As they say, the situation is fluid.
TFG had a conversation with the President of Mexico today. He says they reached an agreement to, effectively, close the border and stop migration cold.
Migration has been the really hot issue. That tariff on Mexican cars may never happen.
From 32 years ago, in a 1992 presidential debate, Ross Perot:
We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor, … have no health care—that’s the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don’t care about anything but making money, there will be a giant sucking sound going south.
… when [Mexico’s] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it’s leveled again. But in the meantime, you’ve wrecked the country with these kinds of deals.
DB2
I remember that comment well. But the “JCs” only saw dollar signs, and Friedman urged it, in words to the effect “exploiting countries who give away labor cheaply is good for us”.
Unfortunately, I donated my copy of “Free To Choose” to the local library, some years ago. This synopsis was provided by Mr Google’s AI:
“Free to Choose” advocates for the idea that businesses should be free to utilize cheap foreign labor, arguing that doing so allows for greater economic efficiency and lower prices for consumers, essentially letting the market decide where to source labor based on cost, without government interference;
So, more than 40 years after Freidman foisted that book on us, we are dependent on the good will of foreigners for materials and products necessary for the US economy. Meanwhile, people who used to earn a decent living making Zenith TVs and Schwinn bikes, now work non-union jobs with low pay and minimal benefits. Not surprisingly, people use their vote as an anger management tool.
Steve
Sure. Order from Mexico and require it be delivered by a Mexican driver. No US grocery stores left as Walmart moved south.
But tariffs will make veggies from Mexico costly. California will do very well. And maybe Texas, Florida, and others. Where will they get the manpower? Robots? Automation?
Prisons. Lockups. Jails.
Impose a national work requirement for Medicaid.
Then Sppankee would have to get a JOB !!!
That is what he said. Unfortunately, what he says is generally untrue.
Bury Sppankee under one or more of the pilings…
Initial reporting on Fox Noise said she agreed. On the news tonight, she is talking about human rights. Of course, I suppose we can expect Fox Noise to buff up everything TFG says.
Of course the “America hating Commies” are reporting the Mexican president denying it. This would of course embarrass TFG, so Mexico will probably be lined up for extra special “retribution”.
I have not heard TFG put any specific numbers on tariffs for Korea, Japan, or the EU.
Steve
I am buying a mattress and new fridge when deflation kicks in for a while.
Now is not the time to buy anything.
But I will price things in January.
@steve203 tfg has a mandate? Hahahah 20% split 10% on each side care. The other 80% do not and think every last one of us is a liar and bull artist. Right now people are riding with the winner. That won’t last. It will turn on a dime.
What a difference a day makes.
Note “economists at Goldman Sachs”…in the report…expect inflation. Now why would they tell you that? We will get deflation. They are “economists”, they have Ph.Ds. Why would they tell you the wrong thing?
CNN is expecting the cost to the average family to be $2600 per year. Interesting. That is not how deflation works. Why not tell people there will be deflation?
The Chinese 60% tariffs and the rest 20%.
As bad as inflation is, deflation is worst. Not sure why you think or hope it will happen. Forget what economist think. What signs or thought you have why we will have deflation. Retooling will not bring it. If it does then it fails as nobody will buy anything if they wait for prices to go cheaper
Click the link to the prior METaR thread. There is a well laid out case for deflation. On the link the second post on the Fordney and Emergency Act Tariffs demonstrate the results. The thread is about the early 1920s and alludes to the later 1929 tariffs that saw deflation mostly until 1941.
More tariff implications - oil imports from Canada and Mexico.
Per the first page, Mexico has more options, Canada fewer.
But there are implications for US refineries - in particular, those that need the heavy variety.
As noted in another thread: the incoming regime is very pro-production and consumption of oil and gas. Where is the downside, for the cronies, of tariffs on Canadian and Mexican oil and gas? When the price at retail in the US rises, blame the “horrible” foreigners. Meanwhile, the tariffs give domestic producers cover to raise their prices. US drillers make more profit. US producers make more profit. The government pockets more tariff revenue to cover more tax cuts.
Steve
We will possibly have a global recession for one to two years as other countries respond in kind.
Oil does not do well in a global recession.
BTW you know the yahoo headlines calling this the trump rally are calling a de facto top. It is not like a massively overpriced market going into sheer craziness will top out a heaping ton higher.
Another reason for the prices to fall.
Yet they cut production of oil and gas due to oversupply. Prices had been falling–but perhaps not for much longer. Ah, the economic slowdown will cut prices–only not the way the incoming wannabee leadership wants it to happen.
