Likely tariffs upon US goods will be the response.
Though some countries may try negotiations first.
What will the US response to increased tariffs?
The US could cave. But then what was the point?
I think it is more likely the US will double down & increase tariffs.
A test on which nations have stronger economies and can endure the pain.
Nations that have export-driven economies, such as China & Germany & Mexico, could be crushed.
Which nations can maintain its higher tariff course?
Germany is already suffering the āgreat sukky soundā of cheap labor. Production work has been moving to eastern Europe for some time. In VWās new agreement with the German union last fall, 35,000 German production workers are being RIFed, while production of the Golf, for sale in the EU, which has been in Wolfsburg, since the 70s, is moving to Mexico.
Steve
And for those German companies heading to the US, cheap energy.
DB2
The EU has a free trade agreement with Mexico. And the EU has been negotiating a free trade agreement with Brazil. Seems the EU has not learned from the USā example and is still listening to the advocates of āthe only thing that matters is that stuff be cheaperā.
Steve
I see Canada & China have responded with higher tariffs.
I await the US responseātuck tail & reduce tariffs or increase tariffs on those nations.
Weāve seen countries recently target tariffs on products coming out of āred statesā. But will they shift to areas where the US is dominant in the world.
Depends on how determined TIG is to raise the revenue, to cover the tax cut he wants.
Steve
Doesnāt matter the rate of tax or tariff if nobody is buying. That is what is starting to happen. The only way to raise enough money would be to tax/tariff interstate trade. Wait for itā¦
This is a policy at odds with itself.
Either itās going to raise a lot of revenue, in which case weāre going to keep importing stuff from abroad, orā¦
Itās going to force manufacturers to produce things here and create jobs, in which case it wonāt raise a lot of revenue.
It canāt be both.
That is not worth anything.
A negotiation means the factories did not come back to the states.
It is far too early.
Besides consider the parties involved. No one has any trust.
There will, no doubt, be a lag, as manufacturers adjust. So, first six months or a year āWOW, look at all that loot coming in. A big tax cut for ME is totally covered!!ā. Then, a couple years later, as manufacturers adjust, the narrative changes āOh WOW, look at the deficits due to falling tariff revenue. Government spending for others needs to be cut MORE!!!ā
Want to try my āMBA hatā on? It makes the stuff that is going on more understandable.
Steve
Or weāll just quit buying stuff. Take that new vehicle I was thinking about. Now Iām thinking Iāll wait 4 years.
The president reveals the purpose of the tariffs.
A cudgel to wring concessions from nations that trade with the USA.
The transactional president.
If he gets his deal; the tariff drops or goes away completely.
I guess this means the campaign contribution is in the mail.
In his first term, Trumpās tariff threats brought world leaders to his door to cut deals. This time, his actions so far have led to steep retaliation from China and promises from European allies to push back.
I donāt see the president backing down.
He has a 2 year window until the midterm election.
I see China is (net-net) a force for good in the world. They work hard, and have lifted millions out of poverty in their own nation and all around the world.
However, US needs to decouple its supply chain out of China for its security. Tariffs are more of a security argument than an economic argument.
Foreign Minister Jan LipavskĆ½ insisted during an interview with POLITICO that, despite the failure of closed-door talks so far, the bloc could use a carrot-and-stick strategy to avert a full-blown transatlantic crisis.
Funny, tariffs are the presidentās carrot-and-stick strategy to extract concessions.
In other words, heās running an extortion racket?
Steve
āI donāt see the president backing down.ā
Even if Trump backs down on Monday, why would any business leader trust anything he says ??
Iām trying to look at this rationally, putting aside my deep dislike for Trump. At takes about 2 seconds to google up example after example of Trump spouting 1 thing, then doing a 180 soon after. Why would any business want to make big capital investments on say a new factory build, based on ātariffs are here to stayā and then " everything is negotiable" ?
I do expect Trump to transact the tariffs down ( or even out, if enough money can be grifted by him ). But will that be enough for business leaders to say OK, everything is settled now, lets make that $5 Billion dollar investment in a new plant ?? I have serious doubts about that.
Without question - that and control. Senator Murphy has a spot on description of whatās going on:
Pete
