Watching Trump - Tariffs - your thoughts

[Livingbytheocean]

Did I actually hear him use the word rape in his presidential address?

I have been blindsided listening to the ‘content’ by the flippant use of that word.

But these tariffs aren’t going to let the average American keep more money in their pocket

I don’t think they realise it, this is a huge tax rise

The massive economic consensus that it won’t work, it’ll drive up prices in the US and it’ll cause a recession.

There are huge contra-indications about his actions. Google Smoot-Hawley tariffs and see how they made the great depression worse and last a lot longer.

There’s masses of evidence on the inflationary pressures of even relatively low tariffs. Massive tariffs are going to cause chaos. His methodology for the level of tariffs imposed is insane too.

The bigger the deficit the bigger the tariff.if your a small Caribbean nation selling bananas to the US, the trade imbalance is massively in your favour because you can’t afford to buy planes from Boeing or Dodge Ram trucks. On the flip side, if you’re an American,bananas are about to get very expensive because your government just levied a 50% tax on a basic foodstuff. Coffee is very badly affected by this as well.

Lesotho in southern Africa is going to be massively hit despite being achingly poor. They have been selling food to America while buying next to no expensive luxury American brands.

Except it’ll take years and years to rebuild the infrastructure, factories and power grid to bring back the industry and ifit does come back, the goods will be ridiculously expensive because skilled factory workers in America get paid ten times what Chinese factory workers get paid and in two years time the American public, facing raging inflation will punish the republicans in the ballot boxes and congress will rein in trump tariffs.

America has lost its world leader status. Their electoral system can produce wild cards like trump and they therefore cannot be trusted as an economic and security partner when a rogue president can chuck all previous treaties under the bus.

We produced one wildly rogue prime minister and her own cabinet put her to the sword in less time than the Fanta Fuhrer has been in power.

Who do you think is going to pay the tariffs?

I am just wondering what happens when companies look at the cost of building and fitting out a factory, employing the American workforce and paying them a wage + health insurance etc and by the time the product has reached the store to be sold.The cost to produce it and getting it to the customer is more than the imported product + tariff.

I honestly am wondering what extras Trump is offering to businesses to make their products in the US

Surely no company would set out to build a factory and employ a highly paid workforce when it would cost them more money to produce the same stuff as they currently import
All they will do is change the prices to reflect the tariff and carry on importing as it’s cheaper and less hassle

What I don’t understand is the claim there will be more jobs- what about robotics and AI? Products are going to be ridiculously priced in the US if alongside moving away from cheap Chinese labour they don’t use new technologies.

The only way tariffs will 'work' for the USA (or anywhere else), is if the cost of importing becomes so prohibitive that companies relocate to the USA and manufacture locally, thereby creating jobs and boosting the economy. Perhaps some will, perhaps they won't. In the meantime, the revenue from the tariffs will I i imagine be used to give tax breaks that will favour the rich - that's what Trump is all about. I shall be watching particularly carefully to see how those pesky penguins on the Heard and McDonald islands react after years of ripping off the USA with their nasty protectionist attitudes.

Actually it isn’t. He’s only allowed it to do it in a national emergency which he’s declared and congress can reverse that if they want to. They won’t, but they can.

You do know that Trump derangement syndrome is entirely fictional? Made up by a US senator to explain why he is deeply unpopular.

And how would we replace the revenue VAT generates? If we remove vat for American goods, what happens when China and the EU demand the same concessions?

Have they?
Labour kept money in peoples pockets and put it on business instead... the cry is its a "Tax on Jobs"
Labour have a Workers Rights bill, getting rid of ZHC, more employment rights... the cry is that will destroy jobs and slow the economy...

These complaints are nodded through sagely by the very people they are meant to help.....

Cheap shit made abroad? not all of it, in fact most goods from Asia/China are very high quality and not possible to be made in the West any more... we simply do not have the workforce, the skills or the raw materials.

Look at Korean cars? it took companies like Hyundai a decade or more and billions to make decent cars...
For the UK to launch a new car brand would be impossible, heck we can't even manage a battery start up... or produce the high end chipsets used across our economy.

Car manufacturing went abroad because the UK produced cars like the Hillman Avenger and the Leyland/Austin Allegro, it had nothing to do with globalisation and betrayal by the "left...

People, unfortunately, often fall for simplistic solutions, promised by charlatans, like Boris Johnson... and now Farage.... promising tax cuts....

This is about the super-wealthy ‘friends and family’ of trump enriching themselves by shorting the economy to make billions by forcing share prices down. When he ‘changes his mind’, the wealth transfer is going to be absolutely colossal.

We destroyed our own car industry. Friends worked at Cowley and Birmingham in management back in the day. They went on to be very successful working for Nissan and Seat. The workforce was decimated in the UK.

This is just rage bait for the MAGA crowd to get them onside. The USA, as the richest country in the world, has been is the main beneficiary international trade. The purpose of the Tarifs is to fund lower taxes for Trump and big buisness. As he said last night he does not give a f... about tanking the economy to achive this.

Nissan have been reported to be considering increase in US production. Not sure if it’s definite.

It does all sound expensive but on the AI / automation front in pp that also still benefits the country on shoring as you get higher productivity and taxes on profit.

Oh yes! When they’ve bought up shares cheaply enough he’ll suddenly have a eureka moment.

easternstandard. What about the increased cost of all the individual components?

Not sure. I get the idea behind on shoring v the very high movement to cheaper countries including China, but have questions around pricing and how that all works.

@EasternStandard This is a great discussion that covers that
https://www.cato.org/multimedia/media-highlights-tv/scott-lincicome-discusses-trump-administrations-tariffs-bulwark

@TheNoonBell

Not really, it just makes him look more of a dick. Starmer could remove VAT and the tariffs would go, making us all better off. Further if we are allowed free speech, like we used to have, we will even get a trade deal.
Trump has been quite open about this but the UK media have decided to spin it as impossible to bow to his demands, even though it would be in the public's interest to do so.

If Starmer were to bend the knee, what exactly is it in Trump's history that convinces you he would stick to any kind of agreed upon deal?

And have you looked at how 'free speech' is working out for the US?

But Nissan already have infrastructure there. They aren’t building their first factory there and the costs that entails.

I am looking at companies who design their ideas in America, build the product overseas and then import it to the US to sell.

I know quite a few business people who operate this way. They aren’t a big car manufacturer with or without factories in place.
If the UK brought in these type of tariffs I could see that they either continued as normal and just added the tariff on to the cost to the customer or move to a lower tariff country, have the goods imported to their warehouse in the lower tariff country then exported to the US market at a more competitive price to the customer.

Or will car manufacturers import large pieces of cars (i.e not cars) then put them together on US soil.
Which could be done by machine.

The US can do this more than smaller countries as they have a larger market already.

If automation / AI picks up dramatically the last thing you want is no tax on profits from that. A smaller country which relies on off shoring and doesn’t have jobs or tax increase due to AI will find it increasingly difficult.

There was a good piece on BBC WS last night which covered the reason wrt China. If you look how they’ve expanded into Africa and other places and we buy their cheap goods and rely on those prices, they have built some serious military kit in the meantime. I’m not sure they are a definite threat but they are in a good position if they do become one.

The US is pretty much the only country that can try to reorder away from that.

@Maggiethecat I think there’s a large element of this involved- I mentioned earlier in the thread howRees Mogg and his ilk were doing the same with regards to Brexit- using political malarkey to manipulate markets for the already wealthy

The mistakes made in the uk motor and m/c industry go back to the 50s and 60s, Japan was already making better cars and motorbikes, even then.

We took our market dominance, the profits from this and squandered it, mostly in the form of dividends.

By the time the 70s arrived, it was all too late.

Whilst Trump and his ilk may make vast fortunes from what they are doing now, they'll wreck the USA's position as a friend to the West and destroy their influence, he is treating the world like some real estate development... it will bode very very badly for the USA.

The RoW can and will survive with a diminished USA, even China will prove to be a more reliable trading partner.

Anyone who thinks the US is going back to its industrial heyday & that Trump even cares, is as bonkers as he is.