I believe tariffs are being used by the US not as a foundational economic strategy per se, but as a very persuasive means of forcing otherwise unwilling trade partners to negotiate fair (free) trade arrangements to level the global economic field, end the disastrous policies of both political parties that resulted in the exporting of American manufacturing, loss of jobs and gutting of middle America. This is not a “tariff war”, it is not just a negotiation, it is the restoration of the “American Dream”! It is also perhaps a means to cause the end of the failing Chinese Communist mercantile system.
I haven’t checked this statement for supportive data, but my guess is the tariffs have largely affected the stock market by having their greatest impact on international stocks and mutual funds, rather than domestic companies. I also wonder if this is hitting hardest the pocket books of bought and sold politicians. There is an awful lot of screaming going on. Me thinks it’s for themselves more than it is for thee.
I’m no expert on tariffs , but from what I have seen so far with all the chaos and the confusion, not many “experts” are experts either, but as you say, self interest play a big part. I tend to lean towards Martin Armstrong’s view on tariffs and the global economy in general. He seems to be correct very often.
I'm sorry but this misses the real story. Manufacturing in the US has been growing but it's just not using humans and services have been growing much faster. The Chinese took the shitty jobs but robots (automation) are taking the good ones.
Here you can see a good rate of growth in manufacturing output, but that it is still declining as percentage of the economy because other areas are growing faster:
Finally...the other big issue is vocational training. We already have almost half a million unfilled manufacturing jobs in the US right now and many manufacturers struggle with workforce skills and turnover. We are solving the wrong problem.
Perhaps, but the data do not yet reflect the full effects of the tariff strategy. China initially took the low level jobs or making cheap junk to sell back to Americans. They have since spun those off to other se Asian countries such as Vietnam and are trying to compete globally in the higher end industries. Not exactly working out as well as they had hoped. Their controlled mercantile system keeps the majority of their populace poor to prohibit them from developing a consumer economy that might lead to uncontrolled capitalism which ironically could allow them to compete with the US consumer. Not going to happen because of their communist ideology of societal control. Traditional manufacturing has been affected by robotics but not to the extent of replacing all human involvement. Trump wants open free markets with no tariffs, which could happen by the end if the summer. Tariffs are just a cudgel to get people to the table and make them realize America is back in control of its destiny Let’s see the data in 12 months.
When we can make small precision screws in quantity we will know manufacturing is back. Apple found no US sources in their attempt at a Texas assembly plant. Low margin production has a poor US base.
Good article. I find the tariff debate so disingenuous. I live in Washington State. We have a 10% “tariff” on pretty much all goods and services but we call it sales tax. We also have a “tariff” on gasoline that runs somewhere around $1.50 a gallon. We have another tariff on the miles driven by trucks who deliver good and services. My point being is we already tax everything 100 times over yet economists are pretending a new Federal Tax is the one that will ruin the economy. Low taxes are key to a successful economy but let’s not kid ourselves that the tariffs are one straw that broke the camel’s back.
If Americans don’t understand bankrupcy $36 Trillion and $1.6T trade deficit, guess we’re doomed. POTUS is doing only thing he can do & Bessent agrees. Media is enemy.
Depressingly correct. Machevelli pointed out that anyone trying to make fundamental changes will always face a coalition of those who like the status quo.
I couldn’t push the like button for your comment…because I don’t. But it’s the sad, sad truth. The only other possibility is that we so loved the game of “kick the can” as children so much, that we found a way as adults to continue to play.
“I would much prefer that Congress gets its priorities in order and cuts spending and regulations so that the American citizen and his family can thrive.”
[taking a moment ...]
The Tariff Policies of DJT are in play precisely because Congress cannot be counted on (read: “trusted”) to do anything.
The hand-wringing and caterwauling of the present moment comes from minions who were not elected POTUS. The very same people who were OK with a fake “president” ceding his Responsibilities to underlings (and the immoral and worthless Media who covered up the subterfuge).
The worst thing to happen to America in the past half century? The emergence of the permanent Obstructionist Class.
My opinion as a Canadian is I like the tariff idea ... If only to scare the hell out of all our politicians ... All their salary's are indexed automatically to inflation ...we need to expose the unbelievable corruption here and we can't do it from here due to the onerous censorship on every possible news venue .... I love Trump and what he is doing and if we can't fix our country we are going to be in somebody's pocket anyway for sure ... Might as well be Americas pocket ... At least if we can arm ourselves against the politicians and the wild animals we might have a chance
A secular financial bubble decades in the making has been waiting to find its pin and the tariffs are probably it (actually more like a hot knife). The pain which will result, likely over the next 10 to 15 years (this is a secular cycle), isn't actually Trump's fault but he is certainly going to be blamed for it now.
Perhaps I should note I say this as someone who recognizes that pathological authoritarians were in control the previous 4 years (Joe was just a pitiful façade) and that the Trump administration has been working remarkably vigorously to get those toxic political control freaks out of positions of power. Generally I'm very supportive of Trump's efforts but he just committed a mind numbing blunder financially, economically and politically...not even a maybe. This blunder may be even worse than promoting those horrifically dangerous and ineffective COVID injections, which is saying something given the extent of the humanitarian catastrophe caused by the injections.
The "stock market", buoyed by fake money from the Fed and its member banks, is the depository for baby boomer retirement, through investment in pension funds, IRAs, mostly in the stock market. These retirement vehicles are lower than anticipated due to COViD (lockdown and small business failures), inflation due to the Fed's malfeasance. Continuing inflation plus high interest rates have caused the economy to be less robust. So, we have lower stock market returns, uncontrolled inflation and high interest rates. Bad timing it would seem for Trump's tariff experiment? The stock market has fallen badly in two days (no collapse, I hope) and tariffs will cause a price increase on foreign made products. This will cause a cut in spending by retirees, lower and middle classes. A perfect storm for a recession-depression crash of the US economy (and many other countries)? We had better pray that the Trump theory is correct and comes together quickly. A rank amateur in economics, my musings are not a prediction, but, be careful-- very careful.
Tariffs make for an easy political target. Trying to explain the inflationary policies of the Federal Reserve, the insufferably opaque federal tax and regulatory codes (numbering in the tens of thousands of pages), and the effect those have on prices over the decades is much too hard to explain even by the very smart people.
Is it the “economy” that needs rebalancing, or is it trade? We have massive trade deficits (losses) on virtually every front. Trump is ending Bretton Woods, the system by which America got plundered by friend and foe alike.
Remember, a trade war between a country with a trade surplus and one with a corresponding deficit is virtually certain to be won by the latter, as it has nothing to lose.
I agree to an extent; China's economy grew at 10% per year, every year for ten years. That is unheard of. Why? Tariffs.
This stuff worked to deflate prices from 2018 to 2020 and folks are finally figuring this out
You all had the highest purchasing power of your lives in Jan 2020... And then the financialists on Wall Street activated Event 201 to kick Trump out with their Scamdemic.
I understand the opposition, I don't understand why all other don't trust that Trump knows exactly what he is doing. It is not a short - time line - fix - so it doesn't help our movement to sow doubt and distrust.
The more you know about his economic plan/ design the more you can trust it.
I believe tariffs are being used by the US not as a foundational economic strategy per se, but as a very persuasive means of forcing otherwise unwilling trade partners to negotiate fair (free) trade arrangements to level the global economic field, end the disastrous policies of both political parties that resulted in the exporting of American manufacturing, loss of jobs and gutting of middle America. This is not a “tariff war”, it is not just a negotiation, it is the restoration of the “American Dream”! It is also perhaps a means to cause the end of the failing Chinese Communist mercantile system.
I haven’t checked this statement for supportive data, but my guess is the tariffs have largely affected the stock market by having their greatest impact on international stocks and mutual funds, rather than domestic companies. I also wonder if this is hitting hardest the pocket books of bought and sold politicians. There is an awful lot of screaming going on. Me thinks it’s for themselves more than it is for thee.
I’m no expert on tariffs , but from what I have seen so far with all the chaos and the confusion, not many “experts” are experts either, but as you say, self interest play a big part. I tend to lean towards Martin Armstrong’s view on tariffs and the global economy in general. He seems to be correct very often.
I'm sorry but this misses the real story. Manufacturing in the US has been growing but it's just not using humans and services have been growing much faster. The Chinese took the shitty jobs but robots (automation) are taking the good ones.
Here you can see a good rate of growth in manufacturing output, but that it is still declining as percentage of the economy because other areas are growing faster:
https://www.macrotrends.net/global-metrics/countries/USA/united-states/manufacturing-output?
And here you can see that the growth is coming without adding jobs very quickly
https://en.m.wikipedia.org/wiki/Manufacturing_in_the_United_States?fbclid=IwY2xjawJflRVleHRuA2FlbQIxMAABHtma1QwID-2oDwANwIl2nxj0xzQhYWWUGUDe3xqWPnvYoHsN5M4laD_X0QAj_aem_o3JwCU_NVNqNltuKFfU_PA#/media/File%3AManufacturing_GDP_(nominal_and_real)_and_Manufacturing_Employment.png
Finally...the other big issue is vocational training. We already have almost half a million unfilled manufacturing jobs in the US right now and many manufacturers struggle with workforce skills and turnover. We are solving the wrong problem.
https://www.bls.gov/news.release/jolts.t01.htm
I'm not trying to be a jerk but this is a very destructive policy that is going to make us all a lot poorer if it is not stopped quickly.
Perhaps, but the data do not yet reflect the full effects of the tariff strategy. China initially took the low level jobs or making cheap junk to sell back to Americans. They have since spun those off to other se Asian countries such as Vietnam and are trying to compete globally in the higher end industries. Not exactly working out as well as they had hoped. Their controlled mercantile system keeps the majority of their populace poor to prohibit them from developing a consumer economy that might lead to uncontrolled capitalism which ironically could allow them to compete with the US consumer. Not going to happen because of their communist ideology of societal control. Traditional manufacturing has been affected by robotics but not to the extent of replacing all human involvement. Trump wants open free markets with no tariffs, which could happen by the end if the summer. Tariffs are just a cudgel to get people to the table and make them realize America is back in control of its destiny Let’s see the data in 12 months.
When we can make small precision screws in quantity we will know manufacturing is back. Apple found no US sources in their attempt at a Texas assembly plant. Low margin production has a poor US base.
Good article. I find the tariff debate so disingenuous. I live in Washington State. We have a 10% “tariff” on pretty much all goods and services but we call it sales tax. We also have a “tariff” on gasoline that runs somewhere around $1.50 a gallon. We have another tariff on the miles driven by trucks who deliver good and services. My point being is we already tax everything 100 times over yet economists are pretending a new Federal Tax is the one that will ruin the economy. Low taxes are key to a successful economy but let’s not kid ourselves that the tariffs are one straw that broke the camel’s back.
Wait and see. It's all we can do. I pray it's successful.
Good points. Results over rhetoric will always matter most. The problem is some results take longer than an election cycle.
Right. Still, it's the political reality we operate within.
Agree. It’s a challenge.
If Americans don’t understand bankrupcy $36 Trillion and $1.6T trade deficit, guess we’re doomed. POTUS is doing only thing he can do & Bessent agrees. Media is enemy.
Depressingly correct. Machevelli pointed out that anyone trying to make fundamental changes will always face a coalition of those who like the status quo.
So... 🤔 our fate lies on the level of need for immediate gratification by the current population? Yikes 😬
I couldn’t push the like button for your comment…because I don’t. But it’s the sad, sad truth. The only other possibility is that we so loved the game of “kick the can” as children so much, that we found a way as adults to continue to play.
You are right. We truly did.
You wrote:
“I would much prefer that Congress gets its priorities in order and cuts spending and regulations so that the American citizen and his family can thrive.”
[taking a moment ...]
The Tariff Policies of DJT are in play precisely because Congress cannot be counted on (read: “trusted”) to do anything.
The hand-wringing and caterwauling of the present moment comes from minions who were not elected POTUS. The very same people who were OK with a fake “president” ceding his Responsibilities to underlings (and the immoral and worthless Media who covered up the subterfuge).
The worst thing to happen to America in the past half century? The emergence of the permanent Obstructionist Class.
My opinion as a Canadian is I like the tariff idea ... If only to scare the hell out of all our politicians ... All their salary's are indexed automatically to inflation ...we need to expose the unbelievable corruption here and we can't do it from here due to the onerous censorship on every possible news venue .... I love Trump and what he is doing and if we can't fix our country we are going to be in somebody's pocket anyway for sure ... Might as well be Americas pocket ... At least if we can arm ourselves against the politicians and the wild animals we might have a chance
A secular financial bubble decades in the making has been waiting to find its pin and the tariffs are probably it (actually more like a hot knife). The pain which will result, likely over the next 10 to 15 years (this is a secular cycle), isn't actually Trump's fault but he is certainly going to be blamed for it now.
Perhaps I should note I say this as someone who recognizes that pathological authoritarians were in control the previous 4 years (Joe was just a pitiful façade) and that the Trump administration has been working remarkably vigorously to get those toxic political control freaks out of positions of power. Generally I'm very supportive of Trump's efforts but he just committed a mind numbing blunder financially, economically and politically...not even a maybe. This blunder may be even worse than promoting those horrifically dangerous and ineffective COVID injections, which is saying something given the extent of the humanitarian catastrophe caused by the injections.
The "stock market", buoyed by fake money from the Fed and its member banks, is the depository for baby boomer retirement, through investment in pension funds, IRAs, mostly in the stock market. These retirement vehicles are lower than anticipated due to COViD (lockdown and small business failures), inflation due to the Fed's malfeasance. Continuing inflation plus high interest rates have caused the economy to be less robust. So, we have lower stock market returns, uncontrolled inflation and high interest rates. Bad timing it would seem for Trump's tariff experiment? The stock market has fallen badly in two days (no collapse, I hope) and tariffs will cause a price increase on foreign made products. This will cause a cut in spending by retirees, lower and middle classes. A perfect storm for a recession-depression crash of the US economy (and many other countries)? We had better pray that the Trump theory is correct and comes together quickly. A rank amateur in economics, my musings are not a prediction, but, be careful-- very careful.
Tariffs make for an easy political target. Trying to explain the inflationary policies of the Federal Reserve, the insufferably opaque federal tax and regulatory codes (numbering in the tens of thousands of pages), and the effect those have on prices over the decades is much too hard to explain even by the very smart people.
Is it the “economy” that needs rebalancing, or is it trade? We have massive trade deficits (losses) on virtually every front. Trump is ending Bretton Woods, the system by which America got plundered by friend and foe alike.
Remember, a trade war between a country with a trade surplus and one with a corresponding deficit is virtually certain to be won by the latter, as it has nothing to lose.
It should be in order at least half a year before that so people feel the difference. We'll need some policies that have a short term impact for that.
I agree to an extent; China's economy grew at 10% per year, every year for ten years. That is unheard of. Why? Tariffs.
This stuff worked to deflate prices from 2018 to 2020 and folks are finally figuring this out
You all had the highest purchasing power of your lives in Jan 2020... And then the financialists on Wall Street activated Event 201 to kick Trump out with their Scamdemic.
I understand the opposition, I don't understand why all other don't trust that Trump knows exactly what he is doing. It is not a short - time line - fix - so it doesn't help our movement to sow doubt and distrust.
The more you know about his economic plan/ design the more you can trust it.