Tariffs? Trade Wars

[Stef N]

What poo is the Orang-Utan going to fling our way tomorrow?? What a shambles.

[Goldcrest]

What poo is the Orang-Utan going to fling our way tomorrow?? What a shambles.

Perhaps chlorinated chicken is going to be part of a 'trade deal'?!

The FT today talks about Arnold Toynbee's idea that civilisations commit suicide when they decline and how Trump could get close to that..... Flights to the US are down, foreign students are frightened to visit in case they get snatched off the street by masked agents. Countries helping out with the earthquake relief in Myanmar are many but not the US (dismantled USAID) and scientists are emigrating. I read that people are going ("fleeing") to Europe (Spain, France and the UK). R&D is being cut (something that for every dollar spent is estimated at 5 dollars worth to the economy). What has taken 250 years to build is being "vaporised" in a few months and further, relationships are soured enough for the effect to become like our Brexit (which we are still suffering from), arguably worse. The effect on US citizens will come later. 

To what extent there will come a push back and when I'm unsure. As my initial post suggested I think his ideas are ruinous economically - and not just for jobs and livelihoods over here (and elsewhere in the world) but also for US citizens. Maybe the market turmoil will settle and this is an example of brinkmanship or some kind of technical master strategy, a disruption if you like. Though I am of the view that he is simply doing what he said he would do, I do wonder if the various outcomes and scenarios have been adequately thought through. Just my view as a numpty who could be very wrong of course.

[Stef N]

10% for us and 25% on all cars but much bigger for many other countries. Some of the poorest countries on the planet, like Bangladesh are getting hammered.
Some of the numbers look very random and will need the fact checkers to go over.

[Goldcrest]

10% for us and 25% on all cars but much bigger for many other countries. Some of the poorest countries on the planet, like Bangladesh are getting hammered.
Some of the numbers look very random and will need the fact checkers to go over.

I thought the whole spectacle looked like a US version of The Price is Right. Almost a suggestion of asking countries to "come on down" and negotiate. Cheap and nasty but I can see the thinking. I had read Ian Dunt's piece yesterday too about the UK's humiliation in having to take our medicine from the US and maybe we ought to stand up against it like other countries are (the EU). Yet, he also acknowledges that Starmer may have been playing a decent hand in moving towards a deal and that the UK hasn't got the sheer power that the EU economy has. We've lost so much ground too with the aftermath of Brexit that this latest tariff adds to. Johnson and his Brexit acolytes have made sure that the UK has severe trade barriers and onerous customs checks with its biggest trading partner. 

What now? Some series of 'agreements' about chicken, beef?  An easier tax regime for Amazon et al? A smooching with Charles to come (our so-called soft power?).

Dunt speaks of the stupidity of tariffs, that they impoverish both you and your trading partners. The administration seems totally unaware that there are such things as mutual relationships. Yet, I also wonder (as Dunt concludes) that by being the US's little bullied brother, whether Starmer and this government will in time be damaged by his strategy. Unlike Carney in Canada. Or, whether, in the realm of international diplomacy and marco-economics the UK's stance is actually adult and responsible?

How long will the backlash take to arrive in the US? Two years?

[Stef N]

I have just been catching up with Ian Dunt's BlueSky page and there are some very good posts on there. Mostly bewilderment at the stupidity of this but also anger at some of the poorer countries getting such poor treatment.

Listening to James O'Brien today and his early theory was that none of this is an economic plan but simply a show of strength, a "why are you doing this Donald? "Because I can!" mentality, followed by world leaders going on their knees to him. A bit of a shakedown. 

Hopefully Starmer is too clever to fall for this and I hope he pursues something similar to what Ed Davey suggested, an economic coalition of the willing.

[Goldcrest]

Thanks mate, a very interesting read. :-)

I have just been catching up with Ian Dunt's BlueSky page and there are some very good posts on there. Mostly bewilderment at the stupidity of this but also anger at some of the poorer countries getting such poor treatment.

Listening to James O'Brien today and his early theory was that none of this is an economic plan but simply a show of strength, a "why are you doing this Donald? "Because I can!" mentality, followed by world leaders going on their knees to him. A bit of a shakedown. 

Hopefully Starmer is too clever to fall for this and I hope he pursues something similar to what Ed Davey suggested, an economic coalition of the willing.

I very much think the same. That it's actually a case of standing in the limelight...this time across the globe. I can see him now thinking to himself "look at those beautiful headlines.. they're all about me". If that's the case then the shame of this move is that it's going to hurt a lot of people for a long time.

I liked what Davey had to say - "it's like we're meant to be grateful Trump gave our friends a black eye and left us with just a wedgie". Had to chuckle at that.

[Goldcrest]

Thanks mate, a very interesting read. :-)

I have just been catching up with Ian Dunt's BlueSky page and there are some very good posts on there. Mostly bewilderment at the stupidity of this but also anger at some of the poorer countries getting such poor treatment.

Listening to James O'Brien today and his early theory was that none of this is an economic plan but simply a show of strength, a "why are you doing this Donald? "Because I can!" mentality, followed by world leaders going on their knees to him. A bit of a shakedown. 

Hopefully Starmer is too clever to fall for this and I hope he pursues something similar to what Ed Davey suggested, an economic coalition of the willing.

I very much think the same. That it's actually a case of standing in the limelight...this time across the globe. I can see him now thinking to himself "look at those beautiful headlines.. they're all about me". If that's the case then the shame of this move is that it's going to hurt a lot of people for a long time.

I liked what Davey had to say - "it's like we're meant to be grateful Trump gave our friends a black eye and left us with just a wedgie". Had to chuckle at that.

A professor from Berkeley (believe he advised the Clinton administration) has urged the UK, Europe, Canada, Japan and Australia (and others) to form a trade alliance and hit back at Trump in the strongest way. Also (though at pains to suggest it) he thinks US scientists and the best brains should be courted and invited over here.

Liberation Day? More like Liquidation Day. All quite predictable and I think the worst is still to come.

Truss and now Trump...similar 5 letter surnames that will feature in economic history.

[Stef N]

Sad irony that the American boom was partly helped by scientists fleeing authoritarian states in the early 20th century. The opposite will lead to the bust.

I saw an interesting question earlier about how many people are making money from this fiasco? My theory is that everyone knew that this was a stupid idea so nobody would fall into a trap. I wish I knew more about short-selling and the like to figure out if my theory is near or miles off.

[Goldcrest]

Shorting of markets and individual companies? I'm sure
Intelligentsia leaving? Tick
Executive orders rather than using government apparatus.... after all this is an emergency isn't it? Tick
May have missed some things.

What's curious is that the US economy in 2008 was about the size of the Eurozone and now nearly twice the size. US wages are about 40% higher than other industrial countries. Services, big tech, banking, law, music and film...all big successes. And the fastest growing sectors globally. Manufacturing seems the main focus and counts the most.

Won't other countries start finding other trade partners if they cannot trust the US? Or are they so dependent? I'm reading about China's various responses in the last 5 years (in today's New York Times .. summary courtesy of The Knowledge). And China, Japan and South Korea are already meeting up in response to the US policy.

Maybe this is a display of power most of all, coupled with seismic changes (clamping down on immigration , universities, lawyers and so on) aimed at rebutting the left and centre of US politics (and indeed society). Some will be loving it but I don't think the majority will.

[Stef N]

Watching the awful Trevor Phillips and I was surprised to hear Gillian Keegan talking sense on this subject, i.e don't retaliate too quickly/agreeing with the current government stance. Also Caroline Lucas clearly pointing out this isn't a Brexit bonus and how much the economy lost, with that collossal brainfart, to what we lose with Trump's mess.