“Trade wars are good, and easy to win”
A quote from the wit and wisdom of Donald J. Trump.
So, just like when Trump initially announced the tariffs on Mexico and Canada, the markets have reacted badly.
CNBC reports, Dow drops 600 points, Nasdaq flirts with correction territory as Trump’s trade war escalates: Live updates.
The Dow Jones Industrial Average dropped 647 points, or 1.5%. The S&P 500 shed 1.5%. The Nasdaq Composite lost 1.4%, pushing the tech-heavy index near correction territory, which is when it falls 10% from a recent high.
Business. Does. Not. Like. Trump’s. Tariffs.
This is because they are a very bad idea that will directly impact not only the profitability of many, many companies but will also raise the price of many goods for US consumers.
I heard a report on NPR yesterday that Trump was talking about a tariff on imported lumber because that would make houses cheaper. This just in: No. It would not. Indeed, quite the opposite.
I suspect a lot of the financial and industrial types looking at the market plunge voted for Trump. But the leopard wouldn’t eat their profits and valuations! Right?
And this is insane. Tariffs will not stop fentanyl.
First, as I noted in an extensive post back in December, stopping fentanyl smuggling is hard.
Second, when it comes to Canada specifically, allow the following headline from CNN to explain: Canada makes up just 0.2% of US border fentanyl seizures.
So, either they don’t understand what they are dealing with, or they are lying about why they are doing it (although, really, it is both).
I understand that they think tariffs give them leverage over other countries, but beating people rarely results in the kind of results one needs. Further, others can pick up clubs as well.
Worse, Americans will suffer from all of this, and there will be little to show in terms of gains.
I would note that he promised to do this, and many tried to warn of the consequences, and yet here we are.
Source for the title quote is Reuters (2018). Source for screencap, here.
I’ve started doing the same thing I did during the last Republican trifecta and short selling 1-3 year US treasuries, which should not work, but Republicans are so bad at governing that it did
Nobody wins a trade war. United States has a Trillion dollar trade deficit annually. Someone explain to me our winning scenario? But hey, you reap what you sow. I’ll go get my popcorn ready, not my fault.
The felon loves tariffs because he can sell exemptions to favored industries/businesses. The SC gave him a get out of jail free card, by making presidential actions free from criminal liability, so selling exemptions becomes a presidential action.
But yes, he doesn’t understand/care about how tariffs work and the results of the broad implementation.
They are at most a minor inconvenience for people with a billion dollars. And the only people without a billion dollars are losers that deserve what they’ve got coming for their lack of hard work.
So they’re missing over 99% of the fentanyl coming to the US. 25% tariffs won’t be anywhere near enough. Raise them to 99.8%!
@Stormy Dragon:
I hear you, and this intentional chaos makes me nervous.
What most Republicans know, but cynically ignore is that millions of households, both working and retired people, at every level of household income, have their retirement funds, through 401k, 403b, and other plans, invested on Wall Street. Right now Republicans are willing to ride with Elon Musk who told us that there was going to be pain but it’s going to be worth it.
They’re looking to burn it down and hoping that people forget about the arson before the 2026 mid-terms.
It’s worth revisiting the Tax Foundation’s analysis of these Tariffs:
I’ve left in there critique of Biden’s continuation of Trump 1 tariffs as I think it’s important to note that neither side has been particularly good on this topic in recent years.
All that said, it’s worth repeating that these tariffs continue to be an effectively regressive tax on American Citizens and other people living within the US. These fees will NOT be paid by foreign countries. They will be paid by Americans one way or the other.
I realize some big brain MAGA supporters will claim that these are necessary long term steps to return manufacturing to the US. I’d love to see any evidence of that happening in any significant way from the tariffs that began in 2016 (we have almost a decade’s worth of data from that). As far as I can tell, the answer so far is no.
That’s before we get to the fact that American manufacturers often increase their prices thanks to the artificial increase in prices created by the tariffs. Which, under a capitalistic system makes sense in terms of returning value–especially in the short term–to your stakeholders (which, btw, is something Adam Smith recognized as far back as “The Wealth of Nations.”)
@Kathy:
This is his ‘Canada will pay for the wall,’ strategy.
If I could ask a question?
Why 99.8% and not 100%? Is 99.8% better for marketing purposes?
@Stormy Dragon: I suspect many in Trump’s circle positioned themselves to made a bundle on this manipulation.
@Matt Bernius:
just an important note on those estimates and assumptions.
I hate these tariffs as much as the next guy, but color me skeptical about the long term implication to the stock market. Get back with me in a week or a month. Remember the “Harris market dive” last September/October(?) that ruled the Republican talking points for almost 24 hours before the market – unaided by any candidate – righted itself?
@Joe:
Most often stock markets don’t react, they overreact.
I kind of see it as any good news is interpreted as “Whoo-hoo! Stocks will go up and up forever! BUY! BUY!” And any bad news as “WE’RE DOOMED! stock prices will tank forever! SELL! SELL!”
The latter can be true of some companies (Theranos, anyone?), but not for the whole market. Things stabilize, people get used to them, and things keep on going on, in the long term, as they did before.
Of course, it can take time. How long did it take the stock market to recover from the 1929 crash? The housing market is still reeling from the 2008 mortgage securities crash.
@Joe: I agree that one day, or any short-term trend does not suggest anything about the long-term.
But the short-term signal is clear, yes?
@al Ameda: it’s cute you think we’ll have any more elections.
Snark aside, these volks aren’t acting like they are at all concerned about the welfare of the American people or blowback.
@al Ameda:
Because 99.8% + 0.2% = 100%
Of curse it’s not rational. But then neither is what passes for a government in America these days.
@Kathy: “How long did it take the stock market to recover from the 1929 crash?”
A generation, right? But that era also had high unemployment, which the US doesn’t have now (unless Mexico and Canada impose retaliatory tariffs, and supply chains for materials and parts for US industry become discombobulated), and less regulatory oversight than the US has now (unless the administration follows through on financial industry deregulation and even the suggestion of eliminating the FDIC).
@Argon:
I haven’t seen an analysis, but I expect you’re right that the incidence of tariffs is heavily regressive. That alone would recommend them to Republicans. Additionally, the revenue from tariffs will show on the CBO’s books. The cost will not, making it easier to justify extending the Trump 1.0 tax cuts.
Trump monetary theory the same as his vaunted foreign policy instinct: ignorance, stupidity, narcissisism, amorality, recklessness, and incompetence.
These tarriffs show again: the rapist is not qualified, does not know what he’s doing. The only reason Americans pretend this orange buffoon is hireable is because he’s a str8 white guy. Change any one of those demographic variables, Trump would’ve been laughed off the campaign trail.
@Eusebio:
Ah, but a beginning’s being made with the removal of so many federal employees.
Canada already has. I expect Mexico to follow suit next week.
Well, maybe. the king still likes the rapist for some reason. He’s out of power, but it’s unclear how much influence he wields on the current president.
@gVOR10: Exactly. It is a tax on poor folk to finance a reduction in wealthy folks tax burden. But try explaining it all to someone who is still likely making monthly payments on their Leather Bound Trump Bible purchase.
@Eusebio:
I do not think this is correct. The tariffs, all by themselves, make the costs of those inbound parts more expensive. Which will cause a slowdown, if not a recession.
Of course, my guess at how this plays out is that everybody who plays ball with Trump will get an exemption. So no recession, just more strongarming. Which Trump supporters love. Until it happens to them.
@Jay L Gischer:
I agree with you about the tariffs on imports. I guess my point about retaliatory tariffs on exports is that Canada and Mexico are by far the top two recipients of US exports, and tariffs will make those exports less attractive to Canadian and Mexican buyers. Also established import-export supply chains in general will be mucked up. I can’t begin to understand how the North American auto industry will function with the tariffs in place, but I assume the made-in-Japan Prius Prime, as well as many other Japanese and Korean made car models, for example, will have less competition in the US.
@Matt Bernius:
“These fees will NOT be paid by foreign countries. They will be paid by Americans one way or the other.”
I’m glad to see we agree that corporate taxes should be reduced to zero, seeing how “they will be paid by Americans one way or another.”
@Connor:
Exactly. This is parallel to how Republicans believe that, in theory, a marginal income tax rate of 0.00% will pay for everything. No deficits. Basically, it’s like a virgin birth, a miracle.
@Steven L. Taylor:
I certainly would not argue that markets did not react negatively to the tariffs. But I would advise restraint in apportioning cause. A number of large retailers have recently issued negative guidance on earnings.
The sugar high of fiscal stimulus that supported consumer spending in 2022-2023-2024 looks to have run its course. The alternative of debt financed spending has become more expensive and consumer debt/cash flow ratios are high. And the price level is 20% higher.
I understand the politics. Joe Biden had to tout the jobs picture. But they were mostly rebound jobs, government, low wage and double counted part time jobs. The fact is he conveyed a real turkey of an economy. Structurally unsound. Time will tell.
@al Ameda:
That’s just a really dumb comment. Did you mean that?
What do you believe is the tax incidence of a corporate tax?
A tariff?
You are aware, right, that the tax yield craps out at about 20.% of gdp? Black markets and tax schemes kick in. Turnips run dry. Free people get tired of becoming serfs for government, the non-taxpayers and other parasites.
How much do you pay in taxes? Why not more?
@Connor:
Clearly you got your economics degree from Trump University.
People who think the law doesn’t apply to them, and the rules don’t apply to them, come to believe they can manipulate and meddle with things they can’t control and don’t understand, and there won’t be any adverse consequences. There were none when they broke the law and the rules, after all. So why should anything else be any different?
Of course, as per Niven’s law, Nature doesn’t care if you’re having fun, or venting spleen, or making a profit, or beating your chest like a gorilla.
@Jay L Gischer:
Look at the supply of money. A 1/3rd reduction. That’s your Depression. Not the stock market.
@Daryl:
Yes. A rebound. And then look at the trend under Biden. And then look at the jobs composition. It’s vey available data.
Do you have reading comprehension issues?
@Connor:
I appreciate the slight of hand there Drew. You don’t contest the point I am making (because you know I’m right) and you then extend the concept to a dumb extreme.
Though I guess you are agreeing that this is a regressive double dip on consumers. Also I note you didn’t address any other aspect of my comment. Because, of course, you can’t without making an really dumb direct argument.
Wait, I thought we were in an existential budget crisis where the country will fall apart without addressing our out of control debt. And yet, shockingly, you are all for cutting progressive taxes in favor of regressive ones.
BTW, still waiting for an explanation on how the NYC congestion pricing was a “regressive tax” (according to you).
@Connor:
Seriously?
There are plenty of countries that have taxed way above that for a long time and are not notably in peril of imminently “crapping out”.
That does not make higher taxes good per se.
It just depends what the perceived need is.
For instance, is it better to have people end up paying more in private health insurance that in tax to support a public health system, because, for some abstruse reason that is “market spending”, no matter how effectively obligatory, and therefore a contributor to a flourishing economy.
Whereas taxes and state managed services are obviously horrid and rotten, because reasons?
Many Corporations don’t pay taxes. I am sure you are aware of how they do that, right?
My effective income tax rate is 8% and I have a six figure salary. The Federal Income Tax is not the massive burden you make it out to be.
Tariffs are bad for everyone. Both sides. Trade Wars are bad for all parties involved. How is that good?
Make an argument, dude. Quit deflecting. A simple argument you could make is you feel Tariffs will bring in substantial revenue….etc…or whatever your argument is, because you are not making an argument. You are just trolling. Anyone can do that.
@JohnSF:
They distribution of taxes within the percentage GDP total taxation is another matter, of course.
Youv’e got various options: income tax at base rate, grduated levels of income tax, corporation tax, VAT, inheritance tax, wealth tax, property tax (and graduated levels thereof) etc.
Also duties and excise, and “sin taxes” various.
And, of course, tariffs.
Arguably the daftest of them all.
Though salt-tax is in there with a shout.
Or the window tax, lol. Now there’s a classic.
@Connor:
Still waiting for a citation to back this claim up. Real economists, please, not The Tobacco Institute.
@Connor: You are utterly eliding the fact that tariffs are a tax that will be paid by consumers. Pointing out an existing tax does not change the fact that a Republican president just increased taxes.
@Connor: Sure, buddy, the market dive was Biden’s fault. Whatever you say.
@Connor:
I’m sorry that you don’t believe that Republicans have been selling, for decades, the idea that tax cuts always pay for themselves, and that the outcome of the tax cuts will not result in deficit spending.
Just the other day, in 2017 Trump sold exactly that to us.
@Matt Bernius:
No, Matt. I don’t think you are right. Your attempt to win a debate by simple assertion aside. And my point seems to have gone right over your head. You can’t argue that that tax incidence in the case of tariffs falls solely on the consumer, but in the case of corporate taxes, is wholly or partially born by the imposer. That’s just intellectually unsound, bordering on dishonest. The rest of your comment is just arrant nonsense.
@DrDaveT:
The fact that you don’t know this disqualifies you from serious debate. But go look at widely available data from Statista, various Fed sources, most prominently the St Louis Fed. (FRED)
Go educate yourself.
@al Ameda:
Again, not my point, and you just arguing a point you want to argue.
Dumb.
@Connor: “Do you have reading comprehension issues?”
Do you have to be both stupid and insulting?
Don’t touch the poison frog
@Steven L. Taylor:
Please read my comments on tax incidence. You do not know this. You simply assert it. Economist have argued this for decades. As I said, I certainly will not argue that consumers will not bear costs. What portion is debatable. How to extract ourselves from this is debatable.
But I think missed in this whole debate are the costs to US citizens of the mercantilist policies of other countries. Where is your concern for those harmed? Apparently lost in callous disregard. I would argue lost in a simplistic economic view fueled by nothing more than TDS. Is your irrational Trump hatred worth the destruction of US jobs, towns and values?
As for the Biden comment, that shows just ignorance. The economy has been softening, and coming off its monetary fix for a while. Its widely spoken about in the financial press, but more importantly in Fed data and the like. The jobs analyses are widely available with simple searches.
I understand your partisan need to ignore reality, but is that where you really want to be? Just a partisan? Is it?
@Steven L. Taylor:
Please read my comments on tax incidence. You do not know this. You simply assert it. Economist have argued this for decades. As I said, I certainly will not argue that consumers will not bear costs. What portion is debatable. How to extract ourselves from this is debatable.
But I think missed in this whole debate are the costs to US citizens of the mercantilist policies of other countries. Where is your concern for those harmed? Apparently lost in callous disregard. I would argue lost in a simplistic economic view fueled by nothing more than TDS. Is your irrational Trump hatred worth the destruction of US jobs, towns and values?
As for the Biden comment, that shows just ignorance. The economy has been softening, and coming off its monetary fix for a while. Its widely spoken about in the financial press, but more importantly in Fed data and the like. The jobs analyses are widely available with simple searches.
I understand your partisan need to ignore reality, but is that where you really want to be? Just a partisan? Is it?
@Steven L. Taylor:
Please read my comments on tax incidence. You do not know this. You simply assert it. Economist have argued this for decades. As I said, I certainly will not argue that consumers will not bear costs. What portion is debatable. How to extract ourselves from this is debatable.
But I think missed in this whole debate are the costs to US citizens of the mercantilist policies of other countries. Where is your concern for those harmed? Apparently lost in callous disregard. I would argue lost in a simplistic economic view fueled by nothing more than TDS. Is your irrational Trump hatred worth the destruction of US jobs, towns and values?
As for the Biden comment, that shows just ignorance. The economy has been softening, and coming off its monetary fix for a while. Its widely spoken about in the financial press, but more importantly in Fed data and the like. (You might want to read the Fed reports routinely. I do.
I especially like the St Louis Fed) The jobs analyses are widely available with simple searches.
I understand your partisan need to ignore reality, so be it; but is that where you really want to be? Just a partisan? Is it?
@al Ameda:
This.
Now we have another iteration.
“Anything DOGE does, even if unconstitutional, or at best unlawful, is justified by the debt/deficit. And what DOGE will do means we don’t have to get real about ACTUAL spending and revenue issues.”
All the indications thus far is that DOGE won’t even begin to have serious impact on the budget. (If anything, likely to make it worse, by spending required to correct the screw-ups)
Either you massively cut “mandatory” spending (Medicaid, Medicare, Social Security, Veterans Benefits) OR you cut the ENTIRE discretionary budget, including ALL defence spending.
Or a combination of both.
Even MAGA could not avert a Congressional melt-down over that. lol
Or, if you want to restrain debt growth (which, if you are sensible, you discount for inflation plus growth, but that’s another issue), you get serious: you combine sensible spending reductions, properly audited by OMB and Congress, with some rather moderate tax increases (mostly by revoking a lot of arcane exceptions, plus a minor base tax rise).
Job done.
But can a Republican Congress and administration do that?
Aye, there’s the rub.
@wr:
xoxo
Do you have anything substantive?
I’m sorry if I am direct, and gruff. But I find that I’m the recipient of much worse.
Suck it up, buttercup.
@Just Another Ex-Republican: Lol, Exactly. I think Connor is a Russian bot. There are a ton of them out there
The triple post above confirms it. Bot.
@Connor:
I learned that from watching you dad.
BTW, to that note all I see in your response is arguing from assertion with a bit of authority sprinkled in. Weak Drew… Very weak.
At last something you are a demonstrated expert in… You are the master at that (see again your previous representation of NYC congestion pricing as a key example).
If my points (which mirror many from the Tax Foundation) are so easily disprovable, you could just insert a link to back up your claims. But instead you turn to insults and loud of words.
BTW, having been through this cycle with you way too many times, do detect the start of the slow slide into your next epic flameout and rage quit for two weeks?
@Jc:
No it’s just Drew/Gauraldi/Jack (and I am sure other identities) who has an unhealthy obsession with this site.
Give it about a month and he will flame out, rage quit the site very publicly, and then a few weeks later return under another name.
I guess it’s cheaper than therapy.
@Connor: Tariffs are, definitionally, taxes. Your party just raised taxes. You can dissemble all you like. This is the case.
Trump just raised taxes.
@Connor: And only a partisan hack sees Trump announce tariffs, have the markets literally react in real time, and then try and blame the previous administration.
There are nuanced arguments to be made, but you are not making them. You are simply being not just a hack, but a fool.
I am being blunt because I am tired of nonsense.
@Connor: assuming we set corporate tax rates to zero as you suggest, how would you propose we make up that government revenue shortfall?
@Connor:
So, no, you don’t have one?
Sorry, dude. I was an academic for a long time. I know the rules of citation. You, clearly, have nothing. It would have been so easy to provide just one key reference… if such a thing existed.
@Connor: Where do you get your steaks, or your tofu, if you’re vegan? I’m actually here, on the ground, raising your steaks, and my neighbor might be raising soybeans, and I can tell you that Trump’s “policies” just cost me and my neighbor a lot of damn money.
https://www.youtube.com/watch?v=kiihC0yE4Ds
@Connor: We’d all respect you a lot more if you bailed the fuck out and didn’t keep trying to come back under different names. Just quit. Choose a name, state your position, and stand with it. Why can’t you give us up, Drew?
Or whatever your name is now. (so many eyerolls, high school type eyerolls, if you get my drift)