Trumps Tariffs. An idiots guide?

[CosyNavyLeader]

Can someone try and explain it to me in an easy to read, simplistic version?

Please no nasty comments. I have ADHD and I struggle to read large news articles. And there are so many of them. But I want to understand.

Thankyou in advance.

Just bumping this incase anyone can be bothered!

Explain what in particular? There's a lot going on.

I don't know!? Maybe that's why I find it too overwhelming to understand.

Everything made outside the US is going to cost a lot more for Americans to buy. Trump hopes this will mean they buy American goods instead. A Ford car rather than a Honda, an Apple phone not a Samsung.

Companies who sell a lot of stuff into the US worry about the effect on their business if all of a sudden a large market for things like scotch whisky stops buying.

An American wants to buy a Thing that would need imported from a different country. It's $10.
Tarrifs on that country means the item is now _% more expensive. The buyer will now have to pay that extra percent for the item.

Exactly what @SeventeenClovesOfGarlic said. So if a bottle of Jack Daniels was $20 last month and a bottle of Bells scotch whisky was $20 last month, the Jack Daniels is still $20 and the Scotch is now $22.

An American manufacturer uses components to make their Widgets that are made in China. Those components usually cost $5. However now Trump says there has to be a 100% tax on the components because he would rather those components be made in the USA. So now the component costs $10. The Widget manufacturer therefore has to pay more to manufacture , the price of the Widget has to increase, meaning the ultimate consumer is worse off.

Multiply this by everything that gets imported to the USA from China and other countries to get a feel for the sheer scale of what is happening.

It may be that at some point in the future someone will indeed build a factory to make the component (or whatever) in the USA but this will take years. In the meantime inflation, poor international relations and decreasing quality of life is the consequence for the majority of ordinary people

To be honest, I couldn't care about the impact on the American people. This is what they voted for.

I do care though that if America goes tits up, economically, it will affect all of us. And it's already affecting all of us who have investments and pensions.

This works for things that ARE manufactured in the US but they have been part of a globalised market place and suffered de-industrialisation like everywhere else. To replicate domestic manufacture will take many years , and in the meantime all ordinary Americans will suffer either through shortages or higher prices not to mention macro economic shifts such as interest rates and currency devaluation

I think you would care if you worked for a manufacturer of items largely exported to the US

well that's what I mean - I don't care that things are more expensive for Americans, but do care about the knock-on effects.

Thankyou for the replies. It makes sense.

He's basically just trying to make America more wealthy. And throwing the rest of the world under a bus whilst doing that. He really is a lunatic.

He's throwing the average American under the bus too. They are struggling with the cost of living too, and he has just made lots of things that they buy from food and clothes to electronics a lot more expensive.

At the same time he is assuming that they are all excited about working in factories.

Can anyone explain how it would affect the UK, please?

Do we need to be worried?

Yes that’s the ultimate aim - he doesn’t seem to realise that there is a LOT of pain between “Tariff is the most beautiful word in the world” and “Make America Wealthy Again”. It will be very interesting to see how quickly those who “lent” Trump their votes (ie not the hardline MAGA cult) come to realise this

What is important is, though it is the Trump administration using presential powers to apply tarrifs, ultimately it is the Republicans in Congress who have to take fully responsibility for the current state of affairs.

This is a Republican decision and action and the party needs to stop deflecting all the goings on as Trump / Doge doings.

General financial turmoil will impact any equity based ISA and Pension funds, could impact interest rates, currency values

Anyone who works for a company that exports a lot to the US might be worried for their jobs: Jaguar LandRover has already suspended exports, will they need to manufacture quite so many cars for example?

China will be looking for new customers elsewhere, could they flood other markets with cheap(er) goods thus impacting domestic manufacturers?

The bit that confuses me is when Trump says the money is pouring in?
Surely it's pouring into the government? Not benefitting US businesses?
I thought he was against central government?

Lots of potential impacts - some harder to predict than others.

Any of our industries that export to the US are likely to suffer in the short term, as those exports will suddenly become a lot more expensive so the demand is likely to drop. This could result in job losses here in those companies.

Most people in the U.K. have pensions that are invested in the US stock market, and they are likely to lose value as well (the closer you are to retirement, the more problematic that is). More generally, turmoil in the global markets will have knock on implications for the U.K. economy in likely myriad ways we can’t yet foresee.

www.bbc.co.uk/news/articles/czd35l8995eo.amp

He is lying.

Long term he believes that the US will stop importing (as much), instead producing more from within the US, which would, in theory, benefit US companies.

But that ignores the fact that the infrastructure is not there in the US and a variety of factors mean it is impossible to replicate supply chains more cheaply. Ultimately US consumers are going to have to pay a lot more for the same stuff - it’s like a huge tax increase on them. Obviously trump hasn’t presented it like that but soon the penny will drop.

To be fair “trying to make America wealthy” is exactly what he was elected to do and obviously the leader of any country should care more about the wellbeing of their own country than the rest of the world. So “throwing the rest of the world under a bus” would be fine if it led to a net gain for America. The concern though is that overall this won’t be better for Americans.

I work for a US company, it’s wiped millions off the value of the company.
All our products are manufactured in China so all our business planning for pricing etc are in complete turmoil. We did some business planning last year for tariffs but didn’t expect the levels he is now implementing.
Currently the business is expecting the UK & EU business to help close the gap in revenue from the US tariffs meaning all our product will be more expensive / less offers in our markets.

I’m really puzzled why there isnt louder pushback from Trump voters, Republicans, however scared they are of going against Trump. Aren’t tariffs also affecting US pensions and investment portfolios - isn’t Trump worried it’s going to turn the average American against him?? Or is he really using the threat of economic turmoil as a negotiating tactic? (I thought the whole Iceland thing was insane and also a negotiating tactic but I’m really not sure now.)

This is what I’m waiting for - the scales to drop from the eyes of the midwestern housewives who believed Trump when he said he’d reduce the price of eggs but failed to understand everything else that “America First” really means