US tech tariff exemption may only be temporary, says Lutnick(ft.com)
ft.com
US tech tariff exemption may only be temporary, says Lutnick
https://www.ft.com/content/9038804f-cf69-4193-9332-8b5ea1f9af4b
63 comments
This is not about investment, it's about extortion. Bend the knee, or be destroyed. No US business sector can exist without foreign imports. It's a perfect lever to extract fealty from the corporate sector. They sell tariffs as all sort of things to different groups, sometimes out right lies (it's a tax on foreigners). But in the end it's only about control and power.
The president of my country thinks global finance is the same thing as hiring contractors in New York City. Which he was also bad at.
That and likely insider trading https://x.com/nikitabier/status/1911097542126784521?s=46&t=V...
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This is the key point. It’s uncertainty which spooks the markets and investor confidence.
Are there any decent alternatives? At what point does transparent securities fraud generally lead to capital flight?
There's tons of global markets to invest in, not just US, and of course other US investment instruments other than stocks if you feel those are more investable in current climate.
There has already been capital flight. Trump's (temporary?) U-turn on tariffs was due to a massive sell-off in US Treasuries, largely by the Japanese, which caused yields to jump.
There has already been capital flight. Trump's (temporary?) U-turn on tariffs was due to a massive sell-off in US Treasuries, largely by the Japanese, which caused yields to jump.
Was that a actual selloff, or an unwinding of the basis trade leading to a selloff?
I don't know - I'd initially seen it discussed without mention of that, but now I see there's talk of two different basis trades ...
https://www.morningstar.com/news/marketwatch/20250412232/how...
The US would certainly be in trouble if the perception of instability reduces the appetite for US debt, or if holders choose to weaponize it.
https://www.morningstar.com/news/marketwatch/20250412232/how...
The US would certainly be in trouble if the perception of instability reduces the appetite for US debt, or if holders choose to weaponize it.
Most of the world has an unstable government that does stuff like this every decade or two at least. If the US is going to be just as bad, everywhere is an alternative, although none of them will be as good as the US was.
... I mean this is the sort of thing that _developing world_ countries do, sure, but it's not at all the norm for a developed economy.
I would say that most of the world falls into that category.
The USA is back to being a monarchy, after a 235 year run as a democracy (or 60 years[0], if you want the real experience of 20 million people at the time): everything depends on the mad king's decrees, and no one can rein him in.
[0] https://archive.is/mkJIi
[0] https://archive.is/mkJIi
its what the techbros voted for
> Who's going to bother to invest in American manufacturing when the tariff "strategy" changes daily?
Isn't that the point? If things are so unstable, you avoid the instability by manufacturing domestically.
Isn't that the point? If things are so unstable, you avoid the instability by manufacturing domestically.
No, what if the tariffs go away before you are done building your widget factory. Now you have widgets that are too expensive to sell to anyone.
If they want anyone to believe that the tariffs will remain in effect long enough to make a profit, they will need to pass a bill. Ideally, a bill that ratchets tariffs up over a long enough period of time to actually build the capacity in the US of the thing you want to tariff.
If they want anyone to believe that the tariffs will remain in effect long enough to make a profit, they will need to pass a bill. Ideally, a bill that ratchets tariffs up over a long enough period of time to actually build the capacity in the US of the thing you want to tariff.
Still not sure a bill will give you that stability, since Trump has used loopholes to sidestep ratified trade agreements that he himself negotiated. Anything signed by this President isn't worth the paper it's printed on.
A bill wouldn't provide any security. It'd just be repealed as soon as the economic stagnation set in. If you wanted to build a factory through socialist policy, the only way to do it would be to cover the capital costs with direct investment by the treasury.
The tariffs hit domestic manufacturers harder than imports, so no?
If manufacturers move overseas, they (so far) get to compete for US business on a level playing field, and (in some alternate countries) can make planning decisions that assume due process exists and the law will be upheld. In the worst case, they can sell everywhere but the US.
If they move to the US, the cost of their inputs varies 100% week over week, and 2/3rds of their highly skilled factory workers are subject to random imprisonment.
Also, the president will use market manipulation and insider trading schemes to raid their capital reserves, then brag about it on video.
If manufacturers move overseas, they (so far) get to compete for US business on a level playing field, and (in some alternate countries) can make planning decisions that assume due process exists and the law will be upheld. In the worst case, they can sell everywhere but the US.
If they move to the US, the cost of their inputs varies 100% week over week, and 2/3rds of their highly skilled factory workers are subject to random imprisonment.
Also, the president will use market manipulation and insider trading schemes to raid their capital reserves, then brag about it on video.
But then you risk tariff policy changing, and suddenly you're undercut by foreign factories again, and you lose all your investment in the American factory. It still needs certainty that the tariffs are staying.
The uncertainty only works to return manufacturing where America is cost-competitive without tariffs, and that's a tiny slice of manufacturing.
The uncertainty only works to return manufacturing where America is cost-competitive without tariffs, and that's a tiny slice of manufacturing.
Manufacturing is extremely capital-intensive with a lead time of years. That's a huge gamble to make when policy will probably change by the time you're done and leave you manufacturing at a big loss.
No, because all your precursor components are also fluctuating massively every few days. How do you produce and price widgets when widget grease is $1 on Monday and $10 on Tuesday?
You don't. You just give up on that market.
You don't. You just give up on that market.
Manufacturing doesn't just happen magically. You need factories and a trained workforce, and various infrastructure. The point is that you may not be keen to invest now in building a factory that'll be usable in a couple of years if everything is constantly changing every week.
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> If things are so unstable, you avoid the instability by manufacturing domestically.
That’s not avoiding the instability, that’s suffering the full brunt of the instability. That’s completely backwards.
That’s not avoiding the instability, that’s suffering the full brunt of the instability. That’s completely backwards.
And then you get defrauded, and the mad king pardons the person who robbed you? Like he pardoned Justin Sun, Trevor Milton, Carlos Watson, etc?
Yeah investors love investing in unstable places /s
That was close. We almost had clarity on something for a minute.
> When asked to clarify whether tariffs on iPhones might “come back on in a month or so”, Lutnick replied: “Correct. That’s right . . . We need our medicines and we need semiconductors and our electronics to be built in America.”
They need their medecine. So much incertitude….
They need their medecine. So much incertitude….
"One month is enough time to reshore semiconductors"
- someone, probably
- someone, probably
Yes, just a month or two to replace China.
Good thing they didn't happen to, oh, completely shut down a prior administration policy designed specifically to fund the construction of the factories needed to make those semiconductors onshore. Oh wait...
They actually haven't shut it down yet, because they're a bunch of less than competent people selected for loyalty.
It's profoundly depressing that this is all so badly thought out.
Like, how is anyone supposed to plan for anything with this kind of governance?
Like, how is anyone supposed to plan for anything with this kind of governance?
It was planned, but they honestly did not know it would destroy so much so quickly that they'd be associated with negative consequences.
Yes, that's the point, they're utterly incompetent.
So badly planned then
Ok but that's worse.
- Jan 20 – Inauguration & Tariff Promises
- Feb 1 – Tariffs Imposed on Canada, Mexico, and China
- Feb 3 – Temporary Pause on Tariffs
- Mar 4 – Tariffs Reinstated
- Apr 2 – "Liberation Day" Tariff Announcement
- Apr 9 – Tariff Reversal
- Apr 12 – Trump Adds Tariff Exemptions
Using a moving average algorithm, adding a phi factor of 0.89 for corruption, and a beta factor of 0.67 for chaos, we predict the next tariff policy change to occur around April 26 (+/- 2 days margin error)
- Feb 1 – Tariffs Imposed on Canada, Mexico, and China
- Feb 3 – Temporary Pause on Tariffs
- Mar 4 – Tariffs Reinstated
- Apr 2 – "Liberation Day" Tariff Announcement
- Apr 9 – Tariff Reversal
- Apr 12 – Trump Adds Tariff Exemptions
Using a moving average algorithm, adding a phi factor of 0.89 for corruption, and a beta factor of 0.67 for chaos, we predict the next tariff policy change to occur around April 26 (+/- 2 days margin error)
Missed the one this thread is about, too!
- Apr 13 - Lutnick says exemptions going away "in the next month or two"
- Apr 13 - Lutnick says exemptions going away "in the next month or two"
Using numerical analysis, can someone please plot the inevitable destruction of the American state? I'd like to make some plans to get the fuck out of here before this shit show sinks to the bottom of the sea.
Just like that, appl rally was killed before Monday could start. What a bunch of clowns.
Everything is temporary. Very enlightened of Mr Lutnick to remind us as he wipes away the Mandala of American trade policy one more time.
How is anyone supposed to operate a business in this environment.
Ask all the businessmen who praised and bankrolled this clown show, thinking he could be kept under control (like German businessmen thought they could rein in the little mustached man after he'd crushed the leftist)...
Creating the most abject chaos imaginable, grabbing all the floatation devices while those around you tread turbulent waters, is by most definitions, diabolical.
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With out-of-touch guys like this managing the country, how would it be possible to evade disaster, let alone winning?
Person bankrupting casinos and doing crypto rug pulls, started doing stock exchange rug pulls. That's it and nothing else. One trick pony.
On some podcast they were saying Trump ran his business 30 days out. He did what he to in order to survive the next 30 days.
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Of course it is. It will require a regular Maralago dinner subscription.
Congress needs to take the tariff ability away from Trump, this is fucking ridiculous.
Back and forth and back again.
In other news, invest in Bitcoin, far more stable
In other news, invest in Bitcoin, far more stable
Bitcoin... not sure if that's a good idea, especially given the fact both Trump and his wife launched their own memecoins already.
Pretty sure it was a joke, that Bitcoin is more stable than the administration.
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How many times will the tariffs shift between Lutnick's comments here and 1 month from now?
Uncertainty does not encourage investment. So, we probably shouldn't believe them when they say that's why they're doing this.