Trump 2.0 - Economic Policy including Tariffs, Interest Rates, Inflation, Trade Policy

TGHusker

TGHusker

Well-known member
Well, on the radio on my way to work, I heard that Trump will impose a 25% tariff on day one on Canada and Mexico.  Effectively turning back NAFTA.  An additional (added on to current tarriffs) 10% tariff will apply to China.   So our CFO here at work, who was on vacation, came in to work because our corporation CFO in Mexico (our USA based company is wholly owned by the Mexican corporation) wanted to have an emergency discussion on the tariffs this morning.    At this point we don't know the full ramifications.  Our foundry, machining and assembly for many of our pumps are done in Mexico.  Many are also sent to Tulsa for machining and final assembly and testing - all depending on the customer requirements.  

So it could mean: 1. more pumps will be completed in Tulsa   or  2. Our costs will go up and we lose some of the competitive advantage we have by having our sister companies doing the work in Mexico.   

Overall, we know that additional costs of tariffs aren't absorbed by the Mexicans, Canadians, or Chinese - the price is tacked on to what we pay.  I expect inflation to hit the fan.  

American manufacturing will not/cannot adjust so quickly that we produce everything in the USA.  Prior to WW2 we did produce approx 96% of what we consumed in the USA.  With all of our trade agreements, we are woven together like a fabric with other economies.  Expect a lot of pain as we tear that fabric apart.   Let's hope that it isn't the same paid we experience 100 years ago that led to the depression. 

It seems to me that tariffs are like slapping yourself in the face because you are mad at someone else.  Or like drinking poison, hoping the other person dies. 

https://www.nbcnews.com/politics/donald-trump/trump-says-plans-enact-new-tariffs-canada-china-mexico-first-day-offic-rcna181753

President-elect Donald Trump said Monday that his incoming administration would slap new tariffs on imported goods from Mexico, Canada and China, solidifying a key campaign promise that could have a major impact on trade.

Trump said in a post on Truth Social that he plans to impose a 25% tariff on products imported from Mexico and Canada, framing the proposal as a response to the ongoing fentanyl crisis.
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The reformed GOP is crazy.  It's anti free markets but also anti worker rights.  It's kind of what a party with no valid direction would look like regarding manufacturing and the American economy (surprise, surprise).

Let's just play along and say they are successful in getting pretty much all things possible made in America.  Factories take on the challenge and navigate their reorganizations. Great!  Now we just have to find the workers to fill those jobs and probably drastically cut pay and benefits to make up the difference in prices from goods that were previously made in China, Mexico, etc.  

Meanwhile, those global economies take a huge hit and can no longer afford the goods that the US would like to export.

I'm with you @TGHusker, it don't see how we can undo this web without creating a bunch of chaos that is going to take literal decades to try any make any work comparitively.

 
funhusker said:
The reformed GOP is crazy.  It's anti free markets but also anti worker rights.  It's kind of what a party with no valid direction would look like regarding manufacturing and the American economy (surprise, surprise).

Let's just play along and say they are successful in getting pretty much all things possible made in America.  Factories take on the challenge and navigate their reorganizations. Great!  Now we just have to find the workers to fill those jobs and probably drastically cut pay and benefits to make up the difference in prices from goods that were previously made in China, Mexico, etc.  

Meanwhile, those global economies take a huge hit and can no longer afford the goods that the US would like to export.

I'm with you @TGHusker, it don't see how we can undo this web without creating a bunch of chaos that is going to take literal decades to try any make any work comparitively.
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It only took WW2 to truly correct the depression which was basically caused by tariffs.  

Yes I agree with the ridiculous cycle you note below - dog chasing tail  

Tarriff > hopefully leads to demand of made in USA goods > USA goods expensive >  Inflation > consumers can't afford the new prices > thus companies  try to lower costs by either 1. Breaking unions or 2 hiring immigrants >  1. Breaking Unions means union workers get paid less and therefore there is even less buying power for USA goods  2 Hiring immigrants - none available due to Trump's immigration policy >  we alienate our trading partners > USA cannot sell goods overseas due to new imposed tariffs on USA goods > our prestige in the world takes a steep decline >  recession or worse is created in the USA >  China is now the new world leader  > BRICs is the new reserve currency (that may be a stretch but perhaps not if there is a large economic collapse  > a New World Order is created and the USA is left out in the cold.

> USA reverses tariff decision and tries to get back into the trade game.  

 
TGHusker said:
It seems to me that tariffs are like slapping yourself in the face because you are mad at someone else.  Or like drinking poison, hoping the other person dies. 
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Eric confirms the above ^  (But we all know trump, AKA the Bankrupter in Chief,  is such a business wizard with a great business mind)

Eric Trump continued his father’s rant on Fox News, going after China.

“China, if you're going to allow this stuff to get sold in our country, largely produced in China, we're going to add another 10 percent ... We are going to cost your countries, your economies, we're going to cost your businesses billions, hundreds of billions of dollars if you think ... you're going to poison Americans,” he said.

https://www.msn.com/en-us/news/world/eric-trump-demonstrates-in-30-seconds-he-doesn-t-have-a-clue-how-tariffs-work/ar-AA1uN5Lk?ocid=entnewsntp&pc=DCTS&cvid=d54fbf5aa9d74b0592b435359a2cb5de&ei=18

“A popular delusion is that foreigners would bear the burden,” the Bloomberg editorial board wrote before the election.

Tariffs are paid to the government by the retailer or manufacturer importing the products, not the country where the goods were purchased from. Trump’s tariffs may help some companies whose products are already made in the U.S., but economists have warned that tariffs would raise costs for US companies who have to buy goods from abroad.

U.S. companies may take on that extra cost and make a smaller profit, or as is more likely, they could pass those costs on to the American consumer.

Washington Post and CNN political commentator Catherine Rampell noted on Bluesky on Monday that “If you voted out the incumbent because you thought grocery prices were too high, I got some bad news from you.”

“For example, 90 percent of our avocados come from Mexico. Guac is REALLY gonna cost extra,” she added.

“We import $105B in cement/lime/minerals and $28B in lumber/paper from Canada. We also *already* tariff that lumber to death,” Rampell said. “Expect construction costs to go through the roof.”

 
teachercd said:
But, why?

If tariffs are bad why would they impose them?  Seems like you would do the opposite of the bad stuff.  
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Because we are doing it to them.  That's how trade works.  

I have a big customer in Canada.  The sales rep for the account is all in on Trump and the tariffs.  If Canada does the same thing back, he's really not going to like it.  The same customer can import a competitor's product from China with no tariffs.

 
BigRedBuster said:
Because we are doing it to them.  That's how trade works.  

I have a big customer in Canada.  The sales rep for the account is all in on Trump and the tariffs.  If Canada does the same thing back, he's really not going to like it.  The same customer can import a competitor's product from China with no tariffs.
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Yeah, I get that part.  But if it just hurts their country, why do it?

Like I get the "tit for tat" but if it only tariffs only hurt the country that are placing the tariff on the imported goods, why would you do it to hurt your own country?

Unless the reason is as you said, because they are doing it to them.  It just doesn't seem to make sense. 

 
I just had a customer (a distributor) call me from NC.  She, CFO, was concerned about our pump POs and if pricing will change on Jan 1 on the undelivered goods.  She is also concerned about the future pricing and if her customers look elsewhere. She does so much business with us that a drastic price increase would deeply harm their family owned business.  

Wherever Trump goes there is CHAOS.  50% of the voters voted for this clown show.  Most of them were probably the 'uneducated' voter that Trump likes.  He pulled the wool over their heads and appealed to their fears (which he created for the most part through his misrepresentation of our current economy).  These voters most likely had no concept about tariffs other than what the fraudster told them.  So as @BigRedBuster noted we will be doing a lot of this:  :snacks:    Watching the chaos take hold of our country.   

 
teachercd said:
Yeah, I get that part.  But if it just hurts their country, why do it?

Like I get the "tit for tat" but if it only tariffs only hurt the country that are placing the tariff on the imported goods, why would you do it to hurt your own country?

Unless the reason is as you said, because they are doing it to them.  It just doesn't seem to make sense. 
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I never have said it doesn't hurt the other country.  I've said it hurts American consumers because we are the ones paying the tariff.  That causes inflation.  Canada gets hurt because they lose the exports.  However, there are other countries to sell it to that don't have tariffs.

Interestingly, MAGAts love complaining about high gas prices.


 
BigRedBuster said:
I never have said it doesn't hurt the other country.  I've said it hurts American consumers because we are the ones paying the tariff.  That causes inflation.  Canada gets hurt because they lose the exports.  However, there are other countries to sell it to that don't have tariffs.

Interestingly, MAGAts love complaining about high gas prices.
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I 100% agree with this, that is why I am asking, why would Mexico do it too if it is only going to hurt Mexico and cause inflation and hurt their economy?  

Just seems like bad policy. 

 
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teachercd said:
I 100% agree with this, that is why I am asking, why would Mexico do it too if it is only going to hurt Mexico and cause inflation for them?  
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A lot of what they buy from us, they can get elsewhere.  The key is, they are trying to get the US to go against the Trump Tariffs.  This is how trade wars work.

A product they buy a s#!t ton of from the US is corn and soybeans.  Well, they can get corn elsewhere in the world.  Mexico put a ban on GMO corn a few years ago and it crashed the corn price in the US.  I guess farmers possibly have FA and FO.

 
BigRedBuster said:
A lot of what they buy from us, they can get elsewhere.  The key is, they are trying to get the US to go against the Trump Tariffs.  This is how trade wars work.

A product they buy a s#!t ton of from the US is corn and soybeans.  Well, they can get corn elsewhere in the world.  Mexico put a ban on GMO corn a few years ago and it crashed the corn price in the US.  I guess farmers possibly have FA and FO.
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So the tariffs that Mexico places will not hurt Mexico because they can just get cheap stuff from other places.  

That makes more sense.

 
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