I'm bouncing between this and thinking that "this time it's different". You can reverse tariffs policy, but a lost trust is very hard to repair.
Indeed. That's especially true on the NATO side. This is a historical event on the scale of the breakup of the USSR.
Exaggeration isn't helpful. Whatever "this" is, you can't possibly make an assessment of that kind until years after the fact.
In March 2020, people were convincing themselves that the global economy was flying straight into the ground, but people who didn't lose their minds made a lot of money, quickly.
IMO, there was a better case for that panic, given the context (they were partly right! the lockdown stuff was incredibly costly!), than there is that this particular spasm is meaningful. Only time will tell.
I don't think you fully grasp the gravity of Trump's actions.
For the first time in its history, NATO is excluding the US from arms purchase programs. This takes place at a time where the EU is scrambling to prepare for a war with Russia, which is also caused by Trump's action of abandoning it's allies,
The Trump administration is also heavily invested in annexation rhetoric targeting multiple NATO members.
Then there's the whole tarrif absurdity.
These sequence of moronic steps individually represent world-changing events. They all took place in a couple of months into the Trump administration's takeover.
This goes well beyond the suspicion that Trump is a Russian stooge. This changes the way the world was structured after WW2. The fall of the soviet union might even have a smaller impact in world history.
I "grasp the gravity", to the extent that anyone is actually able to do so at this time. I am unwilling to engage in hyperbole in order to create the illusion of a nearby black hole.
This is a non-partisan reaction. I am opposed to tariffs; I am also opposed to panic and exaggeration.
> This goes well beyond the suspicion that Trump is a Russian stooge.
Your choice of neutral, unbiased language is compelling.
People who didn't panic during the covid crash made money not because they understood the situation but rather because the money supply went into the stratosphere.
The problem in the US is that the tariff situations is bonkers insane, was clearly not thought out at all, and the person controlling the strings is talking about ways to run for a 3rd term instead of considering resignation.
This is a political crisis. The best we can hope for is that the Senate pushes forward with attempts to reign in the president’s tariff powers and the House actually goes along, which is unlikely right now.
I think we’re going to start seeing Republicans test the waters with breaking rank with Trump soon though.
It's all so divisive, but it frustrates me to no end that likely the biggest end that people trying to defend this, without any admission this is a crisis of confidence waiting to happen if it's not already there.
The amount of political capital immolated for the sake of this course of action is flatly embarrassing. It doesn't really matter what they want or how long they think it's going to take to get it, the damage is already done.
This is already happening. The snag is, until the break adds up to a 2/3 majority in both House and Senate, a presidential veto of a bill reversing the tariffs cannot be overridden. And to get to 2/3, a lot more pain is going to have to be felt in Trumpland.
Been hearing that weekly for 8 years. If everything before this didn't trigger significant action, I doubt this will.
When people this committed to crazy are shown [more] evidence, they just double down.
Sharks will always be in the water around Trump waiting for him to slip. The question is, will Independents(maybe even some of the base) shift hard away when they start feeling the pain of the tariffs.
This mostly a market overreaction or correction from being overvalued if we look at the past. This Chinese trade war has been going on since Trumps first term (at least). The rates on the top import/exports have been around or over 25% for a while. It's also interesting how much China is hurting itself with pork. The Chinese own Smithfield and are a huge importer of pork from the US, yet they slapped an 80% tarriff on it?
Hell, it’s mostly reversible if the administration would own their mistake. But they won’t.
That’s the problem: This is not a natural disaster or even a reaction to a market-created crash. It was orchestrated by the people who were supposed to be doing the opposite.
I don’t believe claims that the United States is doomed or other hyperbole. I do believe that this is firmly different than anything we’ve seen in our lifetimes though.
But who knows?! Maybe this is the time...
Up until WWII happened I doubt many people would have believed that sort of death and destruction was right around the corner. They'd just had WWI and weren't expecting that settling the unsettled business from that would be around 3x worse, break the European colonialists and ... I don't know how wiped out Jews in Europe were, but it was a painful experience although I assume some survived. The property damage was also extensive.
High tariffs isn't going to be the end of the world & this particular stage of crisis doesn't look very important. But the overall geopolitical crisis we're in as everyone realigns certainly could end the world as we know it. Both in the literal and worst case senses. Few went in to WWII chuckling and saying that they were going to break their own power permanently, but that is what a lot of participants ended up doing.
I simultaneously take comfort from the fact that no-one else seems as worried as me and dread from the fact that it'd be the 3rd world war that people just walked into because they weren't taking the threat seriously enough. We appear to have been watching insane policy come out of the US diplomatic establishment for a good decade now. And the crisis is still escalating.
The people in charge of the government did this. The people who will still be in charge of the government. The bad thing is not gone. The bad thing has no end in sight. And the bad thing is doubling down.
With Covid, recovery came as Covid was removed. With Trump, recovery can come with…
This point is especially hollow because it is true that many countries have maintained asymmetric tariffs on us. Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them. I’d take their cries of “lost trust” more seriously if they hadn’t shown with their actions they will pursue their own advantage too.
US has been very successfully exporting its debt (quite literally, almost no other country can run such high deficits for so long) and services.
What do you think happens with all that money if Americans can’t buy those cheap imported goods anymore?
Also other countries like China or Japan won’t be able to continue buying US bonds. Basically Americans are getting free stuff funded by debt they are never going to pay back and still you have people whinning…
> larger %
US decided to charge e.g. 15 times higher tariffs on the EU than the EU does. You believe that’s even remotely reasonable?
Or do you actually trust Donald’s table that they made to confuse clueless idiots?
Where Trump is fundamentally correct is that a trade imbalance means selling pieces of your country off to compensate. Equities, bonds, land. All a claim against future money that sucks those returns out to go to foreigners. America has been lucky in the past, in that the huge market for dollars helped us avoid some of this, but that’s not a limitless solution.
Obviously the answer is not that we must make Nikes here. It’s also not that we must have zero trade deficit with any single nation. But we probably should focus on exporting more advanced goods and more services to bring our overall trade deficit down, focusing on a net zero or overall trade surplus outcome.
As long as GDP growth outpaces (or is even) the increase in debt it’s not a big issue. Some spending cuts and mild tax increases (maybe not so mild for the higher brackets) would solve that.
> focusing on a net zero or overall trade surplus outcome.
If you looked at the countries pursuing such policies like Germany or Japan they haven’t been doing that well at all over the past 20 years. Basically no real growth and they are permanently stuck in the early 2000s. US on the other hand has been doing extremely well (lack of redistribution is another issue).
Debt growth is massively outpacing growth in GDP. You're right that it's less of an issue if we grow quickly and effectively keep leverage the same but that's not what's happening.
Germany and Japan haven't focused super heavily on achieving a trade deficit. As you said, Germany has huge problems with her welfare state and Japan has huge demographic issues. I'm not saying we should achieve a trade balance by tariffing everything to death; I am saying we should focus on faster growth to get there and reduce our insane level of consumerism. I don't have an issue with a temporary trade deficit for growth-oriented reasons, but I have little save contempt for people ordering packages of chinesium temu crap.
They have. For Germany maximizing their trade surplus was one of their primary goals for many decades. Amongst other things that’s why they accepted the Euro (easier than devaluing DM).
> As you said, Germany has huge problems with her welfare state
I never said that.
And Germany specifically has quite low government debt and a very high trade surplus. Yet.. it’s not doing better economically than the US. Welfare hardly has much to do with that.. e.g. US government excluding all private spending spends about the same as Germany as % of GDP on healthcare. Total social spending is not that massively higher either (~23% vs ~28%).
> ordering packages of chinesium temu crap
Sure, but that’s by and large insignificant. If we look up US imports by category consumer goods don’t really make up that much.
Also, I don’t really see how can tariffs do much besides lowering productivity and increasing prices.
Like that complete nutjob Lutnick said they want “millions and millions of people in America screwing in little screws to make iPhones”. That just makes no sense, you want to minimize the amount of easily outsourcable low productivity jobs in your country.
The trust issue is domestic, too. Businesses just got slapped with the largest tax increase in history at home. Pointing fingers at other countries is a distraction. It’s ridiculous to think that this will encourage companies to start building factories here when even the raw materials are now heavily taxed on their way in to the country. Any sane company is going to pause US factory investment until there is some clarity and predictability.
- America and Hypotheticalstan each export $1T to each other with a bunch of tariffs on various things. America raises $50B in tariff revenue on Hypotheticalstan’s imports while Hypotheticalstan raises $100B on American imports.
- America doesn’t make enough defense-critical stuff: steel, solar panels, chips, aluminum, rare earths, etc.
- America has a ~$918B trade deficit.
Things I do not care about:
- Vietnam makes our Nikes.
- We have a trade deficit with specifically Vietnam.
Why should you care how much another country charges its residents to import stuff from the US?
Just sell at the price you want to sell at and who cares what goes on after your goods land.
Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.
Or they could go, everything's gotten so expensive these days, I'll buy wine less often altogether.
Sometimes it's hard to tell if the US public is even aware of this. I mean, what is the point of tarrifs other than raising the prices in the domestic market of imported goods and services? That's all they do.
The rationale from the perspective of the central government is that this will finally make foreign goods and services uncompetitive with regards to domestic alternatives, and thus will finally render them viable. But that childish assumption is based on so many absurd notions that are plainly unrealistic. The only thing that's real is the direct impact of tarrifs: increase the price of goods and services in the domestic market.
You have to get more money into the hands of the consumers in order to be able to implement something like this.
And with this, we’re almost getting to realizing why tariffs in the United States are a bad thing.
Cutting off your own nose to spite your face.
So if France can export wine at a price that’s reasonable enough, your domestic wine industry will fail, undercut completely by cheap French imports.
Tariffs in and of themselves are not all dreadful. They help level the playing field and support domestic industry.
But you can’t go from decades of offshoring manufacturing to suddenly charging punitive tariffs without making imported goods (which were the only ones your citizens could afford) much more expensive, and therefore, yes, folks might buy wine less often altogether.
I don’t actually care about t-shirts being made in china. That’s not an industry that matters at all. I do care about china closing her entire market to American tech, for instance.
You can try to 'hurt' another country's producers, but they're likely to just go and find another market for their goods.
I think that's the thing — you plan in business for people to operate in _their own_ best interests. If people stop doing that & their behaviour is volatile, then you're going to put your own mid-term plans on pause until you know what's what.
> Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them.
Is that happening, trade deficit aside, & when you factor in services as well as goods?
* no junk food, no weird GMO garbage. * road-legal automobiles, no EPA-workaround trucks with shoulder-high hoods. * advanced tech hardware gadgets. * entertainment * no, we're not particularly interested in guns.
Tell me what exactly what aren't we already buying from the US, when it's competitive: quality food we have our own, sorry; cars, well you've gone down a crazy path since I can remember; hardware, well we do, except you chose to offshore manufacturing; entertainment, we do... a lot; guns, be honest, you know you have a problem, not us.
So what's the point of this tantrum?