President Trump

BobKowalski said:
Japan, EU et al aren’t rushing to resist the US. A 15% rate is below the threshold of retaliatory tariffs and no one is keen on increasing their own domestic pricing. Why would they? It’s dumb.

There are no trade deals in place. Nothing to adhere to, No obligations. It’s basically in return for a 15% tariff will you take part in my TV show. The price for the show is an increase in costs for US domestic consumers. Meanwhile, everyone else starts the process of boosting trade around the US and absent the US.

China is the outlier. Their exports rose 5.8% in June on a year on year basis while exports to the US fell by 16% - a lot of that is due to US companies having rushed in and stockpiled while they can. I have no idea how China will ultimately play this, nor Canada and Mexico and they are the three biggest US trade partners.

The US has always had a strong protectionist streak so who knows how it plays out after Trump, but the factors will be domestic. Food prices, gas prices etc they will be the determining factors and if the US consumer is happy to pay more at the till then a tariff rate will stay. Likely, the US consumer will pay more no matter what happens. Once a pricing is baked in and the US consumer gets accustomed to the higher prices then dropping the tariffs down to the previous average of around 5% will not see a reduction in consumer pricing. Any saving will go onto a company’s bottom line.

The legacy of all this will be that you can’t trust the Yanks, which I guess for China is good news.
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I think this is it.
 
west didsblue said:
And for their US manufactured goods that include components from the EU.
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And components from Mexico. US domestic cars currently have a 25% tax. Japanese cars a 15% tax and no limits on the numbers they can ship in.

‘Matt Blunt, who heads the American Automotive Policy Council that represents the Detroit Three automakers, said they were still reviewing the agreement but "any deal that charges a lower tariff for Japanese imports with virtually no U.S. content than the tariff imposed on North American built vehicles with high U.S. content is a bad deal for U.S. industry and U.S. auto workers." @Reuters
 
FogBlueInSanFran said:
Guardrails don’t work if they’re simply ripped off the side of the road by the public because they want to combat when they drive drunk. And those who are supposed to police such actions don’t.

“See? This was inevitable” is a pretty rearview mirror take when during Watergate — the greatest constitutional crisis prior to this one — the guardrails worked correctly. But they don’t if effectively ALL of the representatives of the people — every last one in the GOP IMO — don’t act in the greater interests of the nation. And by the way — Joe Biden didn’t either when he decided to run for re-election.

Blaming the system is effectively absolution for the bad actors.
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The system of guardrails is meant to stop bad actors from succeeding.
 
BobKowalski said:
Japan, EU et al aren’t rushing to resist the US. A 15% rate is below the threshold of retaliatory tariffs and no one is keen on increasing their own domestic pricing. Why would they? It’s dumb.

There are no trade deals in place. Nothing to adhere to, No obligations. It’s basically in return for a 15% tariff will you take part in my TV show. The price for the show is an increase in costs for US domestic consumers. Meanwhile, everyone else starts the process of boosting trade around the US and absent the US.

China is the outlier. Their exports rose 5.8% in June on a year on year basis while exports to the US fell by 16% - a lot of that is due to US companies having rushed in and stockpiled while they can. I have no idea how China will ultimately play this, nor Canada and Mexico and they are the three biggest US trade partners.

The US has always had a strong protectionist streak so who knows how it plays out after Trump, but the factors will be domestic. Food prices, gas prices etc they will be the determining factors and if the US consumer is happy to pay more at the till then a tariff rate will stay. Likely, the US consumer will pay more no matter what happens. Once a pricing is baked in and the US consumer gets accustomed to the higher prices then dropping the tariffs down to the previous average of around 5% will not see a reduction in consumer pricing. Any saving will go onto a company’s bottom line.

The legacy of all this will be that you can’t trust the Yanks, which I guess for China is good news.
Click to expand...
My thought is that you might have made the most rational choices at every tactical stage, yet you could still lose this confrontation in the end, because you cannot equally counter the will imposed on you by the other side. This will would lead to an imbalance in the overall trend. The rational decisions you made tactically cannot salvage the broader situation. Trump’s tariff war was reckless and unreasonable, and it has already been met with resistance from China. If Europe ever had a chance to say no to the U.S., this would have been the best opportunity. Against this backdrop, Europe chose a certain degree of compromise. In my opinion, this is indeed a victory for the U.S, at least for now.
 
west didsblue said:
No one wins a trade war. It’s about limiting losses. The biggest loser will be the US as ultimately their consumers will pay for it all, and the rest of the world will gradually become less dependent on the US market.
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Seems like a very surface level analysis to me that. If the US consumer pays the tariff then why have all these nations with large surpluses with America been freaking out and offering all sorts of concessions to reduce the tariff?

Maybe it's a bit more complicated than that? Maybe America is the prime consumer market on the planet and exporters are desperate to maintain market share, because passing the tariff on to the consumer makes them less competitive?

Seems to me the sensible thing to do would be to swallow some of the tariff to maintain market share and switch production to America to avoid the tariff. I suspect we're going to see a major manufacturing boom in America.

Alongside the tariff regime the OBBB reduces taxes and regulations, provides tax right offs for business infrastructure investment, which further incentivises businesses to relocate.

We saw 3% growth in America last quarter and low inflation, and this was before the business friendly legislation was passed, so there is the potential for a big economic boom when all this kicks in.

The naysayers who were chirping about the stock market a few months ago have gone remarkably quiet recently, and I suspect Trump is going to do it to you all again.
 
Hgblue2 said:
Seems like a very surface level analysis to me that. If the US consumer pays the tariff then why have all these nations with large surpluses with America been freaking out and offering all sorts of concessions to reduce the tariff?
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Because due to the fact that the US consumer pays, fewer decide to make the purchase and thus fewer units are sold.
 
Hgblue2 said:
I suspect we're going to see a major manufacturing boom in America.
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I'd be surprised if there was a significant take up on this, sure there will be some, but set-up costs and increased labour costs may well in many instances remove any cost benefit to doing that. What may happen is smaller subsidiary plants in america purely for the american market, which would reduce the impact of the above, not add export costs to asia/europe, benefit from no tariffs and limit the potential hit should the world revert to trade norms on the death of the king shitgibbon making those plants uneconomic once more.

But I'm an engineer not an economist so what the fuck do I know
 
Alvin-blue-qhd said:
My thought is that you might have made the most rational choices at every tactical stage, yet you could still lose this confrontation in the end, because you cannot equally counter the will imposed on you by the other side. This will would lead to an imbalance in the overall trend. The rational decisions you made tactically cannot salvage the broader situation. Trump’s tariff war was reckless and unreasonable, and it has already been met with resistance from China. If Europe ever had a chance to say no to the U.S., this would have been the best opportunity. Against this backdrop, Europe chose a certain degree of compromise. In my opinion, this is indeed a victory for the U.S, at least for now.
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The resistance is geared to the pressure and exposure each country faces. The EU can accept 15%, as can Japan. Beyond that it becomes a trade embargo and then there is retaliation.

The Japanese trade minister was talking about the commitment to invest $550 billion in the US. Leaving aside the fact Japan invested more than that in 2024, the trade minister said 95% will be loans and loan guarantees ie normal commercial business deals and anyway it can be slow walked if necessary. There is nothing in writing, no way to monitor it or frankly to enforce it. What Trump forgets is that other countries have agency. You can’t make a country do something if the pain exceeds the benefit. The ‘pain’ of a 15% tariff as opposed to the current 5% average is bearable - but there is pain for the US as well which is something else Trump ‘forgets’ or doesn’t give a shit about.

China, Canada and Mexico are the three main countries as they have the most trade and exposure with the US. So, in your opinion, how will China respond?
 
SWP's back said:
Because due to the fact that the US consumer pays, fewer decide to make the purchase and thus fewer units are sold.
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It's not compulsory for the exporter to pass the tariff on and there is a strong incentive not to as your post above outlines, which is why I say it's much more complicated than some are suggesting.

I've not researched how many cars for example are sold in America but I know it's massive and it's more slanted towards the really profitable luxury end.

This market is crucial to the viability of a lot of businesses, not just cars. So a loss of market share in America is a serious blow to the survival of these businesses in a way that doesn't apply to any other export market.
 
Hgblue2 said:
It's not compulsory for the exporter to pass the tariff on and there is a strong incentive not to as your post above outlines, which is why I say it's much more complicated than some are suggesting.

I've not researched how many cars for example are sold in America but I know it's massive and it's more slanted towards the really profitable luxury end.

This market is crucial to the viability of a lot of businesses, not just cars. So a loss of market share in America is a serious blow to the survival of these businesses in a way that doesn't apply to any other export market.
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You’re right that it’s not mandatory for an exporter to lose his profit margin to maintain market share but it’s not very good business to become unprofitable.

In reality, every link in the supply chain will swallow some of it but the consumer isn’t going to be left out.
 
Hgblue2 said:
It's not compulsory for the exporter to pass the tariff on and there is a strong incentive not to as your post above outlines, which is why I say it's much more complicated than some are suggesting.

I've not researched how many cars for example are sold in America but I know it's massive and it's more slanted towards the really profitable luxury end.

This market is crucial to the viability of a lot of businesses, not just cars. So a loss of market share in America is a serious blow to the survival of these businesses in a way that doesn't apply to any other export market.
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An example : In 2023, China was BMW's largest single-country market, with 791,985 BMW and MINI vehicles sold. The United States was the second largest market with 361,892 units sold. Europe as a whole, including Germany, accounted for 877,369 BMW and MINI sales.
 
Alvin-blue-qhd said:
My thought is that you might have made the most rational choices at every tactical stage, yet you could still lose this confrontation in the end, because you cannot equally counter the will imposed on you by the other side. This will would lead to an imbalance in the overall trend. The rational decisions you made tactically cannot salvage the broader situation. Trump’s tariff war was reckless and unreasonable, and it has already been met with resistance from China. If Europe ever had a chance to say no to the U.S., this would have been the best opportunity. Against this backdrop, Europe chose a certain degree of compromise. In my opinion, this is indeed a victory for the U.S, at least for now.
Click to expand...
What you're witnessing at the moment is the warm up act, in boxing terms, the undercard. Trump knows he can slap these trading partners around, because their countries are heavily reliant on America for it's export markets and defence.

The real fight is the one with China. Trump is pissed that previous Presidents have put him in a position of relative weakness by exporting American manufacturing and leaving him in a position where he is dependent on China. I suspect he will negotiate some temporary deal until he feels he no longer needs Chinese imports. Then it's game on. I also suspect China knows this, hence the formation of the BRICS.

I should clarify that when I say China I'm referring to the Chinese government and not the Chinese people. Most Westeners have massive respect for Chinese culture and the people, but there is an inevitable battle coming, hopefully not violent, between the capitalist America and communist China.
 
Hgblue2 said:
It's not compulsory for the exporter to pass the tariff on and there is a strong incentive not to as your post above outlines, which is why I say it's much more complicated than some are suggesting.

I've not researched how many cars for example are sold in America but I know it's massive and it's more slanted towards the really profitable luxury end.

This market is crucial to the viability of a lot of businesses, not just cars. So a loss of market share in America is a serious blow to the survival of these businesses in a way that doesn't apply to any other export market.
Click to expand...

At 15% the tariffs will be swallowed by US companies and consumers. There is plenty of data on this already.


"Most suppliers are passing through tariffs at full value to us," a purchasing manager of a chemical factory said in the report. "The position being communicated is that the supplier considers it a tax, and taxes always get passed through to the customer." @NPR

Manufacturing, new orders, production all of these are contracting.
 
Hgblue2 said:
What you're witnessing at the moment is the warm up act, in boxing terms, the undercard. Trump knows he can slap these trading partners around, because their countries are heavily reliant on America for it's export markets and defence.

The real fight is the one with China. Trump is pissed that previous Presidents have put him in a position of relative weakness by exporting American manufacturing and leaving him in a position where he is dependent on China. I suspect he will negotiate some temporary deal until he feels he no longer needs Chinese imports. Then it's game on. I also suspect China knows this, hence the formation of the BRICS.

I should clarify that when I say China I'm referring to the Chinese government and not the Chinese people. Most Westeners have massive respect for Chinese culture and the people, but there is an inevitable battle coming, hopefully not violent, between the capitalist America and communist China.
Click to expand...

BRICS was formed in 2009.
 
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