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Trump exempts smartphones and computers from new tariffs
Lot of sound and fury, but it seems at the end of the day nothing will happen. Over/under on how many more 'exemptions' we'll end up with?
What an awful sign for our civilization --- Trump's reversal reflects our lack to accept short term pain to achieve long term objectives. For my purposes here, it doesn't matter whether the tariffs on phones would have actually helped: what matters is that Trump believed they would, that he was the duly elected head of state, that imposing tariffs was within his legitimate authority, and that he had a majority in the legislature as well.
He still couldn't do it. If he couldn't, nobody can. And if our societal time preference really is this high, we are fucked.
The tariffs were a bad idea! Let's take the CCP's famous EV subsidies. Xi is taxing his subjects and giving that tax as a subsidy to his industries so they could charge a much lower price than the Americans or Europeans! That's a direct wealth transfer from China's productive class to the low-to-middle class consumer abroad! Is it a national security concern when the US has no steelmaking capabilities? Yes, maybe, and that's why Dimon initially said to get over the tariffs:
But he changed his mind when it became clear that no, Trump doesn't actually understand that the trading of our pork for plastic pieces of crap can largely be left alone and we'll be better for it. Dimon again weighed in and was reportedly the reason Trump buckled:
And it's made worse when the US has to back off in a very cuckish manner such as this. Having a very high pain tolerance is useful, but Trump found the limits of it (about -20% in the index and a narrowly avoided liquidity crunch).
The tariffs were bad. Showing the world that the US was bluffing all along is worse. You get nothing. You don't get onshoring (you never would have, because supply chains would rather wait 4 years than be saddled in perpetuity with the US's uncompetitive (non-immigrant) labor standards), and you don't get China to come to the table.
In four years, everything will be reversed and more, and this policy instability is going to prove insidious.
I'm not sure I'm getting my point across. You're still talking about the object level impact of the tariffs. I'm talking about the ability of the state to translate will into action when the action involves short term pain.
Did Trump have a sincere change of heart? Did Dimon convince him on the merits of the ineffectiveness of the tariffs in achieving his stated goal? Or did Dimon instead point out that Trump wouldn't last long if he kept doing this even if it was good for the country?
It looks to me like a chunky soup of unnamed elites was unwilling to suffer these short term consequences and blocked Trump despite their having no formal authority and Trump having all the formal authority. That they were able to do that is what doesn't bode well for the country.
How are we supposed to solve the problems with elder care and entitlements if we're unable to endure pain? It tells me we're going to just give up the Pacific the first time the Chinese sink an aircraft carrier. It tells me we're in for another episode of high inflation, because every other inflation solution involves pain. A man or nation that cannot endure pain is weak and not long for this world.
I agree that this looks really bad for our prospects of diffusing the social security bomb.
One counterpoint: the Fed's recently-concluded historic rate-hiking campaign. Higher rates make it harder for the US to service its debt, and yet they raised the rates anyway. People were so concerned over the fallout that we spent two years predicting a recession that never came. But I believe that the Fed would have been willing to push us all the way over the cliff, because having runaway inflation is so, so much worse than a contracting economy.
You know why the Fed could do that? Because no one could fire Powell, and no one elected him. I won't take my conclusions too far, but one of Trump's pressure points in the last weeks has been Republicans panicking about the effects people's 401k balances will have on their 2026 reelections. And I believe them. I truly think that if Trump stuck to his guns, even if the long-term effects are worth it, the Republicans would have been finished as a party in the short term, and then you don't get those policies anyway.
Correct. I don't think our own problems get solved until we have an executive with unchallenged personal authority and immunity to firing.
Cool, and I'm sure you would still hold that belief if the executive was some blue-haired progressive who went by Ze/Zir pronouns right?
Of course not. Necessary != Sufficient
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