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Trump Tariffs - "The Dumbest Trade War"


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This topic needs a thread of its own and we watch it unfold.   The Felon, who is now our president:facepalm:, appears to think we can dominate the world and exert our economic power on friend and foe. 

 

 

 

Unclear Policy Goals

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 The president’s trade assault, which makes no distinction between ally and adversary, is an assertion of U.S. dominance with significant risks.  

Until the moment when President Trump announced 25% near-universal tariffs on Canada and Mexico, many on Wall Street, in Washington and in foreign capitals doubted he would. They didn’t see how the changes served the U.S. economic, political or strategic interest. 

That Trump did so anyway shows just how profoundly he is rewriting the source code of U.S. economic relations. The postwar bipartisan consensus that the U.S. prospers by fostering cooperation and integration with allies and neighbors is gone. In its place looms the prospect of continuous trade war driven not by traditional alliances and ideology, but the priorities of the day. The winner is the one who can inflict, and withstand, the most economic pain.  

What comes next is highly uncertain because Trump’s motives are difficult to discern. He justified the tariffs, plus a 10% tariff on China, as a way to stop the flow of fentanyl and illegal migrants.  

Howard Lutnick, Trump’s commerce-secretary nominee, last week said Canada and Mexico “are acting swiftly” on those concerns, implying a resolution could come quickly. The tariffs are to take effect Tuesday.

Yet negotiators from both countries reportedly have struggled to figure out what would satisfy Trump. His officials have set vague-enough conditions that could justify tariffs indefinitely. Even if the tariffs announced Saturday are modified or removed, Trump can reimpose them at any time, and he is still considering broad tariffs on the entire world. 

Drugs and migrants might turn out to be a pretext for bigger, long-term goals. Trump claims tariffs will usher in a “golden age” akin to the late 1800s. He sees them as not just a source of revenue and protection, but a sort of financial gunboat diplomacy that could force Canada to submit to annexation and Denmark to surrender Greenland.

“Will there be some pain? Yes, maybe (and maybe not!). But we will make America great again, and it will all be worth the price,” Trump wrote on social media Sunday.

Philip Verleger, a longtime energy analyst, writes in a forthcoming article that Trump “intends to ‘Make America Great Again’…by diminishing the power of every other country. Cooperation is not an objective. His focus is dominance.”

This trade war isn’t like the last

While Trump hit many countries in his first term, China was the focus. Most of the $380 billion of imports, annualized, subjected to tariffs were from China, noted Erica York of the Tax Foundation. By contrast, York estimates Trump’s latest tariffs will hit about an annualized $1.4 trillion of imports—mostly on U.S. allies. 

 

 

 

Tariffs & the Great Depression

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President Donald Trump has argued that “trade wars are good and easy to win.” But many economists have disagreed that raising tariffs sharply can improve the economy. In particular, experts have pointed to the failure of the Smoot-Hawley Tariff Act, passed in June 1930, to protect U.S. industries from tariff increases.

Although this came several months after the stock market crash of 1929, the U.S. hadn’t yet entered “the full onset of the Great Depression,” says Claude Barfield, a resident scholar at the American Enterprise Institute. The thinking among Congress and President Herbert Hoover was that by raising taxes on thousands of imports no matter what country they came from, the act would protect American farmers and secure the nation’s economy. But experts disagreed.

“Economists around the country argued to the Republican Congress that this would only hurt the world economy, and the United States economy,” Barfield says. (Before the political parties realigned in the mid-20th century, the Democrats were the “free trade” party.)

And they were right. Although it did not cause the onset of the Great Depression, it did help extend it. After President Hoover signed the bill into law, stocks dropped to 140.

Other countries responded to the United States tariffs by putting up their restrictions on international trade, which just made it harder for the United States to pull itself out of its depression. Imports became largely unaffordable and people who had lost their jobs could only afford to buy domestic products. Global trade tanked 65 percent.

In effect, the Smoot-Hawley Tariff Act “prolonged [the depression] and possibly deepened it around the world, not just in the United States but for other countries,” he says.

Ultimately, this influenced the country’s long-term trade policies. Beginning with the Reciprocal Trade Agreements Act of 1934, and continuing with other acts throughout the century, the United States began to negotiate trade policies individually with countries, instead of imposing unilateral tariffs across the board.

America used relief from tariffs as a bargaining chip. “What we would do was to say to a country, ‘If you lower your tariffs on such and such, we will lower our tariffs,’” Barfield says. “So you had then a whole group of reciprocity agreements negotiated in between 1935 and 1941.”

The premise was that negotiating deals with other countries to reduce tariffs promotes economic growth. Since 1945, both Republican and Democratic presidents have mostly sought to lower trade barriers and negotiate reciprocity agreements. Those efforts have been reflected in the General Agreement on Tariffs and Trade, the World Trade Organization and the North American Free Trade Agreement

 

 

 

 

Smoot-Hawley Act

 

Canada will Cease to Exist

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"Without this massive subsidy, Canada ceases to exist as a viable Country. Harsh but true!"   

He added: "Therefore, Canada should become our Cherished 51st State. Much lower taxes, and far better military protection for the people of Canada - AND NO TARIFFS!"

Within hours of the White House’s tariffs announcement on Saturday, Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum imposed matching charges on imported US goods.

Trudeau announced "far-reaching" 25 per cent tariffs on American products, affecting £86 billion in value, including beer and wine, household appliances, and sporting goods.

The Prime Minister said he would "not back down in standing up for Canadians", but warned of real consequences for people on both sides of the border.

 

 

 

The Dumbest Trade War

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President Trump conceded Sunday that there may be “some pain” from his sweeping tariffs on Mexico and Canada, but they will eventually lead to a new “GOLDEN AGE.” Nice of him to promise a glorious future because the pain is already unfolding, and the tariffs won’t even take effect until Tuesday.

WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID,” Mr. Trump posted on Truth Social on Sunday morning. He also included a blast at these columns for leading the “Tariff Lobby” after our Saturday editorial called his 25% across-the-board tariffs on our friends and neighbors “the dumbest trade war in history.”

We appreciate Mr. Trump’s attention, though we’re anti-tariff and not lobbyists. But bad policy has damaging consequences, whether or not Mr. Trump chooses to admit it. Mr. Trump can’t repeal the laws of economics any more than Joe Biden could on inflation.

Tariffs are taxes, and when you tax something you get less of it. Who pays the tariff depends on the elasticity of supply and demand for the specific goods. But Mr. Trump wants American workers and employers to take one for the team. Hope you don’t lose your job or business before the golden age arrives.

The economic fallout began Saturday evening as Canada said it will retaliate with a 25% tariff on $30 billion (Canadian dollars) of U.S. goods, with another C$125 billion to follow in three weeks. Mexican President Claudia Sheinbaum also promised to retaliate.

Canada’s new border taxes will hit orange juice, whiskey and peanut butter—all from states with GOP Senators. Prime Minister Justin Trudeau said Ottawa’s tariff list would also include beer, wine, vegetables, perfume, clothing, shoes, household appliances, furniture and much more. He said Canada could also withhold critical minerals.

Note that Canada’s Conservative opposition leader, Pierre Poilievre, also called for retaliation. Mr. Poilievre is the favorite to be the next Prime Minister and he rightly said the trade war will damage both countries. But he said Canada had to stand up for its “sovereignty” and protect its economic interests.

Mr. Trump’s tariffs are already roiling North America’s energy markets, which are highly integrated. The President implicitly recognized the risk by hitting Canada’s energy exports to the U.S. with a lower 10% tariff. But that will still hurt Midwestern refiners that rely on Canadian oil. Canada and Mexico could send more of their oil elsewhere for refining, perhaps even China.

Canada’s expanded Trans Mountain pipeline runs from Alberta to the West Coast and has spare capacity. It could be used to increase tariff-free oil shipments to Asia that would hurt California refineries that now import oil from Trans Mountain. California could have to import more oil from the Middle East.

Mr. Trump says the tariffs will revive U.S. manufacturing. But Jay Timmons, CEO of the National Association of Manufacturers, said in a statement that “a 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally.”

He added that, while his members understand the need to reduce fentanyl flows to the U.S., “the ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs.”

Many more trade groups have criticized the tariffs, including even U.S. aluminum makers who benefited from tariffs in the first term. Canada accounts for more than half of U.S. aluminum imports (owing to its cheap hydropower) that secondary and downstream manufacturers use.

None of this means the Trump tariffs will tip the U.S. economy into recession. U.S. growth may be strong enough to absorb the blow from tariffs, as it was after Mr. Trump’s more modest levies in the first term. But the same can’t be said about Mexico and Canada, where growth is weak and which depend on U.S. markets for much of their GDP.

The tariffs may also not cause a surge in the general U.S. price level. Overall inflation depends far more on the Federal Reserve’s monetary policy. But prices will increase for most tariffed goods, which will be painful enough.

The tariff broadside also adds new policy risk and uncertainty that could dampen business animal spirits. Markets have been pricing in an assumption that Mr. Trump would step back from his most florid tariff threats, or limit tariffs to China.

The hammer blow to Mexico and Canada shows that no country or industry is safe. Mr. Trump believes tariffs aren’t merely useful as a diplomatic tool but are economically virtuous by themselves. This will cause friends and foes to recalibrate their dependence on America’s market, with consequences that are hard to predict. How this helps the U.S. isn’t apparent, so, yes, “dumbest trade war” sounds right, if it isn’t an understatement.

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Hope you aren't planning on buying a car soon.


Car prices could rise by $3k

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The duties would immediately hit almost one-quarter of the 16 million vehicles that are sold in the US each year, as well as the parts and components that go into them — an import market that totaled $225 billion in 2024, according to research from consultant AlixPartners. Tariffs will add $60 billion in costs to the industry, the research shows, much of which is likely to be passed on to consumers.

Automaker stocks traded sharply lower on Monday as investors began to digest the impact of tariffs. General Motors Co., which has the heaviest exposure to Mexico and Canada among major US manufacturers, was down 7.9% as of 7:44 a.m. before regular trading in New York. Ford Motor Co. fell 4.7%. Toyota Motor Corp. and Nissan Motor Co. dropped in Asia trading, while Volkswagen AG and Stellantis NV led the steepest intraday decline in European auto shares since April.

Automakers in Mexico have been preparing by preemptively importing both more components and vehicles, which may ease the blow in the first few weeks, said Guillermo Rosales, president of the Mexican Association of Automotive Distributors, or AMDA. After that, the outlook is less certain. “Everything depends on the course that the Trump administration takes in this matter,” he said.

 

 

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Car components can make their way back and forth across US borders as many as eight times during production, heaping duties onto a sprawling industry that relies on materials from all three countries. At the consumer end of the supply chain, the average price of a new car may climb by about $3,000, Wolfe Research analysts have said, further straining affordability with prices already close to all-time highs.

 

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A Mexico Pause

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  • President Donald Trump said that he is pausing for one month a new 25% tariff on goods entering the United States from Mexico after Mexican President Claudia Sheinbaum agreed to immediately send 10,000 soldiers to her country’s border to prevent drug trafficking.
  • The announcement of the pause came two days after Trump slapped 25% tariffs on goods from Mexico and Canada, as well as a 10% tariff on goods imported from China.

President Donald Trump on Monday said he is pausing for one month his new 25% tariffs on goods imported from Mexico after that country’s president agreed to immediately send 10,000 soldiers to the U.S. border to prevent drug trafficking from Mexico.

Trump in a social media post said that during the pause “we will have negotiations” on the tariffs “headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick, and high-level Representatives of Mexico.”

 

He also said “I look forward to participating in those negotiations” with Mexico President Claudia Sheinbaum “as we attempt to achieve a ‘deal’ between our two Countries.”

The announcement of the pause came two days after Trump slapped 25% tariffs on goods from Mexico and Canada, as well as a 10% tariff on goods imported from China.

U.S. stocks, which had opened trading lower Monday, regained most of those losses on news of the pause of the tariffs on goods from Mexico.

Trump in his Truth Social post said that he and Sheinbaum spoke Monday morning ahead of the announcement of the pause.

Both he and Sheinbaum said that the 10,000 Mexican National Guard troops that she is sending to the border with the U.S. will have the mission of halting drug trafficking from Mexico, particularly that of the deadly opioid fentanyl.

 

Trump also wrote that the Mexican troops will aim to stop the flow “of migrants into our Country.”

Mexico’s response to the tariff threat contrasts with that of Canada.

Canadian Prime Minister Justin Trudeau said Saturday night that his country would implement a 25% tariff against $155 billion in U.S. goods in retaliation for Trump’s tariffs, which had been announced hours earlier.

 

 

1 minute ago, TGHusker said:

 

A Mexico Pause

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How long until we find out that Mexico has deployed 10k National Guard soldiers to the border since 2004?

 

Canada is about to agree to "enforce the northern border" in ways that they already do. Trump has successfully manufactured a crisis to solve, all while trouncing America's allies.

 

We really need to hold dumb Republican voters to a higher standard. The Republican Party is now a side show that simply appeals to a voting base that has no understanding of the world outside of what they see on Fox News, what they see in an algorithmic Tik Tok, or what their favorite podcast bro tells them. These voters are dangerously misinformed.

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3 minutes ago, Dr. Strangelove said:

How long until we find out that Mexico has deployed 10k National Guard soldiers to the border since 2004?

 

Canada is about to agree to "enforce the northern border" in ways that they already do. Trump has successfully manufactured a crisis to solve, all while trouncing America's allies.

 

We really need to hold dumb Republican voters to a higher standard. The Republican Party is now a side show that simply appeals to a voting base that has no understanding of the world outside of what they see on Fox News, what they see in an algorithmic Tik Tok, or what their favorite podcast bro tells them. These voters are dangerously misinformed.

How long before Trump claims agreed to buy Jim Beam whiskey so all tariffs are off and Trump won HUGELY!!!!


3 minutes ago, Dr. Strangelove said:

How long until we find out that Mexico has deployed 10k National Guard soldiers to the border since 2004?

 

Canada is about to agree to "enforce the northern border" in ways that they already do. Trump has successfully manufactured a crisis to solve, all while trouncing America's allies

Create the crisis (Playing the Villian) and solve the crisis with all ready existing remedies (Playing the Hero).  The multi-faceted personality of the Felon, aka Disrupter in Chief.   

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One more for the day

 

So prophetic my friend.  The Doctor is in the House.

5 hours ago, Dr. Strangelove said:

Canada is about to agree to "enforce the northern border" in ways that they already do. Trump has successfully manufactured a crisis to solve, all while trouncing America's allies.

 

Pause Canada

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  • President Donald Trump agreed to pause the implementation of planned tariffs on imports from Canada for at least 30 days, Canadian Prime Minister Justin Trudeau said.
  • The pause was announced hours after Trump said he would pause tariffs on imports from Mexico for one month.
  • Trump on Saturday said he would impose 25% tariffs on goods from Mexico and Canada, and 10% tariffs on goods imported from China.

President Donald Trump on Monday agreed to pause the implementation of planned U.S. tariffs on imports from Canada for at least 30 days, Canadian Prime Minister Justin Trudeau said.

The pause was announced in a tweet by Trudeau hours after Trump and Mexico’s president said Trump would pause for one month planned tariffs on imports from Mexico.

 

In both cases, the pauses came after those countries agreed to take steps toward preventing the trafficking of the deadly opioid fentanyl into the United States.

Trump on Saturday said he would impose 25% tariffs on goods from Mexico and Canada, and 10% tariffs on goods imported from China. Trump had also planned to impose a 10% tariff on energy resources from Canada.

Trudeau on Saturday warned that his country would implement a 25% tariff against $155 billion in U.S. goods in retaliation for Trump’s tariffs.

But in a tweet Monday announcing the pause, Trudeau wrote, “I just had a good call with President Trump.”

 

 

 

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17 minutes ago, TGHusker said:

One more for the day

 

So prophetic my friend.  The Doctor is in the House.

 

Pause Canada

 

 

 

At a certain point, you have to repect Trump's absolute disrespect he has for the intelligence of his voters.

 

It's pretty terrible for America that our President is a creature forged in the cesspool of television, but the guy absolutely doesn't give a s#!t about anything other than what his voters see on a Fox News clip.

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1 hour ago, Dr. Strangelove said:

 

At a certain point, you have to repect Trump's absolute disrespect he has for the intelligence of his voters.

 

It's pretty terrible for America that our President is a creature forged in the cesspool of television, but the guy absolutely doesn't give a s#!t about anything other than what his voters see on a Fox News clip.

 

I was trapped in a patient room today with a chronic Fox News watcher. It wasn't a super long treatment, and I could've just grabbed the remote and muted it, but I decided to just listen in a for a few minutes.

 

I cannot understate how completely it has morphed into state-run propaganda. Knowing it's closely coordinated with the White House itself in terms of editorial decisions and what they want their messaging to be, I literally mean state-run. It's completely indistinguishable from RT or whatever the equivalent channel would be in North Korea or China.

 

A lot of con voters are not the sharpest tools in the shed to begin with. That in and of itself wouldn't be that bad. But they choose to let their brains marinate in this derp, with many I see seemingly watching ONLY Fox News. So then they're morons AND brainwashed.

 

Point is we're screwed as long as they're willing freebasing propaganda. A huge chunk of America just up and decided they'd prefer a used car salesman hocking them bulls#!t because it makes them feel good and they think it's funny when the libs are mad.

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Trump's entire business strategy his entire life has been to come into the room, swinging his d!(k around with the most outrageous demands imaginable, then when he backs off them with slightly less outrageous demands they all the sudden seem like a reasonable compromise in comparison.

 

A simple strategy, and has some merit. But, imo, what he (and his sympathetic and bootlicking media cohorts) miss is that everyone he deals with has known how he operates for a long time, and are using the exact same strategy against him.

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From CNBC.com

 

POINTS
  • Commenting on Trump’s decision to impose trade duties on America’s closest trading partners at the weekend, the Kremlin on Monday said it is keeping a close eye on “tensions” from the sidelines.
  • Russian President Vladimir Putin praised President Donald Trump on Sunday, saying his second administration would “restore order” in Europe.
  • European leaders are gathering on Monday, with the threat of tariffs likely to be high on the agenda.

Russia’s Vladimir Putin warned Europe will quickly “stand at the feet of the master” after U.S. President Donald Trump imposed tariffs on Canada, Mexico and China, provoking a global markets meltdown and alarm among European allies.

Following Trump’s decision at the weekend to impose trade duties on America’s closest trading partners, Russian President Putin said Sunday that Trump’s second administration would “restore order” in Europe.

 

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3 hours ago, Danny Bateman said:

 

I was trapped in a patient room today with a chronic Fox News watcher. It wasn't a super long treatment, and I could've just grabbed the remote and muted it, but I decided to just listen in a for a few minutes.

 

I cannot understate how completely it has morphed into state-run propaganda. Knowing it's closely coordinated with the White House itself in terms of editorial decisions and what they want their messaging to be, I literally mean state-run. It's completely indistinguishable from RT or whatever the equivalent channel would be in North Korea or China.

 

A lot of con voters are not the sharpest tools in the shed to begin with. That in and of itself wouldn't be that bad. But they choose to let their brains marinate in this derp, with many I see seemingly watching ONLY Fox News. So then they're morons AND brainwashed.

 

Point is we're screwed as long as they're willing freebasing propaganda. A huge chunk of America just up and decided they'd prefer a used car salesman hocking them bulls#!t because it makes them feel good and they think it's funny when the libs are mad.

Never forget that watching Fox News makes viewers know less about the world around them than watching no news at all. It literally causes viewers to become more stupid as they watch. 

 

2 hours ago, Lorewarn said:

Trump's entire business strategy his entire life has been to come into the room, swinging his d!(k around with the most outrageous demands imaginable

It must be noted that this is also done to women in ways a court as determined to be nonconsensual and in certain circles is called "sexual assault" or "rape".

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