confusion about that. They said they paused the global tariffs but didn't mention the Canada and Mexico tariffs. If the 10% global tariff is in addition to the Canada and Mexico tariffs, the net tariff rate on those countries could be quite high. Combined with 125% tariffs on China and we would have very burdensome tariffs on 3 of our largest trading part…

Didn’t the global “reciprocal” tariffs exempt Canada and Mexico?

Re: Trump temporarily drops tariffs to 10% for most countries

#902

Post by wqaatwt »

mk89 wrote: post #364
StormChaser_5 wrote: post #86

It'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.

> We also have VAT on imports.

Maybe you should not repeat these nonsensical talking points?

VAT applies to everything, both imports and domestically produced goods. This reasoning makes even less sense than Trump’s ChatGPT tables…

> but his goal is to introduce a fixed "tariff" like a soft VAT.

You really don’t understand at all what VAT is?

Re: Trump temporarily drops tariffs to 10% for most countries

#903

Post by kamaal »

milesvp wrote: post #614
magicloop wrote: post #397

"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…

> 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. That something else, in almost 100% of the situations, is dollars.

If you want the world to trade using your currency. You have to give them dollars. That is buy something from them. That is, imports.

All of this comes a section of US politics not being able to understand why the dollar standard even exists.

Re: Trump temporarily drops tariffs to 10% for most countries

#904

Post by freetanga »

somanyphotons wrote: post #155
freetanga wrote: post #104

The stock exchange and the tariffs are not the battleground. Asia started dropping US treasury bills. 30 year bills reached a max in decades Trump blinked. Edit: this was front and center in Financial Times, WSJ three hours ago. Now suddenly pushed back, exchange rally being front page news. People don’t understand how close to financial apocalypse we have been. Somebody in the WH scared the shit out of Trump.

Do you have a link or article title for reading about the dropping of tbills

And after a few hours this seems to be confirmed

https://www.cnn.com/politics/live-news/trump-tariffs-cnn-tow...

I have a moderate understanding of finances, but for me this was the Siamese cats from the aristocats playing around the nuclear football

Re: Trump temporarily drops tariffs to 10% for most countries

#905

Post by sdenton4 »

ajross wrote: post #868
milesvp wrote: post #614

Earlier 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…

This is all correct, but it's a first principles explanation that doesn't explain why US bonds, and in particular the 10-year note, spiked today . Yes, eventually excessive tariffs would have that result. They literally hadn't even taken effect yet. So this doesn't explain the bond motion today. Someone was dumping, we don't know who or why. But the answer to that question is a lot (a lot ) more important than people…

"someone"... Or lots of people looking at US stupidity and deciding that their long term bonds were suddenly looking like a bad investment.

Re: Trump temporarily drops tariffs to 10% for most countries

#906

Post by TomK32 »

magicloop wrote: post #397

"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. > Instead of being seen as a safe haven, U.S. debt itself started to look shaky. Maybe it was the deficit outlook, maybe the global response to tariffs — but whatever it was, yields started climbing. Fast.

So, it's not this unstable president, his insult-spewing vice-president and his buddy the hyperactive billionaire manipulating a social network for Russia and China that makes the rest world want to avoid the USA for the next few years?

Re: Trump temporarily drops tariffs to 10% for most countries

#907

Post by intended »

magicloop wrote: post #397

"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…

This again sees more logic in this than there exists.

America doesn’t have ANY issue refinancing that debt. US treasury is the risk free rate. It’s the basis of an infinite number of financial models as the baseline level of risk people will tolerate. Every single analyst from here to China works on that basis.

This idea that you can’t refinance debt is nonsense. American firms are wildly profitable, and America used to be the safest bet to set up a new firm, or do ground breaking research.

If you wanted to make more money, increase taxes, and you can refinance debt even faster than this. Shifting the yields is … how does that apply to new bonds which would be auctioned??? The face value and rate are set anyway.

Re: Trump temporarily drops tariffs to 10% for most countries

#908

Post by intended »

milesvp wrote: post #614
magicloop wrote: post #397

"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…

> 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 are exporting services. Vast amounts of highly profitable services.

Re: Trump temporarily drops tariffs to 10% for most countries

#910

Post by JumpCrisscross »

milesvp wrote: post #614
magicloop wrote: post #397

"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…

> 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…

> we are choking off the supply of dollars used to buy debt (rather abruptly), so that US debt is chasing fewer dollars and has to give a bigger yield as a result

Well, also, the holders of our debt now need liquidity. So they sell this famously-liquid asset we've been selling them for decades.

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