Trump's Trade War Escalates as China Retaliates with 34% Tariffs(nytimes.com)
nytimes.com
Trump's Trade War Escalates as China Retaliates with 34% Tariffs
https://www.nytimes.com/2025/04/04/business/china-trump-tariffs-retaliation.html
219 comments
One thing that I'd like to inject into this discussion, is that the nominal trade imbalance is not the only relevant figure, and maybe not the most important one. For many goods, there is a very strong disconnect between the market value (the lowest price you can offer a group of suppliers competing against each other) and what one might call, for lack of a better word, true value (the price you'd be willing to pay if you had no alternatives). For luxury goods, these are often nearly the same, while basic goods might have a 5x difference and antibiotics could well have 1000x. When this is taken into account, the trade between the West on the one hand, and China and Russia on the other, is not unbalanced by a factor of 2, but more like 20. The West receives a huge amount of energy, manufactured products, chemical precursors, electronics, technological supplies, medical supplies and basic medicines. And in return they send champaigne, BMWs, branded clothing, intellectual property, and yes, some aircraft and photolithography machines. The effect of this has already been demonstrated once with the mostly unsuccessful sanctions against Russia, but would be felt ten-fold if there were a major disruption of trade between China and the West. China is at a point in their development, where they really could walk away from trading with the West if they really had to, but the Western economies would likely be sent into shock by such a step. Not that I think this is likely to happen, but I do get the feeling that the new tariffs are mostly giving China a leg-up towards full economic independence, while onshoring the US industry will be a very long and painful process.
I’m not sure what you mean by “the West” in this context. No one besides the US are unilaterally raising tariffs on China. The US stands alone in this and the rest of us are fine to keep trading with China while whatever agenda is being pursued by the US regime.
I'm just making a general point, since the trade between China and the EU is qualitatively similar to China-US. And while the EU is anti-Trump at the moment, I do not think it is beyond aggressive economic action against China for political reasons, if nothing else. (And let's not forget about the new tariffs on Chinese electric cars).
U.S is giving tariffs to everyone, though...
I get what you're trying to say but I don't think it's couched in a way that is understandable to the average person. I think a more understandable way to put it is to point out USA will be ok on the very base things like food and energy (assuming they don't piss us Canadians off further) but China has competed to a almost nothing the next few rungs up the ladder to the point where production capacity outside China (and certainly within USA and the dwindling number of deeply friendly nations) is almost non existent. This includes very, very valuable things like chemical precursors and finished products in everything including biotech, building supplies, factory parts, etc. So a world where China walks away pretty quickly falls apart to a much lower standard of living for everyone in the west for a decade or possibly two. That world would be much blander food wise, much more exposed to the elements for many more of us and with much more death from treatable disease.
We have an opportunity here to rebuild the industrial capability and walk ourselves a bit further up the cost structure now with the help of having access to chinese output and what we are doing instead is pretty foolish.
That talk of what we pay vs what we would pay is being used in your argument to point out the pain of losing access to a cheap chinese product when it's more useful for antitrust discussion of where market power is being abused and instead just pointing out the direct pain of a china walking away situation in my opinion.
We have an opportunity here to rebuild the industrial capability and walk ourselves a bit further up the cost structure now with the help of having access to chinese output and what we are doing instead is pretty foolish.
That talk of what we pay vs what we would pay is being used in your argument to point out the pain of losing access to a cheap chinese product when it's more useful for antitrust discussion of where market power is being abused and instead just pointing out the direct pain of a china walking away situation in my opinion.
I'm not sure the 'true value' is that important for trade. Taking the example of antibiotics, they may be worth 1000x the cost of production but if country A stops selling them you can just make them in country B. We got by fine without Chinese exports until they started becoming a thing from around 1990 on.
Long-term -- yes; short and medium-term -- not necessarily. For example, during and after Covid, Germany had a very severe antibiotics shortage. I think it is still ongoing to some extent. On one hand, it seems ridiculous to suggest that Germany is incapable of producing all the antibiotics it needs. On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially. Same thing with the chip shortage -- these weren't even close to leading-edge chips, but trying to ramp up production domestically would likely cost 10x or more. Same with Russian gas, or any number of other things. Supply chain crunches can do a lot of damage even for individual products. If they were to happen simultaneously across multiple industries, the effect could be truly disastrous.
> Long-term -- yes; short and medium-term -- not necessarily. For example, during and after Covid, Germany had a very severe antibiotics shortage. I think it is still ongoing to some extent.
That sounds like a good reason to favor local manufacturing.
> On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially.
And that sounds like a good reason to do it now and not wait for a crisis when the consequences would be worse.
That sounds like a good reason to favor local manufacturing.
> On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially.
And that sounds like a good reason to do it now and not wait for a crisis when the consequences would be worse.
> On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially.
It depends on the nature of that particular good's production.
Some industries are incredibly supply-chain and labor-intensive.
Others are capital-intensive.
Others may be knowledge-intensive.
A country should seek to compete in industries it has the most core competencies in.
It depends on the nature of that particular good's production.
Some industries are incredibly supply-chain and labor-intensive.
Others are capital-intensive.
Others may be knowledge-intensive.
A country should seek to compete in industries it has the most core competencies in.
> A country should seek to compete in industries it has the most core competencies in.
While US policymakers were following that advice, China did the opposite. They decided what they wanted to compete in and built the core competencies they needed to do so.
While US policymakers were following that advice, China did the opposite. They decided what they wanted to compete in and built the core competencies they needed to do so.
If there's lack of a better phrasing, I would rename "true" value as "maximum extraction" value.
Pharma products were previously tariff-free under a WTO agreement that is based on the principle that life-saving items shouldn't face any tariffs. Looks like this exemption is now also being eliminated and will probably cause the prices of drugs and treatments in the USA to skyrocket.
> Pharma products were previously tariff-free under a WTO agreement that is based on the principle that life-saving items shouldn't face any tariffs. Looks like this exemption is now also being eliminated
Pharma along with semiconductors is still exempted.
The biggest hit this has is on textiles and apparel as those were industries that have almost no NAFTA/USMCA presence anymore.
Electronics will be a mixed bag as most US origin electronics assembly was already returning to Mexico due to Zero COVID in China (20-23) and Vietnam (20-21), or moving to India (26% tariff) and Malaysia (20% tariff)
Pharma along with semiconductors is still exempted.
The biggest hit this has is on textiles and apparel as those were industries that have almost no NAFTA/USMCA presence anymore.
Electronics will be a mixed bag as most US origin electronics assembly was already returning to Mexico due to Zero COVID in China (20-23) and Vietnam (20-21), or moving to India (26% tariff) and Malaysia (20% tariff)
Wait, they can go up more!? I remember thinking prices for really basic medication in the States was insanely expensive — something which costs $0.50 in Europe would cost $3+ in Target n co
mtalantikite(1)
31% tariffs on Switzerland will be felt.
Pharma is exempted from the tariffs regime, but in that list it should also be the EU and India as well.
Most medicaments in the US are sourced from EU (Ireland, Germany, Netherlands), EFTA (Switzerland as you rightfully noted as well as Denmark), and India
Most medicaments in the US are sourced from EU (Ireland, Germany, Netherlands), EFTA (Switzerland as you rightfully noted as well as Denmark), and India
[deleted]
I'm kinda happy about this.
Our farmers in Utah lobby so hard for water, then use it to grow alfalfa which they sell to China because they can sell it there for more money than it can be sold locally. It boils my circuits that they ask for our precious water -- to which they have historically had an obvious right, growing our food -- and then basically ship it overseas. Keep the crops at least sold in the US, and hopefully to other Utahns who have a hard time buying alfalfa because China inflates the price. 80% of our water goes to farmers here. I'm glad of it when they grow wheat and sell it to us, but not when it gets exported. These tariffs will hopefully help with that.
Our farmers in Utah lobby so hard for water, then use it to grow alfalfa which they sell to China because they can sell it there for more money than it can be sold locally. It boils my circuits that they ask for our precious water -- to which they have historically had an obvious right, growing our food -- and then basically ship it overseas. Keep the crops at least sold in the US, and hopefully to other Utahns who have a hard time buying alfalfa because China inflates the price. 80% of our water goes to farmers here. I'm glad of it when they grow wheat and sell it to us, but not when it gets exported. These tariffs will hopefully help with that.
It’s a fair point, but I feel like we could take more targeted action on alfalfa without the side effects of the current policies. It feels a bit like celebrating your house burning down because you didn’t like the color of paint in the kitchen.
Honestly, no one should be using water to grow alfalfa in Utah. The way Western water law currently works with prior appropriation encourages extremely wasteful uses of water, just because they don’t want to lose their valuable water allocations (use it or lose it). Alfalfa is a VERY water intensive crop, growing it in the desert wouldn’t make sense without these perverse incentives.
There’s a lot of effects, but one very visible one in Utah is the fact that the Great Salt Lake is drying out, because too much water is being diverted from its tributaries. Now there’s dust getting stirred up from the exposed lake bed that’s chock full of heavy metals, which is less than ideal next to a fairly big city.
There’s a lot of effects, but one very visible one in Utah is the fact that the Great Salt Lake is drying out, because too much water is being diverted from its tributaries. Now there’s dust getting stirred up from the exposed lake bed that’s chock full of heavy metals, which is less than ideal next to a fairly big city.
How are the farmers selling to China at better prices and then the consumers also buying from China at higher prices than the local farmers.
How does it not short circuit and the farmers just sell locally for the price of the goods from China?
How does it not short circuit and the farmers just sell locally for the price of the goods from China?
The market is saturated. American farmers already buy as much alfalfa as they want. The next unit of alfalfa is worth basically nothing to them.
To sell more alfalfa in America you'd need more farms to raise more cattle (the main use for alfalfa), which would put even more strain on the American water supplies. That would produce more meat, which you could sell to China, but it would be more expensive than the Chinese homegrown beef, which they'd buy more of.
To sell more alfalfa in America you'd need more farms to raise more cattle (the main use for alfalfa), which would put even more strain on the American water supplies. That would produce more meat, which you could sell to China, but it would be more expensive than the Chinese homegrown beef, which they'd buy more of.
alfalfa is water-intensive. This export is straight up resource theft.
But youve clearly defined what the problem is. Is a tariff the solution?
Yes it is not the answer. About this issue see https://www.sltrib.com/opinion/editorial/2022/12/04/why-its-...
Tariffs look more and more like the Bolivian Tree Lizard cleanup plans: https://youtu.be/P9yruQM1ggc
It’s not the only solution, but it is one, as we saw back in the first Trump administration and their tariffs on, and the resulting counter tariffs from, China. It will almost certainly dramatically reduce demand for crops like this from the US, which will lead to less farmers (as many leave the business or go bankrupt) and ultimately less water usage by the farmers.
What does US farmers going bankrupt solve?
These people are standing in a burning house, happy they won't have to pay the heating bill
I believe you may have some reading comprehension problem with what they laid out?
At least in the parents posters mind that less farm exports leads to less water usage. Hence bankrupt farmers solves things like aquifers going empty and lakes draining leavings environmental disasters.
Now, how it actually works out in the end may be different, but the concept doesn't seem completely broken at first appearance.
At least in the parents posters mind that less farm exports leads to less water usage. Hence bankrupt farmers solves things like aquifers going empty and lakes draining leavings environmental disasters.
Now, how it actually works out in the end may be different, but the concept doesn't seem completely broken at first appearance.
Bankrupting farmers isn't a solution. That's like also saying bankrupting consumers means they'll eat less. The initial problem laid out what farm products leaving for China. They had no problem with using the water, just that its products were being exported rather than used locally. Also, water is a local cycle. Keep the products close to put the water back into the systems.
> That's like also saying bankrupting consumers means they'll eat less.
I would presume that this is true, in the sense that the overall economic footprint of what these bankrupted consumers eat will be smaller.
The caloric difference will be insignificant. But instead of having it come from meat, and especially cattle, have it come from vegetables and poultry.
No one needs to eat red meat every day.
I would presume that this is true, in the sense that the overall economic footprint of what these bankrupted consumers eat will be smaller.
The caloric difference will be insignificant. But instead of having it come from meat, and especially cattle, have it come from vegetables and poultry.
No one needs to eat red meat every day.
Honestly it feels a bit like pissing one's pants to get some warmth in winter. It solves the immediate problem, but how it works out in the end...
> I believe you may have some reading comprehension problem with what they laid out?
Why the personal attack?
The top level comment didn't claim that it would solve the water problem, but that it would solve some apparent problem with Utahns but being able to buy alfalfa. Now another commentor is saying that it'll solve the water problem by putting farmers out of business. Is there a local unmet need for alfalfa?
Why the personal attack?
The top level comment didn't claim that it would solve the water problem, but that it would solve some apparent problem with Utahns but being able to buy alfalfa. Now another commentor is saying that it'll solve the water problem by putting farmers out of business. Is there a local unmet need for alfalfa?
Farmland is overpriced in part due to farm subsidies. It will help bring land prices back to earth for other uses.
> they can sell it there for more money than it can be sold locally
So, just to be clear here: you want Utah farmers to foot the bill for the trade war? If they are forced to sell locally for less, they're the ones losing money. Utahns end up poorer in this scenario.
Obviously in a trade war, everyone ends up poorer. It's just simple math. It's absolutely dumbfounding the extent to which people have simply decided to ignore an honest truth simply because of the lies of one political cult.
So, just to be clear here: you want Utah farmers to foot the bill for the trade war? If they are forced to sell locally for less, they're the ones losing money. Utahns end up poorer in this scenario.
Obviously in a trade war, everyone ends up poorer. It's just simple math. It's absolutely dumbfounding the extent to which people have simply decided to ignore an honest truth simply because of the lies of one political cult.
I don't think it was OPs point. OP's point is that agricultural exporters in Utah profits on externalizations (aquifer depletion), which impoverishes everybody depending on that aquifer.
When you come to the realization that you can't drink money, this comes as good news.
When you come to the realization that you can't drink money, this comes as good news.
So... you think Utahns are simply going to stop farming and end up destitute? I'm not following. No, they'll keep turning the spigot on because they have kids to feed, they'll just be poorer.
If you want better water regulation in the Utah desert, the solution is better water regulation in the Utah desert and not a huge tax on trade.
If you want better water regulation in the Utah desert, the solution is better water regulation in the Utah desert and not a huge tax on trade.
Of course they'll continue farming. Just not alfalfa!
Yeah, because passing water regulation under any administration, let alone this one, is a common occurrence. /s
OP was just trying to make lemonade from the lemons we are served.
OP was just trying to make lemonade from the lemons we are served.
And I'm just saying that there are no lemons here. Empoverishing Utah farmers does nothing to fix their aquifer, period. They'll just be forced into less lucrative crops, and potentially into techniques that are more short-term and less protective of long term resources like water. Look at aquifer management elsewhere in the world. Are the poor countries doing a better job? Exactly.
Sure, but it's also entirely the wrong policy solution for the problem as it has been laid out.
Wonder whether Americans or the Chinese can weather tough times better.
Chinese don’t get to protest or voice dissent and Americans can’t be bothered to
Chinese don’t get to protest or voice dissent and Americans can’t be bothered to
Chinese people would understand that tough times are because Americans elected an idiot.
Americans would understand that tough times are because their fellow Americans elected an idiot.
It will be a crisis for both countries, but it will unite one and divide another. I think everyone will lose but America is likely to lose harder, bigly even.
Americans would understand that tough times are because their fellow Americans elected an idiot.
It will be a crisis for both countries, but it will unite one and divide another. I think everyone will lose but America is likely to lose harder, bigly even.
> Chinese people would understand that tough times are because Americans elected an idiot.
Traditionally, countries get pretty unhappy with their own leadership when the economy gets bad...
There's not a lot of room for nuanced political attribution at population scale.
Traditionally, countries get pretty unhappy with their own leadership when the economy gets bad...
There's not a lot of room for nuanced political attribution at population scale.
Both sides just survived covid in their own ways. There was suffering though, just like there will be again.
What? The US President has said repeatedly that tariffs are an easy money maker with no adverse side-effects. China is about to experience the boom times just like everyone in the US is now. You heard the US President’s comments about the recent jobs report, right?
Well, Chinese don’t have proper elections so there, I don't know.
But you can be sure that in the USA, this will all stop in 2 years with the midterms, and be reversed in 4 with the presidential elections. No one other than Trump’s fan base likes this even now, imagine in a few months when people start feeling the terrible repercussions.
But you can be sure that in the USA, this will all stop in 2 years with the midterms, and be reversed in 4 with the presidential elections. No one other than Trump’s fan base likes this even now, imagine in a few months when people start feeling the terrible repercussions.
The whole issue is that no one can be sure it will stop in 2 or 4 years. That's precisely the risk: will it stop? Will it not? Either way, I'm not investing some millions of dollars to setup shop in the USA if all that investment will go bust if the next election cycle removes tariffs.
Anyone saying they are sure about what is happening in the next 2-4 years in the USA is delusional.
Anyone saying they are sure about what is happening in the next 2-4 years in the USA is delusional.
I don't see this stopping, maybe escalate to talks about the need for a 3rd term.
How can you even remotely be sure of that given the results of the 2016 and 2024 elections?
Esp. considering how they've always got someone to blame for the issues that they cause. It's an ancient playbook
1. Identity a problem
2. Blame $group of people for the issue and rally citizens to you
3. Oust previous administration/rulers with rallied citizens
And then to stay in power
1. Create or identity a problem
2. Blame $group of people for the problem
3. Rally citizens to ostracize the new group of ppl
4. Back to 1
The issues never need to be resolved, as long as the citizens blame someone and feel empowered to lash out against someone (the people getting blamed).
1. Identity a problem
2. Blame $group of people for the issue and rally citizens to you
3. Oust previous administration/rulers with rallied citizens
And then to stay in power
1. Create or identity a problem
2. Blame $group of people for the problem
3. Rally citizens to ostracize the new group of ppl
4. Back to 1
The issues never need to be resolved, as long as the citizens blame someone and feel empowered to lash out against someone (the people getting blamed).
[deleted]
> How can you even remotely be sure of that given the results of the 2016 and 2024 elections?
No one can be sure of anything, but the specific years you picked happen to have possibly two of the least electable candidates on the ballot.
Biden was not even a particularly good candidate in 2020, but he was able to win. I think that’s indicative of how low the bar is.
No one can be sure of anything, but the specific years you picked happen to have possibly two of the least electable candidates on the ballot.
Biden was not even a particularly good candidate in 2020, but he was able to win. I think that’s indicative of how low the bar is.
Hopefully so, but I'm not certain elections will be the same as they have. There's reason to believe Trump has no intention of leaving office, and the Republican party has not intention of losing power. This is their chance to remake America long term, and they can't really do that if it gets overturned every 2-4 years.
Democrats have been saying exactly the same since Bush Junior was elected: "OMG, this will surely become an autocracy by the end of his mandate! There's no way we will ever have democratic elections again!"
Really, I don't like Trump, I think he is a buffoon, but Democrats are so tiresome, calling wolf every time they don't get what they want. I know toddlers with more self restrain.
Really, I don't like Trump, I think he is a buffoon, but Democrats are so tiresome, calling wolf every time they don't get what they want. I know toddlers with more self restrain.
You're not paying attention. Doesn't matter what was said before. It matters what the Trump administration is doing this time. I wasn't saying this after Trump won the election. It was everything he's done since taking office.
Trump himself, out of his own mouth, with his own tongue, using the air from the breathe inside his lungs, has literally and explicitly with no ambiguities said on multiple occasions that he wants to violate the constitution and have a third term. Republican leaders are humoring the idea.
You mentioned there are multiple occasions: You got a quote on that? I did a quick Google search, but the most recent events are hogging up the results and I didn't hear anything literal about him saying what you claim he was saying. If you're referring to the most recent question asked by a reporter, what you're saying is false -- there was nothing literal or explicit about it.
The specific text in the 22nd Amendment states: "No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once"
Key word is "ELECTED," (the loophole) but this is up for debate as the intent of the amendment. Deeper dive here: https://www.factcheck.org/2025/04/legal-scholars-dispute-con...
The specific text in the 22nd Amendment states: "No person shall be elected to the office of the President more than twice, and no person who has held the office of President, or acted as President, for more than two years of a term to which some other person was elected President shall be elected to the office of the President more than once"
Key word is "ELECTED," (the loophole) but this is up for debate as the intent of the amendment. Deeper dive here: https://www.factcheck.org/2025/04/legal-scholars-dispute-con...
It wasn't up for debate with the last 12 presidents...
And many people seem to have collective amnesia about the January 6 Capitol riots, the Trump-Raffensperger phone call, the fake electors plot, etc. Trump has shown us many times who he is, and yet somehow many conservatives still refuse to believe the evidence that is right in front of their eyes.
It's not that conservatives don't believe -- it's that they don't care.
Winning > rule of law
Which I blame solely on conservative talk radio's lack of morals, and inspiring the same in their listenership.
Winning > rule of law
Which I blame solely on conservative talk radio's lack of morals, and inspiring the same in their listenership.
I am not part of Trump's fan base, and I am in favor of taking action to reverse decades of negative trends I've seen happening as a result of American corporations selling their souls to the highest outside bidders. It's going to be short term pain for long term gain.
Tariffs are not a magic button for "short term pain, long term gain". The way they're being implemented is more like "short term pain, long term pain".
You genuinely think the corporations will stop "selling their souls to the highest outside bidder" with tariffs? Like, how exactly could such a thing happen?
Besides, corporations are actually better equipped to deal with sudden expenses then small businesses. Corporations will suffer the lest and possibly will pay for exceptions for themselves in white house. Smaller businesses wont be able to do the same.
Besides, corporations are actually better equipped to deal with sudden expenses then small businesses. Corporations will suffer the lest and possibly will pay for exceptions for themselves in white house. Smaller businesses wont be able to do the same.
I keep hearing people say short term gain, but no one wants to put a time on short term, nor do they want to do the math on how long it would take for their their plans to come to actual fruition using tariffs. There is nothing short term about setting up steel mills, rare earth extraction, chip factories, growing coffee...
This isn't short-term pain for long-term gain; it's short-term pain for long-term catastrophe.
The tariffs aren't some carefully-devised scheme to work out how to reshore manufacturing to the US; they're a slapdash scheme based on such idiotic economics that people had to do a double-take because the President of the United States and his cabinet couldn't possibly be that stupid. And once that sinks in, it becomes extremely counterproductive to the ostensible aims.
Why should anyone bother reshoring anything to the US? You might escape 30% tariffs on your product, but only for 30% tariffs on the inputs to your product. And living in the US means your long-term plans are always at risk of the toddler-in-chief throwing another tantrum because, as we've already seen, a deal he makes yesterday can become the worst deal in the world that is proof of how much the US is getting cheated tomorrow.
The tariffs aren't some carefully-devised scheme to work out how to reshore manufacturing to the US; they're a slapdash scheme based on such idiotic economics that people had to do a double-take because the President of the United States and his cabinet couldn't possibly be that stupid. And once that sinks in, it becomes extremely counterproductive to the ostensible aims.
Why should anyone bother reshoring anything to the US? You might escape 30% tariffs on your product, but only for 30% tariffs on the inputs to your product. And living in the US means your long-term plans are always at risk of the toddler-in-chief throwing another tantrum because, as we've already seen, a deal he makes yesterday can become the worst deal in the world that is proof of how much the US is getting cheated tomorrow.
Can you be specific about how you think any of these actions will fix that?
Negative trends of what? Exchanging highly paid services for cheap goods?
EU needs to start taxing heavily any services provided here by the USA. Having the USA moron in Chief pretending that the comercial balance is solely made of physical goods to create an Excel sheet warrants a nice lesson.
EU needs to start taxing heavily any services provided here by the USA. Having the USA moron in Chief pretending that the comercial balance is solely made of physical goods to create an Excel sheet warrants a nice lesson.
>EU needs to start taxing heavily any services provided here by the USA.
Their services are provided by companies/branches in the EU not the US.
When you buy a EC2/S3 bucket from AWS you get invoiced by Amazon Luxembourg, not Amazon Washington. When you buy a Microsoft, Google, PayPal, Meta or Apple service, you'll be buying from a company registered in Ireland or Netherlands. And most of them also have datacenters in the EU for their EU customers.
So how do you tax them more than other companies in the EU? Make The Great EUSSR Firewall?
Their services are provided by companies/branches in the EU not the US.
When you buy a EC2/S3 bucket from AWS you get invoiced by Amazon Luxembourg, not Amazon Washington. When you buy a Microsoft, Google, PayPal, Meta or Apple service, you'll be buying from a company registered in Ireland or Netherlands. And most of them also have datacenters in the EU for their EU customers.
So how do you tax them more than other companies in the EU? Make The Great EUSSR Firewall?
In fact I think EU should heavily tighten the screws on US big tech on grounds that their presence is a security risk.
They are beholden to the US government in many ways, and relying on the services beholden to a hostile foreign nation should be considered a risk.
They are beholden to the US government in many ways, and relying on the services beholden to a hostile foreign nation should be considered a risk.
So, it'll probably be tarriffing the large US financial institutions first, and excluding them from public procurement.
Honestly not sure what they'll do about tech, but it's not gonna be pretty.
Trade wars are bad for everyone, but we are where we are I guess.
Honestly not sure what they'll do about tech, but it's not gonna be pretty.
Trade wars are bad for everyone, but we are where we are I guess.
What makes these EU companies part of the American companies then?
Tariff licensing costs.
What you see here is entirely about "corporations selling their souls to the highest outside bidders", who do you even think benefits from all this if not the oligarchs?
China makes everything, US does nothing. Who do you think will weather this better?
Let's not be hyperbolic. The US is still the second largest manufacturer in the world.
Small US companies near me, reliant on Chinese inputs, aren't suddenly getting hundreds of millions to build factories that'll take years to finish. Trump’s plan assumes most small businesses can pause everything for long, expensive factory construction/toolup projects. In my area our three big manufacturers depend on Canadian aluminum and Chinese subcomponents. Tariffs won’t bring jobs back but they’ll kill the ones we still have.
That's maybe the biggest problem with the Trump tariffs - not enough time to adjust. If you were doing it properly you'd plan years ahead.
Which is likely one reason among many why Biden didn't cancel the Trump v1 tariffs. Instead the IRA included a good chunk of money to invest in green infrastructure. We had Trump sticks and Biden carrots working somewhat harmoniously, and a smooth transition.
It will suck on both sides, but the majority of American households can weather a $2-4k blow over the next year as supply chains react.
Congress stepping in to exclude Canada and Mexico and the NAFTA exemption cushions the blow significantly.
Most of Latin America being placed at the lower end of the announcement means manufacturers who used to be competitive until China Shock set around 2014-16 can be cost competitive again.
Other large markets like India, UK, and Vietnam are negotiating as well and India expects as Bilateral Trade Agreement to be closed by Aug-Oct.
Congress stepping in to exclude Canada and Mexico and the NAFTA exemption cushions the blow significantly.
Most of Latin America being placed at the lower end of the announcement means manufacturers who used to be competitive until China Shock set around 2014-16 can be cost competitive again.
Other large markets like India, UK, and Vietnam are negotiating as well and India expects as Bilateral Trade Agreement to be closed by Aug-Oct.
Half of Americans say they live paycheck to paycheck, so no - the majority of households will not be able to survive for long if they have to spend an extra few thousand to stay where they are today.
Those that can will be cutting spending, which will ripple across the rest of the economy.
There's no sign that negotiation is even possible, never mind likely.
One tell is that tariffs have been applied to the Heard and McDonald Islands, which are inhabited by penguins and produce no imports or exports.
These are not the actions of a rational administration.
Those that can will be cutting spending, which will ripple across the rest of the economy.
There's no sign that negotiation is even possible, never mind likely.
One tell is that tariffs have been applied to the Heard and McDonald Islands, which are inhabited by penguins and produce no imports or exports.
These are not the actions of a rational administration.
Mexican cartels just got handed the biggest payday of their wildest dreams. 30% profit on the entire global economy if only they can get it past the border.
Strangely, I was thinking about this yesterday, that smuggling now became profitable :) It used to be and still is very profitable in some countries with goods that attract big tariffs like cigarettes. Gray markets will boom.
>Half of Americans say they live paycheck to paycheck, so no - the majority of households will not be able to survive for long if they have to spend an extra few thousand to stay where they are today
What do you think the death toll will be? A majority of households not surviving would put it over 160 million.
$4k per capita (not household) loss would put the US in 2022 territory [1].
https://fred.stlouisfed.org/series/A939RX0Q048SBEA
What do you think the death toll will be? A majority of households not surviving would put it over 160 million.
$4k per capita (not household) loss would put the US in 2022 territory [1].
https://fred.stlouisfed.org/series/A939RX0Q048SBEA
Holy bad faith bs from someone who pretends they're a straight shooter. “...the death toll.” What a trash response to Americans suffering.
So kind of you to volunteer that the poorest among us have nothing and should be happy about it.
You admit this is a $4k hit that Congress didn’t pass. Guess after all your talk here, you don’t actually believe in the Constitution or separation of powers just “I should be able to do what I want with power.”
$4k no biggie, right? From my experience, it just means when things wear out, they don’t get replaced. So shoes for kids get stretched to last longer. Car maintenance gets skipped. (You can judge a bad president by the number of broken-down cars on the side of the road.). It’s food not bought, medical/dental care skipped, rent coming up short.
The real death toll won’t be a one-time body count. It’ll be slow and quiet: worse health, more homelessness, more suicides. And for what? So we can LARP like we’re rebuilding American industry without giving businesses the capital, labor, or time to do it?
This isn’t strategy. It’s cruelty pretending to be policy.
So kind of you to volunteer that the poorest among us have nothing and should be happy about it.
You admit this is a $4k hit that Congress didn’t pass. Guess after all your talk here, you don’t actually believe in the Constitution or separation of powers just “I should be able to do what I want with power.”
$4k no biggie, right? From my experience, it just means when things wear out, they don’t get replaced. So shoes for kids get stretched to last longer. Car maintenance gets skipped. (You can judge a bad president by the number of broken-down cars on the side of the road.). It’s food not bought, medical/dental care skipped, rent coming up short.
The real death toll won’t be a one-time body count. It’ll be slow and quiet: worse health, more homelessness, more suicides. And for what? So we can LARP like we’re rebuilding American industry without giving businesses the capital, labor, or time to do it?
This isn’t strategy. It’s cruelty pretending to be policy.
Im not the one making the hyperbolic claim that a majority of households wont survive long.
Nah, you're just the one OK with Trump unilaterally imposing tariffs, something that the Constitution says only Congress can do. And like your failure to address that point in your response, caring about the Constitution isn't a thing to you.
I don't have to defend your baseless personal claims that have nothing to do with what I said. You can imagine whatever you want.
[deleted](1)
> the majority of households will not be able to survive for long if they have to spend an extra few thousand to stay where they are today.
The median American household has an income of around $78,000 [0]. They can survive the blowback. The Trump admin on the other hand will not.
As a Sullivan, Raimondo, and IRA supporting Dem, it's a win-win for me. Harsher policies against China have been enacted which will not be rolled back (just like how the Biden admin let Trump 1 era tariffs remain) and it will cause a severe blow as midterm fundraising season has started. The NY by-election for Stefanik's seat itself proved that the tariffs and DOGE have made plenty of purple to light red seats vulnerabile.
I wrote some thoughts about this recently [1]
[0] - https://www.census.gov/quickfacts/fact/table/US/SEX255223
[1] - https://news.ycombinator.com/item?id=43574128
The median American household has an income of around $78,000 [0]. They can survive the blowback. The Trump admin on the other hand will not.
As a Sullivan, Raimondo, and IRA supporting Dem, it's a win-win for me. Harsher policies against China have been enacted which will not be rolled back (just like how the Biden admin let Trump 1 era tariffs remain) and it will cause a severe blow as midterm fundraising season has started. The NY by-election for Stefanik's seat itself proved that the tariffs and DOGE have made plenty of purple to light red seats vulnerabile.
I wrote some thoughts about this recently [1]
[0] - https://www.census.gov/quickfacts/fact/table/US/SEX255223
[1] - https://news.ycombinator.com/item?id=43574128
> The median American household has an income of around $78,000
What are the expenses of the median American household?
What are the expenses of the median American household?
The whole trump thing went from prospects of economic boom to "the median household is enough wealthy to tolerate the price increase" really, really quick
It was both. Musk said there would be pain for the short term. Trump promised the long game.
I like how you talk about them like there is any "game" involved. Neither individual knows what the hell he's doing. Just greedy self-serving bulls in a china shop.
You do understand that means half of all American households make less than 78k? If your reasoning is based on the upper half of wealthiest Americans, it ignores virtually all the most vulnerable.
Income distribution: https://www.statista.com/statistics/203183/percentage-distri...
Income distribution: https://www.statista.com/statistics/203183/percentage-distri...
They call it blowback because 'increased homelessness, suicides, kids not getting new shoes as they grow, people having teeth pulled instead of dental work' and 'you will have nothing and be happy' make their policy look bad.
Then later they will make fun of the people that have missing teeth because they chose food for their kids over dental work and call those people trash.
Then later they will make fun of the people that have missing teeth because they chose food for their kids over dental work and call those people trash.
Nearly half of the US live paycheck to paycheck[1]. Their lives are not getting easier.
[1] https://www.cnbc.com/amp/2024/11/19/bank-of-america-nearly-h...
[1] https://www.cnbc.com/amp/2024/11/19/bank-of-america-nearly-h...
> but the majority of American households can weather a $2-4k blow over the next year
- Wasn’t this the administration that campaigned on lowering costs of goods? Now, not even a half-year in, the narrative is “Sorry, deal with it, while we chaotically disrupt global markets.” - The administration is apparently intent on a strategy that builds the U.S. manufacturing base. That’s not a one-year horizon, if ever.
- Wasn’t this the administration that campaigned on lowering costs of goods? Now, not even a half-year in, the narrative is “Sorry, deal with it, while we chaotically disrupt global markets.” - The administration is apparently intent on a strategy that builds the U.S. manufacturing base. That’s not a one-year horizon, if ever.
There was a former Republican President who ran on the promise, "Read my lips, no new taxes". And then he raised taxes.
> $2-4k blow over the next year as supply chains react.
It's gonna take a lot longer, and cost Americans a lot more money for "supply chains to react" and move manufacturing to the US.
It's gonna take a lot longer, and cost Americans a lot more money for "supply chains to react" and move manufacturing to the US.
Manufacturing isn't returning to the US due to these tariffs.
Just like before the tariffs, the US is still too expensive.
On the other hand, it has killed cost-competitiveness for Chinese exports directly from China or via transshipment from Vietnam.
The tariff regime has now made Latin America (Brazil, Colombia), Turkiye, Philippines, parts of the EU (Poland, Czechia, Romania), and India cost competitive. And NAFTA/USMCA exemptions still remain and this was something Congress pushed back HARD on to ensure.
Just like before the tariffs, the US is still too expensive.
On the other hand, it has killed cost-competitiveness for Chinese exports directly from China or via transshipment from Vietnam.
The tariff regime has now made Latin America (Brazil, Colombia), Turkiye, Philippines, parts of the EU (Poland, Czechia, Romania), and India cost competitive. And NAFTA/USMCA exemptions still remain and this was something Congress pushed back HARD on to ensure.
> Manufacturing isn't returning to the US due to these tariffs.
Even if it did, is it even desirable?
Countries that actually tried to keep manufacturing beyond its usefulness typically punch beneath their weight, such as the case of Germany.
The US lost manufacturing because it was heavily automated and those jobs don't pay really well. They are great for poor countries, because working in a factory sweatshop is better than plowing fields in rural areas, but advanced economies eventually grow beyond that.
The US, being the most advanced economy in the world, transitioned a long time ago into a finance and service economy. It's kind of fascinating (viewing from the outside) that it want to revert to a more rudimentary economy, and there are people applauding that.
Even if it did, is it even desirable?
Countries that actually tried to keep manufacturing beyond its usefulness typically punch beneath their weight, such as the case of Germany.
The US lost manufacturing because it was heavily automated and those jobs don't pay really well. They are great for poor countries, because working in a factory sweatshop is better than plowing fields in rural areas, but advanced economies eventually grow beyond that.
The US, being the most advanced economy in the world, transitioned a long time ago into a finance and service economy. It's kind of fascinating (viewing from the outside) that it want to revert to a more rudimentary economy, and there are people applauding that.
Germany is the largest industrial power after the US and China. What on earth do you mean "punching below its weight"?
> Countries that actually tried to keep manufacturing beyond its usefulness typically punch beneath their weight, such as the case of Germany.
Can you explain to me how Germany is punching below their weight?
Like, I personally think that having manufacturing in multiple places is good for resiliency reasons at the very least.
> The US lost manufacturing because it was heavily automated and those jobs don't pay really well. They are great for poor countries, because working in a factory sweatshop is better than plowing fields in rural areas, but advanced economies eventually grow beyond that.
This is a complete myth. The US lost manufacturing because capital controls were removed, and capital went looking for new margins. Like, all of Microsoft's English customer service and technical documentation were in Ireland in the 90's. Is that because Irish people have comparative advantage in these fields? No, it's because wages were super super low compared to the US. We used to have a bunch of clothing factories too, because we were cheap.
Fundamentally, stuff actually needs to be made if you want a modern society. You can outsource that to cheaper countries/Asia for a while, but it's not gonna end well. Like, a large proportion of the population are not cut out to be tech or finance professionals, and if you outsource all the factories that they could have worked at, then they'll get really depressed and angry and vote for Brexit/Trump/Le Pen/AfD.
And given that most of the rich west are democracies, you can't just pretend these people don't exist.
Can you explain to me how Germany is punching below their weight?
Like, I personally think that having manufacturing in multiple places is good for resiliency reasons at the very least.
> The US lost manufacturing because it was heavily automated and those jobs don't pay really well. They are great for poor countries, because working in a factory sweatshop is better than plowing fields in rural areas, but advanced economies eventually grow beyond that.
This is a complete myth. The US lost manufacturing because capital controls were removed, and capital went looking for new margins. Like, all of Microsoft's English customer service and technical documentation were in Ireland in the 90's. Is that because Irish people have comparative advantage in these fields? No, it's because wages were super super low compared to the US. We used to have a bunch of clothing factories too, because we were cheap.
Fundamentally, stuff actually needs to be made if you want a modern society. You can outsource that to cheaper countries/Asia for a while, but it's not gonna end well. Like, a large proportion of the population are not cut out to be tech or finance professionals, and if you outsource all the factories that they could have worked at, then they'll get really depressed and angry and vote for Brexit/Trump/Le Pen/AfD.
And given that most of the rich west are democracies, you can't just pretend these people don't exist.
They're not cost-competitive because they don't have anything like the same manufacturing capacity or R&D facilities for many manufacturing sectors.
> Manufacturing isn't returning to the US due to these tariffs.
Even if it did, who cares? It wouldn't make anything less expensive or better and unemployment was already basically as close to zero as it will ever get. If wages go up that would just increase inflation more.
I can't figure out what they even imagined this was going to accomplish.
Even if it did, who cares? It wouldn't make anything less expensive or better and unemployment was already basically as close to zero as it will ever get. If wages go up that would just increase inflation more.
I can't figure out what they even imagined this was going to accomplish.
> I can't figure out what they even imagined this was going to accomplish.
The downfall of Democracy in America and the alienation of all our allies? That is clearly their goal here...
The downfall of Democracy in America and the alienation of all our allies? That is clearly their goal here...
[deleted]
> Congress stepping in to exclude Canada and Mexico and the NAFTA exemption cushions the blow significantly.
I know the senate voted this through. But it still has to pass the house doesn't it? I doubt it will even get to be voted on with Mike Johnson as speaker.
I know the senate voted this through. But it still has to pass the house doesn't it? I doubt it will even get to be voted on with Mike Johnson as speaker.
And even then, they’d need a 2/3 majority in both chambers to get past a Trump veto right?
There’s no way they’d get that in the house.
There’s no way they’d get that in the house.
The expanded child tax credit was ~3k per year. It absolutely clobbered child poverty rates. This sort of delta in expenses can change a family's fortune significantly.
It's too bad that INS v Chadha essentially gutted the National Emergencies Act, which could allow Congress to end some/all of the tariffs. In it's original form, the NEA allowed Congress to pass a concurrent resolution to terminate an emergency without needing the president's signature. Now it has to be a joint resolution, which can be vetoed by the president, and what president is going to sign off on the termination of an emergency they themselves declared?
> a $2-4k blow over the next year as supply chains react
Can you explain the magical supply chain adjustment that will lower prices after a year?
Can you explain the magical supply chain adjustment that will lower prices after a year?
And, of course, all those Americans who were already poor and are now even poorer will have the extra time and money to start businesses and manufacturing lines. Especially with the 30% increase on prices for all the machinery and raw goods they may need to import.
[deleted]
Feels like peak HN to just say all Americans can weather extra thousands per year...
Many American tech leaders helped usher in a Trump presidency in the belief that he could be their strongman protecting them from meddling foreign governments: No more EU levying fines or China making demands, they thought, or else Donald would target them with punitive tariffs! They had the mob boss on their side and this was their time to trample the world.
Zuckerberg explicitly stated this in his Rogan interview.
Pretty funny how that turned out. American tech is going to be on a carousel of ass kickings. The fines and punitive measures are going to be coming at a torrential clip, and of course the US economy is going to be in for an extremely rough few years, and tech is the first thing that sees budget cuts. Quite aside from the entire industry being gut punched by the stupidest tariff regime in human history.
Art of the Deal
Zuckerberg explicitly stated this in his Rogan interview.
Pretty funny how that turned out. American tech is going to be on a carousel of ass kickings. The fines and punitive measures are going to be coming at a torrential clip, and of course the US economy is going to be in for an extremely rough few years, and tech is the first thing that sees budget cuts. Quite aside from the entire industry being gut punched by the stupidest tariff regime in human history.
Art of the Deal
It seems there’s a lot of money to be made if you are willing to navigate eu business rules to build European copies of American technology companies. Like I have thought about starting a European based, European values cloud data science platform. There’s a lot of people who would simply want to move away from azure, Google, etc. even though Europe can sometimes be draconian and highly segmented.
> Art of the Deal
Reminder that Trump had no part in writing the book:
* https://en.wikipedia.org/wiki/The_Art_of_the_Deal
More seriously, this 2018 article from Indiana University negotiations professor David Honig has (re-)popped in recent months:
> Distributive bargaining always has a winner and a loser. It happens when there is a fixed quantity of something and two sides are fighting over how it gets distributed. Think of it as a pie and you’re fighting over who gets how many pieces. In Trump’s world, the bargaining was for a building, or for construction work, or subcontractors. He perceives a successful bargain as one in which there is a winner and a loser, so if he pays less than the seller wants, he wins. The more he saves the more he wins.
> The other type of bargaining is called integrative bargaining. In integrative bargaining the two sides don’t have a complete conflict of interest, and it is possible to reach mutually beneficial agreements. Think of it, not a single pie to be divided by two hungry people, but as a baker and a caterer negotiating over how many pies will be baked at what prices, and the nature of their ongoing relationship after this one gig is over.
[…]
> One of the risks of distributive bargaining is bad will. In a one-time distributive bargain, e.g. negotiating with the cabinet maker in your casino about whether you’re going to pay his whole bill or demand a discount, you don’t have to worry about your ongoing credibility or the next deal. If you do that to the cabinet maker, you can bet he won’t agree to do the cabinets in your next casino, and you’re going to have to find another cabinet maker.
> There isn’t another Canada.
[…]
> Trump has the same weakness politically. For every winner there must be a loser. And that’s just not how politics works, not over the long run.
* https://medium.com/@davidhonig_67081/distributive-bargaining...
* https://blogs.iu.edu/keep/distributive-negotiation-vs-integr...
* https://www.pon.harvard.edu/daily/negotiation-skills-daily/n...
Reminder that Trump had no part in writing the book:
* https://en.wikipedia.org/wiki/The_Art_of_the_Deal
More seriously, this 2018 article from Indiana University negotiations professor David Honig has (re-)popped in recent months:
> Distributive bargaining always has a winner and a loser. It happens when there is a fixed quantity of something and two sides are fighting over how it gets distributed. Think of it as a pie and you’re fighting over who gets how many pieces. In Trump’s world, the bargaining was for a building, or for construction work, or subcontractors. He perceives a successful bargain as one in which there is a winner and a loser, so if he pays less than the seller wants, he wins. The more he saves the more he wins.
> The other type of bargaining is called integrative bargaining. In integrative bargaining the two sides don’t have a complete conflict of interest, and it is possible to reach mutually beneficial agreements. Think of it, not a single pie to be divided by two hungry people, but as a baker and a caterer negotiating over how many pies will be baked at what prices, and the nature of their ongoing relationship after this one gig is over.
[…]
> One of the risks of distributive bargaining is bad will. In a one-time distributive bargain, e.g. negotiating with the cabinet maker in your casino about whether you’re going to pay his whole bill or demand a discount, you don’t have to worry about your ongoing credibility or the next deal. If you do that to the cabinet maker, you can bet he won’t agree to do the cabinets in your next casino, and you’re going to have to find another cabinet maker.
> There isn’t another Canada.
[…]
> Trump has the same weakness politically. For every winner there must be a loser. And that’s just not how politics works, not over the long run.
* https://medium.com/@davidhonig_67081/distributive-bargaining...
* https://blogs.iu.edu/keep/distributive-negotiation-vs-integr...
* https://www.pon.harvard.edu/daily/negotiation-skills-daily/n...
I hate to say it: this might be the thing that actually screws his movement.
Biden was uninspiring but ultimately did okay on a few things. The things that screwed him were inflation - some of which was Trump's fault - and his mental state, which can happen to anyone at that age. The inflation followed Harris in her run, as people were fondly remembering 2017-2019 and the era of lower prices. They thought putting Trump back in office would reverse the trend.
Well, now he's drastically kicking prices up left and right with no end in sight. It's not even macroeconomic factors doing this like it was with COVID; it's purely the strokes of his pen.
The bottom line is the ultimate thing that matters in American politics, as it is everywhere. The talk about democracy, institutions, rights, etc. are all window dressing. "It's the economy, stupid", and it's getting noticeably worse.
Of course, I could also be totally wrong like everything else has been for the last 10 years when it comes to predicting the downfall of that tyrant.
Biden was uninspiring but ultimately did okay on a few things. The things that screwed him were inflation - some of which was Trump's fault - and his mental state, which can happen to anyone at that age. The inflation followed Harris in her run, as people were fondly remembering 2017-2019 and the era of lower prices. They thought putting Trump back in office would reverse the trend.
Well, now he's drastically kicking prices up left and right with no end in sight. It's not even macroeconomic factors doing this like it was with COVID; it's purely the strokes of his pen.
The bottom line is the ultimate thing that matters in American politics, as it is everywhere. The talk about democracy, institutions, rights, etc. are all window dressing. "It's the economy, stupid", and it's getting noticeably worse.
Of course, I could also be totally wrong like everything else has been for the last 10 years when it comes to predicting the downfall of that tyrant.
No doubt Lutnick and Bessent are taking crazy risks with their strategy. If they are to be believed, their plan is to have a recession at the begining of the term to get long term bond price lower and refinance the debt. By their own account, they outright said to Trump things aren't going to be good until 2028. So, I guess we have to prepare for a few years of crap. Let's hope it doesn't trigger a depression that would need government bailout to save the economy.
What’s worrisome is, if they’re planning on things to suck until 2028, that is precisely when the next presidential election is supposed to happen. Suppose he feels like he must have 4 more years, to take credit for the V-shaped recovery, and not go out like a loser? Suppose he declines to step down?
They're already talking about how he can have a third term, 22nd amendment be damned.
The recent Civil War movie had the president serving a 3rd term leading to 19 states seceding. How would the blue states respond to Trump ignoring the 22nd amendment?
As a general rule, with some exceptions of course, Democrat politicians tend to "roll over and take it". If the Supreme Court rules that Trump is the president from 2028-2032, expect blue state leaders to just go "oh ok" and then accept that he is the president.
You can contrast it with what red states would do if Obama had a third term.
You can contrast it with what red states would do if Obama had a third term.
The same way they responded to ignoring of the 14th? The Supreme court will provide some travesty justification and that'll be it.
FWIW, that is 100% a retconned explanation. No one anywhere was talking about this theory until the last week.
It's clear that Trump demanded tariffs, tried to do it once early, and got cold feet. What happened with Lutnick et. al. is Court Politics. They saw an opening to improve their own status by selling a creative lie that would allow Trump to do what he wants. So he bought the lie and picked new favorites.
But it remains a lie. No one serious thinks that this is a good idea.
Also: refinance the debt?! First, no, that's not how federal bonds work. They're a contract and you pay the interest it says on the note. But even if you had a magic money pool around to do buybacks or whatever... most of the outstanding debt is in 30 year notes at like 3%! How low do you think they're going to get the Fed to go?
It's clear that Trump demanded tariffs, tried to do it once early, and got cold feet. What happened with Lutnick et. al. is Court Politics. They saw an opening to improve their own status by selling a creative lie that would allow Trump to do what he wants. So he bought the lie and picked new favorites.
But it remains a lie. No one serious thinks that this is a good idea.
Also: refinance the debt?! First, no, that's not how federal bonds work. They're a contract and you pay the interest it says on the note. But even if you had a magic money pool around to do buybacks or whatever... most of the outstanding debt is in 30 year notes at like 3%! How low do you think they're going to get the Fed to go?
I think at least some of them are also true believers. The administration is full of people that have their own extreme ideas on how the world should work and now they have the chance to try them.
$9 trillion of government debt is maturing over the next year. That's around 25% of the US debt.
https://www.reuters.com/markets/us/us-treasury-plays-cat-mou...
https://www.reuters.com/markets/us/us-treasury-plays-cat-mou...
Right, that's the amount issued in short term bonds and whatnot. It cycles all the time. But again: it's maturing. You don't need to "refinance it", for the same reason you don't refinance a mortgage with only $6k principle left. There's no point, just pay it off and work on a new loan.
So the question becomes "can we get better rates for bonds?". And clearly the answer is hell no, because nothing in this mess makes US debt look more attractive to foreign investors. We're moving in the opposite direction from the way the cult expects things to go.
So the question becomes "can we get better rates for bonds?". And clearly the answer is hell no, because nothing in this mess makes US debt look more attractive to foreign investors. We're moving in the opposite direction from the way the cult expects things to go.
'Trump talked about tariffs to Opra in the 80s because 25% of US debt would mature in 2025' isn't the 4d chess you think it is.
[deleted]
I don't think they have a strategy.
These aren't people who care about the national debt. Trump has not only stated, but bragged publicly, that he does what he can to pay as little in tax as possible. He's had an appeal in front of the IRS for probably over a decade now for writing down the value of a business loss (the casino in Atlantic City, IIRC) that he received monetary gain from.
That's not what you do when you see a financial issue as a threat to the nation you supposedly love. They are too short-sighted to have a strategy.
If there's a depression or major recession, I don't think the government bailout would be the main concern. Civil unrest would be. I'm in my early 30s and I've seen four major financial crises (2002, 2008, 2020, and now 2025) in my lifetime. I'm doing alright because I come from a place of privilege. There are literally millions of people my age who aren't going to be doing alright in the situation you describe, and there's a good chance they would see that as the death knell of their hopes and dreams, all because of the shareholder and political classes in this country.
These aren't people who care about the national debt. Trump has not only stated, but bragged publicly, that he does what he can to pay as little in tax as possible. He's had an appeal in front of the IRS for probably over a decade now for writing down the value of a business loss (the casino in Atlantic City, IIRC) that he received monetary gain from.
That's not what you do when you see a financial issue as a threat to the nation you supposedly love. They are too short-sighted to have a strategy.
If there's a depression or major recession, I don't think the government bailout would be the main concern. Civil unrest would be. I'm in my early 30s and I've seen four major financial crises (2002, 2008, 2020, and now 2025) in my lifetime. I'm doing alright because I come from a place of privilege. There are literally millions of people my age who aren't going to be doing alright in the situation you describe, and there's a good chance they would see that as the death knell of their hopes and dreams, all because of the shareholder and political classes in this country.
My work is raising prices about 25% just based on the asumption. Apologies to the customers.
Prices are going up on everything. As a customer, I will be buying less products. Apologies to the Employees who will be losing their jobs over reduced profits.
Just yesterday people were trying to convince me that price hikes were good and would benefit Trump’s base. Now JP Morgan is predicting a global recession. I cannot fathom how this is good for America.
It just feels like a colossal own-goal that will weaken America on the global scale. Americans will suffer in a recession. And it was by choice that this administration put us here.
Is there any recourse?
It just feels like a colossal own-goal that will weaken America on the global scale. Americans will suffer in a recession. And it was by choice that this administration put us here.
Is there any recourse?
Hope you have an opportunity to vote again, and that the coup is unsuccessful this time.
>Is there any recourse?
Nope. The avalanche has begun, it's too late for the pebbles to regret their vote.
Nope. The avalanche has begun, it's too late for the pebbles to regret their vote.
Thanks for the great B5 quote.
The vast majority of us are just minor pebbles in trump’s grand experiment, just trying to find a quiet place to avoid all the noise and nightmares.
The SV mantra of “Move fast and break things” is not something that you really should apply to entire economic systems.
Someone will probably profit but it’s not going to be the average American citizen ( or citizen of any other country)
The vast majority of us are just minor pebbles in trump’s grand experiment, just trying to find a quiet place to avoid all the noise and nightmares.
The SV mantra of “Move fast and break things” is not something that you really should apply to entire economic systems.
Someone will probably profit but it’s not going to be the average American citizen ( or citizen of any other country)
> Just yesterday people were trying to convince me that price hikes were good and would benefit Trump’s base.
Apparently, they have a plan.
AFAICT, the plan is based on the US being "the last man standing" after WWII and turning its wartime manufacturing base into the machine which rebuilt the world but, nonetheless, they have a plan.
So rejoice in the Glorious Leader's wisdom and know he feels your economic pain and hardship. We must all make sacrifices to Make America Great Again.
Apparently, they have a plan.
AFAICT, the plan is based on the US being "the last man standing" after WWII and turning its wartime manufacturing base into the machine which rebuilt the world but, nonetheless, they have a plan.
So rejoice in the Glorious Leader's wisdom and know he feels your economic pain and hardship. We must all make sacrifices to Make America Great Again.
>Now JP Morgan is predicting a global recession.
Good thing JP Morgan's predictions were never wrong /s
Edit: to those who downvoted, do you have any arguments to contradict my statement and would you put your money into JP's predictions? Go ahead, I'll wait.
Good thing JP Morgan's predictions were never wrong /s
Edit: to those who downvoted, do you have any arguments to contradict my statement and would you put your money into JP's predictions? Go ahead, I'll wait.
JP Morgan are actually saying a 60% chance. So you can't really say they were right or wrong.
No Hyper-economy, like China or the EU is going to stand about and take what seems like economic intimidation from the US. All the unaffiliated nations are going to be collateral damage in this clash of the economic titans.
The best thing everyone can do is maintain low tariffs and try and strike free trade deals with each other. But the consequeces of Trumps Trade war are going to be disasterous for smaller developing nations and their economies. We'll see more poverty, more political instability, civil wars, coups and other unpleaseant activities.
The USA will probably get higher inflation while the rest of the world sees lower inflation if not deflation.
We'll have to find a way of getting through this window of misfortune to the other side, where I suspect we'll all be poorer and less free.
The best thing everyone can do is maintain low tariffs and try and strike free trade deals with each other. But the consequeces of Trumps Trade war are going to be disasterous for smaller developing nations and their economies. We'll see more poverty, more political instability, civil wars, coups and other unpleaseant activities.
The USA will probably get higher inflation while the rest of the world sees lower inflation if not deflation.
We'll have to find a way of getting through this window of misfortune to the other side, where I suspect we'll all be poorer and less free.
Why does America get inflation and everyone else gets deflation in your view?
Chinese firms that used to produce goods for the US are now going to sell these goods in other countries instead, increasing supply in the other countries, lowering prices.
Can the rest of the world just absorb the ridiculously high levels of consumption of the US market?
Because China will flood the markets with its products that it can no longer economically sell in the US.
Things will cost more in the US than elsewhere assuming we (abroad) don't also attack ourselves.
In this scenario, the US voluntarily goes quasi-autarky, but everyone else continues to trade.
And billionaires are still going to be rich.
I hope one day USA wakes up and realize the solution is wealth tax to these billionaires
I hope one day USA wakes up and realize the solution is wealth tax to these billionaires
Like what Norway did?
https://www.theguardian.com/world/2023/apr/10/super-rich-aba...
Yes, why not? To the best of my knowledge Norway is still thriving. Ideally more countries would get on board with such ideas and there will be fewer palpable places for them to relocate to.
From the article, “The model in Norway is that everyone should contribute relevant to ability and therefore those that have a greater ability to pay taxes, should pay a little more.” This seems more than fair, particularly while failing tax systems are leading to unprecedented levels of inequality.
From the article, “The model in Norway is that everyone should contribute relevant to ability and therefore those that have a greater ability to pay taxes, should pay a little more.” This seems more than fair, particularly while failing tax systems are leading to unprecedented levels of inequality.
Ahh sounds like good old Karl Marx “From each according to his ability, to each according to his needs”
https://en.m.wikipedia.org/wiki/From_each_according_to_his_a...
People don't become billionaires solely due to ability. Luck is the dominant factor: affluent upbringing and inheritance.
Let them drive inequality and create chaos somewhere else.
A wealth tax isn't the only solution, it's just the more civilized option that's in everyone's best interest
> I hope one day USA wakes up and realize the solution is wealth tax to these billionaires
That only works if everyone everywhere does it all at the same time, so they've nowhere to move to/hide.
That only works if everyone everywhere does it all at the same time, so they've nowhere to move to/hide.
They can’t bring their assets that are tied to US without divesting and got dinged once.
Sounds to me like it's best to start taxing billionaires and hope that other places follow suit.
When obama brought in his affordable healthcare, one of the big issues he discovered was that healthcare in the usa depends almost entirely on exports from china.
the other issue at the same time for the democrats was that they were losing middle american votes because the globalists shipped those jobs overseas.
There has been bipartisan support to exit globalism since; and it is over obviously. Obama, Biden, and Trump have all be making major changes to exit.
Without the need for global trade, the usa is also no longer world police. They have instead condensed their blue water navies down to super carrier groups that will project power into specific spots like yemen/houthis for example.
The usa rather abruptly switched from trying to sustain stability over the world to the opposite; they benefit from causing chaos elsewhere because backhome stability will be attractive to investors.
Welcome to how trade always was; we usually had our navies trading bullets and not goods.
China isn't ready and these retaliatory tariffs will only punish themselves.
https://www.usni.org/magazines/proceedings/2020/february/chi...
the other issue at the same time for the democrats was that they were losing middle american votes because the globalists shipped those jobs overseas.
There has been bipartisan support to exit globalism since; and it is over obviously. Obama, Biden, and Trump have all be making major changes to exit.
Without the need for global trade, the usa is also no longer world police. They have instead condensed their blue water navies down to super carrier groups that will project power into specific spots like yemen/houthis for example.
The usa rather abruptly switched from trying to sustain stability over the world to the opposite; they benefit from causing chaos elsewhere because backhome stability will be attractive to investors.
Welcome to how trade always was; we usually had our navies trading bullets and not goods.
China isn't ready and these retaliatory tariffs will only punish themselves.
https://www.usni.org/magazines/proceedings/2020/february/chi...
>> Trump's Trade War
That might be how it is understood locally, but on an international scale this is quickly moving from "Trump's" to "America's" trade war. Various levels of US government have had opportunity to weigh in, but have generally acquiesced to the recent tariff policies. Calling this a "trump problem" wont fly much longer. This is now American trade policy.
That might be how it is understood locally, but on an international scale this is quickly moving from "Trump's" to "America's" trade war. Various levels of US government have had opportunity to weigh in, but have generally acquiesced to the recent tariff policies. Calling this a "trump problem" wont fly much longer. This is now American trade policy.
Yeah 1) He won the popular vote. His support actually increased the 2nd time around, and 2) He should be in a tiny jail cell right now, what was Biden doing for 4 years?
This isn’t going away even if he leaves office in 4 years (which is looking unlikely).
This isn’t going away even if he leaves office in 4 years (which is looking unlikely).
> He should be in a tiny jail cell right now, what was Biden doing for 4 years?
Not causing a global financial crisis, mainly. But vis-a-vis his predecessor’s recurrent criminality, it’s hard to imagine what his options were, considering the capture of the remaining branches of government. Well, that, and the Constitution.
Not causing a global financial crisis, mainly. But vis-a-vis his predecessor’s recurrent criminality, it’s hard to imagine what his options were, considering the capture of the remaining branches of government. Well, that, and the Constitution.
With hindsight Biden should maybe have encouraged the Jan 6th prosecution to happen less than four years after the event.
What economist is advising Trump? Can we read their game plan somewhere?
specifically America’s chronic and ever-expanding trade deficit — says that America is the globe’s biggest trade loser and a victim of unfair, unbalanced, and nonreciprocal trade"
Finally the source of “we’ve been treated unfairly” is revealed?
Finally the source of “we’ve been treated unfairly” is revealed?
Eh. Not really. Trump has been espousing the same mercantilist zero-sum game view about trade since the 1980s.
He simply picked an economic advisor who shares his views.
He simply picked an economic advisor who shares his views.
Well that's why I put a question mark on the end of my sentence :) Thanks.
Not sure why anyone would trust someone who has bankrupted 6 companies personally and directly to make any choices on the economy.
erelong(3)
How is it retaliation to destroy your own economy by making the same bad life choices? Isn't actual retaliation to just ignore the entire thing and thank the US for the extra percentage points in advantage you got for free?
You can't be bullied and not respond - that's an invite for future bullying.
Besides, this isn't at all the same. China isn't adding tariffs on the whole world like the US are.
Besides, this isn't at all the same. China isn't adding tariffs on the whole world like the US are.
If you assume the US tariffs are unchangeable then you would be right but the hope of retaliatory tariffs is that they will get the US to update it's tariffs in response to the economic harm caused. It will also harm China of course but I would imagine they hope the harm caused to the US will reduce the tariffs and leave China better off in the long run. This is not totally unreasonable, the US is ostensibly more sensitive to the economic conditions of it's citizens so one could imagine China outlasting the US in this game of chicken.
If the US is consistent with the tariff policy that they've laid out, then I'd expect the opposite to happen. If China increases their tariffs and as a result increases their trade surplus, then that means that the US's tariffs go up as they are a function of the US's trade deficit.
Nobody is increasing anything.
When China applies tariffs against the US, the result is that China imports the goods it needs from other countries. For example, now that US soy is prohibitively expensive for Chinese importers, they can buy from Brazil (who China is not applying the same tariffs against).
In the case of the US, the US importers cannot switch to anyone else, since it decided to go full trade war against every single country.
When China applies tariffs against the US, the result is that China imports the goods it needs from other countries. For example, now that US soy is prohibitively expensive for Chinese importers, they can buy from Brazil (who China is not applying the same tariffs against).
In the case of the US, the US importers cannot switch to anyone else, since it decided to go full trade war against every single country.
I'm not following. If China buys soy from Brazil instead of the US, and the US imports the same amount overall from China in either case, then doesn't that increase China's trade surplus with the US?
> If the US is consistent with the tariff policy
This is doing a lot of heavy lifting here. The US can say it's tariff policy is whatever it wants but the administration is under constraints. If there was some extremely compelling data that the economic effects caused by the retaliatory tariffs would cause an overwhelming democratic victory at the midterms that would have a much bigger effect on policy than the formula for tariffs the administration wrote down. I am not predicting this definitely will happen but it is the kind of thing I am sure people are considering when they are imposing retaliatory tariffs.
This is doing a lot of heavy lifting here. The US can say it's tariff policy is whatever it wants but the administration is under constraints. If there was some extremely compelling data that the economic effects caused by the retaliatory tariffs would cause an overwhelming democratic victory at the midterms that would have a much bigger effect on policy than the formula for tariffs the administration wrote down. I am not predicting this definitely will happen but it is the kind of thing I am sure people are considering when they are imposing retaliatory tariffs.
I asked the google and it appears a big chunk of Chinese imports are agricultural products. Farmers not having a market to sell their products into isn't such a good thing for any administration so they seem to have a bunch of leverage on this point alone.
China can hit American farmers, but their overall trade surplus is $295 billion. The US has much more leverage.
The USA accounts for 15% of China's exports. That's big. But the US is facing retaliatory tariffs from not just China but also Canada and the EU and others, accounting for over 35% of US exports. China is betting on the rest of the world being tough to the US, and it might well pay off.
Trade surplus is not sufficient to analyze the issue here. It is about commitment. What you want is something closer to the probability that the trade surplus will lead to a policy change. Even if it is true that the average Chinese citizen will be more negatively impacted than the average US citizen that negative impact doesn't equally translate to policy change. The US congress is fairly evenly split. It doesn't take that much to cause a policy shift.
There simply isn't a whole lot of alternatives to Chinese imports to the US.
So while tariffs will stop some importation of Chinese goods due to costs others are just going to cost more for consumers until the proposed US manufacturing capacity is build up.
Same with auto parts, even the US car makers rely on foreign made parts and have no real alternatives.
So while tariffs will stop some importation of Chinese goods due to costs others are just going to cost more for consumers until the proposed US manufacturing capacity is build up.
Same with auto parts, even the US car makers rely on foreign made parts and have no real alternatives.
Until there are alternatives. When the price of a given product increases, it becomes more attractive for competitors to invest in making that product.
Even if companies are convinced they need to manufacture stuff locally (ie they believe these tariffs are never going away, whereas in practice you'd expect that, at absolute most, they're gone within four years, likely two, and maybe within weeks), you're talking about years to build up production capacity. China is likely taking the (reasonable) view that US consumers won't put up with years of higher prices.
Sure, unless they flip-flop on tariffs and make your investment not as attractive as it initially seemed.
People assume there's going to be massive investments into what is essentially an uncertain market. A reversal of the capital outflows of the previous decades or something, dunno?
Why, exactly, would people from other countries chose to invest in the US when they could just keep their investments at home and/or engage with more reliable trading partners like the EU, South America or Asia?
People assume there's going to be massive investments into what is essentially an uncertain market. A reversal of the capital outflows of the previous decades or something, dunno?
Why, exactly, would people from other countries chose to invest in the US when they could just keep their investments at home and/or engage with more reliable trading partners like the EU, South America or Asia?
Not if this doesn't actually destroy their economy and gives them even more percentage points. Also the USA has imposed tariffs on almost everyone whereas China has specifically targeted the USA with tariffs. They have much more scope to re-source their imports.
They likely expect Europe and the other big economies to join in. US attacks every country in the world, most of those countries retaliate by attacking the US (at this point, the US, which has a trade war with the world, is in a worse position than everyone else, who only have trade wars with the US), US capitulates, would be the theory. The intent is to make the problem go away, quickly. Of course, the flaw there is that this requires borderline-sane leadership.
"Be the better person" is a good rule of thumb, but it's a bad strategy when somebody attacks you materially.
One idea is to increase incentives to buy non-US goods. And I really hope the EU puts similar incentives on services.
It’s a war, man. You inflict pain on your enemy. Trump has a pattern of tucking tail when confronted.
Amazing that anybody can look at that guy and think he's "strong". It's so obvious that he's a chicken shit at heart. I mean I guess he talks big, although his language and vocabulary is so stunted, I can't even see that. I guess he was really brave after getting "shot" (probably nicked his own ear with a fingernail when he was pulled to the ground by secret service).
But tariffs are a pain on YOURSELF. It's self harm.