I've been highly amused by all the brouhaha over President Trump's tariffs. To hear the mainstream media and the progressive left, you'd think that the United States' economy was about to slide down the slippery slope to perpetual ruin, taking our prosperity and future prospects along with it. The reality has proved to be rather different.
Therefore, I was happy to read in the Bahnsen Group's daily Dividend Cafe newsletter yesterday:
China Trade Deal
What we know:
The 125% reciprocal tariffs are off the table for ninety days, coming back down to 10%.
On an annualized basis, this is $300 billion of tariff cost to the economy that now won’t happen.
What we don’t know:
Currency was either not discussed or has not been floated publicly in terms of where things are headed. I have no doubt some discussion of currency will be a part of any final, successful deal.
What needs to be said:
Maybe things fall apart in the next 90 days. Maybe they don’t. Maybe it gets better. Maybe it gets worse. BUT, if you were a U.S. importer or domestic manufacturer heavily reliant on Chinese imports for your production, and your costs were up 145%, shutting down your supply chain entirely, and now you had what might only be 90 days to order parts/goods/materials before seeing skyrocketing prices, what would you do? Expect an ordering bonanza in the next ninety days that defies human imagination.
There's more at the link.
Nobody expected so quick - or so favorable - a deal . . . except President Trump, I suspect. He's played his cards masterfully. If things continue to go this well, a whole new international economic order will open up.
Makes a pleasant change from Bidenomics, doesn't it?
Peter
6 comments:
I listen to to the local 'news station' (ABC affiliate IIRC) for the 'talk radio' shows on my commute. Yesterday at the 'top of the hour' news blurbs, the talking head was prattling on about the tariff situation
.
What caught my attention was the characterization of the breakdown of the '90 day pause' rates, citing 20% as punitive for Fentanyl, and the other 10% as, and I quote, "Retaliatory".
The proper term is "RECIPROCAL", as in "I'm simply matching the tariff you have placed on us."
Additionally, I read a headline after i got home about '...another Trump flip flop on tariffs". Out of disgust, i did not read the actual article, but I'd say it's a fair bet that it completely glossed over (if it even acknowledged) the fact that the 145% was intended as a metaphorical cudgel to get China to take Trumps position on the trade imbalance seriously, and enter into talks to start making substantive changes; which is PRECISELY what happened.
There is zero doubt in my mind these were deliberate mischaracterizations intended to make Trump look bad.
No matter how much you hate the MSM....
With all due respect, this has serious "praising Big Brother for raising the chocolate ration to 20 grams a week" vibes. Why are we acting like Trump has scored a win by rescinding a policy he put in in the first place?
Yes... what was the status quo ante compared to the new situation for US goods accessing Chinese markets and vice versa? I want to see a real before/after comparison, not "we raised tariffs, got China to the table, got some unspecified concessions and removed the tariffs."
Differ
All countries have had tariffs on the USA while the USA has none on the other countries. The worse country for trade with all countries is China as they have tariffs against other countries, copy inbound products and send similar cheaper outbound products, do not allow for any company to sue in China, and if needed will ship their products via another country to another country to bypass tariffs (example China to Vietnam to USA).
COVID showed the USA that the virus came from China. It also showed the USA that Big Pharma had the vaccines produced in China. This was a bioweapon and the fix both made at the same place so the USA had a National Security Issue. Further most USA industry, auto building, ship building, electronics, and other issues have moved out of the USA due to costs leaving middle class dying and the country more and more in debt. Trump's push for tariffs with all countries to make more fair trade will cause more companies building in the USA, job growth in the USA, and cuts in USA debt.
Ummm, dude, we have always had tariffs on other countries.
https://www.usitc.gov/2015_htsa_basic_edition.htm
That's the tariff schedule from 2015.
https://www.usitc.gov/2015_htsa_basic_edition.htm Alot of what comes into the country is under 10% or free now column #2 is for those countries on the bad boy list!So no we do not hardly charge any tariffs
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