US Tariff War

[MillionMilesAway]

I don't really have a point, I'm just trying to get my head round a very complicated financial situation.

Taken to an extreme (simplified greatly)

Your US company makes a profit of 10m a year, and sells 50m of products to Canada.
Canada imposes tariffs, and Canadians move 20% of that imported product to a different provider.
Your US company has now lost 10m sales and is now longer profitable.

Lose 30% of sales to Canada, and you're going bust.

It's economic warfare, and Trump is working on the idea that the US has a bigger economy and can be a bigger bully.

 

[Saddleworth2]

Fair fucks to Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, won't be bullied by adickhead.

Hope Starmer has the balls to do the same when trump targets us

Some stats for context:

• In 2023, the UK imported £57.9 billion of goods from the United States (10.0% of all goods imports) and exported £60.4 billion of goods (15.3% of all goods exports).
• Machinery and transport equipment was the main commodity traded with the United States in 2023, with £19.9 billion of imports and £27.2 billion of exports.
• In 2023, the UK imported £57.4 billion of services from the United States (19.5% of all services imports) and exported £126.3 billion of services (27.0% of all services exports).
• Other business services was the main service type traded with the United States, with £29.7 billion imported and £56.9 billion exported.
• Exports of business and management consulting and public relations services was the main service export to the United States, with £22.9 billion exported in 2023 accounting for over half (54.8%) of all UK exports of this service type.
• In 2023, the United States was the UK's largest import and export partner for services and was the UK's largest export partner and second largest import partner for goods.

 

[Mr Kobayashi]

I was particularly amused that 95% of avocados in the US are imported from Mexico (according to reports). That suggests that there won't be any serious alternative producer than paying higher prices in the US.

You'd think not, particularly as he's rounding up migrant workers at the same time.

Although it isn't quite as simple as that, if tariffs are high enough they could change consumer habits to the extent that people on low and median incomes swap out avocado for other foodstuffs.

 

[MillionMilesAway]

You'd think not, particularly as he's rounding up migrant workers at the same time.

Although it isn't quite as simple as that, if tariffs are high enough they could change consumer habits to the extent that people on low and median incomes swap out avocado for other foodstuffs.

Yes, avocados are obviously a trivial market from a national importance basis. First they have to find the alternative, then the alternative needs to be in sufficient quantities. Avocados are inessential, many other things won't be so inessential.

Apparently (see link - if I understand it right) from 2023-24, the US spent $3.5bn on Mexican avocados. This in turn produced for the US economy:

• $7.5 billion in U.S. economic output
• $4.2 billion in U.S. GDP
• $2.5 billion in U.S. labor income from more than 42,000 U.S. jobs for American workers
• $1.1 billion in U.S. taxes

That's quite a lot of labour income that could be affected, and I assume it would be the less well paid people being at risk.

“Every dollar of Mexican Hass avocado imports in the fiscal year 2023/24 generated $2.13 in economic output in the U.S., with a more concentrated impact in California and Texas, the country’s largest avocado-consuming states.”

Report: Mexican avocado imports boost U.S. and Mexico's economies

DALLAS, Dec. 12, 2024 /PRNewswire/ — As the only region that can currently meet the ever-growing demand for avocados in the U.S., Mexico and its fresh imports are contributing to a positive economic impact in both countries. The Avocado Institute of Mexico has released its 2023-2024 Economic...

www.producebluebook.com

 

[JASR]

I was particularly amused that 95% of avocados in the US are imported from Mexico (according to reports). That suggests that there won't be any serious alternative producer than paying higher prices in the US.

Back when the election was won, I said the economic/inflation figures for the US in May (ie the March/April figures) are going to be interesting.

I didn’t quite figure that Trump would throw the vast majority of the US population over a cliff at such a pace, I thought it would be more gradual.

 

[KS55]

Yes, avocados are obviously a trivial market from a national importance basis. First they have to find the alternative, then the alternative needs to be in sufficient quantities. Avocados are inessential, many other things won't be so inessential.

Apparently (see link - if I understand it right) from 2023-24, the US spent $3.5bn on Mexican avocados. This in turn produced for the US economy:

• $7.5 billion in U.S. economic output
• $4.2 billion in U.S. GDP
• $2.5 billion in U.S. labor income from more than 42,000 U.S. jobs for American workers
• $1.1 billion in U.S. taxes

That's quite a lot of labour income that could be affected, and I assume it would be the less well paid people being at risk.

“Every dollar of Mexican Hass avocado imports in the fiscal year 2023/24 generated $2.13 in economic output in the U.S., with a more concentrated impact in California and Texas, the country’s largest avocado-consuming states.”

Report: Mexican avocado imports boost U.S. and Mexico's economies

DALLAS, Dec. 12, 2024 /PRNewswire/ — As the only region that can currently meet the ever-growing demand for avocados in the U.S., Mexico and its fresh imports are contributing to a positive economic impact in both countries. The Avocado Institute of Mexico has released its 2023-2024 Economic...

www.producebluebook.com

We need Nigella Lawson to explain the economic importance of avocados https://images.app.goo.gl/96XMnnQABJyBAe2c8

 

[Rory Bluelow]

What I don't understand is, if the country slapping on the tariff pays it, why would countries put them on to basically tax their own people? Don't get it.

Protectionism. It encourages inward investment (in theory) and disincentivises purchase of imported goods. He’s targeting Countries with a big trade imbalance but a very blunt instrument and a dangerous game imo. Especially going for across the board tariffs rather than specific commodities/goods.

 

[MillionMilesAway]

We need Ms Lawson to explain the economic importance of avocados.

who is Ms Lawson?

 

[bluethrunthru]

What I don't understand is, if the country slapping on the tariff pays it, why would countries put them on to basically tax their own people? Don't get it.

I assume he thinks that the consumer will turn to the cheaper American made alternatives .......... whether that alternative exists seems a mere bagatelle, a fly in the ointment.

Basically he and the people around him just don't understand how the world works.

 

[KS55]

who is Ms Lawson?

Nigella. See edited post

 

[The perfect fumble]

Fair fucks to Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, won't be bullied by adickhead.

Hope Starmer has the balls to do the same when trump targets us

There's every reason to think Trump won't.

The trade balance between the UK and US is in their favour.

We are not a member of the EU.

Trump needed to declare a national emergency with Mexico and Canada to do what he did, god knows what he will dream up to justify what he's planning for the EU.

But it's beyond me to imagine what gobshite threat he could make up for the UK.

 

[Scottyboi]

A united Europe is more important than ever and try to build better ties with African countries. We need to work more with the EU regardless of Brexit, not rejoin but help each other thrive.

 

[bluemanchester]

We need Nigella Lawson to explain the economic importance of avocados https://images.app.goo.gl/96XMnnQABJyBAe2c8

Didn't take long for nice big fruits to enter the fray.
Personally I love preparing them;-)

 

[Really_here]

I assume he thinks that the consumer will turn to the cheaper American made alternatives .......... whether that alternative exists seems a mere bagatelle, a fly in the ointment.

Basically he and the people around him just don't understand how the world works.

I think he and the people around him are intent on self-interest and couldn't give a toss about how the world works for other people.

 

[urban genie]

There's every reason to think Trump won't.

The trade balance between the UK and US is in their favour.

We are not a member of the EU.

Trump needed to declare a national emergency with Mexico and Canada to do what he did, god knows what he will dream up to justify what he's planning for the EU.

But it's beyond me to imagine what gobshite threat he could make up for the UK.

Him and musk have been hinting at crasging pur economy to topple the government and the UK being a proxy state led by aimilar types to them.

The cunts a nutter

 

[Brewster's millions]

I think he and the people around him are intent on self-interest and couldn't give a toss about how the world works for other people.

They’re doing it in response to what they perceive to be their own self-interest, but I very much doubt that the fallout will actually be positive for them.

It will be genuinely interesting to see what triggers a reversal on this from Trump - I would imagine that any minor concession or action from Canada on border security issues will be heralded as a major win and a cause for lifting the tariffs.

 

[The Light Was Yellow Sir]

I assume he thinks that the consumer will turn to the cheaper American made alternatives .......... whether that alternative exists seems a mere bagatelle, a fly in the ointment.

Basically he and the people around him just don't understand how the world works.

Of course, the only way to get cheaper American stuff is to either use tariffs or to hugely cut the wages and working conditions of the workers.
So, as for who voted for what, we know tariffs won’t work, so wealth transfer from poor to rich, on a scale much bigger than the wealth transfer under covid (which was the biggest ‘modern day’ one ever) is about to start.

 

[The perfect fumble]

Him and musk have been hinting at crasging pur economy to topple the government and the UK being a proxy state led by aimilar types to them.

The cunts a nutter

He is, but punitive tariffs imposed on us isn't going to deliver No 10 to Tommy Robinson, topple Starmer, boost Farage or make Brexit better, in fact it works against all those things

 

[mancity2012_eamo]

I don't really have a point, I'm just trying to get my head round a very complicated financial situation.

Don’t feel bad. Trump hasn’t got his head around it yet.

 

[BlueMoonAcrossThePond]

Not only are the tariffs stupid - they're politically unsustainable. I think Trump will drop them within a month or two and claim some sort of face-saving victory as the reason he's ended them.