The level of hyperbole on here about some of the changes exceeds some of the actual tariff rises. Really we need to see how negotiations change things. Talk of trade wars and 'coalitions' against Trump's US are silly. I don't think his measures will work as they are but we must let the dust settle - and the UK does relatively well. The truth is that some countries don't exactly have clean hands re tariffs.
Very hard to know what you are talking about unless you give specific examples, and make some actual arguments.
What comments are hyperbole, and which, if any, are reasonable criticism?
Which tariff rises warrant the hyperbole and which don't?
Which countries don't have clean hands re tariffs? What tariffs do they impose?
Why is talk of a trade war silly?
I'm content with my comment.
Sure.
It's the worst kind of comment on here: - unnamed posts 'on here' criticised - zero facts to back up the criticism
But I'll save time in future and just skip past your pointless contributions, so thanks for the clarification.
It's because everywhere gets a tariff, with 10% the minimum. Much more if you sell a lot of stuff to the USA.
So we get 10% not because Starmer has kissed arse, but rather because we don't have much trade imbalance with Trumpistan.
Well, quite. Eccentricities in terms of islands aside, this is a fairly real world aggressive tariff policy, promised by Trump and now coming in. And will probably result in some visible stuff like more Nike factories setting up in the US etc.
It seems to me that if you favour free trade - the best response is to negotiate - tit for tat simply plays his game and makes things worse.
The best response is to simply ignore the US. The tariffs will do far more damage to the US than to other economies, because it is a hell of a lot easier to stimulate domestic demand (which is what the EU and China should do) than it is to immediately built out new manufacturing capabilities.
Result: the US will get inflation, job losses and falling the real incomes.
The rest of the world, if it plays its cards right and stimulates domestic demand, will do fine.
The level of hyperbole on here about some of the changes exceeds some of the actual tariff rises. Really we need to see how negotiations change things. Talk of trade wars and 'coalitions' against Trump's US are silly. I don't think his measures will work as they are but we must let the dust settle - and the UK does relatively well. The truth is that some countries don't exactly have clean hands re tariffs.
Very hard to know what you are talking about unless you give specific examples, and make some actual arguments.
What comments are hyperbole, and which, if any, are reasonable criticism?
Which tariff rises warrant the hyperbole and which don't?
Which countries don't have clean hands re tariffs? What tariffs do they impose?
Why is talk of a trade war silly?
I'm content with my comment.
Sure.
It's the worst kind of comment on here: - unnamed posts 'on here' criticised - zero facts to back up the criticism
But I'll save time in future and just skip past your pointless contributions, so thanks for the clarification.
It seems to me that if you favour free trade - the best response is to negotiate - tit for tat simply plays his game and makes things worse.
RCS's suggesting that we just ignore it ius the correct one. After an uncomfortable period of adjustment, the USA ends up paying a lot more for inferior products. The rest of the world trades happily amongst itself, reaping the benefit of a free trade organisation that exludes the USA.
Rest of the World wins, USA goes down the toilet.
I should add that I do not think this will happen, because it is politically difficult. The RoW will want to show some political muscle, but economically, it makes sense.
It seems to me that if you favour free trade - the best response is to negotiate - tit for tat simply plays his game and makes things worse.
The best response is to simply ignore the US. The tariffs will do far more damage to the US than to other economies, because it is a hell of a lot easier to stimulate domestic demand (which is what the EU and China should do) than it is to immediately built out new manufacturing capabilities.
Result: the US will get inflation, job losses and falling the real incomes.
The rest of the world, if it plays its cards right and stimulates domestic demand, will do fine.
In America they call it the "Great Depression" in the 1930s, but Trump is ambitious, he wants a greater depression.
My upcoming visit is going to be interesting. I also have a forex transaction of USD 19 000 coming up. I think it just got a lot cheaper.
If it was about cost most goods wouldn’t be made in China anymore.
Things are made in China because they have very sophisticated, integrated supply chains and literally millions of people with the skills all in one place.
The idea this can be undone in five years is for the birds. It’s literally batshit crazy.
I would imagine the supply chains aren't in the USA anymore for things like automotive assembly. I don't know the auto supply markets in the USA very well, but I do in the UK, and the component suppliers for UK car manufacturing left for Europe, Eastern Europe, India, Vietnam and China in the 1990s and 2000s. Here in Wales we lost Bosch distributors, Lucas Girling brakes, Ate, Teves, Valeo, SU Butec, Llanelli Radiators, Allied Signal, Signode, Visteon, Ford Engines, Smiths Industries, TRW, Harman ICE systems, BMW pressings, and many, many more. I suspect the same is true in the US. They are not coming back soon, Tesla, Ford, GM, Toyota, Honda, NissanChrysler/Jeep, VW and BMW in the first instance will just have to absorb the cost, or pass it on to consumers.
Most will not be coming back at all. The industry is transitioning to EVs; who is going to build a new ICE component plant in the US ?
It seems to me that if you favour free trade - the best response is to negotiate - tit for tat simply plays his game and makes things worse.
The best response is to simply ignore the US. The tariffs will do far more damage to the US than to other economies, because it is a hell of a lot easier to stimulate domestic demand (which is what the EU and China should do) than it is to immediately built out new manufacturing capabilities.
Result: the US will get inflation, job losses and falling the real incomes.
The rest of the world, if it plays its cards right and stimulates domestic demand, will do fine.
Pretty much everything we buy from the USA can be bought elsewhere, so reciprocal tariffs as retaliation are not incompatible with a RoW free trade policy,
Starmer wants to make a deal with Trump. To what end? Trump can turn on you in a split second and all that time money and resources you poured i to cultivating that market go down the crapper. Or he uses it as leverage to force you or humiliate you. I sincerely hope that starmer is working on this hypothetical deal to ease mid term turbulence as the UK transitions towards an economy that is built with stable partners in the EU. I can't think of a worse decision for this hungry than to cosy up to Trump and the USA.
So, last night I was struggling to understand Trump's chart. I had assumed that he had arbitrarily assessed non tariff barriers to come up with his figures. It appears that he might have done that by evidencing the existence of NTBs by the existence of a deficit on the part of the US with that country.
So the theory of Trump is that relatively poor countries, like Vietnam, can only export their wares to the US if they buy sufficient goods (and possibly services, who knows) from the US to have a balanced trade.
Countries which do have broadly balanced trade with the US, like the UK get a 10% tariff anyway, just because.
Is there any of this that makes any sense at all? Well, the US (and the UK) has been running a trade deficit for a very long time. It has acted as consumer of last resort to the world and enormously assisted both the growth of China and East Asia by doing so. This has not been an act of gratuitous generosity but a source of cheap goods for the US (and UK) consumer as well as a major source of excess profits for large American companies that have transplanted production to these countries.
The way he has responded to this is batshit but I do think that a case can be made that (a) the US (and UK) trade deficits are simply not sustainable indefinitely. Trump mentioned last night that the consequence was that a majority of US assets are now foreign owned (this is bullshit but the accumulated foreign acquisition of capital assets is a problem here as well as in the US). (b) the longer term consequences of letting other people make all your stuff for you is not some Ricardian nirvana but unemployment and, eventually, poverty for the consumers.
I suppose the next question is will his policy work? Some of this is "already happening" as he put it. This is not a consequence of his tariffs but policies such as Biden's CHIPS Act which created strong NTBs in favour of US manufacture. If the US goes back into large scale manufacturing it will have addressed one problem and created jobs for American workers. The question is whether this will offset the economic chaos that disruption to flows of trade this will cause. My money would be on not but we shall see.
It seems to me that if you favour free trade - the best response is to negotiate - tit for tat simply plays his game and makes things worse.
The best response is to simply ignore the US. The tariffs will do far more damage to the US than to other economies, because it is a hell of a lot easier to stimulate domestic demand (which is what the EU and China should do) than it is to immediately built out new manufacturing capabilities.
Result: the US will get inflation, job losses and falling the real incomes.
The rest of the world, if it plays its cards right and stimulates domestic demand, will do fine.
I'm not sure the best response is to simply ignore the US. Sure, don't impose retaliatory tariffs. But repond with a policy by every nation that is tariffed (ie everybody) having a policy of "Buy American last".
And a requirement for all US goods and services to be marked with a big stars and stripes logo. So you know what to buy last.
Something else the world could do which would infuriate Trump is to make him a non-person. The world should stop name-checking him. Never use the word "Trump". Just "the President of the United States".
It seems to me that if you favour free trade - the best response is to negotiate - tit for tat simply plays his game and makes things worse.
The best response is to simply ignore the US. The tariffs will do far more damage to the US than to other economies, because it is a hell of a lot easier to stimulate domestic demand (which is what the EU and China should do) than it is to immediately built out new manufacturing capabilities.
Result: the US will get inflation, job losses and falling the real incomes.
The rest of the world, if it plays its cards right and stimulates domestic demand, will do fine.
It depends if the countermeasures achieve their purpose of getting the other side to back down. Trump 1 did back down eventually. If Trump 2 doesn't this time, they will make things even worse.
So, last night I was struggling to understand Trump's chart. I had assumed that he had arbitrarily assessed non tariff barriers to come up with his figures. It appears that he might have done that by evidencing the existence of NTBs by the existence of a deficit on the part of the US with that country.
So the theory of Trump is that relatively poor countries, like Vietnam, can only export their wares to the US if they buy sufficient goods (and possibly services, who knows) from the US to have a balanced trade.
Countries which do have broadly balanced trade with the US, like the UK get a 10% tariff anyway, just because.
Is there any of this that makes any sense at all? Well, the US (and the UK) has been running a trade deficit for a very long time. It has acted as consumer of last resort to the world and enormously assisted both the growth of China and East Asia by doing so. This has not been an act of gratuitous generosity but a source of cheap goods for the US (and UK) consumer as well as a major source of excess profits for large American companies that have transplanted production to these countries.
The way he has responded to this is batshit but I do think that a case can be made that (a) the US (and UK) trade deficits are simply not sustainable indefinitely. Trump mentioned last night that the consequence was that a majority of US assets are now foreign owned (this is bullshit but the accumulated foreign acquisition of capital assets is a problem here as well as in the US). (b) the longer term consequences of letting other people make all your stuff for you is not some Ricardian nirvana but unemployment and, eventually, poverty for the consumers.
I suppose the next question is will his policy work? Some of this is "already happening" as he put it. This is not a consequence of his tariffs but policies such as Biden's CHIPS Act which created strong NTBs in favour of US manufacture. If the US goes back into large scale manufacturing it will have addressed one problem and created jobs for American workers. The question is whether this will offset the economic chaos that disruption to flows of trade this will cause. My money would be on not but we shall see.
It's not services because if it was we would be looking at a 30% tariff because we export a LOT of services to the USA. Here seems a good point to post an update from the tweet I posted yesterdat
https://x.com/JamesSurowiecki/status/1907564123862257863 This tweet is correct, but it's actually worse than I thought: in calculating the tariff rate, Trump's people only used the trade deficit in goods. So even though we run a trade surplus in services with the world, those exports don't count as far as Trump is concerned.
However our goods balance of trade is roughly in sync hence the 10% tariff. And if you look at the actual balance of trade figures for goods across countries the percentages work out....
I suppose the next question is will his policy work? Some of this is "already happening" as he put it. This is not a consequence of his tariffs but policies such as Biden's CHIPS Act which created strong NTBs in favour of US manufacture. If the US goes back into large scale manufacturing it will have addressed one problem and created jobs for American workers. The question is whether this will offset the economic chaos that disruption to flows of trade this will cause. My money would be on not but we shall see.
The other half of the question is does America actually need lowish paying factory jobs and would the places where workers want those jobs be places where companies want to build a factory for logistical reasons.
Starmer wants to make a deal with Trump. To what end? Trump can turn on you in a split second and all that time money and resources you poured i to cultivating that market go down the crapper. Or he uses it as leverage to force you or humiliate you. I sincerely hope that starmer is working on this hypothetical deal to ease mid term turbulence as the UK transitions towards an economy that is built with stable partners in the EU. I can't think of a worse decision for this hungry than to cosy up to Trump and the USA.
Good morning
This is way beyond just stable EU partners and now includes many other countries all of whom need to come together for mutual security and trading benefits
I am not a Lib Dem but Daveys response to create a European and Commonwealth grouping is the way forward
The one thing that is certain Trump absolutely dislikes the EU, and they would be sensible not to give a knee jerk retaliatory response as Trump will just react by ever increasing tariffs on the EU
I suppose the next question is will his policy work? Some of this is "already happening" as he put it. This is not a consequence of his tariffs but policies such as Biden's CHIPS Act which created strong NTBs in favour of US manufacture. If the US goes back into large scale manufacturing it will have addressed one problem and created jobs for American workers. The question is whether this will offset the economic chaos that disruption to flows of trade this will cause. My money would be on not but we shall see.
The other half of the question is does America actually need lowish paying factory jobs and would the places where workers want those jobs be places where companies want to build a factory for logistical reasons.
If Trump deports 20 million people like he promised, then no they probably won't need those jobs.
It seems to me that if you favour free trade - the best response is to negotiate - tit for tat simply plays his game and makes things worse.
The best response is to simply ignore the US. The tariffs will do far more damage to the US than to other economies, because it is a hell of a lot easier to stimulate domestic demand (which is what the EU and China should do) than it is to immediately built out new manufacturing capabilities.
Result: the US will get inflation, job losses and falling the real incomes.
The rest of the world, if it plays its cards right and stimulates domestic demand, will do fine.
As we have discussed before it is easy to stimulate domestic demand when you have a large trade surplus and low public debt. We are not in a position to do so because we already have a significant trade deficit and a fiscal deficit of £10bn a month. If anything we need to reduce domestic demand to increase domestic investment to boost future output. We were dependent on external opportunities such as growth elsewhere filling in the gap (at least to some extent) that such necessary policies would cause. As the Emperor of Japan once noted in a different context, things are not necessarily moving to our advantage.
We seriously need a boost in demand in the EU, Germany in particular, to reduce our huge trade deficit with them and create demand in this country to offset the necessary policies here. I think the chaos Trump has unleashed on the world significantly increases the risk of a mild recession here. Reeves is not proving a lucky Chancellor.
I suppose the next question is will his policy work? Some of this is "already happening" as he put it. This is not a consequence of his tariffs but policies such as Biden's CHIPS Act which created strong NTBs in favour of US manufacture. If the US goes back into large scale manufacturing it will have addressed one problem and created jobs for American workers. The question is whether this will offset the economic chaos that disruption to flows of trade this will cause. My money would be on not but we shall see.
The other half of the question is does America actually need lowish paying factory jobs and would the places where workers want those jobs be places where companies want to build a factory for logistical reasons.
Whether they are low paid depends on productivity. Car plants, chip plants, phone manufacture and the like can have good wages for the relatively few (compared to historical times) people that work in them.
Labour got blamed for the 2007/2008 recession so presumably they get blamed for this one.
Unless there’s some substantial change, got to be a minority government next time around.
I think it’s possible that, because it’s so obvious one man is the cause of the recession, that Labour will escape the blame. They certainly need to be clear in their messaging.
The level of hyperbole on here about some of the changes exceeds some of the actual tariff rises. Really we need to see how negotiations change things. Talk of trade wars and 'coalitions' against Trump's US are silly. I don't think his measures will work as they are but we must let the dust settle - and the UK does relatively well. The truth is that some countries don't exactly have clean hands re tariffs.
Same answer to you as I gave to Sandpit. It isn’t “talk of trade wars”. This IS a trade war. Started by America. It isn’t “coalitions against Trump’s US are silly”. They are real - look at the China / Japan / South Korea deal signed days ago. Sandpit tried to claim CPTPP meant the UK couldn’t sign new deals - tell that to CPTPP members China and Japan signing a “one response” deal with non-member South Korea.
What the US imagine will happen is capitulation. The world can’t take down its tariffs because they don’t exist as portrayed. The moron maths has already been exposed. And as well as “tariffs” removed Trump declares the buy in to be that we all buy “tens of billions of dollars of US goods”
No. No. No.
The people who will suffer most will be American consumers. This announcement screws countries who make stuff we like - such as Vietnam. If America doesn’t want to buy Nike trainers, everyone else does. If America doesn’t want to buy iPhones, everyone else does. Get it?
Just as globalisation was starting to be threatened by asshole nationalism, here comes Trump to reinvigorate it. Free trade - just not of American goods.
So, last night I was struggling to understand Trump's chart. I had assumed that he had arbitrarily assessed non tariff barriers to come up with his figures. It appears that he might have done that by evidencing the existence of NTBs by the existence of a deficit on the part of the US with that country.
So the theory of Trump is that relatively poor countries, like Vietnam, can only export their wares to the US if they buy sufficient goods (and possibly services, who knows) from the US to have a balanced trade.
Countries which do have broadly balanced trade with the US, like the UK get a 10% tariff anyway, just because.
Is there any of this that makes any sense at all? Well, the US (and the UK) has been running a trade deficit for a very long time. It has acted as consumer of last resort to the world and enormously assisted both the growth of China and East Asia by doing so. This has not been an act of gratuitous generosity but a source of cheap goods for the US (and UK) consumer as well as a major source of excess profits for large American companies that have transplanted production to these countries.
The way he has responded to this is batshit but I do think that a case can be made that (a) the US (and UK) trade deficits are simply not sustainable indefinitely. Trump mentioned last night that the consequence was that a majority of US assets are now foreign owned (this is bullshit but the accumulated foreign acquisition of capital assets is a problem here as well as in the US). (b) the longer term consequences of letting other people make all your stuff for you is not some Ricardian nirvana but unemployment and, eventually, poverty for the consumers.
I suppose the next question is will his policy work? Some of this is "already happening" as he put it. This is not a consequence of his tariffs but policies such as Biden's CHIPS Act which created strong NTBs in favour of US manufacture. If the US goes back into large scale manufacturing it will have addressed one problem and created jobs for American workers. The question is whether this will offset the economic chaos that disruption to flows of trade this will cause. My money would be on not but we shall see.
It's not services because if it was we would be looking at a 30% tariff because we export a LOT of services to the USA. Here seems a good point to post an update from the tweet I posted yesterdat
https://x.com/JamesSurowiecki/status/1907564123862257863 This tweet is correct, but it's actually worse than I thought: in calculating the tariff rate, Trump's people only used the trade deficit in goods. So even though we run a trade surplus in services with the world, those exports don't count as far as Trump is concerned.
However our goods balance of trade is roughly in sync hence the 10% tariff. And if you look at the actual balance of trade figures for goods across countries the percentages work out....
Hence the bonkers tariff on Cambodia. It matches the goods ratio of £0.35 billion to £30 billion.
Not sure how America achieved a trade surplus with one of the poorest countries in the world unless....
It seems to me that if you favour free trade - the best response is to negotiate - tit for tat simply plays his game and makes things worse.
You can't negotiate with someone who doesn't abide by agreements already in existence, not even when he negotiated them.
You absolutely can negotiate with them.
You just can't rely upon said negotiations.
If you view negotiations, and agreements, as temporary and only lasting as long as they satisfy both partners in the negotiation then there's nothing stopping any negotiation, nor any agreement, from happening.
If you go into negotiations with open eyes that whatever you're negotiating might not last long, a negotiation is possible.
Comments
It's the worst kind of comment on here:
- unnamed posts 'on here' criticised
- zero facts to back up the criticism
But I'll save time in future and just skip past your pointless contributions, so thanks for the clarification.
Result: the US will get inflation, job losses and falling the real incomes.
The rest of the world, if it plays its cards right and stimulates domestic demand, will do fine.
Rest of the World wins, USA goes down the toilet.
I should add that I do not think this will happen, because it is politically difficult. The RoW will want to show some political muscle, but economically, it makes sense.
My upcoming visit is going to be interesting. I also have a forex transaction of USD 19 000 coming up. I think it just got a lot cheaper.
The industry is transitioning to EVs; who is going to build a new ICE component plant in the US ?
Wait until it begins to bite.
So the theory of Trump is that relatively poor countries, like Vietnam, can only export their wares to the US if they buy sufficient goods (and possibly services, who knows) from the US to have a balanced trade.
Countries which do have broadly balanced trade with the US, like the UK get a 10% tariff anyway, just because.
Is there any of this that makes any sense at all? Well, the US (and the UK) has been running a trade deficit for a very long time. It has acted as consumer of last resort to the world and enormously assisted both the growth of China and East Asia by doing so. This has not been an act of gratuitous generosity but a source of cheap goods for the US (and UK) consumer as well as a major source of excess profits for large American companies that have transplanted production to these countries.
The way he has responded to this is batshit but I do think that a case can be made that (a) the US (and UK) trade deficits are simply not sustainable indefinitely. Trump mentioned last night that the consequence was that a majority of US assets are now foreign owned (this is bullshit but the accumulated foreign acquisition of capital assets is a problem here as well as in the US). (b) the longer term consequences of letting other people make all your stuff for you is not some Ricardian nirvana but unemployment and, eventually, poverty for the consumers.
I suppose the next question is will his policy work? Some of this is "already happening" as he put it. This is not a consequence of his tariffs but policies such as Biden's CHIPS Act which created strong NTBs in favour of US manufacture. If the US goes back into large scale manufacturing it will have addressed one problem and created jobs for American workers. The question is whether this will offset the economic chaos that disruption to flows of trade this will cause. My money would be on not but we shall see.
And a requirement for all US goods and services to be marked with a big stars and stripes logo. So you know what to buy last.
Something else the world could do which would infuriate Trump is to make him a non-person. The world should stop name-checking him. Never use the word "Trump". Just "the President of the United States".
LOL
Republicans are increasingly anxious about a midterms wipeout
Across the party, there’s a push to refocus on economic issues even as some worry the president’s tariffs could cause short-term harm.
https://www.politico.com/news/2025/04/02/republicans-midterm-backlash-fears-030290
https://x.com/JamesSurowiecki/status/1907564123862257863
This tweet is correct, but it's actually worse than I thought: in calculating the tariff rate, Trump's people only used the trade deficit in goods. So even though we run a trade surplus in services with the world, those exports don't count as far as Trump is concerned.
However our goods balance of trade is roughly in sync hence the 10% tariff. And if you look at the actual balance of trade figures for goods across countries the percentages work out....
This is way beyond just stable EU partners and now includes many other countries all of whom need to come together for mutual security and trading benefits
I am not a Lib Dem but Daveys response to create a European and Commonwealth grouping is the way forward
The one thing that is certain Trump absolutely dislikes the EU, and they would be sensible not to give a knee jerk retaliatory response as Trump will just react by ever increasing tariffs on the EU
We were dependent on external opportunities such as growth elsewhere filling in the gap (at least to some extent) that such necessary policies would cause. As the Emperor of Japan once noted in a different context, things are not necessarily moving to our advantage.
We seriously need a boost in demand in the EU, Germany in particular, to reduce our huge trade deficit with them and create demand in this country to offset the necessary policies here. I think the chaos Trump has unleashed on the world significantly increases the risk of a mild recession here. Reeves is not proving a lucky Chancellor.
What the US imagine will happen is capitulation. The world can’t take down its tariffs because they don’t exist as portrayed. The moron maths has already been exposed. And as well as “tariffs” removed Trump declares the buy in to be that we all buy “tens of billions of dollars of US goods”
No. No. No.
The people who will suffer most will be American consumers. This announcement screws countries who make stuff we like - such as Vietnam. If America doesn’t want to buy Nike trainers, everyone else does. If America doesn’t want to buy iPhones, everyone else does. Get it?
Just as globalisation was starting to be threatened by asshole nationalism, here comes Trump to reinvigorate it. Free trade - just not of American goods.
NEW THREAD
Not sure how America achieved a trade surplus with one of the poorest countries in the world unless....
You just can't rely upon said negotiations.
If you view negotiations, and agreements, as temporary and only lasting as long as they satisfy both partners in the negotiation then there's nothing stopping any negotiation, nor any agreement, from happening.
If you go into negotiations with open eyes that whatever you're negotiating might not last long, a negotiation is possible.