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.

I think, apart from everything else about Trump, is his mindset is stuck in the 1970s and 80s, when he was young and when the world was a very different place, and before the globalism we have in 2025.

Also, populists like Trump and Farage are shonky salesman selling the people this rose tinted spectacles, nostalgic, golden age of "the past", that largely didn't exist as described, and is impossible to get back to anyway.

A little bit complex but this explains how tariffs are actually calculated to achieve trade balance and how crass it is.

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The language Trump and his crew use to describe the tariffs is very disingenuous and this is what's lead to a lot of confusion, when they say 'they're going to pay us X%'. The importer pays the tariff. So if someone buys something from the UK, it will cost them 10% extra to do so, with that extra 10% being paid to the US treasury by the importer (company based in the US) not the exporter (company based in the UK). There's knock on effects here as others have described (individual industries/companies cutting production, impact on pensions and investments etc). But the actual cost of the tariff itself is paid by the US importer alone.

And the whole argument that it will increase manufacturing in the US is nonsense as they simply can't produce the majority of goods at the same price or less than their foreign competitors, which was why they effectively outsourced to other countries in the first place. The idea that they can produce everything needed for US-based manufacturing is just daft - it's just not about the goods themselves. They may well be able to produce certain products but need to have the whole supply chain for that product based in the US too, including the materials and machinery needed to kit out factories in the first place. And they need cheap labour. And there's a lot of products simply that can't be supplied in the US, or at least not at the level needed.

There's also issues around intellectual property. Some companies have licences for products to ensure exclusivity to give time to recoup development costs (e.g. pharmaceuticals). So while in theory they might be able to physically make products in America, there may well be legal red tape which should, in theory, be a barrier to production. But knowing the Trump administration, this will be ignored. The whole thing is a minefield.

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"More or Less" on radio 4 this morning had an interesting analysis of the "reciprocal" nature of the tariffs. He's not charging 10% tariff on those countries who charge 10% tariff on American goods; it's some semi-complicated calculation that's been done using the trade imbalance - which calculation they've got wrong by doubling it!

We're going to Japan this July. British pound is falling sharply against Yen. We'll probably need to eat convenience store "Ramen" instead of fancy "Ramen".

It's a summary of where USA is - with quick explination of why these tariffs are not normal in way usually used.

You are of course correct that workers are consumers and that tariffs generally result in an inflationary impact.

However those that are unable to become workers because of offshoring of industry cannot afford to become consumers at the same level as those in work.

Sorry I don't have anything interesting to add to the discussion. But it all makes for an informative read. Thankyou for the replies.

Trump delays tarrifs by 90 days and according to CNN ‘The Dow skyrocketed more than 2,300 points, or 6.2%. The S&P 500 shot up 7%. The tech-heavy Nasdaq soared 8.5%.’

Let’s hope he didn’t tell any friends and family about his change of heart in advance of making the announcement.

So am I right in thinking - every country now has 10% so it has increased from 0 but EU countries were going to be 20% so they’re just 10% for the next 90 days - all bar china ?

Yes. And I presume they have to bribe trump so that they can stay at 10%. Poor Lesotho, they don't have any money to do so.

That's what the 'negotiations' were about. Trump wanted to sell us chlorinated chicken and get our nhs to buy medicines from American companies. But I dunno what the incentive is, he hasn't said he would drop lower than 10%. Singaporean PM went to talk to trump (for singapore money is no object they have one of the world's biggest sovereign wealth funds and reserves and will pay whatever money is necessary), and trump told him 10% is a floor not a ceiling. Tariffs rate on singapore is 10%

The tariff only gets slapped on depending on when the item was loaded onto the tanker ship (or airplane, or border crossing vehicle) to be transported to USA. If loaded during an "on" period then the tariff would apply, if loaded during an "off" period then no tariff applies, regardless of when the shipment arrives into USA.

Just to remind us all about the confusing on-off-on-off situation.

Sorry bringing the convo a few pages back, I do think people are fed up with globalisation.

The difficulty is what alternative are we imagining? I'm finding it quite hard to imagine a different economy.

I'm also extremely aware that there's a wider event happening with AI and automation. Trump policies could accelerate this. Companies make people redundant to save money. Tech companies continue to develop AI at pace, offering cost savings to companies. Everyone is interested so even if the tariffs are removed there's no incentive to rehire staff when even more of the work can be done by AI.
Company shareholders benefit, pensions and investments start to rise again. The richest buy more assets and avoid tax through loopholes, so it never improves. The gap widens again between richest and poorest.

Having said all that I am optimistic because I think you have to be.

My company is a US manufacturing company (in US), even our stocks plummeted

The problem is we can’t uninvent the wheel. Deindustrialisation of the West occurred due to the cheaper goods (lower pay, poorer conditions and all) available from the previously underdeveloped nations who found a lucrative niche. The only way that the west could replicate that domestically is to either get rid of hard earned workers rights or accept that everything will be more expensive. Neither of these are attractive prospects. So we’ve grown to rely on each others nations to provide the things we all need and want. Trump doesn’t understand this

Poor Lesotho, they don't have any money to do so.

Lesotho is an example of Trump's slapdash approach to tariffs. It's an extremely poor country, it's citizens do not buy American because they can't afford it. Lesotho exports diamonds. America doesn't have diamond mines.

The tariff on Lesotho is only marginally more sane than tariffs on penguin islands.😆

Trump is a fucking idiot. He is destroying America.

The scales are dropping from small and medium business owners as they realise just how much they use or sell, comes from China. Farmers are copping on too as costs soar and they face reciprocal tariffs on what they export.

Their businesses are going down the toilet.

The Trump supporters I’m seeing being vocal on tv or social media all seem to be saying they are expecting a few months of financial pain, after that the $billions will be flooding in due to the tariffs coming to fruition and it’ll all be worth it.

Just like the Brexit bonus we were promised once we were free from the shackles of the EU. Still waiting for that nine years on. I thought we were going to rejuvenate the British manufacturing industry? I foresee much the same lack of action in the US. Although they are at least richer in natural resources than us.

This is typical a man “sick” of globalisation (50 years in the happening), swings orange dick et voila!

It is so bizarre that Trump&Vance have not considered Services, they are only talking about manufactured items.
The Service side is bigger in most cases.

I think he will backtrack on most of it and with regards to China, he is actually trying to negotiate some sort of deal. He seems confused as to whether China are biggest enemy/competitor or whether go “make your enemy your best friend”. He is gambling with China.
If China and US become some sort of massive trade and defence ally then the rest of the world (including Putin) will have to pretty much do what they collectively want.

2024 US trade deficit in goods: $1.2 trillion
2024 US trade surplus in services $282 billion.

The deficit in goods is over 4 times bigger than the surplus in services.

I completely agree that trying to re industrialise the US is a) going to be very difficult and b) means inflationary pressure at the very least in the short term.

However running a $918 billion trade deficit every year for the US is simply not sustainable.

The US has a national debt of $36 trillion (a lot of it owned by China) and where the interest payments are taking an ever greater slice of Government revenue (much like the UK) as well as decimating blue collar manufacturing jobs.

I agree that the tariffs harm work trade but other than tariffs what else can the US do to reduce their trade deficit ?

Trump seems to not understand trade deficits and to have an issue with countries not being “fair” by not buying American goods.

He doesn’t seem to understand that in some instances they just aren’t selling what other countries want to buy (huge petrol cars, chlorinated chicken, GMO food etc).