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Notes -
Trump tariffs McDonald's:
BBC article for a more detailed overview.
Highlights or lowlights include:
I'm not an economist, but I don't think it's a good idea to throw out tariffs with such clear absence of rigor. The only saving grace is that Trump is fickle, so if enough people yell at him from his in-group, he might pivot in a week. If not, bloody hell.
You know, we were just talking a few posts downthread about how the "experts" are willing to blatantly lie in order to advance their ideological agenda.
We have been told repeatedly for years by the experts that making any sort of adjustment, pushing any buttons on the control panel at all, to the global trade system would lead to complete economic collapse, the rise of fascist dictators, the end of civilization, and in general all manner of untold horrors.
But why should we believe the experts? We know they're ideologically motivated liars. So, fuck it. Let's just start pushing buttons. Smash away and let's see what happens. If for no other reason to prove that you can do something different, alternatives are possible, even if you may indeed get burned.
I'm extremely leery about the potential short or medium term impacts here.
Yet, I find myself willing to see what happens, because the revelations of the past 6ish years is that the Experts WERE pushing buttons on the control panel, and were getting paid very handsomely to push the buttons, but weren't particularly motivated to push buttons that would benefit the people they nominally owed allegiance to. I'm not even talking strictly about NGOs and such, but that's a symptom of it. Hell, during Biden's term, we can't even be sure WHO was at the controls while Biden was half-cogent.
Lets push some buttons that will break some things in the short term, and then (hopefully) quickly build some replacements that are generally better for parties other than elites in the political class.
And I'm young enough I can wait to recover from any short or medium term losses before I'm forced to retire. I grew up during and in the aftermath of the '08 crash. Mentally I've been braced this sort of event for like 10 years. I do feel for those who are stuck in a position where their livelihood is reliant on stock prices, but if you're at or near retirement age you should be in safer assets anyway.
The (classical) Liberal World Order was premised on free trade and financial/industrial interconnections between various countries disincentivizing wars and conflicts and fostering greater cooperation. I sincerely believe that they do have this effect, but I can see and admit there are parts of this order that are causing major issues and yet are not being corrected. I'd point to mass immigration as one example, and collapsing global fertility as another. BOTH of these should in theory be addressable without attacking the foundations of the order itself... but we've not been allowed to even have the discussion.
I would suggest that we're in a particularly unfavorable equilibrium that could collapse into an even worse equilibrium in the nearish future. Whether this is due to irrational/malicious actors screwing with things, or due to inexorable historical forces is a good discussion. But taking a gamble that if you start wrenching on the controls now you can steer away from the iceberg and not crash into something else, well, that is not a thing to be done flippantly.
I can certainly understand people who would rather not have Trump and Co. be the ones at the helm, but the system itself wasn't going to let us have anyone better.
Bad news: there aren't any. Cash-equivalents will get eaten by inflation, everything else is going to get wrecked too.
Remains to be seen, the one interesting thing is that Tariffs are just paper barriers to trade. A 'social construct,' if you will.
We haven't physically built a wall or blown up any bridges.
If countries are willing to play ball and lower all (their) paper barriers to trade, then goods can 'instantly' start flowing again, and possibly under better overall terms. Like, just last week Trump committed to bombing the Houthis in hopes of restoring safe access to the Suez for global shipping. He clearly WANTS goods to flow smoothly.
I will precommit now, that if other countries actively take steps to reduce tariffs and otherwise appease Trump's demands and Trump is too temperamental to accept these offers in good faith and we still have most of these Tarriffs in place at the same levels come May 2nd 2025 (unless real deals are pending come that date), it is a bad thing and we will be in for some rough times. I will criticize/condemn Trump and Co. in no uncertain terms.
If other countries DON'T take active steps to reduce tariffs or otherwise negotiate, I will have to admit that my model of the world is drastically misinformed.
So my full expectation is that there will be a couple weeks of rapidfire and rough negotiations with some touch-and-go moments, but ultimately other nations will do the needful and come the end of April Trump will make a YUUUGE fanfare about signing Tariff reductions and trade agreements with those countries that capitulated, and markets will 'correct course.'
Trump has given himself a lot of runway to try and land this plane relatively smoothly, but there's going to be a lot of turbulence on the way in, that seems certain.
I'll also grant that this causes substantial uncertainty for American investors and entrepreneurs which is 'bad.' But, uhhh, what other country could they find that is inherently more stable and inviting for investment?
The tariffs aren't reciprocal - the "tariffs charged to the USA" column on the poster he held up is a measure of the bilateral trade deficit and has nothing to do with what tariffs are charged on US exports. Vietnam and Israel both cut tariffs on the US, and still got hit. Trump isn't asking Vietnam to cut tariffs, he is asking Vietnam to stop exporting manufactured goods.
Trump may reverse the tariffs in exchange for kayfabe concessions and falsely claim a yuge win (as he did with the first round of Mexico/Canada tariffs), but he hasn't articulated any demands for real concessions that other countries are in a position to make.
At the risk of speculating TOO much, its what you might expect from a "Door in the Face" negotiation tactic.
Which Trump absolutely has employed in the past.
As I said if he's too temperamental to actually negotiate, articulate demands, make some concessions, and reach a deal then yeah, we're in trouble.
We'll probably be getting the first whispers of offers and counteroffers over the weekends. The administration has been much more leak-proof (Issues with Signal chat notwithstanding) and moving much more quickly this time around, indeed the details of the tariffs didn't leak in advance, hence it catching many by surprise! It's absurd to assume there's not a lot of active discussion happening behind closed doors already.
But I think that a guy who knows he's only got about 3 years to impose as much of a policy impact as possible (probably less than 2 if the midterms don't go well) is going to be more aggressive up front.
On this basis literally anything Trump does can be explained as a brilliant negotiating tactic. If your aim is just to induce lower tariffs from foreign nations, why not actually base your tariffs on the real rates of other nations and not this balance of trade nonsense? There are plenty of countries with lower average tariff rates than the US who have nevertheless been hit - what precisely is Trump trying to achieve there if his aim is reciprocal reductions?
Gunboat diplomacy is brilliant negotiating tactic if you have gunboats and the other side don't. Now I think it is stupid for trump to try and fight so many economic blocs at once. He should have chosen EU or China for destruction and let Vance finish the other in 4 years. Not both at once.
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Yes.
He wrote a book on this. To the extent you believe the words on the page, you can use it to make insights into his mind and his preferred strategies. He's not some completely mysterious, inscrutable chaos demon, but when people react to his actions with such alarm, its easy for him to build a reputation as one.
We can make judgments based on his behavior during his first term, which so many people seem to treat like ancient forgotten history.
I AGREE that you can't pretend every Trump move is a 4-D chess move that will inevitably result in whatever his desired outcome is. I prefer to model him as a shark, with finely-honed instincts for survival in his cutthroat environment.
But it would be stupid to assume he does things without some goal or strategy in mind, after all he's successfully outmaneuvered many experienced political actors and avoided a multi-pronged attempt to send him to prison to win a national election. Twice. (maybe three times, but that argument isn't worth rehashing). Other than him just being the favorite of the Gods, the best explanation is he is more canny than his opponents want to give him credit for, or his opponents are genuinely that incompetent.
Here's a question: can you point out any actions he took in the foreign relations arena, from his first term, where he straight up 'lost?' i.e. where he capitulated with absolutely nothing to show for it or maybe even gave something up?
Because he racked up some actual wins. People said moving the U.S. embassy to Jerusalem would trigger chaos and reprisals from the Muslim world. Instead it went smoothly, and many Arab countries lined up shortly thereafter to improve diplomacy with the U.S. and Isreal!
I mean, the Middle East did eventually fall back into increased chaos... during Biden's term.
Oh, and remember when he Went to North Korea, the FIRST President to do so, and got them to at least verbally agree to denuclearization talks?, and NK has been substantially less uppity since then?
Apparently that's still their stated intention!
Look man, I'm trying my best to disentangle my feeling about Trump's persona and actually look at his actions and their outcomes, and end of the day, the guy usually brings home some kind of bacon when he's locked in, no matter how distasteful you find his tactics.
So we could just pretend that THIS time he's acting completely out of pocket and flailing around randomly or see where it actually goes. Yes, there's some cause for concern! Trump can be temperamental! But I'm also modelling the other countries in this situation, and it seems obvious they almost all have good reasons to reach some kind of deal in the very near future, and failure to even try to do so would be irrational on their part! I don't think they're irrational, so I think the pressure from Trump will get them to the table, at least.
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