The trade and economy mega-thread (1 Viewer)

[superchuck500]

Is there a trade deal with China? Is it really a deal or just a pull-back to status quo ante? Is Trump advancing US interests in this well-executed trade battle plan or was this poorly conceived from the start . . . and harmful?

I think the jury's still out, but I haven't seen that the Chinese are offering much in compromise - and it's not even clear if there's going to be an agreement. But it's clear they are working on something and I'm sure Trump will sell it as the greatest trade deal ever. The proof will be in the details.

 

[MT15]

WSJ editorial. You know it’s bad when they say so, they want to like whatever Trump does.

https://www.wsj.com/opinion/donald-trump-liberation-day-tariffs-protectionism-82d0aa3a?st=tcLZ3t&reflink=article_copyURL_share

They list 5 big negatives about this hare-brained policy and no positives.

“The end of U.S. economic leadership. Britain played this role through World War I, but it was too weakened by war to continue. The U.S. didn’t take up the leadership mantle until after depression and World War II. U.S. leadership and the decision to spread free trade produced seven decades of mostly rising prosperity at home and abroad. The U.S. share of global GDP has been stable at about 25% for decades, even as industries rise and fall.

That era is now ending, as Mr. Trump adopts a more mercantile vision of trade and U.S. self-interest. The result is likely to be every nation for itself, as countries seek to carve up global markets based not on market efficiency but for political advantage. In the worst case, the world trading system could devolve into beggar-thy-neighbor policies as in the 1930s.”

 

[DJ1BigTymer]

I know voters disagree with this, but it was true and it had the evidence to back up that claim:

 

[UriUT]

I know voters disagree with this, but it was true and it had the evidence to back up that claim:

Why, one may ask, is American inflation so stable? Is it because the dollar accounts for 60% of the world exchange? How do we impose our will (soft power)? Through sanctions? When we tell china not to interfere in Ukraine, they listened. Why? Because to participate in the world trade, they must pass through US banks due to the dollar's dominance. MAGA isn't making America great. We're lemmings jumping into stupid land lead by the dumbest idiot in the world. This isn't a novel idea. That's why BRICS is around. To destroy the dollar's dominance.

 

[DJ1BigTymer]

Why, one may ask, is American inflation so stable? Is it because the dollar accounts for 60% of the world exchange? How do we impose our will (soft power)? Through sanctions? When we tell china not to interfere in Ukraine, they listened. Why? Because to participate in the world trade, they must pass through US banks due to the dollar's dominance. MAGA isn't making America great. We're lemmings jumping into stupid land lead by the dumbest idiot in the world. This isn't a novel idea. That's why BRICS is around. To destroy the dollar's dominance.

It's this ridiculous fascination that the greatest time to be alive was in the 19th century!

 

[UriUT]

It's this ridiculous fascination that the greatest time to be alive was in the 19th century!

OMG!!! The british were dominating the world!!!! We had population booms lead by immigration that helped start the strongest economy by the start of the 1900s. And let's not forget the constant panics each decade. A century of tough learning that lead to Theodore Roosevelt's crusade.

Furthermore, if you ask these maga, who can't be bothered to work on farms, to travel back to the mid and late 1800s, they'd faint working 12 hour shifts, 6 days a week in deep coal mines. I saw a youtube short just the other day of an osha official telling a construction team that they can't have their guy in the hole they dugged. Moments after, the man was buried dead. We have rules and regulations because we learned that the robber barons didn't give a crap about their workers.

 

[Dragon]

WSJ editorial. You know it’s bad when they say so, they want to like whatever Trump does.

https://www.wsj.com/opinion/donald-trump-liberation-day-tariffs-protectionism-82d0aa3a?st=tcLZ3t&reflink=article_copyURL_share

They list 5 big negatives about this hare-brained policy and no positives.

“The end of U.S. economic leadership. Britain played this role through World War I, but it was too weakened by war to continue. The U.S. didn’t take up the leadership mantle until after depression and World War II. U.S. leadership and the decision to spread free trade produced seven decades of mostly rising prosperity at home and abroad. The U.S. share of global GDP has been stable at about 25% for decades, even as industries rise and fall.

That era is now ending, as Mr. Trump adopts a more mercantile vision of trade and U.S. self-interest. The result is likely to be every nation for itself, as countries seek to carve up global markets based not on market efficiency but for political advantage. In the worst case, the world trading system could devolve into beggar-thy-neighbor policies as in the 1930s.”

I disagree with that editorial on one key point. The rest of the world still views free trade as a positive endeavor and is actively forging new trade agreements both within and across continents. The most likely consequence of U.S. tariffs will be increasing isolation for the U.S. and, ultimately, an economic downturn. While the initial impact may be global, other nations will adapt by strengthening new trade relationships, leaving the U.S. to bear the brunt of its self-imposed isolation.

 

[Poison]

I disagree with that editorial on one key point. The rest of the world still views free trade as a positive endeavor and is actively forging new trade agreements both within and across continents. The most likely consequence of U.S. tariffs will be increasing isolation for the U.S. and, ultimately, an economic downturn. While the initial impact may be global, other nations will adapt by strengthening new trade relationships, leaving the U.S. to bear the brunt of its self-imposed isolation.

I typed a response that more or less made this exact point but I didn’t press the button to post it. Look at the deal struck between China, Japan and South Korea just this week. I expect there will be increased integration elsewhere, and a search for new markets for good and services where exporters are deterred by the U.S. tariff wall. For instance, Trump slapped a 10% tariff on Australian exports (calling out beef exports specifically - and notwithstanding the fact we run a trade deficit with America), and the immediate response was that at least a portion of our beef exports might be re-routed to China, Japan, Korea or the Middle East.

There was a really good podcast episode on The Rest Is Politics US a few weeks ago where Anthony Scaramucci (who, if nothing else, is an engaging and intelligent speaker) likened the changes Trump was proposing to institute as akin to the position of the UK post-Brexit.

Contrary to Trump’s prevailing narrative, Scaramucci’s argument was that the U.S. had generally extracted beneficial terms of trade from its bilateral and multilateral trade partnerships. To the extent that Trump’s tariffs provoke a retaliatory response, or dishonour the agreements currently in place with its trading partners, when the tariff wall becomes untenable, the U.S. will have to renegotiate those deals from a position of diminished leverage (as the UK did when they left the EU and then had to renegotiate a whole range of bilateral agreements). It hurts the U.S. economy, it hurts the country from a security perspective, and it will diminish their sphere of influence.

 

[Dragon]

It is already beginning

 

[efil4]

Fml the market futures pointing to a bloodbath.

Idc no more. Me wrangling with my portfolio and talking to FA doesn't really matter. I'm a small fish in a giant ocean and wealth thru market isn't in the cards.

Since Trump, I've lost , from peak portfolio, just under 96,000 in valuation. Ninety six thousand in 3 months.

The only other times we saw crap like this was 2009 and 2020 covid.

Eff this dude.

 

[Dragon]

Fml the market futures pointing to a bloodbath.

Idc no more. Me wrangling with my portfolio and talking to FA doesn't really matter. I'm a small fish in a giant ocean and wealth thru market isn't in the cards.

Since Trump, I've lost , from peak portfolio, just under 96,000 in valuation. Ninety six thousand in 3 months.

The only other times we saw crap like this was 2009 and 2020 covid.

Eff this dude.

That has been the plan all along. I know I have written this before. The Oligarks want to crash the market so that they can buy up companies and property for cents on the dollar.

 

[brandon]

Fml the market futures pointing to a bloodbath.

Idc no more. Me wrangling with my portfolio and talking to FA doesn't really matter. I'm a small fish in a giant ocean and wealth thru market isn't in the cards.

Since Trump, I've lost , from peak portfolio, just under 96,000 in valuation. Ninety six thousand in 3 months.

The only other times we saw crap like this was 2009 and 2020 covid.

Eff this dude.

Yea my daughter’s 529 is looking absolutely awful just 2 years before she graduates. 16 years of prep for college just about to be useless. Ugh.

 

[efil4]

Yea my daughter’s 529 is looking absolutely awful just 2 years before she graduates. 16 years of prep for college just about to be useless. Ugh.

the good news, like for most of us, is we still have a few years to recoup losses. The irritation for me comes from the fact that had it not been for this ridiculous agenda, id be building on a portfolio that is 10% more in value. Instead, now we have to "claw back" losses, which i suspect will take a good 12 months. Just to get back to Jan 2025 starting point.

Thats what is so infuriating to me. EVERYONE that had half a financial brain was screaming this.

So either he simply did this because he is an idiot or there is a purpose behind ( akin to @Dragon said ) - NEITHER are good for the outcome.

 

[superchuck500]

 

[superchuck500]

 

[Neworleansfan]

Yea my daughter’s 529 is looking absolutely awful just 2 years before she graduates. 16 years of prep for college just about to be useless. Ugh.

Same here for my son who will graduate this May. Lucky for us he is getting a full ride so we don’t have to touch it anytime soon.

Feel bad for those who can’t make it up since they already retired and didn’t want any of this since they are withdrawing instead of contributing. They watched their funds getting cut by 15% in a little over 2 months.

 

[superchuck500]

 

[efil4]

and its only the beginning.

As corporations ( large/medium and small ) start to get a good handle on length of this self-imposed economic chaos, they will be addressing lowering sales/profits/outlooks by slowing production which equates to lowering staff.

I cant believe that not a single person in this Administration had the wherewithal to confront Trump about this move.

Or maybe someone ( or multiple ) did and it had absolutely no effect.

 

[efil4]

ok you are approaching @bclemms storm posts levels here of "sunshine" lol.