Tariffs …. Good or Bad?

[tdtwedt]

Punishing bond-market selloff likely forced Trump’s 90-day tariff delay: former J.P. Morgan chief strategist

President Donald Trump was clearly willing to let the stock market melt down after announcing enormous “reciprocal” tariffs on U.S. allies and adversaries alike last week — including levies targeting Antarctic islands inhabited mostly by penguins.

But it was the break in the bond market that likely pushed the White House over the edge, said Marko Kolanovic, formerly the chief global strategist at J.P. Morgan.

https://www.msn.com/en-us/money/economy ... r-AA1CCE3B

[Doctor Steuss]

My prediction is that just like with Canada and Mexico promising what they had already promised, he'll accept the EU's deal that they had already offered back in February. Naturally, this will once again mean he's an amazing negotiator, playing 5D chess, because he managed to solve yet another problem he created, and was able to negotiate a deal that already existed.

I think my favorite thing in all of this has been watching Trump administration officials defending what's been happening. A few days ago, the reason we needed tariffs on places that aren't even inhabited by humans was to prevent China from using them as intermediaries. Apparently, that is magically no longer a problem.

If nothing else, he really does know how to create entertaining reality TV.

[mtalbot_ca]

As Elon Musk is part Canadian, on late night news (Québec), I just saw a topo/portrait on his father. Just to tell you that the apple did not fall far from the tree!

[Doctor Steuss]

Just some random thoughts on my mind this morning. The US (and our President) are entirely justified in a hard-handed approach with China (in my average guy opinion). I just fear that China's tolerance for prolonged economic pain in this is inherently a lot better than ours. Especially where we've already kicked some of our alternative supply chains in the nuts.

It will be interesting to see how this plays out, and I'm certainly hopeful and trying to remain optimistic. From social media, it looks like small businesses are going to be hit the hardest, and they are also the ones less likely to be able to survive this type of thing.

I believe Chinas has three potential key advantages over us, when it comes to weathering a potential trade war:

1. Politically, they don't enjoy the freedoms that we do. If the US starts to experience too much economic sting, our population can express their displeasure without fear. Our duopoly also makes a mid-term, and presidential back-and-forth almost inevitable. China on the other hand can silence critics with impunity, and doesn't have to worry about the current party losing power.

They would ultimately just have to wait it out (if that was their end goal), and gradually establish new trade partnerships. Granted, those trade partnerships would never replace the spending/buying of the United States, but it could be enough to position them on a more reliable and sustainable global footing.

2. Looking at their primary imports from us, it looks like they are poised much better to absorb those costs, as they generally don't impact average consumers in the same way.

3. They can manipulate their currency pretty willy-nilly to make trading with them more appealing for other countries.

I think they also have two potential nuclear options (although I can't really imagine them using them). They could start dumping their US currency and debt holdings, and/or they could abandon any pretense of intellectual property protections. The former would mean at least three quarters of a trillion dollars in treasury securities being dumped into the market. The latter would mean they could start manufacturing and selling rip offs of American products for pennies on the dollar.

[natsb88]

From social media, it looks like small businesses are going to be hit the hardest, and they are also the ones less likely to be able to survive this type of thing.

Yep. Big corporations have been beefing up their supply chain through Mexico since Trump's first term. This was a natural reaction to Trump's fixation on tariffing China, the huge backlogs at the US west coast ports during covid, and the longstanding threat of a dockworker's strike from the west coast union. The result is companies shifting imports to Mexico, bringing in subassemblies from China and doing just enough final assembly in Mexico to label the finished goods Made in Mexico, and importing them at lower or no tariffs. They built massive new warehouses along the southern boarder (mostly Texas) and last year, when it started looking like Trump had a chance at a second term, they upped their game and stockpiled durable goods big time. They can afford to orchestrate these logistics, frontload inventory, and pull from these lower cost goods while these volatile tariffs play out, in a way that small companies simply can't. Couple that with having the capital to weather losses far longer than small businesses, and the elevated tariffs on Chinese imports will absolutely result in further consolidation. More small businesses go under and the megacorps get bigger.

[tdtwedt]

China strikes back with 125% tariffs on U.S. goods as trade war intensifies

China has retaliated against the U.S. President Donald Trump’s reciprocal tariffs by raising its levies on U.S. goods to 125% from 84%, the finance ministry said.

Trump administration confirmed to CNBC on Thursday that the U.S. tariff rate on Chinese imports now effectively totals 145%.

https://www.cnbc.com/2025/04/11/china-s ... il-12.html

[Lemon Thrower]

Authored by Victor Davis Hanson via American Greatness,

The real trade war wasn’t Trump’s - it was decades of lopsided deals, deficits, and double standards America tolerated while others profited...

1.Trump’s So-Called “Trade War.”

Many call the American effort to obtain either tariff parity or a reduction in the roughly $1 trillion trade deficit and fifty years of consecutive trade deficits “a trade war.” But then what do they call the policies of the past half-century by Europe, Asia, China, and others to ensure asymmetrical tariffs, pseudo-health and security trade restrictions, and large surpluses?

A trade peace? Trade fairness?

2. Do Nations Prefer Surpluses or Deficits?

Why do most nations prefer trade surpluses and protective tariffs?

Are Europe, Asia, China, and others stupid? Are they suicidal in continuing their trade surpluses and protective or asymmetrical tariffs?

Is the United States uniquely brilliant in maintaining a half-century of cumulative trade deficits? Do Americans alone discover the advantages of a $1 trillion annual trade deficit and small or nonexistent tariffs?

Why don’t America’s trading partners prefer deficits like ours—given we supposedly believe they are either advantageous or perhaps irrelevant?

3. Would Our Trade Partners Prefer to Trade Places With Us?

Would our trade partners prefer to have America’s supposed benefits of a $1-trillion trade deficit?

Would the United States then “suffer” like they do by running up $200 billion annual surpluses?

4. What if Wages Went Up at the Rate of the Stock Market?

What would now be the reaction of the stock market if over the last decade wages had increased at the rate of stocks—and the stocks at the rate of wages?

5. Is Wall Street’s Panic Based on What Might Happen—Or What Is Happening?

Is Wall Street’s meltdown a fear of what might happen in the future? Or is it reacting to March’s latest jobs report that there were 93,000 more jobs created than predicted? Was the Wall Street panic predicated on reports of much lower oil prices? Did the furor arise over the March inflation report that the annualized inflation rate dipped to 2.6% per year?

6. Is the Frenzy Caused by the Trump Economic Agenda?

Is Wall Street’s worry that Trump’s impending tax cuts, more deregulation, greater budget cuts, and continued efforts to eliminate budget deficits and reduce national debt will stall economic growth?

7. What About North American Neighbors?

If the U.S. was running a $63 billion-plus trade surplus with Canada, refusing to meet its NATO requirements to spend 2 percent of GDP on defense, and instead spent only 1.37 percent, would Canada become concerned?

If Mexico were running a $171 billion trade deficit with the U.S., if Americans in Mexico were sending over $60 billion per year out of Mexico to the U.S., and if American drug dealers were making $20 billion by selling fentanyl and opioids to Mexico, would Mexico be angry?

8. Is the Trump Agenda Bad Economic News?

Is the current panic over tariffs amplified by Trump’s other policies?

Is the sudden end of 10,000 illegal entries a day bothering Wall Street?

Are the media furious that the Red Sea is suddenly navigable again, the Houthis in Yemen curtailing their attacks?

Is the outrage due to the targeting of approximately $200 billion in budget cuts or plans to shave off $500 billion from the annual budget? Does the conundrum arise because Trump is sanctioning Iran, unapologetically supporting Israel, and seeking an end to the Ukraine War?

9. Was the Biden Record Preferable?

Should Trump try to match Biden’s $7 trillion addition to the national debt? Should he return to allowing 12 million illegal aliens into the country? Was the 2021 Afghanistan pullout a good model? Is Wall Street worried that Trump may copy the Biden New Green Deal, his electric vehicle mandates, and more green regulations?

10. Why the Negotiations and Why Now?

Why are 70 countries now wishing to negotiate tariffs with America either down to zero or reciprocally to the same rate as ours?

Is that a good thing? If so, why did our trade partners not wish to lower their trade barriers far earlier?

Did they suddenly and spontaneously decide they were acting unfairly and, on their own prompt, now want to make amends?

What’s Next?

If there soon is a rush of nations to cut a deal with the U.S. and not to be left out of the American market, will there follow another hysterical Wall Street spasm—but not to sell, but instead to buy stocks at bargain prices?

[tdtwedt]

Amazon CEO Andy Jassy says he believes sellers will pass increased tariff costs on to consumers

Amazon CEO Andy Jassy said the company is still waiting to see how President Donald Trump’s tariffs “play out,” but that its third-party sellers may “pass that cost on” to consumers.

https://www.cnbc.com/2025/04/10/amazon- ... umers.html

[tdtwedt]

Peter Schiff...

Because China has raised tariffs so high on U.S. goods, the Chinese will now buy those goods from other countries. Since those other countries will now earn more money selling their goods to China, they will have more money to buy Chinese goods, replacing Americans as customers.

https://x.com/PeterSchiff/status/1910646543075729414

[shinnosuke]

Victor Davis Hanson delivers a message via the Socratic Method. Although I'm certain he and I have varying viewpoints on some of the issues he presented, I do like his presentation style.

[tdtwedt]

Peter Schiff...

For decades we as Americans have lived beyond our means by consuming far more than we produce. To make that possible, we outsourced our manufacturing, sold off assets, and went into debt. Foreign countries like China produced what we didn't, bought our assets, and loaned us the money.

The result was that we got lower consumer prices and interest rates, and higher stock prices. Trump describes this as foreigners ripping us off, and he wants to put a stop to it immediately.

Fine, but understand what that means. We can no longer live beyond our means. We have to stop spending and start saving. We have to roll up our sleeves and go back to work. Consumer prices and interest rates will soar and our stock market will collapse. Welcome to Liberation.

https://x.com/PeterSchiff/status/1910715718787531105

[Doctor Steuss]

Interest rates rocketed up yesterday. Basically, the exact opposite of what they would normally do when markets are indicating an anticipated economic contraction.

[...]

In an interview, Trump basically said the reason he reversed course was because of what was happening here (i.e. the bond markets). The Financial Times had a piece on one likely cause being leveraged funds using treasuries as collateral. The evidence-free conspiracy portion of my brain can't seem to scratch the itch that it was foreign countries dumping some of their US debt as a soft retaliation.

[tdtwedt]

Bonds up again today. What will Trump do?

https://www.cnbc.com/quotes/US10Y

[Doctor Steuss]

Bonds up again today. What will Trump do?

https://www.cnbc.com/quotes/US10Y

I'm certainly no expert, but I think we're still in pretty good non-panic territory. That 20 basis point jump earlier today was wild, but it's shed almost 10 basis points in the last hour-or-so. Still under where it was after the almost 70 basis point rocket ship.

[tdtwedt]

Fed to the rescue of the Bond market?

[tdtwedt]

Trump exempts phones, computers, chips from new tariffs

Smartphones and computers will be exempted from Trump’s reciprocal tariffs, according to guidance from U.S. Customs and Border Protection.

Trump earlier this month imposed 125% tariffs on products from China, a move that was poised to take a toll on tech companies like Apple, which makes iPhones and most of its other products in China.

The new guidance also includes exclusions for other electronic devices and components, including semiconductors, solar cells, flat panel TV displays, flash drives, memory cards and solid-state drives used for storing data.

https://www.cnbc.com/2025/04/12/trump-e ... -dell.html

[tdtwedt]

George Gammon...

So we want to bring back underwear manufacturing but not computer, smartphone, and chip making manufacturing?

I don’t have the mental gymnastics skills to see how MAGA spins this?

More 5D chess maybe??

https://x.com/GeorgeGammon/status/1911040357048991815

[mtalbot_ca]

Good day,

A commercial offensive on TV against tariffs is being played out by the tomatoe soup producers....it portrays that some soup has an after taste of tariffs. Quite funny. See: https://www.youtube.com/watch?v=Tfq_Syd9_Ik

[natsb88]

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