I see it differently. The EU is bending the knee to the tariffs. I think they will do the same on whatever Trump tells them. We have flexed our muscle and the wannebe's are falling by the wayside. The EU is a wannabe The US is still very strong in EuropeFLBear5630 said:I know you don't seem to see the connection between what Trump is doing in Ukraine to tariffs, but there is larger fallout in two areas.Sam Lowry said:Gracias. I think Russia's position on a ceasefire hasn't changed. Ukrainian neutrality and recognition of the newly annexed territories have always been the starting points. Not an easy concession for Trump to make even if he'd like to.ATL Bear said:I never replied to whiterock for this very reason. You're welcome.Sam Lowry said:Isn't there a thread for this?FLBear5630 said:whiterock said:What Trump has done is conceptually very, very simple. The reason no one has yet done it yet is because.....well.....look at the reaction to what Trump is doing. The short term pain is real. The short term angst is deafening. But he's doing the right thing. Sure, one can critique HOW he's doing it, but effectiveness matters more than the means. And man, is he being effective.ATL Bear said:Are you comfortable with the federal government using blunt force tools like tariffs to force private companies to relocate supply chains regardless of cost, efficiency, or consumer impact? Is that economic nationalism or centralized planning?whiterock said:prior to covid, 1st Trump admin had a net gain of 750k. Biden had a comparable number over a full 4 years, but also had the benefit of unprecedented economic stimulus.FLBear5630 said:You guys really believe that tariff's are going to increase industrial manufacturing? Did it work in 2016-20 under Trump and in 2020-24 under Biden? How much more manufacturing did we see? Honest question.KaiBear said:Mothra said:Kind of reminds me of the insistence that tariffs are working, and will end up bringing manufacturing back to the United States.KaiBear said:Assassin said:
Ukraine get's it's ass kicked
https://www.facebook.com/reel/655054747126910
Remember when contributors around here were insisting the embargo's were working, how Putin was taking unaffordable casualties and Ukraine was going to force Russia to withdraw ?
Western propaganda works.
It was all a fantasy.
My friend I seem to remember a similar mentality whenever I said Russia was winning the war.
And like Russia wining the war ; tariffs and even just the threats of tariffs ; are going to bring manufacturing jobs back to the US.
Time clarifies everything.
https://www.forbes.com/sites/chuckdevore/2018/10/16/the-trump-manufacturing-jobs-boom-10-times-obamas-over-21-months/
https://www.factcheck.org/2024/09/trump-vs-harris-on-u-s-manufacturing/
so, yes, policy does matter. it can grow manufacturing jobs (rather than inhibiting them.) Trump's policies will indeed stimulate manufacturing growth - the clear aim of them is to force companies to move larger percentages of their supply chain inside the USA in order to avoid the risks that tariffs pose to their business models.
But the growth of manufacturing jobs is not really the primary statistic. The trade deficit is the more important metric. That's why Trump did not seek to simply match the tariffs of trade partners, but to evaluate the full range of tariff AND non-tariff barriers to trade, for the purpose of sending the signal that trade with the USA under existing arrangements is over. The message is, clearly - If you want to continue selling goods to the USA, you better enter negotiations quickly with a plan to reduce your trade surplus. Companies can do their own calculations on how & where to restructure supply chains (which will take time and investment, which is being factored by the stock markets at the moment). And governments are going to have to make concessions on rates and regulations to find a way to buy more US stuff (goods or services).
What he's doing is simple. Elementary. Effective. But so many people are so thoroughly invested (financially and morally) in globalism that they are having great difficulty accepting that the game has changed. the post-WWII order is over. A new one is being built. The USA is going to demand balanced trade relationships as the price of entering the US market, which is the largest and wealthiest consumer market on the planet.
Biden made the same error Obama did = he provided enormous amounts of fiscal stimulus, but muted the response with crazy stupid regulations (Obamacare, Green New Deal). Just dumb. LIke flooring the gas pedal and holding down the brake at the same time.
To paraphrase Sowell, we are executing a painful solution to solve existential problems created by a previous government solution - using globalism to win the Cold War.
If you oppose overregulation and big government in other parts of the economy (Obamacare, etc.), why is government-directed industrial coercion acceptable here?
Trump critics have been quite vocal about tariffs being a tax, right? So how is raising a tax in one area (trade) and lowering it in another (payroll) "coercion?" Those companies are not being forced to do anything, other than what is good for their shareholders. Government always sets the rules for competition in the marketplace. We just changed the rules. Nobody is forcing anyone to do anything......
What makes this version of market interventionism different? And before you say "national security", yes, we all agree that certain sectors like semiconductors, defense, food, and energy independence require strategic protection. But using that to justify broad, permanent market interference across unrelated industries is a bait and switch. National security isn't an all purpose license to remake the entire economy by government fiat.
I say again: trade policy ALWAYS serves national security. Good trade policy also serves domestic needs. And for several decades, our trade policy has not served common good.
You keep calling this strategy "elementary," and that's exactly the problem. Tariffs are a political signal, not an industrial policy.
LOL tariffs are a tool to forge industrial policy. Always have been.
The idea that we can "force" balanced trade relationships by threatening our partners into submission ignores both how global markets work and how modern manufacturing operates.
Kind of an ironic statement, given developments of today, is it not......
If trade deficits were proof of weakness, the U.S. wouldn't lead the world in economic output, innovation, capital markets, and corporate investment inflows. You're treating structural features of an advanced, service-heavy, reserve currency economy as defects.
Trade deficits are not irrelevant. They have some advantages (which I have noted here many times) and they have some disadvantages (which I have noted here many times). Whether they are appropriate at any given time depends on the problems one is facing. We used them correctly during the Cold War. And we paid an enormous price. (actually, not "we." the working classes paid the full burden). Now, it's time we rebalance. There is no reason whatsoever why we cannot run a trade surplus, and enjoy the many advantages of it. "The only sustainable growth is export-led growth....."
And as for being "simple", economic policy that disrupts supply chains, increases consumer prices, and relies on delayed, uncertain gains isn't simple. It's unnecessarily risky.
Macroeconomics is indeed very simple. And brutal. In every macro & trade class I had, we used the decline of the Rust Belt as the operative example of "creative destruction" hastened by our structural trade deficit. It's easy to say that the death of inefficient industries causes resources to flow to more efficient industries which will increase overall wealth. But macro does not concern itself with what happens to those invested in the inefficient.....those with mortgages in dying mill-towns and no reasonable job prospects at anything approaching their former wages. Just working a checkout register at the convenience store for half what they made on the assembly line. Talk to that guy about "creative destruction" and see what he says. And if you stack up enough millions of folks like that over the decades, eventually, you will a populist wave that will sweep change into office (which is where we are today.....) while those invested in the globalist structures will talk about free trade as a moral imperative no matter how big the trade deficits get (or how many people are harmed by them in the process).
I've mentioned several approaches/ideas that don't require this political theater masked as strategy, nor intentionally damage our economy in the short or long term. You are beholden to the politics and the politician, not real world practical industrial policy that can make us more competitive in manufacturing and many other sectors.
What is being done now is effective, is it not?
When the lion has eaten your leg all the way up to your belt button, you can poison him slowly or you can shoot him between the eyes. Trump has just shot the lion between the eyes. I will thank him for that rather than criticize his choice of caliber.
Honest questions.
So far we have a 90 day pause. That is it. China still has their punitive tariffs In place. The EU has their tariffs in place. Nothing has been negotiated with any of the 75 Nations begging to kiss Trump's ass (his words).
What have we won? I do not see the victory, a short term reprieve of stock market? Actually you could make an argument Trump blinked.
Explain the victory.
Now, where are we on a ceasefire? China going to proxy more in retaliation for the trade war? Offset Walmart losses with military hardware to Russia? Trump going to go brash against Russia or blink?
1- China, as you said
2- Trump's "how" he has done the tariffs and his NATO actions has voided US leadership and ability to have Europe follow whatever he cooks up with Putin. It is not a given the EU will accept what Donald will...