The European Commission has said it is ready to retaliate again if Trump levies tariffs this time around.
Methinks political contributions from corporate entities to red state politicians are about to be affected and likely end the red control of Congress.
It seems the current administration is intent on an universal tariff approach. And universal retaliation will occur.
I would think income tax & corporate tax revenues will decline. Will increased tariff revenue equal that decline? Will US Treasury bonds have to increase to attract investors since US national is likely to increase.
The imposition of tariffs will likely end the era of highest corporate profit of 50 years. That should be reflected in a downturn of the stock market eventually. Domestic consumption should moderate also affecting corporate profits and stock valuations. Perhaps bond demand will benefit as a guaranteed return becomes more attractive as stock returns decline.
I would guess if all the above occurs that will increase the chances of a recession.
OK. Take your best shot to poke holes in my suppositions.
Think about it for a moment. The cheapest models Ford and GM sell are imported from Mexico, or Korea. Knock those models out of the market, and customers have no choice but buy a more expensive model, and the company takes more money off them. The automakers have been working this plan on their own, for years: discontinue their lower priced models, so consumers have no choice but koff up for something bigger and more expensive than they really want. Now the government is helping them.
Add in the loss of Canadian and Mexican production volume, and there is a “shortage” of cars. We are back to 2021-22, when automakers, and dealers, where howling “shortage”, and using it as an excuse to gouge the living daylights out of their customers.
Ford and GM are getting a great return on their investment.
Global corporate entities have billions invested in NA supply chains.
Japan alone has more than 1,300 companies operating in Mexico, with more than half of them in the manufacturing sector.
You will have to do better than:“He would not propose these tariffs if he did not have a green light from his donors.”, Steve.
In October, the Taiwanese electronics giant Foxconn announced plans to build a mega-factory in Mexico to produce Nvidia chips.
I except a universal retaliation to his imposed universal tariff agenda.
It ain’t business as usual.
New business investment in Mexico & Canada will come to a shrieking halt.
Honda’s cheapest model, the HR-V, is built in Mexico. Drop that from the line. What’s your next move for a Honda CUV? The CR-V. The Alliston, Ontario Honda plant builds Civics and CR-Vs, but that source is eliminated by the tariff. Civics are also built in Indiana, and CR-Vs are also built in Ohio, but, take out the volume from Alliston, and there is a “shortage”. So, if you want a Civic or CR-V dig deeper, because you need to outbid someone else for the car. Honda, and the dealer, smile.
I want this to sink in and show why President Musk is sitting next to President Trump and not J.D. Vance.
Taneja’s comments come as Tesla’s stock has skyrocketed nearly 60% since the election that returned Musk ally Trump to the White House. Musk put $100 million toward getting Trump elected and is now head of the advisory Department of Government Efficiency (DOGE) looking to [cut trillions] from the federal budget.
One tenth of a billion dollars into the campaign. Wow, I can’t believe people are not talking about this more.
It is axiomatic in biology and ecology. (And physics and chemistry) that resources are available at the interface between two systems.
Within each system, resources are tied up in cycles, situations, and conditions that prevent movement of those resources. The resources are relatively unavailable. The mechanisms that support and stabilize the system have developed such that when a resource becomes available it is immediately captured and put back into the system.
Resources on the surface of a system, at the edge, the border, are more available.
The more chaotic the border, the more readily available are resources.
We stir sugar in a glass of tea, in order to increase the chaos on the surface of the sugar crystals and dissolve the sugar.
Resources tied up in stable cycles are moribund.
Introducing chaos, shakes those resources loose, making them available to other outside users or more powerful users.
The last 70 years, the so-called pax Americana has allowed stable resource cycles to develop within and between countries around the globe.
A little chaos will destabilize those cycles making resources available to other users.
The US is the most powerful user in the world.
Yup. Samsung has one appliance plant in the US, with about 1500 staff. LG has one appliance plant in the US, with about 900 staff. Whirlpool has 9 plants in the US, with 15,000 staff. Who has the most production volume, and best able to leverage a “shortage” narrative, from others being excluded, to gouge their customers?
The other factor is, the big three automakers have pursued a Welchist strategy of systematically abandoning whatever market segment is least profitable, which makes another segment least profitable, so it is abandoned, and so on. The big three have been losing market share for decades, which has resulted in them awash in surplus capacity. Probably a couple dozen US auto plants have been closed and torn down, over the last 20 years. In spite of that, Stellantis has Brampton, Ontario, and Belvidere, Illinois, sitting idle, while only a trickle of Wagoneers comes out of Warren Assembly. Ford has Oakville, Ontario sitting idle, and Louisville, where the Escape is built, running below 50% of capacity. GM abandoned a plant in Ontario, sold the Lordstown plant to an EV startup, that went bust, while “Poletown” only produces a trickle of obscenely expensive HUMMER EVs, at about 10% of it’s capacity.
The tariffs gives them an excuse to claim force majeure, and shutter the Canadian and Mexican plants, or find other markets for their products. Then they can run their US plants at a higher, profitable, rate.
but a little more chaos and things could become truly shocking…. even very nasty. A huge advantage of a Parliamentary system is that the terms in power are not locked down to 4 year cycles, and so chaos agent(s) can be identified and removed before too much well worth preserving gets destroyed.
having pirates running around killing and destroying,
having to get into “dreadnought” competitive building of huge sinkable chunks of metal with the top 5 or 3 or whatever number of nations or equivalent competing to own largest best air or sea borne swarms of deadly drones,
being forced to uneconomically inefficiently compete with nations with big natural advantages in this or that, nor
having endless tariff wars and alliances
more but I am bored with this ugly tedious listing of stoopidnesses
provides real advantages for almost everybody, but still unborn naval historians…
But it sure looks like tiktok/tweet addicted humans are losing the ability to think long term or large scale and so we are screwed.
And let’s not forget that tariffs will present corporations the opportunity to build in a little padding in their prices now that they have tariffs to blame for it.
As a politician I know would say, don’t worry. It will only cause a little discomfort for a short while.
Yes, that is average transaction price. Discontinue the lower priced models, like the Fiesta, Focus, Sonic, and Cruze, and the average automatically goes up. The “shortage” narrative added more leverage: no incentives from the manufacturer, and “marketing adjustments” often in the thousands, added to the sticker price by the dealer. Since the “shortage” narrative no longer got traction, the last couple years, manufacturers simply started raising the price, otherwise their y/y comps, without the “shortage” narrative, would have looked bad.
