US Tariff War

Japan markets are pleased. Japan auto makers are pleased. US auto makers are not pleased.

Tariff deal of 15% including cars. Japan has also promised to help the US sell US cars in Japan (good luck). Japan who are the largest foreign investor in the US have promised to invest in the US.

It’s going to be interesting to watch the rest of the world trade largely tariff free with the US consumer eating a 15% consumer tax.

Reckon everyone including the EU will end up around this tariff point and unlikely to impose retaliatory tariffs. It gives a degree of stability (famous last words) and doesn’t impose extra cost of living on their consumers.
 
Despite more than $100 billion in tariff revenue so far this year, it is American importers, not foreign exporters, who are bearing the brunt of President Trump’s trade measures, according to Deutsche Bank.

In a research note, Deutsche Bank analysts examined U.S. import prices for manufactured goods during the second quarter, when the tariffs were implemented.

“If foreigners were paying for the tariffs, we would expect to see a sharp reduction in the price of imported goods as they absorbed it into their own margins,” the bank wrote.

“The top-down macro evidence seems clear: Americans are mostly paying for the tariffs,” George Saravelos, global head of FX research at Deutsche Bank AG, said in a note Tuesday. “There is likely more pressure on U.S. consumer prices in the pipeline.”

 
Username Required said:
Despite more than $100 billion in tariff revenue so far this year, it is American importers, not foreign exporters, who are bearing the brunt of President Trump’s trade measures, according to Deutsche Bank.

In a research note, Deutsche Bank analysts examined U.S. import prices for manufactured goods during the second quarter, when the tariffs were implemented.

“If foreigners were paying for the tariffs, we would expect to see a sharp reduction in the price of imported goods as they absorbed it into their own margins,” the bank wrote.

“The top-down macro evidence seems clear: Americans are mostly paying for the tariffs,” George Saravelos, global head of FX research at Deutsche Bank AG, said in a note Tuesday. “There is likely more pressure on U.S. consumer prices in the pipeline.”

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US consumers and importers paying the price was always the more likely outcome, and even if they didn’t US firms would love to jack up prices under the guise of tariffs if they can get away with it.

The US consumers were always in the hook for this one way or the other.
 
I do find some of the polarised reporting on these ‘trade deals’ grating. It is either ‘Japan/EU humiliated’ or ‘Trump outsmarted’ depending on who you hate most and then hysterical nonsense.

Most trade deals take years and usually involve both sides winning enough to make any downsides acceptable. What we are seeing now are ‘handshake deals’ with few details or details disputed ,and a non-binding tariff rate which Japan or EU can ‘accept’ without having to trigger retaliatory tariffs, which they are anxious/relieved to avoid.

We have gone from ‘win/win’ to ‘lose/lose’. Japan potentially loses US consumers via the US sales tax and the US consumer loses because they have to pay the US sales tax. Some for EU or UK or whoever. Everyone potentially loses, but if domestic prices rise in the US to mirror or just slightly undercut foreign goods then the US consumer is the main loser.

Average US tariff rate/consumer sales tax is now around 17% on imported goods, which is a few points shy of the tariff rate during the 1930’s and the Great Depression. Yet, a lot of media portray this as Trump ‘winning’. How is taxing the American consumers and pissing off other countries eg Canada ‘winning’? Winning what exactly?

I get that the EU and Japan ‘lose’, but I am scratching my head how the US ‘wins’, unless you get an kick out of Trump acting the dick with world leaders which appears to give some folk pleasure, but aside from that everyone gets fucked, with the US consumer first in the queue with lube in hand.

The whole thing is bizarre.
 
BobKowalski said:
I do find some of the polarised reporting on these ‘trade deals’ grating. It is either ‘Japan/EU humiliated’ or ‘Trump outsmarted’ depending on who you hate most and then hysterical nonsense.

Most trade deals take years and usually involve both sides winning enough to make any downsides acceptable. What we are seeing now are ‘handshake deals’ with few details or details disputed ,and a non-binding tariff rate which Japan or EU can ‘accept’ without having to trigger retaliatory tariffs, which they are anxious/relieved to avoid.

We have gone from ‘win/win’ to ‘lose/lose’. Japan potentially loses US consumers via the US sales tax and the US consumer loses because they have to pay the US sales tax. Some for EU or UK or whoever. Everyone potentially loses, but if domestic prices rise in the US to mirror or just slightly undercut foreign goods then the US consumer is the main loser.

Average US tariff rate/consumer sales tax is now around 17% on imported goods, which is a few points shy of the tariff rate during the 1930’s and the Great Depression. Yet, a lot of media portray this as Trump ‘winning’. How is taxing the American consumers and pissing off other countries eg Canada ‘winning’? Winning what exactly?

I get that the EU and Japan ‘lose’, but I am scratching my head how the US ‘wins’, unless you get an kick out of Trump acting the dick with world leaders which appears to give some folk pleasure, but aside from that everyone gets fucked, with the US consumer first in the queue with lube in hand.

The whole thing is bizarre.
Click to expand...

Only this. The press are buying into the narrative that tariffs are good for the US.
 
halfcenturyup said:
Only this. The press are buying into the narrative that tariffs are good for the US.
Click to expand...

The press, like Trump, want the TV show where trade deals are exciting and have drama. The fact that there are no trade deals and the US consumer ponies up the cost for the show are irrelevant details. It is all about the show and ‘winning’ ie someone being rude to someone else.

The media are illiterate on trade and how the world actually works. What they want is dramatic content and drama is based on conflict. So, they gravitate towards and promote conflict.
 
Donald Trump has announced the US will impose an additional 100% tariff on China imports, accusing it of taking an "extraordinarily aggressive position" on trade.
 
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