Thanks to the Petrodollar Arrangement, America Outbids the Rest of the World with its Overvalued Dollar. This allows for enormous levels of Consumption & spending beyond one’s means. This arrangement also provides for Recycling Trade surpluses by other nations into the US Equity & Bond markets. This is not ‘cheating by Foreigners.’ It’s a basic Faustian Bargain to accumulate Wealth for the Financial Elite, with (this was thought at the Time) little to no consequence. The ‘Elite’ in these various nations (& America!) have played this game for several decades.
Thus, the American Consumer can buy enormous amounts of Stuff, allowing him a standard of living that most of the World cannot afford. & that has been true for several decades… until April 2, when ‘LIBERATION DAY’ basically told everyone ‘these rules no longer matter anymore.’
Supply Creates Demand, not the other way around. These Tariffs will lower Supply in American Markets & said Supply will go to Domestic & other markets to be consumed. Americans will see Supply shocks & outages, & the COVID funny money will slosh around… so you get the classic ‘Too much money chasing Too Few goods’ maxim of Inflation unfold with ruthless efficiency.
Here’s the Thing:
There are countries around the world whose primary Trading endpoint is not America. They will consume more of what they produce & tap into other markets. If they see Trade barriers go up (as is now the case), they will Lower volume/supply & increase domestic consumption, & penetration into newer markets. This is because every firm or factory they build inside CONUS makes them less competitive overseas, as said overseas markets require cutthroat margins that CONUS cannot provide. So what they will do (we saw this in Trump’s first term) is make some empty promises, delay things, wait it out & then whatever plant or factory they promised to build… they will abandon said plans.
Again, this is about margin & the basic fact that the American market is not competitive compared to the rest of the world. The Chinese can build electric cars now for less than 10,000 Bucks… the ship sailed on that front ages ago, thanks to US uncompetitiveness in industry & manufacturing.
So now that we have outlined all this… Let’s see what Le Robot had to say when asked to summarize the last 5 centuries of Tariff data (per the historical record):
>> Historically, the effects of tariffs have been deeply context-dependent. In the mercantilist era, they served state power more than economic efficiency. At the same Time, in the 19th century, they were crucial in helping late-industrializing nations like the U.S., Germany, & Japan build domestic industries. However, during the interwar period, tariffs like the U.S. Smoot-Hawley Act triggered retaliatory trade wars & worsened the Great Depression. Post-WWII liberalization under GATT/WTO boosted global trade & growth but also contributed to deindustrialization in some regions. In the 21st century, tariffs have reemerged for geopolitical & industrial reasons, with mixed economic outcomes, revealing that their success or failure depends largely on broader national strategies & global conditions. <<
^ Gallagher et al. said roughly the same thing in their seminal 1953 essay, ‘The Imperialism of Free Trade:’
Tariffs ‘work’ when you’re in the Ascent Phase, & when you have an actual, existent Industry. So they are not entirely ‘poor instruments.’ You CAN make them do wonders, but only in conjunction with other policies. If you’re in the decline phase, & you are hollowing out, they don’t. This is because, again, they are ultimately contextual to broader national strategies & global conditions:
If, for instance, 50% of all imports are used by your own declining Industries… what you’ve done with ‘Tariffing the entire world’ a la ‘Liberation Day’ is Nuke them. This is Insanity.
The ‘Balanced Trade Stuff’ is something which works if you have (1) Industry to begin with, (2) National Policy (Investment, subsidies, etc), & (3) Geopolitical headwinds favourable to you (friendshoring comes to mind). It won’t work if all you have is ‘Tariff them to death.’ Finally, here is an excellent essay that looks at Trump’s first term & analyzes the effects (negative & positive) of his various ‘Trade Wars.’ Spoiler Alert: For every minor positive, multiple negatives were accrued. Given said shoddy *practical* record (as opposed to something more theoretical like ‘Balanced Trade’), it’s entirely warranted to call this stuff ‘Lunacy.’
Tariffs are a Tool. It depends on how you wield them. If a hammer is wielded by an amateur or a Fool, he will break shit. If it’s wielded by a craftsman, he will build something beautiful. That’s what it comes down to in the end:
I don't think the American consumer will be 'choosing' how this unfolds, but by the end of it, you will see his purchasing power dissipate & allocate to other consumers worldwide. They will live a slightly better lifestyle for a while (thanks to America's Fall), but that will only persist for a few decades until Ecological Overshoot & its corollaries decimate them with its Negative Feedback loops in the late 21st century.
So basically tariffs don't work if your industry is non existent but they do work if your industry is ascendant.
Well what if Trump gets one player, say TMSC, in one industry, say semiconductors, to build a plant in Arizona? Now the industry is ascendant and tariffs are helpful. Problem solved.
Arguing that protectionism doesn't work when it worked so spectacularly well all across Asia is an extreme challenge. The word salad gambit is probably the only play.
Said firm (i.e. TSMC) 'promised' & then waited out the Term & did nothing.
That’s the thing... these things (mostly verbal agreements) are non-binding. It’s not just that firm in particular, but most others who did the exact same thing. Namely, wait out the term, new admin comes in... & the plant is abandoned & not built.
There’s no margin in Arizona, & you have no guarantee that the next Admin won’t do something stupid. Companies won’t take such a weird, nonsensical deal.
America today is 'not agreement capable,' hence, most of these 'agreements' over the next few years will also flop like they did during his first term.
Tariffs work in specific circumstances. This is not one of them, & I linked Gallagher’s seminal analysis, which goes over other scenarios in which Tariffs are functional... rather than trying to lampoon me to no avail, read the essay. 😉😘
So if you’re talking about those things that are largely a function of a high IQ population than the high IQ East Asian countries do well?!? Color me shocked! Does Detroit have a higher murder rate than Tokyo???
No Asian country has a higher standard of living than the US.
But not for long. Since they have higher average growth rates their standards of living will eventually overtake the US. (Assuming the US maintains free trade which it is in the process of abandoning).
No Asian country has a stronger consumer than America does, since the USD easily outbids others on the world market due to its exorbitant privilege. That's simply how the Global System works.
IF on the other hand, you're talking about non-monetary things, Asia surpassed America decades ago on many different metrics.
Supply does not create demand. Supply-side economics is nonsense.
And as for the supposed great deal the reserve currency regime provides the American people that's nonsense as well. It is great for the wealthy and no one else. Trading cheap consumer goods for precarity, low wage jobs, out of control inflation in real estate, education, healthcare and now food, is hardly a great deal for the vast majority of Americans.
The point about "having industry to begin with" is that we need to rebuild our industrial base. The only way to start that is via protectionist tariffs a/k/a mercantilism. You know, the system the British used to build their industry in the first industrial revolution and China has used for the last few decades to build out its industrial base.
Poor People worldwide demand lots of stuff, but that doesn’t mean anything if the Supply doesn’t exist to begin with. Hence, the Relationship is Asymmetric.
You don’t have to believe in 'Supply-side Economics'. You have to recognize the Biophysical limits of the world & how that skews toward Suppliers.
America fought in Iraq & Afghanistan with no tax hikes... ditto for the Proxy war in Ukraine. That is only possible *if* the US Treasuries are bought up by Foreigners. The Empire you live in (because that’s what it is, an Empire) can only function so long as these very favourable terms exist for its denizens. That’s how the world works.
The Empire’s administrators don’t care about the Hollowing out & all the other things you touch on. That stuff is superfluous for them so long as the Machine can run.
You cannot rebuild anything if 50% of your Inputs (which you get from Foreign Suppliers) will see shortages & outages in the coming months & years thanks to this Lunacy. & if you actually read Gallagher, he makes a similar point in the essay:
Tariffs can tremendously help infant industries in the Ascension Phase, provided there is sound government policy, private-public collaboration, etc. But that is not what these Stupid, Deindustrial Tariffs on the Descent phase will do.
While you’re right it’s a shock therapy, and there’s high risk that the next administration will backtrack, there’s no other way around. The alternative is to continue the deindustrialization process, due to the fact that american companies are less and lass capable of competing with foreign businesses. The USA won’t be able to keep the status of dollar as reserve currency with major impact on the population.
We spoke about this subject a few hours ago with Sir Malcom:
Here's the thing. Chemo is certainly an option, but so too is 'doing nothing.' This is because once the Cancer gets to the terminal stage, you're simply prolonging the suffering of the patient & the Chemo at that point will most certainly Kill her.
The idea that 'we should just shock therapy out of this... even though this may cause Supply Outages & Crush us,' that's just more pain, suffering, etc, followed by Actual Civil Strife & Balkanization.
This is one of those situations where all roads lead to Defeat... so it's better to take the 'whimper' option as opposed to the 'bang' one.
This whole liberation day nonsense has done permanent damage to 🇺🇸 bond markets & supply chains.
Your rhetoric is cute, but ultimately moot & irrelevant whilst my “annoying defeatism” will end up swallowing you whole 😊 Enjoy Liberation Day, patriots! 🇺🇸 🫡
Your commentary reads like WEF nonsense. You sound like all you really want is to rule the world Schwab/Soros style..."You will have nothing and be happy"
Except the MAGA bros are the ones who think manufacturing should die if they cannot overnight “fix” the fact that they use foreign inputs for almost everything they do 😆
See that’s the thing- these bros will end up endorsing the “own nothing & be very happy” silliness just via their deindustrial silliness 😂
Once they do, the WEF technocrats will look like saints to the Deindustrial 🇺🇸 bros who have wrecked their nation via these suicidal tariffs 😆 “populism” will never come back in 🇺🇸 if this lunacy continues!
Tariffs have been used for centuries to protect home industry and build it up. In fact, China, India and countless other industrializing nations have used exactly that tactic to much success - and to the detriment of the US.
The Russia sanctions themselves have served to protect Russian industry and allow them to expand both the size and scope of their industry since 2014.
Your assertion that it is somehow inevitable that the US - using the same approach as every other nation - will somehow have the opposite effect is patently absurd.
To use tariffs effectively you need existent industry along with actual policy, none of which are a thing for le Donald’s 🇺🇸 today. For instance: 98% of all 👞 that 🇺🇸 bros buy are imports…. Pray do tell me how “tariffs will protect the home 👞 industry” when it is a mere 2%? 😉
Let’s be real here: Le Don has no clue what he is doing. If he did, he wouldn’t have done sweeping tariffs against everything & everyone… such that many goods ( 👞 are just one of them, hundreds more goods exist 😉) have no actual industry & production in 🇺🇸, & never will (for ☕️ & 🍌 for instance… there are climatic & biophysical limits).
Copious amounts of manure doesn't make people want more manure. The whole supply creates demand mindset is a farce and attractive only to those who have a pathologic desire to control others.
Your argument was used by 🇪🇺 bureaucrats to argue in favour of trying to corner 🇷🇺 using a buyer’s cartel against their indigenous natural gas, oil & metal industries…
Fast forward over a decade & here we are! 😉 🇪🇺 are poorer & rapidly deindustrializing while 🇷🇺 is ascendant. See that’s the thing:
The guy who makes the stuff, has the cards. Not the guy who has to buy it & doesn’t have the productive forces to build it himself 😘
This isn’t a good example. Oil and gas are the lifeblood of modern civilization, with virtually zero substitutability or elasticity. They’re not like most other products, and certainly not like manufactured products. Buyers’ cartels can work as a strategy, but not when the product is absolutely essential and the seller can redirect to other markets at any time.
Modern Civilization runs on other essentials: Steel, Plastics, Fertilizer & Concrete being what many call 'the Four Material Pillars' of our world (after the Big Three of Oil, Coal & Gas).
You run into many issues when you lack inputs, especially the four inputs I noted above. Buyers’ Cartels have not worked these past few decades because modern economies have had to deal with smaller margins for volume, thanks to increased upkeep costs.
For example- Today, most of America’s 85 million metric tonnes per annum of Steel production... is used for repair & maintenance, as opposed to New construction. A Supply shock of steel would suddenly mean that the entire society can no longer do new infrastructure projects, once the stockpiled steel (which is scant) runs out in the opening months.
JDPON -> Joint Dictatorship of the Proletarian Order of Nations.
It's a Far-Leftie meme that Donald is a Secret Maoist/Muslim/etc. who is a Deep Plant to Implode America from within by first adjusting his tone & tenour as a 'Patriot & Nationalist'... only to then rug-pull everyone with insane Deindustrial policies.
With this Loony stuff right now, which will make what remains of American Industry source Foreign Inputs (50% of all their Inputs btw) at higher prices... that Joke/Meme has basically become a reality. He's the Chairman Mao of American Imperialism, & this 'Great Leap Forward' has basically vindicated the American Communist Party Memes from ages ago... which were once silly Jokes & now becoming stark Reality.
Do you think there's anything to be said for these Tariffs being partly a negotiation tool? We're already seeing the EU coming to the negotiating table. I think there's a point to be made that while the Tariffs can be seen as extreme, they are being levied in response to the US being excessively tariffed. Could there not be a scenario where they eventually lead to the US having more balanced trade opportunities with the rest of the world, thus leading to a net gain over time for US trade?
'Negotiations' do not solve the fundamental issue of the destruction of global value chains, shipping routes, etc.
Also: If you slap tariffs on the whole world like a Pariah... any 'negotiation' will simply be some good material for the cameras, after which they will be dumped into the dustbin. Because here's the thing:
During his first term, Trump negotiated USMCA with Mexico & Canada & then (after getting in for a second term) has de facto ripped up said deal.
There will be no real 'Negotations' thus. There will be some kayfabe for the cameras & maybe something for a few weeks & months, followed by increased pressure (on the supply side) on American consumers.
As for the Balance of Trade stuff-> America will never balance trade with poor countries like Vietnam, EVEN IF Vietnam offers a NEGATIVE TARIFF RATE.
This comes down to basic mathematics regarding GDP per capita, population, purchasing power of the currencies involved, etc.
The Vietnamese Dong CANNOT outbid the American Dollar, period.
This means that when American consumers, producers, manufacturers, etc go onto the international markets to buy product... they can buy most of what they wish EVEN IF they are completely ambivalent.
Meanwhile, if you waved a Magic Wand & made every Vietnamese a 1,000% America Lover, they would STILL not be able to buy much more than the 9.8+ billion USD they did in 2023. America meanwhile? They bought over 95+ billion USD from Vietnam.
The 'Trade Imbalance on a *per country basis*' is nonsense. What is sensible is 'Trade Imbalances on the NET after you add every country up.'
The latter is sound policy which Nations & Empires in the past have pursued. The former is Lunacy which is Mathematically impossible against *most* nations, given the exorbitant privilege of the Dollar & how basic math works.
Your prediction is interesting in light of the fact that on X there are people in the American stock market who are reporting something very different than what the media is. As in profit. Also, you do not include the speed at which America can rebuild, nor the factories that can be retooled. And finally, in spite of America getting the short end of the stick, it's GDP outranks many countries. China- 17 Trillion. Europe, about 27 trillion, America, 29 trillion.
Investors are currently pricing in Stagflation & other Illths, so I would disagree. The real danger in a few months (assuming this nonsense continues) is the Bond market being impacted by a mass exodus from treasuries.
'Speed' is measured in years & decades for Reindustrialization... Study the Cases of Japan, Germany & Gilded Age America. Industry doesn't pop up overnight. Yes, Tariffs *can* work, but it’s a marathon & not this Mad Dash/Sprint.
GDP is not relevant when most of it is in Services & non-tangibles. China (for example) makes more than half the world’s Steel. The issue with Tariffing the entire world while you don’t have any plans for how to safeguard your own Industry’s Inputs (50% of which are Foreign imports, btw) is that it’s just a Big Loser; sorry. Your manufacturing (what is left of it) will get hit by supply crunches & crumble...
I'd add another component. Immigrant tariff. Take your native population to be 100%. If the number of, for example, Mexicans in your country is 10% of that, add 10% to the tariff. This gives the other country incentive to have its people remigrate.
I want everyone screaming, “Muh, it takes YEARS to set up factories! or assembly lines!” to go watch Working Man. Not “A Working Man” but “Working Man”
The Machines in there? From time of delivery they can be installed in a month. I know because I’ve been involved in it. One of those machines is probably all it takes for a single company to make headlight covers for all of a model of cars it sells for in the US, if multiple models. There's quiet a bit of used or underused machines in the US right now.
“But wait, Barbarian, you need a FACTORY to put them in!”
Oh, you mean the ABANDONED factories that we have in Ohio, Pennsylvania, Michigan, etc!? There's definitely a lot of unused and underused factory space. I've been in shops that are half full simply because the shop was in the bad part of town where the rent was cheap but they didn't use all the floor space
But do you know exactly how much product those machines can put out!?
"But what about the material!?"
Are you really going to tell me it's difficult to source cheap plastic or metal? I have worked in all types of plants, making stuff from high grade to low grade plastics and metals. Activated Charcoal. There are things that take awhile to set up and source, and those that don't.
But do you know how much a new plasma cutter can put out? Or an old, but still good, CNC machine? A plastic manufacturer?
Our LNG is Cheap. So is our Coal. We can make our Nuclear cheap too if we cut the red tape. We make tons of our own chemicals in house.
And these things can make TONS of stuff. And there’s lots of it that - literally - just gets sold at auctions these days because we don’t know what to do with it. 480 volt, high ampacity stuff that I’ve seen just go for pennies on the dollar because we DON’T KNOW WHAT TO DO WITH IT. I promise you, promise America can make things again.
That these factories can be filled again. With US born workers, not imported slaves.
I feel like a lot of these objections are from people that have never actually worked in plants, set them up and made them run. Sure - I've never been on the logistics side of things. So I can't speak to that. All I can tell you is that America can easily make the physical factories work faster than anyone thinks, if they want to.
And that if American workers are working in American factories at American living wages - they'll be able to afford American goods.
Or they'll start burning down cities - but that was going to happen if the tariffs didn't happen anyways - so what do you have to lose?
It is worth noting the other factor in getting to Balanced Trade -- and that is increasing US production. Tariffs may provide an opportunity to level the playing field, but then factories must be built in the US and workers trained. There are huge obstacles to doing that -- excessive regulations, greedy lawyers, NGOs with their shady funding, an incredibly convoluted intrusive tax regime, a dysfunctional educational system.
The President has the authority to set tariffs on his own. But dealing with the obstacles to re-industrialization relies on Congress taking appropriate steps. However, Congress created the mess in the first place ... and CongressScum never take responsibility for their own actions. A lot will depend on which group of oligarchs (foreign & domestic) are prepared to make the highest bid for the finest Congress that money can buy.
Maybe I live in a Crazy State (Louisiana) but Hyundai announced a new $5B steel plant planned for a few miles north on the Mississippi River. Maybe we need More Crazy?
Plans can be announced but there is a long way between announcing a plan and employing hundreds of people. Before the plant opens there will be at least one and maybe two new presidents and a whole load of new laws.
The US consumer market is small compared to the 'BRICS and friends' market and S Korea with a tariff of 25% put on cars may decide it is not worth the trouble as US cannot be trusted.
If you seriously believe that 350 million Americans consume more than 4 billion others you have serious problems with numeracy.
If you are talking of certain specifics, such as say "household" consumption of electricity then you could be correct in that a/c and swimming pools consume electricity compared to lighting. However national level or industrial level consumption the US is a midget.
Then using US figures 2021 : US had 330 million and spent $43,000 per capita $14.19tr. China had 1.4 billion and spent $7,000 per capita $9.8Tr. India 1.3 billion spent $4.6 per capita $5.9Tr.
So China and India alone spend more than the USA. Never mind the 30 other countries that now make up BRICS +
The US includes "estimated" expenditure such as the amount that an "owner occupied" house would charge for rent as part of the GDP and it also use actual numbers instead of "Purchasing Parity" where a basket of food in NY my cost$300 whereas in Moscow or Beijing exactly the same purchases would only cost $100 making Moscow and China purchases 3 x as valuable.
In 2023, China had the highest car sales, with over 30 million vehicles sold, followed by the United States with around 16 million.
As I said The US includes "Imputed' values and thus the US can make up any number it likes. (For instance my wife could charge me $ 1 million per annum for household and conjugal services whilst I charge her $1 million for rent, wow our household has an income of $2 million.)
Plus it includes all government permits, licences etc. so elements that are free in other countries get a value and added to the US.
As I said in my article, Trump has combined a national strategic tariff with a scaled tariff. Both policies have their merits; it’s less clear that both at once is meritorious; but that is what he has done.
The problems you mention are important but you could correct all of them and still very little would happen because the price of money is too high. The banking sector in the US has too much bargaining power in relation to all other industries (and labor).
Free trade working as intended exposes workers to foreigners’ self-inflicted low standards of living. Foreigners tend to sneer and screech about tariffs because they benefit from the arbitrage. Next step: taxes on remittances.
Thank you VERY much for your very clear and easily understood explanation of Trump's tariff policy. This article needs to be spread far and wide because it is imperative that people understand all this.
I continue to love James Surowiecki because his book "On the Wisdom of Crowds" is the clearest and best explanation of why information needs to flow freely, which makes it one of the most important books of our times.
Well, I feel delighted--that you own Surowiecki's book. I have memorized that name and its spelling, because I promote that book in posts like this, as one contribution to The Great Awakening.
As I understand it, the US trade deficit has been intentional and necessary in order to export dollars to other countries and thus allow the dollar to act as the world's default reserve currency, which I gather has substantial indirect benefits to the US (essentially acting as the world's banker.)
I'm not entirely qualified to judge what the long-term economic effects of these specific tarriffs will be, but if dollars are no longer going to be net exports then it seems like the dollar will lose its place as an international reserve currency.
It's also not obvious to me that any given country being a net-value exporter to the US is automatically a sign of malfeasance on the part of said country? If country A has a net trade surplus of, say, 10 billion WRT the US, but imports 10 billion worth of goods from country B, which in turn has a trade deficit of 10 billion WRT the US, then... in principle the US can make good on trade as a whole even if it's not true of every specific partner.
I've written elsewhere on the long-term effects of being the world's banker - check my series called "Running on Empty" or the book of the same name.
Your criticism of the scaled tariff is, I think, the best legitimate criticism of the policy. It is possible to have intransitive trade, scissors-paper-rock style. However, most of the countries that have trade deficits with the US genuinely are pursuing mercantilist policies, and that becomes clear based on their overall status as trade surplus countries. I can't know for sure, but I suspect that if you asked the Balanced Trade authors, they would say the gain in efficiency/simplicity from their approach, preventing it from being "gamed" or politicized, is worth it, over trying to calculate intransitive trade balances.
I might come back to this topic later, but even if the argument for simplicity holds I might have suggested easing into the tarriffs gradually over a 10-year period or so, so partners (not to mention the domestic economy) at least have a chance to adjust gracefully. All this 'shock and awe' feels like showmanship more than statesmanship.
Previously I was under the impression Trump was using tarriffs either as a political bargaining chip (e.g, to force Mexico/Columbia/etc. to take back illegal migrants) or to go after specific bad actors like China. This feels a lot more drastic, and more likely to alienate potential right-wing allies in Europe and elsewhere.
He has talked about the tariffs for a long time. He gave plenty of warning for everyone for them. Far more than say, Obama on Obamacare to the insurance agencies. People knew they were coming, as seen by the fact that they front ran the tariffs by buying things and putting them in warehouses, or some companies even announcing that they'd build factories even before the tariffs were announced in finality.
The thing about doing them all at once is that you don't have prices and wages creep up at the same time, making the tariffs essentially worthless. Inflating them away. You have everyone forced to deal with it all at once, which has it's own bargaining power.
Suddenly your neighbors are all much more able to do work for you at a rate much more realistically hirable than someone in India, Vietnam, or somewhere else for making clothing. Your local sawmill might be much more of a deal than Canada or Lowes. You might look around for a machine shop in town for your simple auto parts like a driveshaft. But you can start thinking in such terms, and imagining a world where you're more local than international.
And you will probably be a lot poorer as a result, since you will lose both the benefits of scale with regard to production and also of comparative advantage. Trump is using his tariff sledgehammer to solve a problem where a scalpel is needed. I voted for Trump and most of my comments have been supportive of both his and Elon’s actions. But the name for this is a not well thought out clown show. Do all of you supporting an attempt to balance trade with each of our trading partners which is apparently derived using an incredibly dim-listing formula.
I will defer to any individual here who is either completely self sufficient and manages to also own the pleasures and conveniences of the modern day world that we all enjoy ( including the internet over which we are conducting this discussion - hard to build it yourself) or who exists by making sure that just like you their transactions with their grocer, other merchants, health care specialists, as infinitum. Just as your personal goal is to get the best service or goods available for your money while being treated fairly , so should that be our goal with the companies and individuals abroad with whom we deal. Of course, unfair practices and subsidies ( hidden or overt) should be addressed - but Trump’s focus on manufacturing jobs rather than output will reduce productivity in the manufacturing sector and concentrates on a sector of the economy that is losing share to technology, which is where should be focusing our efforts to remain a leader. I have not addressed the foreign policy aspects related to economic security , which I agree are a complicating factor. But remember that trade is multilateral, not bilateral - whether it involves your personal life or our country/ .
Look. If you want to be a merchant and emphasize dollars over everything else - fine. That is your religion to chose and you can do that over culture, race, other religions, everything else. Simply realize that other people have decided the economy is meant to serve humans, not humans the economy. Thus your arguments about free trade are just wrong, because they're based on the wrong prior moral arguments.
As far as your talks about who people are - I am probably one of the poorest, as measured by income, commenters on here. I'm a self employed electrician that usually makes 45k a year taxable income and had a rough year last year - 28k. I raise 6 children on that.
Despite that, I practice a life akin to what Trump is trying to achieve in these Tariffs - rebuilding classical America. I buy local when I can. My neighbor across the street owns a saw mill and cuts the trees down on his own property. Can import them across the state if needed for 2k a truck load if I needed specific logs for wood. The ones off his property his 14 y/o boy will sell for 33% off the Lowe's price.
I raise my own hogs, milk goats, a steer. My own chickens. I can buy clothes made locally. I can buy furniture made by neighbors. I drink at a local brewery five miles away and am on the board for a cemetery where I expect to be buried when I die.
I am poor but eat well and have freedom with my day. If I don't work I manage my property. I add wealth to it. I spend time with my wife and home schooled children. I fix my cars and do all my own work on them that I can - which is basically everything but deep engine work.
And this isn't hard. I have a better, freer life than most Americans from my perspective. I probably eat better than you do. I probably have more free time than you do, and spend more time with my children. So who is richer in life? By what measure? It has stresses, yes, but you can learn to do without.
Americans CAN LEARN TO DO WITHOUT.
It's being productive, without adding to "GDP number go up."
Everyone has complained for years about what the problems of the US are. And then everyone says that they know the solutions. But then they never think through the secondary and tertiary consequences of those solutions.
Well, guess what plebs. Your ruler chose a solution. And broadcast it in the most obvious way he could for as long as he could - for the whole election cycle onward!
The consequences will now be felt. These consequences are that the wealth of the boomers will be clawed back. The wealth of the corporations will be clawed back. The gadgets, the fluff, and the bubbles are done.
America will be a leaner, meaner, lithe and beautiful Empire again - or it will fracture into regional powers because it can't handle it. But the latter was going to happen under a lot more strife and turmoil of rebellion anyways, only against people wanting to molest your children and shoot you up with vaccines. So why not try?
> Trump’s focus on manufacturing jobs rather than output will reduce productivity in the manufacturing sector and concentrates on a sector of the economy that is losing share to technology...
I'm not convinced that Trump actually *is* focused on jobs rather than productivity, given the Vance/Musk focus on supercharging AI development. Most modern manufacturing plants are heavily automated these days and I'm not aware of specific policy to address this, so there might not be much benefit to the rustbelt here aside from construction work.
If not. The Empire will fall. Simple as that. The Empire only has so many resources, and has too many disparate people to keep messing around with things.
> He has talked about the tariffs for a long time. He gave plenty of warning for everyone for them
Trump's presidency was far from a certainty until last year, and industrial plant takes 3-10 years to build out depending on the sector, so I don't really buy this argument.
> The thing about doing them all at once is that you don't have prices and wages creep up at the same time, making the tariffs essentially worthless
You do realise that imposing tariffs in full force immediately will cause the prices of many goods to increase immediately, in direct proportion to said tarriffs? Yes, local sawmills or machine shops could pick up the slack, to some degree, but if the capacity to meet demand simply isn't there and there hasn't been time to build more production facilities, then you're going to get major short-term increases in the cost of consumer goods, especially if demand is inelastic. And since Americans expect higher wages than Bangladeshis, some of these effects will be permanent.
(That is, unless you apply automation to bypass labour requirements, which makes Elon richer but doesn't especially help retired auto workers. Also a problem with the Trump/Vance policy platform.)
I understand the argument that there are tradeoffs here that could be net beneficial to US workers, if the result is a more self-sufficient country with less concentration of wealth at the top, but I doubt that shock treatment was the way to do it.
"I understand the argument that there are tradeoffs here that could be net beneficial to US workers, if the result is a more self-sufficient country with less concentration of wealth at the top, but I doubt that shock treatment was the way to do it."
Given the scramble to stop any action from happening AT ALL, and all the insider trading that happens....
Do you think that there is any OTHER way to make it happen? Do you honestly think that this could happen at all if he did it any other way?
Also, I've worked as an electrician in industrial settings. You can get plants and lines up faster than 3-10 years. That number is BS. I built out a facility for oil skid manufacturing in 1 year. I've built out lines for simple things in months - and those "simple things" provide napkins for all the what-a-burgers in the country.
So don't tell me we can't do things, and do them quickly. The nonsense about how long it takes to do things is usually a lot of lack of will, planning, and red tape. SOME things it takes longer. MOST things it does not. It's like the Germans deciding to put up the LNG ports when they needed them for Russia - they cut all the red tape and permitting, and got done in months what usually takes years because they needed the gas, and needed it now.
That is what dedicated, skilled, unhampered white people can do when they freaking want to get something done, Margaret.
There is a simple solution to the "three body problem" or a multi-body problem. Here's a very simplified example:
The US has a $10B trade deficit with China, but has a $10B trade surplus with Australia. The scaled tarrifs push China to reduce it's trade surplus with the US. However, Australia can increase their exports by $10B without tarrifs being imposed. China sets up a deal with Australia to transfer or re-export goods through Australia. They may also set up a subsidiary in Australia to sell into thecUS market. It's in the best interests of Australia to do this if they can make a profit on the transactions, even better if they get a new factory. China won't do this for just any subsidized goods, but will focus on goods where it has a real competitive or strategic advantage. The US still maintains balanced trade, everyone is happy..
"The US still maintains balanced trade, everyone is happy.."
It doesn't maintain balanced trade. The US trade deficit in goods was $1.2 trillion in 2024. It doesn't matter who re-exports what, the whole world combined exported to the US $1.2 trillion more goods than it imported from the US.
If the US wants balanced trade, it should simply consume $1.2 trillion less goods from abroad, or about $3,500 per capita.
"Ending Merchantilism" is an ideological battle, not a practical one. As long as we acheive net balanced trade, we should not be concerned with trade arrangements other countries have among themselves.
Yes, and the tarrifs are a way to achieve this. The "laundering" of trade doesn't matter if trade is balanced. My point (remember, I said it was highly simplified) is that what's import to using net balanced trade, not who we buy from and sell to.
Okay... but in that case, how will tarriffs solve the problem of mercantilism, if mercantile states can just launder their goods through a third party and still get inside the US market? Shipping is cheap these days, especially if the administration don't want the hassle and complexity of tracking transactions.
I would like to check that series next, but substack makes browsing an author's archives... challenging. (Like have you ever read or replied to economist Dan Mitchell? I tried searching, but it wasn't working.)
> but if dollars are no longer going to be net exports then it seems like the dollar will lose its place as an international reserve currency
Bingo! Now, we need to look at that chart that says how long were various empire's currencies accepted as reserve currencies, then we need to make a simple assumption "USA is not special" and we come to the simple conclusion "US dollar is going to stop being the reserve currency ANYWAY".
Now ask yourself: if you're the US government, and you KNOW FOR A FACT your currency will lose it's reserve status, are you going to let Mother Nature and "The Free Market" take their course, or will you try to steer the loss so as to prevent a nuclear civil war? Because, when you look at history, whenever a reserve currency status is lost, a giant war is usually happening at the same time, which normally destroys the empire having the currency. Might USA attempt to avoid such a fate?
> Bingo! Now, we need to look at that chart that says how long were various empire's currencies accepted as reserve currencies, then we need to make a simple assumption "USA is not special" and we come to the simple conclusion "US dollar is going to stop being the reserve currency ANYWAY"
There's an argument for this- when I read Disunited Nations it opened with an argument that the world economy was getting too big for the US to continue operating as the world banker, though I'm not enough of a student of economics to fully understand the details.
The dollar should still be able to act as the reserve currency for a smaller circle of strategic allies, however, whereas Trump/Vance seem to be going out of their way to piss off countries like Poland, Denmark, Ireland and Canada, some of which have been extremely reliable US allies. I don't always have a high opinion of their current political leadership, but I doubt that instigating a global recession is the ideal way to break the left's ideological chokehold on power.
And as I mentioned elsewhere, introducing the tarriffs gradually would at least give industries more time to adjust.
Adding one more thing. A kind of obvious thing. Ya'll are arguing details over what's already been done. No take backsies. Also note that no one has been powerful enough to stop him from doing it. Hmn. Haven't really heard the drums of war either, as it's economic. And it's only part of the picture.
You know what I love? Trump does a thing. He acts. Quickly. And the rest just shuffle their feet and yell at each other about whether it was stupid or not, in the face of a man who climbed, independently, to the Presidency, took a messed up economy that was purposefully built that way, made it sing and dance when Obummer said "what magic wand do you have?" and increased employment within a corrupt system and turned the GDP, the stock market and everything else financial into a huge monster bull market. Maybe you forgot that bit.
Repealing tariffs isn't hard in principle. As the economy gets worse and worse and the promised employment boom fails to materialize, Trump is going to be under more and more pressure to undo his idiocy. If out of stubbornness he insists on flying the plane into the ground, everyone is going to start running away from him as fast as possible in hopes of getting clear of the blast radius.
Yup, doomsaying. Easy enough to do. How many times is this? I recall the good old days. Remember Mueller? Yeah, he was going to get that Trump guy. Then Pelosi, then so on and so on.
If he has a chance to succeed, why do you want him to fail? So you can roll around in the ashes and laugh and say I told you so? Is that your win?
> If he has a chance to succeed, why do you want him to fail?
I want him to succeed. Which is why it's so painful to watch him throw it all away by shooting himself in the foot like this right as he was on the cusp of becoming a Great Man of History and sparking an American and Western renascence.
How do you know he’s failing? Any reports of a crash anywhere close to ‘29? No? Well yes, cleaning a house does look pretty awful. Here’s a hint: what DOGE uncovered was where the money laundering was going to, who was doing it and how it worked. Which means the bad actors cannot do it the same way again. It also means those funds have been if not clawed back, at least stopped. Which means recovery is possible.
There are arguments that the stock market is being manipulated to make him look bad. I think it’s taking a dip because certain large corporations need to take a hit.
On a personal note I have observed for 9 years now that every time he makes a move, there is hue and cry that it’s a stupid move, he’ll ruin everything yet here we are, ticking along. The other wailing and gnashing of teeth is the ever popular “We’ll get him this time! This time he falls!”
Gotta be frustrating that someone as stupid as they say he is just keeps on going, ever rising in popularity and continuing to drain the swamp.
Read the sentence again. Had I meant to say I think that the stock markets etc, I would have said that. Instead, I said that there are those who claim that the stocks are etc. Context.
As for whether that happens, they have been manipulated in the past. Pricing as well. Recall the famous incident in the 70’s where prices on gas were raised with the excuse of less oil when there was tons.
Currency is a tool and it’s use depends on the user or users.
When I was growing up, small rural counties had basic manufacturing. They could take cotten, spin it, and turn it into clothes. Even if they didn't have big companies, they had tradesmen, people who could build and fix appliances and radios and cars, trucks, and even had small newspapers.
Now, those are gone and even big cities don't have all that.
We have lost the ability to process our own drugs and have to depend on China.
> What happens if you are paying 4.5% interest on 8 trillion dollars in one year? You will pay $360 billion in interest. Let’s drop the rate to 2.5% for one year. You are now paying $200 billion in interest. Hell, with savings like that [$160 billion per year], Trump can buy a fleet of new aircraft carriers (kidding).
Excellent article. You explain the direct goals behind Trump's tariff plan exceedingly well. I believe that Trump's tariffs are in service of an even higher goal: a realignment of the global economy to reveal true prices and (thus) values, which have been hidden by the distortions created by the global trading system. Elites have benefited from that enormous economic distortion and lack of transparency.
Great explanation and an exposition of both the idea and of the mechanism. Free trade arguments always favour the exporter and harm the importer if deficits are created, since the importer has to in the end engage in either massive debt creation or allow foreign capital to flow back to buy up the raw assests of the target country. America has had that exact thing happen to it on both accounts. The oft-quoted comparative advantage cannot overcome differences in resource base, artificial currency manipulation and lack of political will.
Britain was famously a free trade proponent during early Victorian era, when its industrial output surpassed other nations, with tariffs and trade restrictions kicking in in the second half of 19th century in face of rising American and German manufacturing.
Thanks to the Petrodollar Arrangement, America Outbids the Rest of the World with its Overvalued Dollar. This allows for enormous levels of Consumption & spending beyond one’s means. This arrangement also provides for Recycling Trade surpluses by other nations into the US Equity & Bond markets. This is not ‘cheating by Foreigners.’ It’s a basic Faustian Bargain to accumulate Wealth for the Financial Elite, with (this was thought at the Time) little to no consequence. The ‘Elite’ in these various nations (& America!) have played this game for several decades.
Thus, the American Consumer can buy enormous amounts of Stuff, allowing him a standard of living that most of the World cannot afford. & that has been true for several decades… until April 2, when ‘LIBERATION DAY’ basically told everyone ‘these rules no longer matter anymore.’
Supply Creates Demand, not the other way around. These Tariffs will lower Supply in American Markets & said Supply will go to Domestic & other markets to be consumed. Americans will see Supply shocks & outages, & the COVID funny money will slosh around… so you get the classic ‘Too much money chasing Too Few goods’ maxim of Inflation unfold with ruthless efficiency.
Here’s the Thing:
There are countries around the world whose primary Trading endpoint is not America. They will consume more of what they produce & tap into other markets. If they see Trade barriers go up (as is now the case), they will Lower volume/supply & increase domestic consumption, & penetration into newer markets. This is because every firm or factory they build inside CONUS makes them less competitive overseas, as said overseas markets require cutthroat margins that CONUS cannot provide. So what they will do (we saw this in Trump’s first term) is make some empty promises, delay things, wait it out & then whatever plant or factory they promised to build… they will abandon said plans.
Again, this is about margin & the basic fact that the American market is not competitive compared to the rest of the world. The Chinese can build electric cars now for less than 10,000 Bucks… the ship sailed on that front ages ago, thanks to US uncompetitiveness in industry & manufacturing.
So now that we have outlined all this… Let’s see what Le Robot had to say when asked to summarize the last 5 centuries of Tariff data (per the historical record):
>> Historically, the effects of tariffs have been deeply context-dependent. In the mercantilist era, they served state power more than economic efficiency. At the same Time, in the 19th century, they were crucial in helping late-industrializing nations like the U.S., Germany, & Japan build domestic industries. However, during the interwar period, tariffs like the U.S. Smoot-Hawley Act triggered retaliatory trade wars & worsened the Great Depression. Post-WWII liberalization under GATT/WTO boosted global trade & growth but also contributed to deindustrialization in some regions. In the 21st century, tariffs have reemerged for geopolitical & industrial reasons, with mixed economic outcomes, revealing that their success or failure depends largely on broader national strategies & global conditions. <<
^ Gallagher et al. said roughly the same thing in their seminal 1953 essay, ‘The Imperialism of Free Trade:’
https://www.britishempire.co.uk/maproom/imperialismoffreetrade.pdf
Tariffs ‘work’ when you’re in the Ascent Phase, & when you have an actual, existent Industry. So they are not entirely ‘poor instruments.’ You CAN make them do wonders, but only in conjunction with other policies. If you’re in the decline phase, & you are hollowing out, they don’t. This is because, again, they are ultimately contextual to broader national strategies & global conditions:
If, for instance, 50% of all imports are used by your own declining Industries… what you’ve done with ‘Tariffing the entire world’ a la ‘Liberation Day’ is Nuke them. This is Insanity.
The ‘Balanced Trade Stuff’ is something which works if you have (1) Industry to begin with, (2) National Policy (Investment, subsidies, etc), & (3) Geopolitical headwinds favourable to you (friendshoring comes to mind). It won’t work if all you have is ‘Tariff them to death.’ Finally, here is an excellent essay that looks at Trump’s first term & analyzes the effects (negative & positive) of his various ‘Trade Wars.’ Spoiler Alert: For every minor positive, multiple negatives were accrued. Given said shoddy *practical* record (as opposed to something more theoretical like ‘Balanced Trade’), it’s entirely warranted to call this stuff ‘Lunacy.’
https://warwickpowell.substack.com/p/never-look-a-gift-horse-in-the-mouth?r=1p62fw&utm_medium=ios&triedRedirect=true
Addendum: Trust the Plan Pater! JDPON Don’s Great Leap Forward has just begun! 😉😘
You said what I was going to say but in more words and with receipts.
This might not be good for America but it’s good for the rest of the world.
Thing is, what else can be done? The decline is inevitable so at least that way America gets to choose when and how instead.
Tariffs are a Tool. It depends on how you wield them. If a hammer is wielded by an amateur or a Fool, he will break shit. If it’s wielded by a craftsman, he will build something beautiful. That’s what it comes down to in the end:
I don't think the American consumer will be 'choosing' how this unfolds, but by the end of it, you will see his purchasing power dissipate & allocate to other consumers worldwide. They will live a slightly better lifestyle for a while (thanks to America's Fall), but that will only persist for a few decades until Ecological Overshoot & its corollaries decimate them with its Negative Feedback loops in the late 21st century.
You make no sense. Nice word salad tho.
So basically tariffs don't work if your industry is non existent but they do work if your industry is ascendant.
Well what if Trump gets one player, say TMSC, in one industry, say semiconductors, to build a plant in Arizona? Now the industry is ascendant and tariffs are helpful. Problem solved.
Arguing that protectionism doesn't work when it worked so spectacularly well all across Asia is an extreme challenge. The word salad gambit is probably the only play.
Study his first term.
Said firm (i.e. TSMC) 'promised' & then waited out the Term & did nothing.
That’s the thing... these things (mostly verbal agreements) are non-binding. It’s not just that firm in particular, but most others who did the exact same thing. Namely, wait out the term, new admin comes in... & the plant is abandoned & not built.
There’s no margin in Arizona, & you have no guarantee that the next Admin won’t do something stupid. Companies won’t take such a weird, nonsensical deal.
America today is 'not agreement capable,' hence, most of these 'agreements' over the next few years will also flop like they did during his first term.
Tariffs work in specific circumstances. This is not one of them, & I linked Gallagher’s seminal analysis, which goes over other scenarios in which Tariffs are functional... rather than trying to lampoon me to no avail, read the essay. 😉😘
What Asian country currently has a higher standard of living than the U.S.?
Trick question.
If you're talking about purchasing power, the answer is 'nobody.'
If you're talking about literacy, life expectancy, etc, Many do, even the 'poorer' nations. So it comes down to what we are focusing on.
So if you’re talking about those things that are largely a function of a high IQ population than the high IQ East Asian countries do well?!? Color me shocked! Does Detroit have a higher murder rate than Tokyo???
No Asian country has a higher standard of living than the US.
But not for long. Since they have higher average growth rates their standards of living will eventually overtake the US. (Assuming the US maintains free trade which it is in the process of abandoning).
Again- It comes down to what is being calculated.
No Asian country has a stronger consumer than America does, since the USD easily outbids others on the world market due to its exorbitant privilege. That's simply how the Global System works.
IF on the other hand, you're talking about non-monetary things, Asia surpassed America decades ago on many different metrics.
Supply does not create demand. Supply-side economics is nonsense.
And as for the supposed great deal the reserve currency regime provides the American people that's nonsense as well. It is great for the wealthy and no one else. Trading cheap consumer goods for precarity, low wage jobs, out of control inflation in real estate, education, healthcare and now food, is hardly a great deal for the vast majority of Americans.
The point about "having industry to begin with" is that we need to rebuild our industrial base. The only way to start that is via protectionist tariffs a/k/a mercantilism. You know, the system the British used to build their industry in the first industrial revolution and China has used for the last few decades to build out its industrial base.
Poor People worldwide demand lots of stuff, but that doesn’t mean anything if the Supply doesn’t exist to begin with. Hence, the Relationship is Asymmetric.
You don’t have to believe in 'Supply-side Economics'. You have to recognize the Biophysical limits of the world & how that skews toward Suppliers.
America fought in Iraq & Afghanistan with no tax hikes... ditto for the Proxy war in Ukraine. That is only possible *if* the US Treasuries are bought up by Foreigners. The Empire you live in (because that’s what it is, an Empire) can only function so long as these very favourable terms exist for its denizens. That’s how the world works.
The Empire’s administrators don’t care about the Hollowing out & all the other things you touch on. That stuff is superfluous for them so long as the Machine can run.
You cannot rebuild anything if 50% of your Inputs (which you get from Foreign Suppliers) will see shortages & outages in the coming months & years thanks to this Lunacy. & if you actually read Gallagher, he makes a similar point in the essay:
Tariffs can tremendously help infant industries in the Ascension Phase, provided there is sound government policy, private-public collaboration, etc. But that is not what these Stupid, Deindustrial Tariffs on the Descent phase will do.
While you’re right it’s a shock therapy, and there’s high risk that the next administration will backtrack, there’s no other way around. The alternative is to continue the deindustrialization process, due to the fact that american companies are less and lass capable of competing with foreign businesses. The USA won’t be able to keep the status of dollar as reserve currency with major impact on the population.
We spoke about this subject a few hours ago with Sir Malcom:
Here's the thing. Chemo is certainly an option, but so too is 'doing nothing.' This is because once the Cancer gets to the terminal stage, you're simply prolonging the suffering of the patient & the Chemo at that point will most certainly Kill her.
The idea that 'we should just shock therapy out of this... even though this may cause Supply Outages & Crush us,' that's just more pain, suffering, etc, followed by Actual Civil Strife & Balkanization.
This is one of those situations where all roads lead to Defeat... so it's better to take the 'whimper' option as opposed to the 'bang' one.
Defeatism should send you back to the Middle East, with your ability to say anything to anyone over the internet removed.
If only to gain silence from your halfwit mewling.
This whole liberation day nonsense has done permanent damage to 🇺🇸 bond markets & supply chains.
Your rhetoric is cute, but ultimately moot & irrelevant whilst my “annoying defeatism” will end up swallowing you whole 😊 Enjoy Liberation Day, patriots! 🇺🇸 🫡
Your commentary reads like WEF nonsense. You sound like all you really want is to rule the world Schwab/Soros style..."You will have nothing and be happy"
Except the MAGA bros are the ones who think manufacturing should die if they cannot overnight “fix” the fact that they use foreign inputs for almost everything they do 😆
See that’s the thing- these bros will end up endorsing the “own nothing & be very happy” silliness just via their deindustrial silliness 😂
Once they do, the WEF technocrats will look like saints to the Deindustrial 🇺🇸 bros who have wrecked their nation via these suicidal tariffs 😆 “populism” will never come back in 🇺🇸 if this lunacy continues!
Tariffs have been used for centuries to protect home industry and build it up. In fact, China, India and countless other industrializing nations have used exactly that tactic to much success - and to the detriment of the US.
The Russia sanctions themselves have served to protect Russian industry and allow them to expand both the size and scope of their industry since 2014.
Your assertion that it is somehow inevitable that the US - using the same approach as every other nation - will somehow have the opposite effect is patently absurd.
To use tariffs effectively you need existent industry along with actual policy, none of which are a thing for le Donald’s 🇺🇸 today. For instance: 98% of all 👞 that 🇺🇸 bros buy are imports…. Pray do tell me how “tariffs will protect the home 👞 industry” when it is a mere 2%? 😉
Let’s be real here: Le Don has no clue what he is doing. If he did, he wouldn’t have done sweeping tariffs against everything & everyone… such that many goods ( 👞 are just one of them, hundreds more goods exist 😉) have no actual industry & production in 🇺🇸, & never will (for ☕️ & 🍌 for instance… there are climatic & biophysical limits).
Copious amounts of manure doesn't make people want more manure. The whole supply creates demand mindset is a farce and attractive only to those who have a pathologic desire to control others.
Your argument was used by 🇪🇺 bureaucrats to argue in favour of trying to corner 🇷🇺 using a buyer’s cartel against their indigenous natural gas, oil & metal industries…
Fast forward over a decade & here we are! 😉 🇪🇺 are poorer & rapidly deindustrializing while 🇷🇺 is ascendant. See that’s the thing:
The guy who makes the stuff, has the cards. Not the guy who has to buy it & doesn’t have the productive forces to build it himself 😘
This isn’t a good example. Oil and gas are the lifeblood of modern civilization, with virtually zero substitutability or elasticity. They’re not like most other products, and certainly not like manufactured products. Buyers’ cartels can work as a strategy, but not when the product is absolutely essential and the seller can redirect to other markets at any time.
It's not just Fossil Fuels.
Modern Civilization runs on other essentials: Steel, Plastics, Fertilizer & Concrete being what many call 'the Four Material Pillars' of our world (after the Big Three of Oil, Coal & Gas).
You run into many issues when you lack inputs, especially the four inputs I noted above. Buyers’ Cartels have not worked these past few decades because modern economies have had to deal with smaller margins for volume, thanks to increased upkeep costs.
For example- Today, most of America’s 85 million metric tonnes per annum of Steel production... is used for repair & maintenance, as opposed to New construction. A Supply shock of steel would suddenly mean that the entire society can no longer do new infrastructure projects, once the stockpiled steel (which is scant) runs out in the opening months.
As always, the doom sayer speaks! ;-)
But, please help me with the coded language: "Addendum: Trust the Plan Pater! JDPON Don’s Great Leap Forward has just begun!"
What plan and "JDPON"?
JDPON -> Joint Dictatorship of the Proletarian Order of Nations.
It's a Far-Leftie meme that Donald is a Secret Maoist/Muslim/etc. who is a Deep Plant to Implode America from within by first adjusting his tone & tenour as a 'Patriot & Nationalist'... only to then rug-pull everyone with insane Deindustrial policies.
With this Loony stuff right now, which will make what remains of American Industry source Foreign Inputs (50% of all their Inputs btw) at higher prices... that Joke/Meme has basically become a reality. He's the Chairman Mao of American Imperialism, & this 'Great Leap Forward' has basically vindicated the American Communist Party Memes from ages ago... which were once silly Jokes & now becoming stark Reality.
Thanks for the decode.
It's just Fear Porn with as much validity as the COVID Fear Porn propaganda
Fear is in the markets and soon it will hit the bond markets and get 🇺🇸 one step closer to a sovereign default. 😉 it’s a very important emotion! 😊
Do you think there's anything to be said for these Tariffs being partly a negotiation tool? We're already seeing the EU coming to the negotiating table. I think there's a point to be made that while the Tariffs can be seen as extreme, they are being levied in response to the US being excessively tariffed. Could there not be a scenario where they eventually lead to the US having more balanced trade opportunities with the rest of the world, thus leading to a net gain over time for US trade?
'Negotiations' do not solve the fundamental issue of the destruction of global value chains, shipping routes, etc.
Also: If you slap tariffs on the whole world like a Pariah... any 'negotiation' will simply be some good material for the cameras, after which they will be dumped into the dustbin. Because here's the thing:
During his first term, Trump negotiated USMCA with Mexico & Canada & then (after getting in for a second term) has de facto ripped up said deal.
There will be no real 'Negotations' thus. There will be some kayfabe for the cameras & maybe something for a few weeks & months, followed by increased pressure (on the supply side) on American consumers.
As for the Balance of Trade stuff-> America will never balance trade with poor countries like Vietnam, EVEN IF Vietnam offers a NEGATIVE TARIFF RATE.
This comes down to basic mathematics regarding GDP per capita, population, purchasing power of the currencies involved, etc.
The Vietnamese Dong CANNOT outbid the American Dollar, period.
This means that when American consumers, producers, manufacturers, etc go onto the international markets to buy product... they can buy most of what they wish EVEN IF they are completely ambivalent.
Meanwhile, if you waved a Magic Wand & made every Vietnamese a 1,000% America Lover, they would STILL not be able to buy much more than the 9.8+ billion USD they did in 2023. America meanwhile? They bought over 95+ billion USD from Vietnam.
The 'Trade Imbalance on a *per country basis*' is nonsense. What is sensible is 'Trade Imbalances on the NET after you add every country up.'
The latter is sound policy which Nations & Empires in the past have pursued. The former is Lunacy which is Mathematically impossible against *most* nations, given the exorbitant privilege of the Dollar & how basic math works.
Your prediction is interesting in light of the fact that on X there are people in the American stock market who are reporting something very different than what the media is. As in profit. Also, you do not include the speed at which America can rebuild, nor the factories that can be retooled. And finally, in spite of America getting the short end of the stick, it's GDP outranks many countries. China- 17 Trillion. Europe, about 27 trillion, America, 29 trillion.
The Bond Market & Gold is where the action is.
Investors are currently pricing in Stagflation & other Illths, so I would disagree. The real danger in a few months (assuming this nonsense continues) is the Bond market being impacted by a mass exodus from treasuries.
'Speed' is measured in years & decades for Reindustrialization... Study the Cases of Japan, Germany & Gilded Age America. Industry doesn't pop up overnight. Yes, Tariffs *can* work, but it’s a marathon & not this Mad Dash/Sprint.
GDP is not relevant when most of it is in Services & non-tangibles. China (for example) makes more than half the world’s Steel. The issue with Tariffing the entire world while you don’t have any plans for how to safeguard your own Industry’s Inputs (50% of which are Foreign imports, btw) is that it’s just a Big Loser; sorry. Your manufacturing (what is left of it) will get hit by supply crunches & crumble...
I'd add another component. Immigrant tariff. Take your native population to be 100%. If the number of, for example, Mexicans in your country is 10% of that, add 10% to the tariff. This gives the other country incentive to have its people remigrate.
I want everyone screaming, “Muh, it takes YEARS to set up factories! or assembly lines!” to go watch Working Man. Not “A Working Man” but “Working Man”
https://www.amazon.com/Working-Man-Peter-Gerety/dp/B086P746JB/ref=sr_1_6?sr=8-6
The Machines in there? From time of delivery they can be installed in a month. I know because I’ve been involved in it. One of those machines is probably all it takes for a single company to make headlight covers for all of a model of cars it sells for in the US, if multiple models. There's quiet a bit of used or underused machines in the US right now.
“But wait, Barbarian, you need a FACTORY to put them in!”
Oh, you mean the ABANDONED factories that we have in Ohio, Pennsylvania, Michigan, etc!? There's definitely a lot of unused and underused factory space. I've been in shops that are half full simply because the shop was in the bad part of town where the rent was cheap but they didn't use all the floor space
But do you know exactly how much product those machines can put out!?
"But what about the material!?"
Are you really going to tell me it's difficult to source cheap plastic or metal? I have worked in all types of plants, making stuff from high grade to low grade plastics and metals. Activated Charcoal. There are things that take awhile to set up and source, and those that don't.
But do you know how much a new plasma cutter can put out? Or an old, but still good, CNC machine? A plastic manufacturer?
Our LNG is Cheap. So is our Coal. We can make our Nuclear cheap too if we cut the red tape. We make tons of our own chemicals in house.
And these things can make TONS of stuff. And there’s lots of it that - literally - just gets sold at auctions these days because we don’t know what to do with it. 480 volt, high ampacity stuff that I’ve seen just go for pennies on the dollar because we DON’T KNOW WHAT TO DO WITH IT. I promise you, promise America can make things again.
That these factories can be filled again. With US born workers, not imported slaves.
I feel like a lot of these objections are from people that have never actually worked in plants, set them up and made them run. Sure - I've never been on the logistics side of things. So I can't speak to that. All I can tell you is that America can easily make the physical factories work faster than anyone thinks, if they want to.
And that if American workers are working in American factories at American living wages - they'll be able to afford American goods.
Or they'll start burning down cities - but that was going to happen if the tariffs didn't happen anyways - so what do you have to lose?
It is worth noting the other factor in getting to Balanced Trade -- and that is increasing US production. Tariffs may provide an opportunity to level the playing field, but then factories must be built in the US and workers trained. There are huge obstacles to doing that -- excessive regulations, greedy lawyers, NGOs with their shady funding, an incredibly convoluted intrusive tax regime, a dysfunctional educational system.
The President has the authority to set tariffs on his own. But dealing with the obstacles to re-industrialization relies on Congress taking appropriate steps. However, Congress created the mess in the first place ... and CongressScum never take responsibility for their own actions. A lot will depend on which group of oligarchs (foreign & domestic) are prepared to make the highest bid for the finest Congress that money can buy.
Maybe I live in a Crazy State (Louisiana) but Hyundai announced a new $5B steel plant planned for a few miles north on the Mississippi River. Maybe we need More Crazy?
That was before Trump went rogue.
Plans can be announced but there is a long way between announcing a plan and employing hundreds of people. Before the plant opens there will be at least one and maybe two new presidents and a whole load of new laws.
The US consumer market is small compared to the 'BRICS and friends' market and S Korea with a tariff of 25% put on cars may decide it is not worth the trouble as US cannot be trusted.
This comment proves that you are retarded. U.S. consumers generated 31 % of world household demand. BRICS consumers generated 20 %.
Please supply the source of your claims.
If you seriously believe that 350 million Americans consume more than 4 billion others you have serious problems with numeracy.
If you are talking of certain specifics, such as say "household" consumption of electricity then you could be correct in that a/c and swimming pools consume electricity compared to lighting. However national level or industrial level consumption the US is a midget.
Then using US figures 2021 : US had 330 million and spent $43,000 per capita $14.19tr. China had 1.4 billion and spent $7,000 per capita $9.8Tr. India 1.3 billion spent $4.6 per capita $5.9Tr.
So China and India alone spend more than the USA. Never mind the 30 other countries that now make up BRICS +
The US includes "estimated" expenditure such as the amount that an "owner occupied" house would charge for rent as part of the GDP and it also use actual numbers instead of "Purchasing Parity" where a basket of food in NY my cost$300 whereas in Moscow or Beijing exactly the same purchases would only cost $100 making Moscow and China purchases 3 x as valuable.
In 2023, China had the highest car sales, with over 30 million vehicles sold, followed by the United States with around 16 million.
So tell me again "Who is retarded"?
https://data.worldbank.org/indicator/NE.CON.PRVT.CD?most_recent_value_desc=true
Learn some numeracy please
As I said The US includes "Imputed' values and thus the US can make up any number it likes. (For instance my wife could charge me $ 1 million per annum for household and conjugal services whilst I charge her $1 million for rent, wow our household has an income of $2 million.)
Plus it includes all government permits, licences etc. so elements that are free in other countries get a value and added to the US.
You will notice that Wikipedia uses the same terminology and basis but comes up with very different figures. https://en.wikipedia.org/wiki/List_of_countries_by_household_final_consumption_expenditure_per_capita
Having worked with the world bank, I know who I would trust. (Not that I trust Wiki that much)
You're making too much sense for the woke right crowd.
I just watched the Singapore PM speech.
Singapore has Zero tariff on any US goods, it imports more from the US than it exports, and King Donald the First has put a 10% tariff on Singapore!
How is that for reciprocity?
As I said in my article, Trump has combined a national strategic tariff with a scaled tariff. Both policies have their merits; it’s less clear that both at once is meritorious; but that is what he has done.
The people you're replying to are arguments for muting people in article replies.
And it can easily be undone once America gets sufficiently tired of the economic pain this is inflicting.
Louisiana is built different, glad to see the Bayou State getting some fresh industry.
The problems you mention are important but you could correct all of them and still very little would happen because the price of money is too high. The banking sector in the US has too much bargaining power in relation to all other industries (and labor).
Free trade working as intended exposes workers to foreigners’ self-inflicted low standards of living. Foreigners tend to sneer and screech about tariffs because they benefit from the arbitrage. Next step: taxes on remittances.
Thank you VERY much for your very clear and easily understood explanation of Trump's tariff policy. This article needs to be spread far and wide because it is imperative that people understand all this.
I continue to love James Surowiecki because his book "On the Wisdom of Crowds" is the clearest and best explanation of why information needs to flow freely, which makes it one of the most important books of our times.
I actually didn't make the connect between Mr "false tariffs" and the author of that book (which I own). Now I feel bad!
Well, I feel delighted--that you own Surowiecki's book. I have memorized that name and its spelling, because I promote that book in posts like this, as one contribution to The Great Awakening.
As I understand it, the US trade deficit has been intentional and necessary in order to export dollars to other countries and thus allow the dollar to act as the world's default reserve currency, which I gather has substantial indirect benefits to the US (essentially acting as the world's banker.)
I'm not entirely qualified to judge what the long-term economic effects of these specific tarriffs will be, but if dollars are no longer going to be net exports then it seems like the dollar will lose its place as an international reserve currency.
It's also not obvious to me that any given country being a net-value exporter to the US is automatically a sign of malfeasance on the part of said country? If country A has a net trade surplus of, say, 10 billion WRT the US, but imports 10 billion worth of goods from country B, which in turn has a trade deficit of 10 billion WRT the US, then... in principle the US can make good on trade as a whole even if it's not true of every specific partner.
I've written elsewhere on the long-term effects of being the world's banker - check my series called "Running on Empty" or the book of the same name.
Your criticism of the scaled tariff is, I think, the best legitimate criticism of the policy. It is possible to have intransitive trade, scissors-paper-rock style. However, most of the countries that have trade deficits with the US genuinely are pursuing mercantilist policies, and that becomes clear based on their overall status as trade surplus countries. I can't know for sure, but I suspect that if you asked the Balanced Trade authors, they would say the gain in efficiency/simplicity from their approach, preventing it from being "gamed" or politicized, is worth it, over trying to calculate intransitive trade balances.
I might come back to this topic later, but even if the argument for simplicity holds I might have suggested easing into the tarriffs gradually over a 10-year period or so, so partners (not to mention the domestic economy) at least have a chance to adjust gracefully. All this 'shock and awe' feels like showmanship more than statesmanship.
Previously I was under the impression Trump was using tarriffs either as a political bargaining chip (e.g, to force Mexico/Columbia/etc. to take back illegal migrants) or to go after specific bad actors like China. This feels a lot more drastic, and more likely to alienate potential right-wing allies in Europe and elsewhere.
He has talked about the tariffs for a long time. He gave plenty of warning for everyone for them. Far more than say, Obama on Obamacare to the insurance agencies. People knew they were coming, as seen by the fact that they front ran the tariffs by buying things and putting them in warehouses, or some companies even announcing that they'd build factories even before the tariffs were announced in finality.
The thing about doing them all at once is that you don't have prices and wages creep up at the same time, making the tariffs essentially worthless. Inflating them away. You have everyone forced to deal with it all at once, which has it's own bargaining power.
Suddenly your neighbors are all much more able to do work for you at a rate much more realistically hirable than someone in India, Vietnam, or somewhere else for making clothing. Your local sawmill might be much more of a deal than Canada or Lowes. You might look around for a machine shop in town for your simple auto parts like a driveshaft. But you can start thinking in such terms, and imagining a world where you're more local than international.
And you will probably be a lot poorer as a result, since you will lose both the benefits of scale with regard to production and also of comparative advantage. Trump is using his tariff sledgehammer to solve a problem where a scalpel is needed. I voted for Trump and most of my comments have been supportive of both his and Elon’s actions. But the name for this is a not well thought out clown show. Do all of you supporting an attempt to balance trade with each of our trading partners which is apparently derived using an incredibly dim-listing formula.
I will defer to any individual here who is either completely self sufficient and manages to also own the pleasures and conveniences of the modern day world that we all enjoy ( including the internet over which we are conducting this discussion - hard to build it yourself) or who exists by making sure that just like you their transactions with their grocer, other merchants, health care specialists, as infinitum. Just as your personal goal is to get the best service or goods available for your money while being treated fairly , so should that be our goal with the companies and individuals abroad with whom we deal. Of course, unfair practices and subsidies ( hidden or overt) should be addressed - but Trump’s focus on manufacturing jobs rather than output will reduce productivity in the manufacturing sector and concentrates on a sector of the economy that is losing share to technology, which is where should be focusing our efforts to remain a leader. I have not addressed the foreign policy aspects related to economic security , which I agree are a complicating factor. But remember that trade is multilateral, not bilateral - whether it involves your personal life or our country/ .
I await the incoming disagreements with interest.
Look. If you want to be a merchant and emphasize dollars over everything else - fine. That is your religion to chose and you can do that over culture, race, other religions, everything else. Simply realize that other people have decided the economy is meant to serve humans, not humans the economy. Thus your arguments about free trade are just wrong, because they're based on the wrong prior moral arguments.
As far as your talks about who people are - I am probably one of the poorest, as measured by income, commenters on here. I'm a self employed electrician that usually makes 45k a year taxable income and had a rough year last year - 28k. I raise 6 children on that.
Despite that, I practice a life akin to what Trump is trying to achieve in these Tariffs - rebuilding classical America. I buy local when I can. My neighbor across the street owns a saw mill and cuts the trees down on his own property. Can import them across the state if needed for 2k a truck load if I needed specific logs for wood. The ones off his property his 14 y/o boy will sell for 33% off the Lowe's price.
I raise my own hogs, milk goats, a steer. My own chickens. I can buy clothes made locally. I can buy furniture made by neighbors. I drink at a local brewery five miles away and am on the board for a cemetery where I expect to be buried when I die.
I am poor but eat well and have freedom with my day. If I don't work I manage my property. I add wealth to it. I spend time with my wife and home schooled children. I fix my cars and do all my own work on them that I can - which is basically everything but deep engine work.
And this isn't hard. I have a better, freer life than most Americans from my perspective. I probably eat better than you do. I probably have more free time than you do, and spend more time with my children. So who is richer in life? By what measure? It has stresses, yes, but you can learn to do without.
Americans CAN LEARN TO DO WITHOUT.
It's being productive, without adding to "GDP number go up."
Everyone has complained for years about what the problems of the US are. And then everyone says that they know the solutions. But then they never think through the secondary and tertiary consequences of those solutions.
Well, guess what plebs. Your ruler chose a solution. And broadcast it in the most obvious way he could for as long as he could - for the whole election cycle onward!
The consequences will now be felt. These consequences are that the wealth of the boomers will be clawed back. The wealth of the corporations will be clawed back. The gadgets, the fluff, and the bubbles are done.
America will be a leaner, meaner, lithe and beautiful Empire again - or it will fracture into regional powers because it can't handle it. But the latter was going to happen under a lot more strife and turmoil of rebellion anyways, only against people wanting to molest your children and shoot you up with vaccines. So why not try?
Why not try?
Absolutely based. I hadn't realized the full extent of your commitment to the homestead-local lifestyle. Much respect.
It better to be virtuously poor than filthy rich. Besides, those conveniences come with hidden teeth, so they're still a net negative.
> Trump’s focus on manufacturing jobs rather than output will reduce productivity in the manufacturing sector and concentrates on a sector of the economy that is losing share to technology...
I'm not convinced that Trump actually *is* focused on jobs rather than productivity, given the Vance/Musk focus on supercharging AI development. Most modern manufacturing plants are heavily automated these days and I'm not aware of specific policy to address this, so there might not be much benefit to the rustbelt here aside from construction work.
We'll see.
If not. The Empire will fall. Simple as that. The Empire only has so many resources, and has too many disparate people to keep messing around with things.
I'm not convinced the people running Trump's trade policy are even talking to Musk and DOGE.
> He has talked about the tariffs for a long time. He gave plenty of warning for everyone for them
Trump's presidency was far from a certainty until last year, and industrial plant takes 3-10 years to build out depending on the sector, so I don't really buy this argument.
> The thing about doing them all at once is that you don't have prices and wages creep up at the same time, making the tariffs essentially worthless
You do realise that imposing tariffs in full force immediately will cause the prices of many goods to increase immediately, in direct proportion to said tarriffs? Yes, local sawmills or machine shops could pick up the slack, to some degree, but if the capacity to meet demand simply isn't there and there hasn't been time to build more production facilities, then you're going to get major short-term increases in the cost of consumer goods, especially if demand is inelastic. And since Americans expect higher wages than Bangladeshis, some of these effects will be permanent.
(That is, unless you apply automation to bypass labour requirements, which makes Elon richer but doesn't especially help retired auto workers. Also a problem with the Trump/Vance policy platform.)
I understand the argument that there are tradeoffs here that could be net beneficial to US workers, if the result is a more self-sufficient country with less concentration of wealth at the top, but I doubt that shock treatment was the way to do it.
"I understand the argument that there are tradeoffs here that could be net beneficial to US workers, if the result is a more self-sufficient country with less concentration of wealth at the top, but I doubt that shock treatment was the way to do it."
Given the scramble to stop any action from happening AT ALL, and all the insider trading that happens....
Do you think that there is any OTHER way to make it happen? Do you honestly think that this could happen at all if he did it any other way?
Also, I've worked as an electrician in industrial settings. You can get plants and lines up faster than 3-10 years. That number is BS. I built out a facility for oil skid manufacturing in 1 year. I've built out lines for simple things in months - and those "simple things" provide napkins for all the what-a-burgers in the country.
So don't tell me we can't do things, and do them quickly. The nonsense about how long it takes to do things is usually a lot of lack of will, planning, and red tape. SOME things it takes longer. MOST things it does not. It's like the Germans deciding to put up the LNG ports when they needed them for Russia - they cut all the red tape and permitting, and got done in months what usually takes years because they needed the gas, and needed it now.
That is what dedicated, skilled, unhampered white people can do when they freaking want to get something done, Margaret.
"Right wing allies in Europe" don't exist at the scale currently require to be hurt by this.
There is a simple solution to the "three body problem" or a multi-body problem. Here's a very simplified example:
The US has a $10B trade deficit with China, but has a $10B trade surplus with Australia. The scaled tarrifs push China to reduce it's trade surplus with the US. However, Australia can increase their exports by $10B without tarrifs being imposed. China sets up a deal with Australia to transfer or re-export goods through Australia. They may also set up a subsidiary in Australia to sell into thecUS market. It's in the best interests of Australia to do this if they can make a profit on the transactions, even better if they get a new factory. China won't do this for just any subsidized goods, but will focus on goods where it has a real competitive or strategic advantage. The US still maintains balanced trade, everyone is happy..
"The US still maintains balanced trade, everyone is happy.."
It doesn't maintain balanced trade. The US trade deficit in goods was $1.2 trillion in 2024. It doesn't matter who re-exports what, the whole world combined exported to the US $1.2 trillion more goods than it imported from the US.
If the US wants balanced trade, it should simply consume $1.2 trillion less goods from abroad, or about $3,500 per capita.
"Ending Merchantilism" is an ideological battle, not a practical one. As long as we acheive net balanced trade, we should not be concerned with trade arrangements other countries have among themselves.
Yes, and the tarrifs are a way to achieve this. The "laundering" of trade doesn't matter if trade is balanced. My point (remember, I said it was highly simplified) is that what's import to using net balanced trade, not who we buy from and sell to.
Okay... but in that case, how will tarriffs solve the problem of mercantilism, if mercantile states can just launder their goods through a third party and still get inside the US market? Shipping is cheap these days, especially if the administration don't want the hassle and complexity of tracking transactions.
I would like to check that series next, but substack makes browsing an author's archives... challenging. (Like have you ever read or replied to economist Dan Mitchell? I tried searching, but it wasn't working.)
> but if dollars are no longer going to be net exports then it seems like the dollar will lose its place as an international reserve currency
Bingo! Now, we need to look at that chart that says how long were various empire's currencies accepted as reserve currencies, then we need to make a simple assumption "USA is not special" and we come to the simple conclusion "US dollar is going to stop being the reserve currency ANYWAY".
Now ask yourself: if you're the US government, and you KNOW FOR A FACT your currency will lose it's reserve status, are you going to let Mother Nature and "The Free Market" take their course, or will you try to steer the loss so as to prevent a nuclear civil war? Because, when you look at history, whenever a reserve currency status is lost, a giant war is usually happening at the same time, which normally destroys the empire having the currency. Might USA attempt to avoid such a fate?
> Bingo! Now, we need to look at that chart that says how long were various empire's currencies accepted as reserve currencies, then we need to make a simple assumption "USA is not special" and we come to the simple conclusion "US dollar is going to stop being the reserve currency ANYWAY"
There's an argument for this- when I read Disunited Nations it opened with an argument that the world economy was getting too big for the US to continue operating as the world banker, though I'm not enough of a student of economics to fully understand the details.
The dollar should still be able to act as the reserve currency for a smaller circle of strategic allies, however, whereas Trump/Vance seem to be going out of their way to piss off countries like Poland, Denmark, Ireland and Canada, some of which have been extremely reliable US allies. I don't always have a high opinion of their current political leadership, but I doubt that instigating a global recession is the ideal way to break the left's ideological chokehold on power.
And as I mentioned elsewhere, introducing the tarriffs gradually would at least give industries more time to adjust.
https://treeofwoe.substack.com/p/balanced-trade/comment/106087681
Adding one more thing. A kind of obvious thing. Ya'll are arguing details over what's already been done. No take backsies. Also note that no one has been powerful enough to stop him from doing it. Hmn. Haven't really heard the drums of war either, as it's economic. And it's only part of the picture.
You know what I love? Trump does a thing. He acts. Quickly. And the rest just shuffle their feet and yell at each other about whether it was stupid or not, in the face of a man who climbed, independently, to the Presidency, took a messed up economy that was purposefully built that way, made it sing and dance when Obummer said "what magic wand do you have?" and increased employment within a corrupt system and turned the GDP, the stock market and everything else financial into a huge monster bull market. Maybe you forgot that bit.
> No take backsies.
Repealing tariffs isn't hard in principle. As the economy gets worse and worse and the promised employment boom fails to materialize, Trump is going to be under more and more pressure to undo his idiocy. If out of stubbornness he insists on flying the plane into the ground, everyone is going to start running away from him as fast as possible in hopes of getting clear of the blast radius.
Yup, doomsaying. Easy enough to do. How many times is this? I recall the good old days. Remember Mueller? Yeah, he was going to get that Trump guy. Then Pelosi, then so on and so on.
If he has a chance to succeed, why do you want him to fail? So you can roll around in the ashes and laugh and say I told you so? Is that your win?
Shit howdy boy, that is a serious non-win.
> If he has a chance to succeed, why do you want him to fail?
I want him to succeed. Which is why it's so painful to watch him throw it all away by shooting himself in the foot like this right as he was on the cusp of becoming a Great Man of History and sparking an American and Western renascence.
How do you know he’s failing? Any reports of a crash anywhere close to ‘29? No? Well yes, cleaning a house does look pretty awful. Here’s a hint: what DOGE uncovered was where the money laundering was going to, who was doing it and how it worked. Which means the bad actors cannot do it the same way again. It also means those funds have been if not clawed back, at least stopped. Which means recovery is possible.
There are arguments that the stock market is being manipulated to make him look bad. I think it’s taking a dip because certain large corporations need to take a hit.
On a personal note I have observed for 9 years now that every time he makes a move, there is hue and cry that it’s a stupid move, he’ll ruin everything yet here we are, ticking along. The other wailing and gnashing of teeth is the ever popular “We’ll get him this time! This time he falls!”
Gotta be frustrating that someone as stupid as they say he is just keeps on going, ever rising in popularity and continuing to drain the swamp.
Which is why the swamp is mad.
> There are arguments that the stock market is being manipulated to make him look bad.
*slap* You went full commie-retard there for a second, never go full commie retard.
Read the sentence again. Had I meant to say I think that the stock markets etc, I would have said that. Instead, I said that there are those who claim that the stocks are etc. Context.
As for whether that happens, they have been manipulated in the past. Pricing as well. Recall the famous incident in the 70’s where prices on gas were raised with the excuse of less oil when there was tons.
Currency is a tool and it’s use depends on the user or users.
When I was growing up, small rural counties had basic manufacturing. They could take cotten, spin it, and turn it into clothes. Even if they didn't have big companies, they had tradesmen, people who could build and fix appliances and radios and cars, trucks, and even had small newspapers.
Now, those are gone and even big cities don't have all that.
We have lost the ability to process our own drugs and have to depend on China.
We can't even make masks, gowns, or uniforms.
It must stop.
Another insight by a man who isn't drinking Kool-aid: https://sonar21.com/some-observations-on-tariff-hysteria/
> What happens if you are paying 4.5% interest on 8 trillion dollars in one year? You will pay $360 billion in interest. Let’s drop the rate to 2.5% for one year. You are now paying $200 billion in interest. Hell, with savings like that [$160 billion per year], Trump can buy a fleet of new aircraft carriers (kidding).
We should just monetize the debt via the Federal Reserve since the Fed takes the interest paid to it by the Treasury and returns it to the Treasury.
Also likely available at a library near you: https://openlibrary.org/books/OL40007738M/Balanced_Trade
Wow! Fantastic information. Excellent research, excellent presentation.
Wonder why this theoretical/practical basis for the tariff formula was not shared by the government?
Thanks.
That was a phenomenal substack post today. Send it to schmucks like Larry Kudlow and other lazy economists…
Excellent article. You explain the direct goals behind Trump's tariff plan exceedingly well. I believe that Trump's tariffs are in service of an even higher goal: a realignment of the global economy to reveal true prices and (thus) values, which have been hidden by the distortions created by the global trading system. Elites have benefited from that enormous economic distortion and lack of transparency.
Great explanation and an exposition of both the idea and of the mechanism. Free trade arguments always favour the exporter and harm the importer if deficits are created, since the importer has to in the end engage in either massive debt creation or allow foreign capital to flow back to buy up the raw assests of the target country. America has had that exact thing happen to it on both accounts. The oft-quoted comparative advantage cannot overcome differences in resource base, artificial currency manipulation and lack of political will.
Britain was famously a free trade proponent during early Victorian era, when its industrial output surpassed other nations, with tariffs and trade restrictions kicking in in the second half of 19th century in face of rising American and German manufacturing.
Er, last time I looked there was a concerted campaign by Chamberlain to impose tariffs on all outside theEmpire which was opposed by Churchill etc.
The UKs big mistake was to allow the technological secrets they had invested in to be stolen by competitors in the USA, Germany etc.
What a fantastic article. Cuts right through the dubious and misleading screaming commentary everywhere. Many thanks