That’s my read on why the U.S. just paused the global tariff hike to 10%.
From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury. Why? Because Uncle Sam has to refinance a mountain of debt this year, and the cost of that depends heavily on Treasury yields — especially the 10-year. That’s the rate that sets the tone for everything from mortgages to corporate borrowing.
So they tried to spook markets. Introduce global tariffs. Stir up uncertainty. And it worked—at first. Yields dipped. Traders moved to Treasuries as a typical flight-to-safety.
But then something flipped.
Instead of being seen as a safe haven, U.S. debt itself started to look shaky. Maybe it was the deficit outlook, maybe the global response to tariffs — but whatever it was, yields started climbing. Fast.
At that point, the strategy backfired. The executive branch had no choice but to walk it back. So they paused the tariffs.
Because when your national budget depends on cheap debt, you can't afford a crisis of confidence in your bonds.
> Instead of being seen as a safe haven, U.S. debt itself started to look shaky
There's also a more basic answer to why US debt got more expensive. There is no such thing as a "trade deficit". You cannot import something without exporting something else. That something else, in almost 100% of the situations, is dollars. What do you do with dollars, if there's nothing you want to buy? You buy debt. So, every trade deficit ultimately tends to export debt. We have long known that government debt is proportional to trade deficits.
The problem with tariffs, in this context, is that they are being used as a signal that we don't want to sell people dollars anymore, explicitly saying "no more trade deficits". In doing so we are choking off the supply of dollars used to buy debt (rather abruptly), so that US debt is chasing fewer dollars and has to give a bigger yield as a result.
What's worse, is that because we are signalling that the tariffs are meant to be permanent, and we're seeing reciprocal tariffs as a result. When that happens, it means that using dollars in the future will purchase fewer US goods, so the time discount of money has gone up too. Further driving up yields to make bonds attractive enough to sell.
US debt was mostly being bought because "safe". The US being seen as politically and economically stable and the center of the world. Right now that argument is much harder to make.
And meanwhile there is always a lot of US debt that needs to be rolled over (i.e. re-issued to a willing buyer.)
Except for the data point of today's 10-Year Treasury Auction which had a normal, usual result.
Why do people keep repeating this nonsense? 2008? Every "recession" for the last 50 years? Nobody was under the impression that the US was economically stable. Go press max on the 10 year bond yields and tell me what you see. The "crash" puts it to where it was not even a year ago. For 10-year bonds.
The main point is during every recession for the last 50 years, the US government has never missed a loan payment on its debt, even during recessions. It has a near perfect credit score.
Compared to every other developed democracy in the planet, the US is politically unstable with its two party democracy.
Trump is just a product of this right-vs-left volatile maximalism, represented as woke-vs-maga, which is fully on-track to get worse. Try guessing who will be the next woke maximalist and maga maximalist candidate, and what Executive Orders it leads to, which the US is pretty much ruled by at this stage.
Good luck with flip-flopping maga and woke Executive law as a country.
I'm not sure where you've seen left maximalism in the government so far. You get a choice between right and "let's not disturb the status quo" centrish party. There were barely any strong left-ish opinions for quite a while. That whole idea of a conflict seems really artificial, looking at the news from the outside. Let's hear about the left once someone actually manages to force through things like: more residential buildings overriding nimbys, progressive tax without trivial loopholes, wealth tax, kill gerrymandering, federal level build-out of trainlines, etc.
> the US is politically unstable with its two party democracy
How about Netherlands and Belgium? With the exception of PM Rutte (NL) in the last 8 years, normally Netherlands has a relatively unstable democracy, compared to Germany or France. Their gov'ts collapse relatively quickly, then call elections. (To be clear, [Semi-]Presidential systems like France, US, and Brazil don't have the concept of "calling elections", so they are perceived as more stable.) And don't even get me started about Belgium: Their political system is a mess. It is like 2.1 countries in one: The French speaking side, the Dutch/Flemish speaking side, and a tiny German speaking minority. At some point (2011?), the went more than 500 days (FIVE HUNDRED DAYS!) without an elected gov't, while they were negotiating to form a new one. And both NL and BE and facing serious challenges with newly powerful hard right parties (Hello Geert Wilders!). This "woke-vs-maga" story isn't only in the US. Many highly developed nations in Europe are struggling with similar divisions in their political systems.
Somewhat tangential: I see two serious flaws with the US democratic system: (1) The supreme court is too powerful. If you look at many other highly developed, democratic nations, their supreme court (or equivalent) is much less powerful, and they are no worse for it. I have seen that in both semi-presidential and parliamentary systems. (2) The US president is too powerful.
But the country is polarized. So this woke/MAGA maximalist seesaw is what you’d expect if democracy was working.
The two-party angle really has very little to do with it, because there’s not that many “true moderates” in the electorate. Research shows that the “center” is comprised of people with a heterodox mix of views, but they’re not particularly mushy about any specific view.
Well I can accept that argument, it's interesting, but I think I want to disagree. I'm not American, I'm French and I live in China, and in both countries I know so well, the population seem to have many spectrums: young vs old, moderates vs angry, rich vs poor, nature-driven vs success-driven, tired vs energetic etc. So with all those dimensions, France ended up with 12 parties at the presidential election, from royalists to anarchists, going through greens, communists, centrists etc. China ended up with one.
France embraced the chaos and made it a point of pride, while China finds it absolutely terrifying and unproductive - but my point is that the population is exactly the same, scarily similar, in all its funny diversity, but the system is not a mirror of it, just an awkward model built on compromises: France wants to maximize representability and China wants to maximize order.
The US system is pragmatic: need to win, need to give the people a feeling of choice but not give them any sort of real power of structural change, and they split on a strange line, for most of the world, that I have even trouble to describe myself. I think Trump pleases people there because he pretends to be a structure reformist, which sounds fresh.
It's not the people who can't be diverse politically exactly, it's more complex.
The 2 party system has existed for the vast majority of the time the country has been around. Now isn't even the most polarized period of it (though it's certainly up near the top). It's not always worse the next round but it's not always better the next round either.
As a card-carrying Whig party member I take offense to this. US has had periods of 3 parties, where the 3rd party ousts the 1st or 2nd eventually and we're back to two party, though that's more 1800s.
This is a product of duopolistic parties AND social media algorithms. Outrage. Outrage gets clicks, gets money, gets votes.
The C and the I are at war, R is stuck in a vietnam in Ukraine and South Africa is unstable .Leaving Brazil, which yes, brazil and India alone may hold up a stable reserve currency .
Is it? They have some intra-government spats, but I hadn't heard that this threatened the stability of the whole country yet.
> which yes, brazil and India alone may hold up a stable reserve currency.
Also several other countries which joined the last year or are in the process of joining. I believe at some point, the official name was also changed to BRICS+
I seriously doubt Brazil will keep it up if Trump follows through with his threat. Honestly I'm surprised Brazil hasn't been hit hard yet. Brazilian taxes on american products can approach 100%. One for me and one for the government, as we say. A "reciprocal" 10% tariff against brazilian goods is just comical to me. I wish I was paying just 10%.
The biggest things that our dumb oligarchs here profit from are almost 0 or zero.
It's only the shit that we want to buy retail on Amazon US that are crazy expensive. And a big chunk is ICMS, that is state wide, not federal tax.
On top of that DHL charges a premium.
I know because sometimes I can buy directly using my prime subscription my beloved Nintendo games (that I hope I can buy directly from Asia now and cut one big middleman).
Brazil's deficit in the last decade accumulates hundreds of billions USD already, but only benefits a few. Yet as a good dogs we feel relieved that is only 10%. But you forget our biggest export products are already 35% on top what was before (steel).
This is a oligarchy fight that will splat on everyone, including my eggs since we quintupled the exports to cover someone's asses.
By the way, why do we need to buy expensive ethanol abroad since ours is cheaper, but in my state ethanol is never cheaper than gasoline?
Having dollar being the worlds currency is not necessarily a good thing. Yes, you can borrow at low interests rate for a while. But guess what? Those are still debts. And eventually rates rise due to inflation. Now you have hollowed out your industrial base and you are stuck with tons of debts.
Even if dollar gets weaker, better to have less debts and more industrialization
Inflation and the "hollowing of your industrial base" are not inevitably connected, and in the case of the USA, have almost no connection to each other at all.
This is all correct, but it's a first principles explanation that doesn't explain why US bonds, and in particular the 10-year note, spiked today. Yes, eventually excessive tariffs would have that result. They literally hadn't even taken effect yet. So this doesn't explain the bond motion today.
Someone was dumping, we don't know who or why. But the answer to that question is a lot (a lot) more important than people realize, and certainly more so than the immediate market motion or tariff policy.
Honestly if the answer was "The PRC was unloading bonds to send a message" that's sort of the best option, as they have limited wiggle room to continue to do so without wrecking their own financial situation.
If it's "The market as a whole lost confidence in US debt", then we're fucked no matter what Trump does next.
The problem is that China holds only 2.6% of US Debt as of February 2025. Can they leverage that small a percentage to make a market move like that? Especially assuming they didn't dedicate all of their holdings to that action?
You know what the answer is. It’s the global system dumping US debt. Its not like someone knew THIS would be the specific smoke signal that Trump would see and say “oh, lets pump the brakes”
Reversing idiotic decisions after not being able to explain away the backlash they caused is kind of his thing and many people recognized it and expected it before the tariff pause.
I think it’s largely irrelevant now. The cats out of the bag and any country holding large amounts of t-notes and facing hostility from the US will dump them to get Trump to back off.
> we are choking off the supply of dollars used to buy debt (rather abruptly), so that US debt is chasing fewer dollars and has to give a bigger yield as a result
Well, also, the holders of our debt now need liquidity. So they sell this famously-liquid asset we've been selling them for decades.
It's usually not "dollars." It could be any investment or service that could be bought using dollars. And calling foreign investment an "export" is just confusing.
> You cannot import something without exporting something else.
This is incorrect when your national currency happens to be the global reserve currency. All it requires is for the other country to be willing to accept dollars in payment.
[ EDIT: even that's wrong. All it requires is someone being willing to accept dollars, either in payment or as part of a currency exchange. ]
Exporting dollars is exporting something. Combine a constantly depreciating dollar with constant rates of trade and you could end up in a steady state.
However, we define trade deficits to exclude financial transactions for various reasons.
Normal economics does not talk about "exporting currency". You generally buy stuff with currency, which when the seller is in another country happens to mean that dollars (probably) move across borders and thus in some odd sense the currency is exported. But this is really not what is generally said in this context. Exporting stuff normally means providing goods and services to willing buyers in other countries.
Normal economics almost certainly does talk about exporting currency. It’s a key point in freshman macro economics, and central to modern keynseian theory. And while there are some solid alternative to keynes, I doubt that even hayak would claim that you can’t export currencies.
Maybe my google-fu is not that great today, but I could no reference to exporting currency online that was about the concept that paying for imports was exporting currency.
You’re not going to see it used in such terms because of how economics defines trade. However you will see examples that make it clear currency is a commodity subject to supply and demand when you look into exchange rates. https://www.investopedia.com/ask/answers/041515/how-does-bal...
Trade networks allow for stable equilibriums with no individual country having equal trade with any other county. To simplify, A on net sends money to B, and B buys stuff from C with A’s currency, C then buys stuff from A in A’s currency returning that money to A. However, people want to operate in their native currency and there are a lot more than 3 countries in the real world so you end with intermediary currency exchanges changes going on. In theory supply and demand steps in to balance things, in practice cash flows rarely actually sum to 0.
> Normal economics does not talk about "exporting currency"
International finance is almost entirely about balancing the current and capital accounts [1].
The trade deficit is just one part of the current account [2]. Zeroing out the trade balance ceteris paribus requires a change in the capital account, i.e. foreign ownership of domestic assets and/or domestic ownership of foreign assets. If we’re just reducing the current account with tariffs, that means reducing both. Necessarily. This is one of the closest things to a law economics offers because it’s based on identities. The only run-around to it is the reserve account printing domestic currency, and we know how that goes.
Normal economics misses so many things because of narrow minded mathematical models. Like wealth and income distributions or the fact that currency is just another good with its own supply and demand.
I read it accurately. I just don't agree that "paying someone in a different country with my currency" is what is typically, normally meant by "exporting stuff".
The real issue is people are still treating this reactionary buffoonery as if it's a trade policy that warrants critique. It isn't. Trump is a fucking idiot and he has surrounded himself with other fucking idiots and they and the reactionary base of fucking idiots they've created are cheering him on for doing fucking idiot things.
A journalist successfully reverse-engineered the likely formula used to arrive at the figures for each nation, and it's not only implemented stupidly, it's also wrong from first principles. It's the same thing an actual school child might come up with if you asked them to. This is the same kind of "economic policy" cooked up by dumbasses on reddit who sincerely believe they are qualified to "fix US trade."
If our congress wasn't also packed full of ineffectual liberals and other fucking idiots, he'd be impeached by now for sheer incompetence.
It's the same issue we had in the last Trump admin. This nonsense is elevated to undue credibility by serious people discussing it seriously. It shouldn't be debated, it should be mocked, relentlessly, mercilessly, cruelly. As should Trump himself, as should his supporters, as should his sycophantic followers. Mock, belittle, make fun of, bully, parody, just continuously until every single one of these people refuses to approach a microphone.
It's especially such a farce because what do they expect? If trump said the sky is green and the ocean is red, you'd find scores of these useless faux-intellectuals trying to "prove" the truth, and each data point of evidence would simply be met with various forms of "no it isn't! The sky is green! The ocean is red!"
In their world, any "evidence" to the contrary must be manipulated or misinterpreted, because as we all know the sky is green, the ocean is -- oh, he said it's yellow now? And the sky is red? Hah, of course! We knew it all along, it was the plan, stupid!
And meanwhile...
Most of the democrats' tiny minds struggle to operate outside of a context of rigid rules and procedures. A context of arguing a point and getting at least some degree of fair debate in return.
But this is another age of populism. It doesn't matter what you argue, on either side. Debate transforms, serving only to transmit your message to your side, ideally while inspiring them and demoralizing the enemy. It matters that you seem confident and powerful while you say whatever you're saying. It matters that you seem invincible and indefatigable.
Their world won't be back for quite some time, assuming something at all like it sticks around. They'll keep operating like robots, not understanding why an excellent diss or crude mockery matters more than 1000 additional volumes of "proof" about something in contention.
These are loyalty tests. You prove you belong to the ingroup if you show you believe preposterous things. That's how cults and religions work.
We think this is stupid because it kinda is, but this behaviour is part of the human traits and possibly is adaptive behaviour to enable the very possibility of us living in large societies.
It's a great comment thank you. The part about the changes that would have enabled us to scale as society is really brilliant. I've read a bit about this in historian theories but the focus is often very material (probably because that's what you have evidence of).
I've always been in awe at the (absolutely crazy if you ask me) concept of money. The fact that we accept to give up possessions or time in exchange for the promise that anyone in the future will provide something equivalent because we just show some token/proof (which in itself are intrinsically valueless: sticks, stones, minerals, papers, now bits...).
We've been educated to be a bit suspicious and maybe show a slight contempt for it, probably to avoid being inelegant and also particularly because a lot of big owner of it are seen as not necessarily deserving of it.
But from an evolutionary perspective it's absolutely stupefying. And at its core its extremely positive. It shows absolute trust in our peers. It's probably one of the few behavior that really binds us together.
One could argue that it's the actually one trait that really distinguish us from other animals.
> I've always been in awe at the (absolutely crazy if you ask me) concept of money. The fact that we accept to give up possessions or time in exchange for the promise that anyone in the future will provide something equivalent because we just show some token/proof (which in itself are intrinsically valueless: sticks, stones, minerals, papers, now bits...).
No offense intended, but I think the way you're explaining this is a little overly silly. Value credit was a natural evolution from the barter system and it makes perfect sense. If you wanna run down to the 7/11 for a slushie, do you want to bring a $10 bill, or a live chicken? I definitely vote $10 bill, especially because there's a non zero chance the cashier wouldn't want a chicken anyway, even if it's technically worth enough to trade for a slushie. Money just streamlines this whole process and makes even exchange for goods infinitely more efficient for all parties involved, and I think that's why virtually every organized society we've found evidence of has some type of currency, going back thousands of years.
Now, that's not to say I don't agree that the monetary system as it exists is borderline a crime against humanity. Capitalism and it's various knock-on effects, starting plus or minus with colonialism depending how you want to slice it, is, I think, the most horrific thing we've done to each other in our entire history as a species. But I don't think that's an indictment of money strictly speaking.
That's the thing here. We're so used at the concept of money that you described that it's very hard to reconcile with what money really is.
You can take any introductory banking system course and it will tell the same story. (I recommend Economics of Money and Banking by Perry G Mehrling)
It's not really a finished exchange.
Money represent a debt.
It's a one sided exchange against the promise of the completion of the other side of the exchange in the future (by someone else in this case).
It's like the amount in your bank account is not really money. It's a debt from the bank: the promise that it will deliver this amount as cash if you ask. (M1)
And money is so liquid that we never think about it that way. Except during hyperinflation periods. And bank account are so solid that we think about them as cash. Except during bank runs.
As a side note, the theory that barter really meaningfully took place is being challenged as there is no real evidence of this.
Looking at the fine print of bank accounts, I would assume they completely absolve themselves of responsibility after a catastrophic event (call it C-Day). Or maybe they defer to FDIC insurance which guarantees I will have at least $250,000 after C-Day.
That said, as a consumer, I have no comprehension of how that would actually work. Do I get my guaranteed money 7 days after C-Day or 6 months after C-Day?
If an EMP blitzes my bank's electronic hard-drive records, is it my responsibility to prove I had X dollars in the account? If so, how? I can easily print a statement, but a statement clearly easily be forged. If it's the bank's responsibility, is there any guarantee they maintain physical and up-to-date records? Is there any regulation mandating they keep such records?
What happens if hyperinflation occurs and the 250,000 guaranteed by the FDIC is enough to buy a week's worth of groceries?
There's a lot of unknown variables and potential fragility in the system.
In other complex realms like software engineering, we get evidence that those complex systems really only have the budget to build the "happy path" and lawyers fight the cases when customers get damaged by the "unhappy paths."
It seems like our monetary system is on the happy path and very few times have the unhappy paths been tested.
It's the age were who control the country is the one with most money, not votes, and because company bribery is accepted, don't matter how much Trump get mocked, social media algorithms aren't going to allow that to breach other bubbles, something is clearly wrong when politians ask for money note votesz it isn't a democracy anymlre
It's the age were who control the country is the one with most money, not votes, and because company bribery is accepted, don't matter how much Trump get mocked, social media algorithms aren't going to allow that to breach other bubbles, something is clearly wrong when politians ask for money note votesz it isn't a democracy anymore
Literally the funniest thing about it is that LLMs conjure this "solution" when asked to deal with trade deficits using tariffs. It perfectly possible that one of Trump's people just asked ChatGPT and they implemented the answer.
Also the love affair with tariffs comes from a guy that wrote a book with his ideas and in that book he made up economic expert to support his views. (Ron Cara)
The guy he's referring to is Navarro, who invented an economist named Ron Vara to cite in his pro tariff book. He made up hi source using an anagram of his name, that's batshit crazy.
Sadly, this go-round it's Gen X more than Boomers. We voted for Trump disproportionately compared to other age cohorts. I'm embarrassed on behalf of my idiot friends from high school.
Incompetence is way more dangerous than people realize.
These tariffs are China's Four Pests campaign. Mao, a very trump like figure, decided to protect Chinese crops by destroying sparrows that were picking at them. Killing sparrows killed a predator of insects which did more damage to crops. This coupled with reality denying policies and ignoring experts led to one of the most devastating famines the world has ever experienced.
Hand waiving away this policy that denies reality and hurts America as a rational plan that went wrong is absolutely dangerous. Killing sparrows was "rational" in the same way these tariffs are. Authoritarians believe in power over reason. They do not like submitting to the authority of those who have studied problems because it is an attack on their own supremacy, so they fail to predict second order effects, which were likely obvious.
The damage this administration is doing to trust will be felt for generations. An agreement with America will have no value. No world leader will care what we say, they will only look at what we do. They will see power we have not as potentially being used for their own defense, but as a potential attack on their own sovereignty and they will wish to see us weakened so that they can spend less resources trying to determine our intentions.
If we're going full Mao, we'd be remiss if we didn't note that their plan for industry during the cultural revolution was "the proletariat will own small smelting operations next to their house". It checks out ideologically, workers controlling the means of production.. it just didn't work in reality.
Reminds me a lot of the thought process around having more manufacturing in the US by slapping tariffs around.
There is absolutely a Cultural Revolution feel to the communication by and around the president. See e.g. Bill Ackman's fully-prostrated worshipful response on Twitter this morning. The guy is a successful billionaire! And he needs to sound like a literal cult member in public lest he lose influence.
When everyone feels this way instead of fighting for the future they want to make reality... There are journalists, protestors, entrepreneurs, unionists, billionaires, etc, all fighting for what those history books will say. Ukrainians are fighting for what they will say right now.
I think a better question is what do you want them to say. Do you want them to say tyranny triumphed un-resisted?
The obeying in advance and reflexive glazing is scary in a Twilight Zone or slow-start-of-a-zombie-movie sort of way, but the fact that Trump is playing very fast and loose with due process, talking seriously about "deporting" American citizens and is actively applying economic death penalties to people on his bad side (like the EO stripping security clearance not only from Chris Krebs, but everyone who happens to work at his current employer) is scary in a "is the US as we know it actually going to survive this?" kind of way.
And I'm just pulling a few things off the top of Many Very Worrying Things here for brevity.
And don’t forget the Jan 6 types. They are the Red Guards of Trump and he used them on Jan 6 as an experiment. Pray we don’t have to witness a new culture revolution in our time!
Smart Trumpers are the worst of the bunch. Continuously inventing PHD 5D chess rationalizations for his actions that he immediately invalidates with his next erratic action. Better to just be along for the vibes than to pretend its a strategic, well thought out, well executed plan.
That's not the simplest possible explanation. The simplest explanation is that he did this because he believes in it. Trump has been saying the exact same thing about tariffs since the 1980s—there's video of him talking to Larry King about it in 1987, using exactly the same phrasing and logic that he uses today.
Donald Trump fundamentally believes that everything in life is a zero-sum game, and moreover that everyone is as crooked as him: either you're screwing someone else or you're getting screwed. That's why he's so obsessed with trade deficits specifically, because to him, that negative sign screams "you're getting ripped off."
There are other benefits. By imposing the tariffs like this and wielding them through executive power, he can extort countries and corporations to give him what he wants in exchanging for releasing the hostages, so to speak. And I'm sure people in his orbit _also_ used this as a get-rich-quick scheme, because these people are all grifters. But that is all secondary to the fact that he has believed this for forty years and finally got a chance to do it.
He tried to, but his advisors stopped him. Bob Woodward reported that Gary Cohn snatched papers off his desk on multiple different occasions to stop him from starting trade wars at the beginning of his first term.
This time around he has made sure there are no advisors strong enough to stop him. That means he is far more dangerous now than he was in the first term. And not just in the area of the economy.
I usually dismiss conspiracy theories, but if this were a dump and pump, it would be surprisingly clever. 3 hours before he announced easing tariffs, Trump tweeted that it's a good time to buy stocks. If he gave someone insider information, they could use that tweet as a cover.
> 3 hours before he announced easing tariffs, Trump tweeted that it's a good time to buy stocks. If he gave someone insider information, they could use that tweet as a cover.
Got a link to the tweet? I don't have a Twitter account.
Edit: apparently it is true, and it is on Truth social. Someone sent me a screenshot.
To the downvoters: what is wrong with you? It was an honest question.
If you're gonna use historical analogies, it pays off to be accurate. Marie Antoinette very likely never said "let them eat cake" and she wasn't particularly more detached than aristocrats at the time were generally (which, to be fair, is quite a lot, but not all aristocrats were killed in the revolution).
Marie Antoinette was not killed because she was particularly detached but for treason after plotting against the Constitutional monarchy of 1791 along with Louis XVI and many aristocrats at the time.
wow, fuck. unbelievable crap, but true, nonetheless:
after implying I should be accurate, you go on to make your own statements using weasel words like "very likely never said" and "wasn't particularly more detached" and more on the same lines in the rest of your comment. where is the proof for your weasel words, bro, just like you ask me to be accurate?
weasel words are not accurate words, bro, rather almost the opposite.
”physician, heal thyself” - before you fuck around advising other people what to do or not do.
i see a lot of trends of this on hn too. pathetic.
here is a similar excerpt from your same comment above, with different highlighting by me, which shows even better, your "weaselness" (for lack of a better word - maybe weaselishness or weasel(ish) nature? ):
>wasn't particularly more detached than aristocrats at the time were generally (which, to be fair, is quite a lot, but not all
laughable comment.
iow, what is evident to someone who sees beyond the surface meaning of the words you used, like I can, is that you want to attack someone verbally, without being held responsible for the consequences of your attack. in other words, you are a weakling and a coward.
that is why you waffle or equivocate.
and that is true of a lot of people, not just here but in the world. i have seen enough over my lifetime to know that that is the case.
for a very relevant and important current example, check out the news about the SignalGate scandal involving the topmost echelons of the US govt., how they fucked up, made a fool of themselves in front of the whole world, and then tried, unsuccessfully, like you, to cover it up.
jokers, and beggars, all such people.
update: wow, fuck, again.
proof. some time after writing this comment, on a whim, I thought of googling for the term signalgate, and what was my surprise, to see this Wikipedia page:
It just goes to show the notability of it, because Wikipedia only allows what they consider notable pages (according to their criteria, of course). iow, the topic is considered important by them.
It’s scary to think that the reality is as simple as “Trump is just an idiot that is incapable of understanding even the fundamentals of global trade and has been obsessed with what he thinks tariffs are for 30+ years and is too stubborn to listen to non-stupid people”, while the rest is just hopeless attempts to rationalize his stupidity. But when you’re in a billionaire bubble isolated from reality, and a dumb grifter who rips off every party in every deal you’ve ever done, it makes sense to assume that global trade is just countries ripping each-other off.
The people around him with zipped mouths who know better could very well be treating it as a pump and dump however.
Not clever, or justified, or well though out, or based on any solid evidence. But there's probably a rationale behind it.
Now, ideally, we shouldn't have to care what the rationale was if there was any way of just getting back to "normal", but the same way Mao wasn't a flash in the pan, I assume we're looking at a few decades of it for the US as well.
Or this is like the long history of American tariffs which gave it world class industry. We are in the midst of a 4th industrial revolution and all this insane manufacturing tech being developed just gets shipped over to china because nobody in the US wants to touch it for fear of failing.
For every four pests Mao had 100 successful projects that nobody talks about. Harm reduction is not an optimal strategy for any game.
The Great Chinese Famine was a famine that occurred between 1959 and 1961 in the People's Republic of China (PRC). It is widely regarded as the deadliest famine and one of the greatest man-made disasters in human history, with an estimated death toll due to starvation that ranges in the tens of millions (15 to 55 million).
That's 3% to 10% of China's population starved to death at the time.
Both you and OP are not looking at this from the right angle. The goal here is to decouple US from China. In the meantime, tariffs are raised on every country to gauge which side they are on. Once US knows who the allies are, they will negotiate to have those allies put up massive tariffs on China as well to prevent transshipping.
US wants nothing to do with China. As the biggest consumer economy in the world, the have that right.
And China has shown that agreement with them has no value. Remember that China promised trump in term 1 to massively import US goods and reduce fentanyl, in part to slow trumps tariff down. They did neither of those things. Trump hasn’t forgotten that.
Decoupling from China will lead to China annex Taiwan sooner. China will have the USA and the world by the balls then, so not sure we want that to happen quicker.
And I don't think anyone is calling themselves allies of the USA right now. The whole world is looking to decouple from the USA. Europe is completely over the USA, they can't rely on them for leadership, protection or for trade.
From a tech perspective, expect Europe to decouple from the USA from an economic and cultural perspective in the next decade. Smartest thing Europe can do is to create alternatives to US services, build its own defense industry and stop looking at the USA for any leadership.
is TSMC not currently building a plant in the US? and ASML are Dutch, so they're not at risk. I’m not saying that China taking Taiwan wouldn't be a massive strategic boon, but I don't think it would be "having the world by the balls" by any means
TSMC has not committed to a US plant that applies their most advanced technology. Currently, they are going to produce chips with larger slower features, some generations behind their state of the art -- that's commercially very useful, and a good idea, but in no way replaces the state of the art chips that they produce in Taiwan. Alas.
do you not think that if China invaded Taiwan, the top minds there would just leave and go elsewhere? the machines they use are built in the Netherlands. I know it's not quite as simple as that, but I don't think it'd be the end of the world like people are saying. I think worse would be the precedent it would set.
Other companies have the same EUV machines. TSMC also made the good decision in hindsight to make an early bet on those machines.
We know TSMC is dominant - the real knowledge of how they are doing that is in the heads of people working at TSMC. Or maybe better to say that something is missing from the competitors? Process? Management? Everything?
Cadence and Synopsys are US companies that need to know many of the technical parameters of TSMC processes. They might know more.
America only cared about Taiwan because it warehoused the exiled American friendly government that had a historical claim to power and could potentially be reinstalled.
As time goes on that becomes less and less relevant. Might be time to cut and run.
> Decoupling from China will lead to China annex Taiwan sooner. China will have the USA and the world by the balls then, so not sure we want that to happen quicker.
That seems to be over-rating the importance of Taiwan. If Taiwan sank into the sea tomorrow that'd be a catastrophe and the world would be worse off. But not that badly worse off. Life would continue. China's main global lever comes from the power of their unparalleled-in-history industrial strength and the aura of leadership they are building up internationally because they are substantially more peaceful than the US.
The peacefulness is probably not going to last, unfortunately, but until they change tack it is what it is.
No need, the United States of America already has more surface and underground nuclear test locations than any other nation on earth (IIRC), even more if atmospheric tests are included as those drifted fallout onto US ground surface.
There have been 2,121 tests done since the first in July 1945, involving 2,476 nuclear devices
has been called "the most irradiated, nuclear-blasted spot on the face of the earth".
In March 2009, TIME identified the 1970 Yucca Flat Baneberry Test, where 86 workers were exposed to radiation, as one of the world's worst nuclear disasters.
"The goal here is to decouple US from China. In the meantime, tariffs are raised on every country to gauge which side they are on. Once US knows who the allies are, they will negotiate to have those allies put up massive tariffs on China as well to prevent transshipping." You literally made this up. There has been no announcement about this from the admin. Its all just speculation.
Seeing as there is near total disconnect between what this admin says and what it demonstrably does (let alone the disconnect from reality entirely), why would anyone take anything they say at face value?
There is zero signal coming from any of these folk's mouths.
>>> US wants nothing to do with China. As the biggest consumer economy in the world, the have that right.
Yes, they have the right, but it doesn’t mean this is the right way. Consumers don’t suddenly stop consuming, and factories in the world don’t immediately start producing. This is like a slow flywheel; had we been almost spinning and ready to jump, it would make sense. This is not that.
Also, China is a super power which controls more than factories today. I agree they need to be checked, but sudden changes are not the way. I wish we did it by building trust with allies and then pushing China. Right now, even our allies are wary of us.
Isn't this bit naive? Because in order to decouple, one would expect that there would be policies to actually prepare for production inside US and then apply tariffs. Not other way around.
> In the meantime, tariffs are raised on every country to gauge which side they are on
Why on earth would you be on the side of a country like this? Why we should be an ally of the US right now, if Trump can't even uphold agreements he signed himself 5 years ago? What guarantees do we have that, as soon as we decouple from China, the US won't treat us as a vassal because we gave up our only alternative? The only rational choice is to either be neutral or ally with China.
It looks like the consensus response is other countries embracing more multilateralism. This is a huge opportunity for proponents and governments that promote multilateralism to take charge and make it happen. Ex: China has restricted trade with Aus since 2020 because they, essentially, insulted China/didn't restrict their speech in ways that China wanted. This provides an opportunity for this to be rolled back, which is economically win-win (as most free trade is). Expect to see this sort of thing many times over between many countries in the world. Of course this is rooted in the fact that having ex-US trading partners is no significantly more valuable.
There is the second point to mention too though, which is that China is not exactly an exemplar of open markets and free trade, which is why you are not seeing many countries ally with China and form a united front against the US's trade rampage. Looking beyond the deranged policies, there are some truths in saying that China is a currency manipulator, has imbalanced trade to such a degree it causes problems in other economies, and even the somewhat more "far fetched" points about the unsustainability of a permanent trade deficit do have some truth on some level.
That is why, yes, you are seeing the EU normalize trade relations with China, but there are important caveats, like discussions about China having an expert quota and even internally capping production numbers within their own economy are on the table front and center. This would have never happened before, because China's strategy was to peg a low currency, export, and extinguish industries ex-China. Wish to some level is part of free trade, but it is underpinned in China with state sponsorship to a higher degrees in most trading partners are comfortable with (which is of course countered by the allure of cheap goods).
So another view would be that parties like the EU have new leverage against China that they can use to cut trade deals that strip out some of the abusive practices that made them uncomfortable in the past. If China is then willing to move on a bit from these approaches then the net outcome should be beneficial for the world of course.
I think that many players see the dangers of taking binary sides now more than ever. And indeed, skilled negotiators should see the advantages of playing these forces against each other to get what is best for them. In the face of the recent outrageous events, I would expect a sudden outburst of pragmatism elsewhere.
If the goal was to decouple from China then tarrifs would only be on China and we would encourage trade to move from China to other countries. The administrations actions have the opposite effect. It says the US is untrustworthy even to it's allies and maybe siding with China is not so bad. Note I don't like or trust the Chinese government and don't think other governments should try to get closer to them but Trump's actions make such moves much more likely
At the very least any nation that depends on the US for goods should probably be looking to other sources where possible and increasing support for them since even if the US is useful for now, we're clearly unstable and incompetent which makes us unreliable and risky.
As an Australian who has spent decades watching the trade and resources markets it was notable that Australia, NZ, UK, Canada, and much of the world started taking calls from China and meetings with ambassadors.
The Trump plan to "decouple from China" was verging on dividing the world into the US and everybody else .. a large reason behind the partial rollback.
Countries are now openly rejecting China's offer to join hands .. but still sitting on the possibility of further deals with China should the US tariff insanity continue.
> Remember that China promised trump in term 1 to massively import US goods and reduce fentanyl
China stopped selling unlicensed fentanyl to the USofA, it later stopped supplying fentanyl to both Mexico and Canada.
The problem was that criminals in the USofA and Mexico purchased precursor chemicals in bulk and made their own fentanyl. Restricting precursors led to pre-precursors being purchased in bulk for drug labs to make their own precursors in order to make fentanyl.
The fentanyl problem continued under Trump and rapidly grew in size during his first term.
In 2021, Mr. Biden issued an executive order imposing sanctions on individuals and companies engaged in the illicit opioid trade. His Treasury Department put sanctions on more than 300 individuals and entities, freezing entire networks of fentanyl suppliers and traffickers out of the international financial system.
In 2023 and 2024 he identified China as a major illicit drug-producing country for its role in the synthetic opioid trade — a blow to the reputation of China’s chemical industry.
Simultaneously, the Biden administration pushed U.S. law enforcement agencies to conduct aggressive investigations and build indictments against dozens of Chinese citizens and companies that were trafficking fentanyl precursor chemicals into the United States.
[..] Biden secured a personal commitment from President Xi Jinping to restart counternarcotics cooperation in November 2023
[..] And we made progress. International fentanyl supply chains showed signs of disruption, forcing traffickers to change sources and tactics.
Together with other diplomatic initiatives and an expansive public health campaign, the number of lethal fentanyl overdoses in the United States has dropped.
In the 12 months ending September 2024, overdose deaths were down an estimated 24 percent from the year prior.
What has Trump done now he's back in office? Destroyed any cooperation with China on counternarcotics cooperation.
Tariffs alone will not push China’s government to help reduce drug overdose deaths in the United States. In fact, with Beijing already imposing retaliatory tariffs and proclaiming that it’s “ready to fight till the end,” Mr. Trump’s blunt-force tactics might drive China to cooperate less on fentanyl, not more.
With the stakes as high as they are, American communities cannot afford a miscalculation.
> And China has shown that agreement with them has no value
Unfortunately they still have much more value than agreements with the US and Trump specifically. Which Canada and Mexico found out the hard way.
Of course the probability that Trump actually forgot that he was the one who no signed USMCA and none of his “advisors” dared to tell him is not insignificant..
to be fair, I also made quite a lot of profit in stocks in the last few days without any inside knowledge of the whitehouse. it was a fairly safe bet that these tariffs were not going to last forever, and even if they were, there'd be reprieves
My opinion on this is that the damage has already been done. Successive administrations have already loaded up debt massively and participated in a Ponzi scheme with the Fed to pretend asset valuations in the US make sense. Sooner or later the chickens will come home to roost, and valuation multiples in the US will come to resemble those that have existed throughout history, and those which exist in all other parts of the world currently.
When this happens, there will be a big recession, and that is exactly the moment companies will start deploying AI in earnest to save money. This will create a downward spiral.
Yes, the Trump administration is incompetent. But, if you insist on blaming an administration, I would propose Obama and Biden as more reasonable culprits. It was Obama who presided over the massive Fed intervention into markets that enabled unbridled government spending increases. It was Biden who presided over the most problematic parts of the Covid response. Trump is just an idiot. Obama and Biden are actually bad guys.
> that is exactly the moment companies will start deploying AI in earnest to save money.
Companies are already deploying AI everywhere they possibly can as quickly as they possibly can. They aren't waiting for anything. AI just isn't up to the task of replacing most workers just yet. It's still unclear if it ever will be, but they're shoving AI into everything they can to see how it holds up, to see what it breaks, and to give it more data to work with so that it can hopefully be improved.
I strongly disagree with this point. History shows that most companies don't deploy cost-reduction technologies until forced to by economic conditions. When there's a recession, deployment of AI will be next level.
History shows that companies will do whatever they think will make them the most money. They aren't going to hold off on replacing workers with AI if they think that they can just because it wouldn't be nice or because it isn't recessiony enough. The very instant they think they can get away with firing you and replacing you with software they will do it.
Oh? Then how do you explain massively increased adoption of such technologies right after the financial crisis? You're assuming the world works the way people say it does in a business textbook. The real world is messy, and people don't like replacing employees unless they have to
When the economy slows down companies start getting rid of workers regardless of any technology. It's one of the first levers they pull.
Some companies looking to get rid of even more workers might search for new technologies that they hadn't considered before but which could enable them fire more people, or they might accelerate existing plans to replace workers with technology to get rid of them even sooner.
AI is different though because companies are fully aware of it and they are already moving as fast as they can. They have been salivating at the thought of using AI to fire their workers for years now and they're already making every effort to replace workers anywhere it seems feasible to do so. They are in such a hurry that it sometimes results in embarrassing failures like this one: https://www.motorbiscuit.com/airline-ai-chatbots-refund/
Like you say, the world is messy, which means there is no rule saying that companies must leave massive piles of cash sitting on the table until the economy gets bad enough for them to reach out and take it. Shareholders won't accept that. Any company that sleeps on firing their workers when AI can do the job will get absolutely crushed by their competitors who don't sit on their hands.
The Fed intervention was under Bush.
The vast majority of the "COVID response" was under Trump.
If you look at deficit spending by administration, you will also see that you have things backwards.
Yeah, I mean people love playing political games with this stuff. But the actual crime was what happened between 2009-2012. Trump is just a symptom. Yes, he's a bad guy, but what do you expect people to do?
I expect people to not vote for obviously bad guys.
Obama too had to clean up a mortgage crisis from his predecessor's careless deregulation. Not an excuse for his own crimes, like say drone striking US citizens. But Trump is just openly corrupt, inept, praising autocrats and aspiring to be one.
Obama didn't endorse ZIRP. He wanted to do more stimulus but Congress wouldn't let him.
In that environment ZIRP was the only solution. Ben Bernanke (a Bush appointee, re-appointed by Obama) devoted his academic career to how the Fed could have prevented the Great Recession. He was right.
The "actual reason" always seems to be virtuous in the end. Like "omg Trump had such good intentions!!! He just made a lil implementation booboo". It's always giving mountains of good faith to people who have lied for decades and lie today. Nothing about the clear market manipulation or greed of the party.
I don't even think the market manipulation argument stands. That gives them too much credit.
Trump's hand was forced and he had to retreat. Like the market kept having little bursts before this, based simply on the core reality that this is a trade war that the US cannot stomach without extraordinary financial damage, so everyone just kept waiting for the out. It is far more exposed and doesn't have the "cards", as Trump says, that they think they have.
The guy really, really wants his tariffs, so who knows where we even are now. He will not, under any circumstance, back down. We saw that with Canada -- various pauses, then steel and aluminum tariffs, then car tariffs, then a 25% across the board tariff for non USMCA compliant goods. First he even targeted USMCA. Based upon a lie. He desperately wants these tariffs, and as the very special person he is, he has learned absolutely nothing from today and will be back at the trough when he thinks he gets another go.
The most amazing thing are the Trump faithful who hold this as a win. This is quite possibly the most disastrous outcome of all -- the uncertainty. It is going to be economic calamity for the US.
But maybe Trump can announce that Uganda has removed a tariff or something.
I don't think the GP argued they want to balance the books.
In fact, if they wanted to balance the books, they wouldn't care about the interest rate. The only reason to bet your economy into reducing the interest is if you want to go deeply negative on the books.
> That doesn't pass muster. If they had much interest in balancing the books, they wouldn't be ripping huge holes in revenue collection.
It's not about balancing the books. It's about not making a problem far worse.
You remember the global financial crisis of 2008? The reason most of the bailed out countries requested bailouts was their bonds spiraling out of control when they had to refinance their debt. That was the primary reason they reached out to the likes of IMF and had to undergo austerity programs.
The Trump administration put the US on that path with their global tarrifs and provoking their main trading partners, specially China.
While I agree on the direction I don't think the specific argument completely holds.
The countries in this situation in 2008 where European countries that forfeited their central banks. Having relatively recently switched to the Euro made this situation relatively novel and those governments not used to not have access to this last resort tool. There was also a lack of legislation at the European level to give the central bank authority to intervene. And culturally some countries where much more scared by their recent history by the inflation risk. Which led to push backs and delays in the face or urgency. It's now probably roughly sorted at the EU level.
The USA don't have and never had this issue. The position of the FED is very clear: it will never let the US govt default. So the only risk for US bond holders is inflation (and price if they want to exit early).
They care about inflation too though. Trump is old enough to remember the high inflation 1970s well so he won't make that mistake. Kids today probably won't remember it other than an item from "ancient history" and might make the mistake, but Trump won't.
If they cared about inflation they wouldn't have instituted massive inflation causing tarrifs. Economists are saying there is a chance 70s style stagflation might come back into fashion
Any assessment of Trump’s actions that implies that he personally has a cogent strategy immediately loses credibility in my eyes. If you want to say the people around him think or feel a certain way and are influencing him based on that, fine. But he’s clearly just doing things that hit some nexus of “people around me say this will work” and “I personally, on a vibes basis, think this will be fun.”
Does he? He really wants the Feds to lower interest rates on top of everything else. He might have gotten that wish if he did absolutely nothing with economic policy and rode off the "bidenomics" he chastised for years.
There's definitely not 100% logic involved in his plans.
I would argue there are better and worse kinds of inflation. Wrecklessly printing more money is a worse kind of inflation than a new semi-optional tax, or inflation due to wages rising
The treasury department didn't print money for no reason. Stabilizing the economy during Covid is a much better reason then a pointless and stupid trade war
That's fair but I suggest that they are actually deficit hawks for the long term. In the short term, they've got financing troubles hence they care about the yield.
What if (and I realize this is an extremely pessimistic take) their plan is to just default on the debt and rely on military blackmail? Sure, there's a Constitutional prohibition on questioning the validity of USA debt, but the administration shrugs at the Constitution on a weekly basis. The endless whining about how 'unfairly' other nations are treating the US, 'ripping us off', 'laughing at us' etc is a precursor for aggressive action, and I think it's quite likely that at some point they'll come out and say 'we don't have to pay debts to countries that have been scamming us the whole time.' About one quarter of the population will support MAGA no matter what, and if things get bad enough the administration can just announce they've been 'forced' to take over Greenland and Canada.
A flashing negative warning sign of this would be issue of new kinds of Treasury securities with new complex rules.
That sounds like it would completely destroy the US economy and government budgets (at which point the only thing left to do is to establish a war economy under authoritarian rule and continue war? I don't even know, it sounds completely bananas...)
I don't want there to be a war with any of those countries, but if there's one thing we should all have learned by now, it's to take Trump at his word. When he says he wants to do a thing, he's not bluffing.
There are very few politicians that are actually deficit hawks. The majority that claims that position are actually entitlement hawks. That is, they use fear of the deficit to talk about the need to reign in social security, medicare, medicaid, food stamps, and any other form of government assistance regardless the size or impact on the government budget.
Meanwhile the DoD, CIA, FBI, NSA, DEA, DHS, and ICE have never had a politician seriously consider reducing their funding.
Gotta be honest, I think it's more likely that Trump just has a strange fixation on tariffs. I don't really think there was a whole lot of planning around them other than "I want them".
How he's deployed them and spoken/written about them makes me think he thinks it's a good way to strong arm countries and he wanted to strong arm everyone.
I think it's because it's one thing he can control all by himself. Look at all the attention he's receiving. The "will he/won't he" reality TV. Put a tweet saying X%. No, they won't be cancelled. Yes I'm suspending them for 90 days. And so on.
Except he can't. They're abusing a legal loophole that probably can be easily defeated in court if anyone interested can actually locate their balls to do it
I don't believe he can get a 7/2 ruling in SCOTUS. But I do believe he can get Republicans in the current Congress to jump for him, and to try to ensure their majority by disenfranchising people before the midterms.
I'm not saying he won't win the case but you're daft if you think it won't be 5-4 on the grounds that congress actually has to pass something to signal their intent to the courts.
The question here is not whether congress has to pass something, the question is can congress delegate this authority which is explicitly set by the constitution.
There were a bunch of sentences regarding non delegation of powers of congress, mainly for federal agencies, and courts deciding that congress can't delegate those faculties, so, by the book, this would be a similar situation. There is actually an ongoing case for this aspect of the discussion:
He definitely does, and has since at least the '80s.
That and his self-image as The Best Negotiator (while his actual "negotiating tactics" are really just mob-boss intimidation and bullying) are a huge part of what's going on here.
There's no actual commitment here. He could reverse again tonight. He signaled ongoing dissatisfaction with countries that had retaliated, so may well take further action there during the 90 days, which 90 days are, again, meaningless in that they don't bind him at all, and even if they did, he's done a bunch of things he's "not allowed to" and so far has gotten away with tons of it.
You're right. But as we see with TikTok, he loves to talk big but keep kicking thr can down the road instead of backing off. There will inevitably be more spats in the meantime (especially with the EU), but I wouldn't be surprised if he extends it more when July looms (assuming that congress bill is still struggling to pass).
Trump has had a bizarre fixation on trade deficits since the eighties. Back then he blamed Japan. Now it's China. It's his one and only ideological commitment.
Everyone’s a deficit hawk in the long term. It’s easy to talk tough on reducing dept at some non-specific time in the distant future probably after you leave office.
The tariffs that he kept on would be nothing to sneeze at in more… civilized times. The market overreacted, as was priced in the vix at 50+. We are not out of the woods yet.
125% tariff rate on your biggest importer isn't something I'd say is "nothing to sneeze at" personally. Particularly when the expert economist used to justify it is made up.
Yeah I was wary of saying 'declaration of war' (even though I think it's kinda true), but at least those imports will route themselves through Vietnam or wherever now in a few months.
The EU actually executed some strategy. First they said they would love 0/0 tariffs, which sounds fair to pretty much anyone. And when that didn't fly they put on selective reciprocal 25% tariffs. What Trump did looks even more like a clown show.
They floated 0/0 tariffs before the reciprocal tariffs (and again after), and their tariffs this morning was in retaliation for the steel and aluminum tariffs, not for the reciprocal tariffs.
I am normally all in favor of metonymy, it's perfectly fine and well understood style.
In the case of Trump-as-Mad-King tariffs, it sure would be nice if the world didn't conflate America, the historical land of twisting other nation's arms to reduce tariffs, with Trump and his fake-emergency tariffs.
I can understand if you do, and if America has permanently lost a lot of good will by electing this buffoon for you, I can hardly argue with you.
But still. In my mind, these are Trump's tariffs, not America's.
And specifically the idea that Trump's tariffs are reciprocal, that is even more "Trump is just a liar" than something any honest American would argue.
Even if you call it “Trumps Tarrifs” that means we have a better than even chance of having to deal with this.
If you’ve never elected a buffoon like this it’s easy to believe it’ll never happen. If you’ve done it not once, but twice, it’s really hard to believe it won’t happen again.
Maybe I should write "an American" instead. As in, I assume the person I am responding to is an American and is calling it reciprocal tariffs to propagate the idea that it was reciprocation.
It's a smart strategy designed to exert maximum pressure on someone who is publicly saying they want to annex some of your territory (Greenland), and generally acting in an irrational manner.
James Carville in the 90s: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”
so the uncertainty in the market drove investors to T-Bills, driving up their price and lowering their yield, effectively making servicing the national debt marginally cheaper. By 0.03%, which I imagine stacks up with trillions of dollars compounding.
This makes some sense... but they didn't pause the tariffs. There's still a 10% tariff on everybody (including on top of Mexico and Canada, who were previously exempted from the tariffs announced last week) and the tariff on China continues to rise to preposterous proportions.
Would it have been too inflationary/recessionary to impose these crazy tarrifs on 'rest of world' AND increase china to 125% at the same time so he simply had to sacrifice one to do the other?
Sounds like a sage take (where do I study economics?), but why do people doubt the meaning is as straightforward as the messaging: during campaigning trump said he would rectify the unfair tariffs, and in the lead-up and since election he has talked lovingly about tariffs, with the goal being (as almost everything trump) domestic fortification through jobs, industry, and generating revenue from those who have abused the US largesse to enrich themselves - and now balk at a just correction.
I think there is a backdrop/larger picture (probably nuanced and multifaceted levers against all other parties negotiating), but the main I think is to shake up the global economic landscape to make it easier to improve it. Reset.
I see a lot of complex takes on here that require quite a lot of sophisticated theories...and while I enjoy the complexity and the perspectives (and - wish I had studied economics to really grok them), I think it's really just as simple as they say. And what they say they're doing makes sense.
Maybe the truth is no one really knows what will happen, and so it's a bold move but we'll see. But I believe they're doing what they think is right for America to strengthen the country, just as they say - not some 3 degree removed chess strategy, just simple.
Genuinely wondering why so many people are still giving the Trump administration this much benefit of the doubt that their moves are strategically sound? We're really still doing the whole "3D chess" thing with this guy after he has shown over and over again that he mostly just acts on impulse and the primary qualification for his advisors is loyalty over any type of intelligence or expertise?
I dunno. Somebody literally wrote a guidebook for him to follow, but I haven't even glanced over it.
The stuff I've seen people quote from the book have all been stupid, but the kind of stupidity seems to be a "do X, so you'll get Y" where "Y" is really bad and the author thinks it's good. So I guess I do expect some kind of coherence from him.
That said, I don't remember anybody claiming Project 25 talks about tariffs.
I don't think that Trump himself is competent, but I'm not be so sure about the people around him. The effort it took to put him above the law was at least a decade in the making, so clearly someone knows what they're doing.
I don't think it's a coincidence, for instance, that Steve Banon's strategy of "flooding the zone" looks exactly as the type of chaos currently coming from the White House.
> Genuinely wondering why so many people are still giving the Trump administration this much benefit of the doubt that their moves are strategically sound?
Since I'm one of 'those people' who's been willing to grant Trump some benefit of the doubt in the past, I'll respond with my take. tl;dr Trump's handling of the tariffs have been such disaster, there's simply no possibility it was based on a strategically sound plan. So, in answer to your question, this episode has caused me to substantially foreclose my prior willingness to grant Trump some benefit of the doubt.
To be clear, while I've tried to remain open-minded re: Trump I've never felt that he's especially smart and certainly not someone I'd ever personally like or hang out with but I'm also one of those contrarians who doesn't think every politician or public figure needs to be someone I personally like or approve of in a moral sense. I've also been willing to concede that some things done by the executive branch during his first term were generally positive (whether because of or in spite of Trump isn't clear). I also think his policies and statements have been subject to an unprecedented degree of negative spin in the media - sometimes well-deserved but always hyped overwhelmingly to the negative. So I made an effort to look past the constant headlines of, essentially, "orange man bad in all possible ways." I also decided to ignore Trump's own bizarrely extreme pronouncements and focus only on what he really put into practice and, most importantly, the tangible real-world impact of those actions on the broad population and economy over time (not the extrapolated predictions in the media).
However, even to me, how he's handled this tariff thing has been a complete shit show. I've spent a fair bit of time trying to understand the various explanations, contextualizations and even 'hidden grand plan' theories proposed by some and they simply aren't plausible. It's not a 'master negotiator strategy' because he asked for concessions but never made any concrete proposals of quid pro quo. There was no attempt at serious negotiation with most major trading partners (according to the WSJ) and thus no possibility of meaningful deals.
Now suddenly (somewhat) reversing course like this a few days after going so extreme and then publicly doubling down on his long-term commitment to the 'grand strategy' is unbelievably damaging to any remaining shred of credibility his administration may have had. It nukes any possibility that he was doing a 'crazy guy on the subway' strategy of punching his adversaries in the face and making them believe he was so nuts he'd saw off his own arm just to keep beating them over the head with it - all to cleverly convince them to make meaningful concessions they'd never make any other way. Yeah, well now that he blinked in less than a week, nothing he can do will ever make them believe that. I mean, if that was the plan, it was a terrible plan and poorly executed to boot, but flipping like this is even worse.
All I can figure is that it was a 'crazy guy' plan but that he intended to keep it going for several months and then, when his opponents were bloodied enough he'd open negotiations and "win" in a master stroke. Except he completely miscalculated the degree of economic destruction he'd cause in U.S. markets and has now had to not only fold but reveal he was playing a weak bluff all along. I'm struggling to come up with any way this could have been worse for the U.S. and Trump's interests. After this, it's hard to imagine any trading partner negotiating in good faith, or perhaps, at all with Trump over tariffs in the next 90 days. The only rational strategy for them is to play along and gather info while conceding nothing meaningful and simply wait and see what Trump's ultimately going to do long term.
As far as I'm concerned, I bent over backward to grant Trump some benefit of the doubt and give him a chance to prove himself but the tariffs have been so bungled they're impossible to put it in any positive light. So far, it appears to be an epic disaster of hubris and naive miscalculation.
Is it possible that Trump is just a stupid person? That he genuinely believes the tariffs will be good, that he's being influenced by stupid people (Navarro) that believe this, and that the reaction of bond markets that didn't follow his overly simplistic model made him hit the brakes?
> the reaction of bond markets that didn't follow his overly simplistic model made him hit the brakes?
It's pretty clear that's essentially what happened. The question is how, why and what Trump's plan was.
> Is it possible that Trump is just a stupid person?
I don't think a simple linear scale between "Stupid" <---> "Smart" is a useful model for predicting likely job performance in complex, multi-function roles. Reality is far more complicated and nuanced. Whether assessing an employee, CEO, politician or spouse, just using an IQ test (or any other single point measure on one dimension) yields only an approximate directional indicator. It's certainly not the optimal model because it's entirely possible for an employee, CEO, politician or spouse who scores meaningfully lower on an intelligence test to substantially outperform a higher scorer in real-world results on the broad composite of job, leadership, governance or spousal metrics you care about.
I've read Trump's "Art of the Deal" book. He thinks he's a gifted negotiator based on the success he had in negotiating commercial real estate deals. However, commercial real estate deals are generally a pretty narrowly specific kind of deal structure. They tend to each be one-off, transactional arrangements which hinge on accurately estimating the value which can be extracted over time from a property and the future performance of the market in that location. Then forming a one-time consortium of financial backers willing to provide the capital on terms which will allow the operator to make a profit. While the amounts can be large and horizons long, these are fairly simple deals with only a few unknown dependent variables everyone is estimating the value of their position on. It's a bit like poker in some ways. It's a bid, counter-bid type of structure with only a few sellers and a few buyers at the table at any given time and each seller is offering something different enough that it's not a true commodity. There's hidden information but the domain is constrained and the unknowns are known. The bidding process reveals some information about how each player has assessed the value of their hand. They can either have a truly strong hand, be bluffing or somewhere in-between.
This is why I think Trump is ill-suited to directly managing complex, multi-dimensional geopolitical negotiations. They are profoundly different. There's far more hidden information, the domain is nearly unconstrained, there are unknown unknowns. However, not being good at negotiating these kinds of deals isn't necessarily a problem for a president. There have been a lot of presidents who've done well in geopolitical negotiations who were similarly ill-suited. They did well because they were good at selecting talent to manage those processes, setting high-level objectives and meta-managing those processes against broad political objectives and policies (Reagan would be an example). The fundamental problem with Trump is that he thinks he's good at all types of negotiation AND that it's important to his self-image to be perceived as directly involved and instrumental in 'winning'. The final nail, as it were, is that it's pretty clear Trump's default model in negotiations, politics, legal strategy, financial deals, etc tends to be "win/lose" vs at least starting out seeking a "win/win". Complicating this is that his projected self-image seeks to be publicly acknowledged as winning by beating his opponent.
This is a bad scenario because every counter-party in geopolitical trade negotiations has a far more detailed psych analysis than what I wrote that's been prepared by experts who've read everything Trump's ever said or written publicly. While Trump's actions in any given moment are certainly unpredictable, that's not generally a good thing. Especially because his internal priorities, self-image and emotional dynamics appear pretty easy to read and fairly predictable. Whether they're right or not, the counter-parties almost certainly believe they have a fairly solid take on Trump's psychological drivers. Appearing "scrutible" wouldn't necessarily be a bad thing (in fact it could be quite good), except that these psych evals are both high-confidence AND they say Trump is unpredictable, sometimes acts out emotionally, is swayed by personal loyalty over strategy, can perceive negative outcomes as personal attacks, reflexively seeks retribution for personal attacks, is strongly influenced by the immediate feedback of a couple dozen people and has few strongly-held philosophical or political premises. Whether all of these things are entirely true or not doesn't much matter. Trump has projected them so consistently over so many decades others believe they're true.
That's why when Trump said yesterday that he intends to personally be "deeply involved" in the negotiations with trading partners, I sighed. He has virtually no credibility as someone willing to stick by any framework that might be developed in private negotiations. He also has no patience for the long, painstaking process involved. No matter how good the Treasury and State negotiating teams are, their own boss has convinced the counter-parties that these teams have little real influence or ability to strike a deal. To me, that means the odds of any meaningful deals being negotiated where counter-parties are willing to 'horse trade' elements of significant value is between slim and none.
That's not it at all. I'm sure there's lots of sycophants out there, but a lot of people just don't find "he's stupid and it's random" a satisfying explanation for his actions, even if they disagree with them.
That's weird, cause they sure smeared millions of people real fast as undesirables trans/illegals/DEI/woke, but Trump gets a million chances and coup do-overs and please explain take your time sir: What is the amazing 4D strategy behind telling people to drink bleach?
Nepotism feels good all the way until it sinks your company.
A lot of this stuff is on a YouTube education level, not even a degree. I would be shocked if the US does not have a bunch of economic advisors who tell them what problems there are and what should be done. They've probably mapped out all the next steps. Most US presidents are Harvard-level smart, but the White House has been around long enough to find a way to deliver reports to the simpler ones.
There's a lot of obvious big problems - confidence in the USD, debt rising faster than GDP can catch up, military overextension, China's rise outpacing US, inequality, inaccessible education and health care, opioid crisis, etc.
Trump has a good eye for identifying this - that's why he won the election despite all his weaknesses. It's clear he knows some of this but doesn't understand it - his comments on a BRICS currency, for example. Yes, a "BRICS currency" would threaten Pax Americana but it's on literally nobody's mind.
I feel like, if anything, he's an overplanner. A smarter leader would think, these moves will have unplanned side effects. Trump makes a lot of roundabout moves like DOGE. These moves have a target, but he hasn't thought about the side effects. And when a crisis like COVID hits, it disrupts the complex plans, which is why he reacts so poorly to them.
<< I would be shocked if the US does not have a bunch of economic advisors who tell them
Oh, US does have its share of economic advisors[1] of all stripes. And, I would love to be corrected on this, when SHTF, they immediately argue for NOT the very thing they normally argue for. They can tell what should be done for sure.. just not when it comes to their money..
(edit)Therein lies the issue or at least a part of the it.
Trump is famous for ad libbing and making up whatever he wants in the moment. His first administration was not prepared to govern. I'm not sure how this is seen as over planning.
This just reads like pure fantasy to me. Have you not seen the account from numerous former Cabinet and White House officials about how lazy and incurious he is or how difficult it is to get him to read the reports put in front of him? Have you missed the way he has forced countless career officials out of the government through layoffs, firings, or pushing people to resign in protest? I don’t even know what to say to the idea that Trump is an “overplanner”, you even literally said “he hasn't thought about the side effects” a few sentences later. That’s “overplanning”?
I don't know how that is supposed to work or counts as an "overplanner". That sounds to me more like someone who has goals but doesn't actually have a plan on how to reach that goal.
that assumes a massive amount of economic understanding and intelligence on the part of the President that has simply been completely unobserved for his entire career.
occam's razor provides much better explanations here. He's an idiot obsessed with dominance games and thinks a tariff on a country means that country pays a tax to the US. He thinks trade deficits are bad, just like if I buy a toaster from Target, now I have a "trade deficit" with Target and I need to find something they'll buy from me.
He's a total dangerous moron and these attempts to come up with 11-dimensional chess rationalizations are misguided.
You want to do tariffs for national security reasons? Okay. I get it. Now get congress to pass a bill levying the tariff, have that bill be smart, encourage not just on-shoring, but also near-shoring (Mexico, Canada) of key manufacturing and minerals, apply the tariffs more strongly against the key geopolitical rivals (China), implemented in a graded, predictable manner. Do not piss of every ally in the world, in general pursuing this hierarchy U.S. > Mexico, Canada > European, African, and Pacific Allies > China, Russia. Finally, for key , and highly specific strategic industries, provide subsidies.
I'd believe you if he hadn't already flipflopped on tariffs recently. I think it's much simpler than that: he's pulling whatever levers he has to squeeze everyone and then letting up the pressure on people who do what he wants. He already did this with Canada and Mexico, using tariffs to get them to make a show of border secy=urity.
> Instead of being seen as a safe haven, U.S. debt itself started to look shaky.
Owning US debt is also simply less relevant to countries that are going to be trading less with the US. Countries which are ratcheting up tariffs with the US, for example.
im not an economist, I have no valid opinion on if this is right or not.
BUT, I actually started looking at moving more of the stable bond/treasury holding bit of my portfolio to foreign funds recently (in addition to moving more of the stock/mutual fund balance to international stuff).
If I'm thinking about that as an individual private citizen of the US, I can't imagine what actual professionals are thinking about.
Most foreign mutual funds and ETFs are classified as Passive Foreign Investment Companies (PFICs). PFIC investments face complex and often punitive tax treatment. Gains may be taxed at the highest marginal ordinary income tax rate (not the lower capital gains rate). Additional interest charges may apply. Annual filing requirements via Form 8621 for each PFIC
They likely mean US-domiciled ETFs which hold foreign shares. The big providers (BlackRock, Vanguard and friends) typically have copies of their big funds domiciled in, at least, the US and Ireland (or sometimes Luxembourg); the European versions are UCITS-compliant, and often offered in an accumulating variant (not tax efficient in the US, but it is in some European counties), but otherwise basically the same thing.
This again sees more logic in this than there exists.
America doesn’t have ANY issue refinancing that debt. US treasury is the risk free rate. It’s the basis of an infinite number of financial models as the baseline level of risk people will tolerate. Every single analyst from here to China works on that basis.
This idea that you can’t refinance debt is nonsense. American firms are wildly profitable, and America used to be the safest bet to set up a new firm, or do ground breaking research.
If you wanted to make more money, increase taxes, and you can refinance debt even faster than this. Shifting the yields is … how does that apply to new bonds which would be auctioned??? The face value and rate are set anyway.
I don’t think this checks out. They didn’t walk any tariffs back until after the auction saw strong demand. It went opposite the way one would think setting the fall in bond prices the previous night.
I think this would be expected though, no? Sure, there's flight to safety, but you're also reducing exports to the US, reducing the number of dollars flowing to foreign nationals, which reduces the demand for treasury bills, which an excess of dollars would often be used to buy to have an inflation-"proof" store for your dollars without currency risk. You would also expect devaluation of the dollar from tariffs / trade-war, which I would also expect to cause selling of t-bills in favor of local currencies
Trump's obsession with tariffs dates back to 1988 when he lost an auction for the piano from the movie Casablanca to a Japanese buyer. Afterwards, he started complaining about how all these other countries are ripping America off, and here we are.
"From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury. Why?"
None of leaked conversations or prior discussions indicate anything like this. Peter Navarro has no even slightly nuanced agenda. He's been on record for years about this. I think their position was much more that they'd drive foreign tariffs down and would be able to make other demands against other countries, and they underestimated the tolerance even their base would have.
I find the most consistent explanation for Donald Trump is he does whatever is going to keep himself the top news story in the media. I don't think there's any deeply held belief other than if he doesn't think people are talking about him that's bad
In his interview yesterday he mentioned that he won his weekend golf tournament. Of course he did, otherwise it wouldn’t be newsworthy (still isn’t, but oh well).
Then he asked the reporter if she saw that he won. I think he asked twice.
I look at that simple interaction as the most accurate model of his behavior. Are people talking about me? Good. Why aren’t people talking about me? I need to do something to make sure they do. He may very well have actual intelligence but it doesn’t seem obvious that it is the catalyst of anything he does.
>From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury
You're making it seem that there's a plan ... but what if this is just regular incompetence coupled with capricious behavior from a chaos agent?
I'm watching various officials give interviews and all of them are non-committal as it pertains to expectations. Why? Because none of them actually know!!! Trump has arbitrarily and capriciously changed "the plan" many times.
The political cohort behind the president is roughly in two halves. The first half are the original MAGA crowd (looking out for the working class, pro-liberty, anti-woke, etc.). The second half are the billionaire crowd.
The second group are active on pod casts, on Twitter/X, and are partly represented in government (directly or as advisors). An easy way to follow up on these people is to watch the All In Podcast or their related social media connections.
What these folks have said for a long time is that if USA stay on the same path, the USA goes broke after 10 years. So if you have long term investment in the USA, you lose your fortune in 10+ years.
This is the key motivation for their involvement in the current executive branch of government. This is why the DOGE program is so well supported by them.
If you lose the battle to reduce the 10-year Treasury yield, you lose the billionaires because they stand to make meaningful losses on a 10 year horizon.
I recognize the plight of the common citizen here; they are the plurality. But the big political levers come from these billionaires (absent a grass roots supported leader in the wings).
If the goal to drive the yield on T-notes down, then cut spending and raise taxes. Get the budget into something like balance and the Fed will cut rates, and borrowing costs will fall. You don't need some 3D chess with a manufactured financial crisis.
When your rational explanation involves people shooting themselves in the head to cure a headache, something's off. There's nothing to explain here besides a weak and incompetent leader with a deep need for attention, surrounded by lots of enablers.
I think only thing likely to make US go broke is Trump's actions.
DOGE doesn't save any money. Not only because it's created many legal messes that will take forever to work out in court but because most of those jobs are important and will eventually need to be replaced at great cost and with worse results. Also some of those jobs are for auditing inefficiency and prosecuting corruption resulting in more money spent. And on top of it all they'll be using these non existent savings to justify much larger tax cuts for the rich.
The reason it looks stupid is because it is. It's not that Trump is purely dumb he's just intellectually lazy and doesn't care about policy. He long ago decided he likes tarrifs on instinct so he put massive tarrifs despite the warnings that they would be disastrous
This belief seems to disregard the fact that the billionaire crowd hates markets being spooked far more than it cares about 10 year Treasury yields (which in any case went up precisely because markets were spooked; if you wanted to do something about reducing long term bond yields, committing to just about any other economic policy would be more credible). Even some of the most sycophantic billionaires were evidently furious about the tariff policy.
Also, Trump has been obsessed with the idea of tariffs since the 1980s.
My listening to such billionaires explains a different attitude.
Small investors, and medium investors hate market turbulence for sure.
But when you are a billionaire, you can easily profit from short term uncertainty. For example, Chamath recently disclosed a (potentially large) Credit Default Swap position (meaning he makes huge upside if USA debt position deteriorates). But he was the same person deeply concerned about USA long term debt. He is a well connected person to the executive branch.
The reason is that if you are a billionaire (tied to the USA financial system) then you can't escape the system when the entire system falls due to (God forbid) a collapse of the USA financial system in 10 years time. It is like they are the dinosaurs worried about a Meteor strike, but not worried about tigers and snakes (that can't hurt them).
If the billionaires were genuinely concerned about a complete collapse of the USA financial system in 10 years, they wouldn't have bet on a president with a track record of expanding debt to pump the stock market in the first place, and it would be hard to imagine anything less likely to stave off a crash than launching a trade war or threatening to annex your neighburs. Frankly the only only credible cause of the US economy completely collapsing within a decade is called Donald.
Getting a short term interest rate cut makes very little difference to the robustness of the US economy in a decade's time, and even if it did, there are many ways of getting a short term interest rate cut that don't involve massive economic disruption and permanently sabotaging US trading relationships (most obviously, the president nominates the chair of the Fed...). You could see what the likes of Ackman and Elon actually thought about the tariffs from them breaking ranks to moan about them.
The billionaires who backed Trump like standard right wing stuff like tax cuts, deregulation and/or racism, or figured he was going to win anyway so they might as well get credit for being seen as his ally. Some of them might actually be well informed enough to place shorts (and hey, the ones who own trading shops rather than manufacturing and services companies might be able to win more than they lose in equity value that way) but that's a completely separate issue from the idea that chaos now could have positive effects in a decade's time, which only one billionaire in the world is dumb enough to believe...
The bond market is always the adult in the room. The UK PM lasted like 44 days when the bond market pushed her out [1]. In this case, the flip was that all the chaos led to people leaving behind the USD completely. Trumps view of the US/World is ~30+ years out of date. There are other stable places to put money now where it used to only be USD.
Isn't iceberg lettuce so common in part because it's one of the most stable lettuces? Still absolutely hilarious that Truss was outlasted by a head of lettuce, but I want to make sure that we're being accurate.
Iceberg lettuce is a cultivar known for its longer shelf life and higher water content.
Romaine lettuce is another lettuce cultivar famous for its crunchy texture and higher vitamin content.
I am switching to Romaine for the vitamins now I know (have read a single headline on the internet) better.
China dumped 500B in treasuries and the basis trade blew up is what happened
Tariff deals were still going to happen regardless. The pause is a stop gap for the basis trade (20+x levered), of which an uncontrolled unwinding threatens the entire financial system. Fed already had a bailout facility ready as a plan B. Too big to fail and all that
Calling the Fed bankrupt isn't a close to accurate description of what was described in the column. The post describes a unhealthy balance sheet, but the Fed can't go "bankrupt" in the common sense, as it banks itself, with the assets held on it's ledgers purchased and backed by the hypothetically infinite monetary supply. All that was described in the column wasn't bankruptcy as they put it, but how the Fed organizes assets by their quality.
It's scary to think he's just not got a clue and doing whatever he thinks of in the moment isn't it?
I mean the guy who doesn't understand tariffs, at all, but has publicly loved tariffs for 40 years in charge of tariff policy. That's disturbing to contemplate head on.
Much better to invent some comforting fantasy of secret plots being carried out semi-competently to achieve nebulous but vaguely noble goals.
The refinance is a real issue, but it doesn't matter too much cause the Fed can (and will) always intervene. They can soak up any supply to push the 10 year down.
Same reason why it doesn't matter if China etc.. wants our treasuries. Fed is always there to buy them.
I'm not an economist but I believe this is only the case so long as USD is the global reserve currency. If that ceases to be the case, the Fed has a lot less power to print money and inflate debt away. I believe this is the case Ray Dalio has been making for some time now:
Uncertainty is a massive problem and may itself bring on a recession more than any tariffs. It's a huge factor in the oil market crash that's currently going on. I've seen one oil expert say that Obama was the best president for the oil industry because he did... nothing. There were no kneejerk policy changes on a weekly basis. And anything requiring large capital investments thrives on certainty.
As for Treasury yields spiking, that was no accident. As part of China's (justified) retaliation to the tariffs, they started selling off 10 year Treasuries intentaionlly to spike the rates because that's one thing the Trump administration seemed to care about.
I still don't know what the endgame is/was here. Some seem to think devaluing the dollar was the goal to boost exports but also to effectively devalue US soverieng debt. There's precedent for this eg FDR's sovereign devaluation of the dollar and Reagan's Plaza Accord.
This makes a lot of sense, although I wouldn't give them the credit of being so coherent in their understanding/targeting of what they were doing.
In my opinion the reason it backfired, what they proposed wouldn't merely cause a confidence in crisis, but also implied a fundamental shift in the market and the way it worked, this would also have to be priced in, hence the drop. There was no longer necessarily a "buy the dip, the market will go up at some point".
The T-bill strategy wasn't a secret. Why they walked it back could also be attributed to bringing trade partners to heel at a point of maximum leverage. Or a lack of resolve in leadership. Or messaging and opportunism.
Will it pay off? Who knows. If it does, it will go down as one of the greatest gambits in modern history. If not, perhaps the end of dollar hegemony? End of the Global American Empire? Or nothing at all?
It’s time to stop bending over backwards pretending that Trump’s tariff threats are part of a coherent economic strategy. They’re not.
When you drop the economic lens and view tariffs as a political tool for consolidating power, everything suddenly makes sense.
Here’s how it works:
- Tariffs hurt corporations. They jack up costs, raise costs. Executives know this. The markets know this.
- But there’s a loophole: carve-outs. Trump has the power to exempt individual companies or industries from these tariffs. That means if you’re a CEO and your business is on the line, your only option is to go to Trump and ask for mercy.
- That’s not policy. It’s leverage. It creates a system where corporate leaders must show loyalty to get relief. Not because it’s good for the economy, but because it’s good for Trump. Maybe it's public support for his initiatives, attacks on his enemies. Whatever it is, it gives him political power.
This mirrors the playbook used by authoritarian leaders throughout history. Look at Putin. His use of tariffs wasn’t about growing Russia’s economy—it was about punishing enemies, rewarding loyalty, and projecting control. Tariffs became a way to rewire power dynamics.
Also, this trade war pushes the USA close to a war with China over Taiwan and maybe Panama Canal, which is exactly what you want as an authoritarian to stay on longer. Find an enemy and use emergency powers to maintain control.
The only aggregate alternative to holding T-bills is to hold dollar bank accounts. At which point the bank holds the T-bills instead or the Fed does as balancing assets to the account liability.
It could all be refinanced to three month bills without any issue at all.
Ultimately balance sheets have to balance. In a floating exchange rate system there is no aggregate out.
You are correct on the mechanism here. But my point is adjacent to that. Whilst you always get a buyer for the debt (here the bank), it is the yield that matters as the re-financing cost cannot be escaped irrespective of the owner.
Or maybe investors didn't buy treasuries because they were in on the scam all along. They wanted to stay liquid because the plan was always to crash the markets and spook foreign investors while US investors are informed to wait for the tweet about the 90 day delay and buy cheap stocks.
> Because when your national budget depends on cheap debt, you can't afford a crisis of confidence in your bonds.
True. The odd thing is that the previous tariffs announcements on supposed allies, plus all the other sabre-rattling that Trump has been doing, NATO-bashing, flipping on Ukraine, etc., had already triggered a crisis of confidence. So what did they expect? That unexpectedly unleashing of wildly unreasonable and poorly-calculated tariffs would inspire _more_ confidence? If getting investors to flock to T-bills was the goal, it was always bound to fail. (It only worked in the short term because T-bills are the default in a time of market uncertainty; but when it became clear that the uncertainty was caused not by the market, but by the government's behavior, well then T-bills don't look so good anymore).
>Instead of being seen as a safe haven, U.S. debt itself started to look shaky. Maybe it was the deficit outlook, maybe the global response to tariffs — but whatever it was, yields started climbing. Fast.
Seems pretty simple to me - bond yields moved up sharply because they follow inflation expectations. Bond holders take on inflation risk, so when future inflation is expected to increase, yields go up to compensate. Out of control tariffs equals out of control inflation, which equals rocketing bond yields. The fact that Trump's team didn't realize this would happen is both hilarious and frightening. This is Econ 101 stuff.
I realise I'm asking for an imagined scenario but- who would this adult be, that somehow escaped the purge of competence and oversight in favour of sycophants, and how would they broach the topic with Trump (who of course wants to be the Big Boy and loves supplication)?
I am extremely skeptical that a president and a party that massively increase the national debt every time they hold unified control, and whose single legislative goal this year is to do exactly that once again, is engaging in a sophisticated conspiracy to lower interest payments. If Trump and the GOP actually cared about the debt payments they wouldn't be arguing about how many trillions of dollars to add to it this year.
The much more likely scenario is that this is exactly what it looks like: an incompetent and corrupt president flailing around. Tariffs are an excellent tool for soliciting bribes since there are any number of ways various groups can be exempted, and this type of abuse has often happened historically. The ham-fisted way they have been implemented has done a great job of getting Trump attention. I've never seen anything to make me think that Trump cares more about the long term health of the country over getting bribes and attention for himself.
Just four hours before the U.S. administration announcement, posts here were already calling the surge in U.S. bond yields a "non-event." ( and being flagged..)
It was indeed about T-bills. Something Trump probably doesn't even know what it is. There’s no strategy, no objective, just sheer, unfiltered incompetence.
The stock market’s reprieve will be short-lived. In just eight days, this administration erased $5 trillion in market value, insulted its primary trading partner using language deeply offensive in Asian cultures, and made it clear to investors that it has zero credibility.
Futures are already negative, which is exactly what you'd expect. The market is responding. And let’s be honest: the claim about 75 countries eager to negotiate is a pure lie. The EU has publicly stated the U.S. administration was not even returning their calls.
Correct. It seems to me the increased bond yields payments will significantly exceed revenue raised from tariffs. This is imho a bad long-term signal. I very much doubt the markets will just return to normal after the extreme volatility of the last few days - the huge tariffs on China will cause a lot of economic pain within weeks, and the administration's bellicosity toward Canada and NATO do not project stability and rational decision-making.
Besides the financial uncertainty, I doubt businesses want to make huge capital investments within the US to re/build factories in such a febrile environment. Will they be 'encouraged' to make 'donations' or purchase Trump golf club memberships? Will their foreign management staff be abruptly deported if someone in the administration sours on their country of origin? Will they wake up one day to find they've been denounced by conservative influencers?
Yeah... if that was their reasoning then they are as dumb as a sack of rocks. The rates went up further after the tariffs pause today.
> Instead of being seen as a safe haven, U.S. debt itself started to look shaky.
No shit. Having an inconsistent policy because of clear incompetence (xx Dimensional chess) is a very bad sign for the world largest economy. At some point this will hit the bonds which is the foundation of this economy.
Bessent said the decision had nothing to do with the markets.
“This was driven by the president’s strategy,” he told reporters outside the West Wing. “He and I had a long talk on Sunday, and this was his strategy all along."
Trump later contradicted Bessent.
“I was watching the bond market," he said. “That bond market is very tricky.”
This sounds sensible but that's not what happened. The government debt is not an issue. Trump is more concerned about the stock market, and the market sent him a clear message.
I honestly don't think this was their overall goal (it doesn't logically make sense, given tax receipts dip during recessions and governments often take on even more debt,) but I do think that is why they blinked.
> But then something flipped.
> Instead of being seen as a safe haven, U.S. debt itself started to look shaky. Maybe it was the deficit outlook, maybe the global response to tariffs — but whatever it was, yields started climbing. Fast.
So, it's not this unstable president, his insult-spewing vice-president and his buddy the hyperactive billionaire manipulating a social network for Russia and China that makes the rest world want to avoid the USA for the next few years?
These complex 4D chess strategies never really pan out. Maybe someone in the administration thinks that was the goal but not Trump.
During the campaign Trump said he wanted 10 percent tariffs on the world and 60 percent tariffs on China. After all the noise we are now at… 10 percent tariffs with the world and 125 percent tariffs on China (pending negotiation with China).
"Alarm inside the Treasury Department over signs of distress in the US government bond market played a key role President Donald Trump’s decision to hit pause on his “reciprocal” tariff regime, according to three people familiar with the matter.
Treasury Secretary Scott Bessent raised those concerns directly to Trump in their meeting that preceded the announcement, underscoring the concerns shared by White House economic officials who had briefed the president on the accelerating selloff in the US Treasury market earlier in the day.
The market turmoil has rattled administration officials and market participants because it’s the exact opposite of what historically occurs in moments of global economic crisis or volatility. US Treasuries are considered the safest corner of the market. It’s the place investors across the globe flee toward with the assurance that the dominant US role in the global financial system will ensure asset safety.
But at the same moment Trump’s tariffs were causing foreign leaders to question the durability of longstanding US security and economic alliances, the rapid selloff of safe-haven assets raised concern that financial markets have similar concerns.
Trump acknowledged he’d been watching the bond market, telling reporters after the announcement the market is “very tricky.”
A spike in yields in the 10-year benchmark was of particular concern for Treasury officials. When the yields rise, US consumers face higher costs on things like mortgage rates for homes and financing costs for businesses."
The yield really isn't that big a deal. It's hundreds of billions of dollars over decades if it moves by 1 percent. Compare that to tax cuts leading to trillion dollar annual deficits.
I mean, it could well be that they are risking the stability of the US economy to save money on refinancing the debt, but that would be a stupid thing to be doing.
Trump formulated his ideas on tariffs in the 1980s. He talked about them with Oprah in another ero. He didn't do this in preparation for some realization of the bond situation in 2025.
All those long 8 weeks that people spent complaining about soft power, and the US government spent trying to gaslight people saying that they don't even use the power... The people complaining were talking about something real.
I disagree. Trump has been threatening tariffs since 2016. Each step he gets closer to significant tariffs. This time he stepped back after they seemed real.
Now businesses know he really, super means it this time, so they get another reprieve. But next time it would be hard to claim Trump didn’t warn them.
I agree it's classic brinksmanship and the tariff views he has are genuine and long held. But his numerous signals to the Fed to ask to lower interest rates and the commitment to DOGE (which has the effect of lowering yields) is another strand in his thinking. The two are in conflict causing the flip-flop effect in short term policy.
I think you’re projecting more advanced thinking here than you can give them credit for. The administration doesn’t have military guys keeping discipline.
You have Trump who has an instinctive affinity for tariffs, and a wack pack of various characters doing whatever. I’d guess they thought the Chinese would roll over rather that start dumping bonds.
If your goal is 'lower the rate at which you'll refinance a bit of debt by a quarter of a percentage point', blowing up your export economy, import and tourism industry, and introducing a national 40% sales tax seems like a really weird way to achieve it.
Given that all of those things would torpedo your ability to actually service debt, both new and old.
The 10% apparently also apply to Canada and Mexico now, which they didn’t before:
> In a strange turn of events, the president seems to have added another 10 percent tariff to Canada and Mexico. Asked earlier if the 10 percent tariff extended to those countries, Scott Bessent, the Treasury secretary, said that it did. And a White House official clarified for me just now that that was the case. Previously, Canada and Mexico had been exempted from this round of “reciprocal” tariffs, though they still faced a 25 percent tariff that the president imposed last month on many of their goods.
Market manipulation. 1. Sell. 2. Threaten tariffs. 3. Buy. 4. Walk back tariffs threats. 5. Repeat.
With the secret step 0: Pay enough of an Indulgence to get in the loop of when those are going to happen, and to stay in their good graces so the DoJ doesn't hit you for insider trading.
I'm coming to the conclusion that the tariffs are a distraction. The 10% across the board appears more like a tax hike without calling it one while the focus on China is just the same old trade war from the first term with louder chest-beating.
This is like shooting yourself in the foot to splatter blood on your opponent. It "works" in a sense, but is about the stupidest approach possible.
There's a reason the dollar weakened in this crisis instead of strengthening like usual. Everyone can see that the US will be hurt far more by this idiocy than other countries will.
The US has crashed its own stock market, tanked its own government's approval ratings, and had its own business leaders speak out against the government. This definitely does not increase leverage.
Was the plan to incentivise Korea, China and Japan to work together? You know you've screwed up when bitter rivals decide to cooperate together.
Every government that has to do something undesirable to their citizens have been given something to blame: a beautiful excuse that will be milked relentlessly to the disadvantage of the US.
Businesses get screwed by flaky management - and now we get to see the US get screwed by its unreliable self-centered Prez.
Even countries like Singapore, hit with a 10% tariff (marginal, and far lower than most countries) absolutely panicked.
Interestingly, I looked up the size of consumer markets - the US is twice the size of the next biggest market, the EU.
So I don’t blame countries for panicking.
And if you’re really conspiratorial, one could question whether the push for free trade was really an attempt to put the US into a situation where it had leverage against most of the globe.
With the bounce back the Dow Jones lost 400 points. For comparison, the German DAX lost 900 points, but is only half the size. It is a reckless and probably counter-productive strategy, but I do think Trump will be able to extract short-term benefits from a number of countries. I just hope the EU will finally decrease reliance on the US going forward. Our extreme reliance on US tech and defense makes us easy marks.
"I bought $200 worth of stuff from your store and the store bought $0 worth of stuff from me. To punish them, I'm going to pay myself $100 every time I buy anything from the store in the future - that will show them!"
He only has political leverage over Congress. If they chose to act, they could stop him. Seems weird to kick off negotiations with them by inflicting damage on their constituents.
But a distraction from what? There doesn't seem to be any kind of obvious other thing they're trying to do with the cover. They're not exactly being secretive with ICE arrests, the mass layoffs from the federal government, or their weird campaign against DEI that the administration seems to have all but forgotten about.
They literally have no idea what they doing from one moment to the next. Obviously they are making up facts and strategies on the fly maybe minutes before press conferences. Just look all the math errors, irrational formulas and tariffing penguins. The malevolent incompetence is staggering.
I think they're distracting from the fact that it's a huge tax on the general public. You might say it's obvious, but people just don't process it the same way even though that's what a tariff is.
You know how in a game of Risk, at the early stages you form strategic alliances, but toward the end you inevitably have to break them because eventually someone has to win?
That's a little like what's going on now.
Pissing off your allies is good because if they're happy, that means you didn't squeeze them enough.
And it may hurt us and our companies more than theirs, but it doesn't hurt Trump personally, and that's all he cares about. He's going to be fine, so he's more than happy to cause us pain if it cause them pain as well.
I of course believe that. But Trump does not. Trump believes a good deal is one in which he gets everything he wants, and the opposing party gets nothing. It's a philosophy of domination and control.
It's the reason a "trade deficit" is seen as a bad thing by him. Trade deficits are the result of a mutually beneficial transaction, but that's not enough for Trump. It can't just be mutually beneficial, it has to be beneficial more in our direction than theirs.
Or look at how he treats contractors. He hires a person to do a job, they agree and deliver the work, and that should be the end of the mutually beneficial deal.
But not for Trump, his MO is to stiff contractors, force them to sue, mire them in a legal quagmire, and get them to settle at a loss. This is the kind of deal Trump likes because it's a win for him -- he gets the contracted work at a fraction of the price; and a loss for them -- they probably wouldn't have agreed to do the work had they known what they were in for upfront.
Is this a great way to run the largest economy in the world? Of course not! But that's how it's happening now because that's the kind of guy who is in charge.
Trump thinks of himself as a powerful, insightful deal-maker. He pathologically needs to feel like he is doing something and his comfort zone for what kinds of things to do is "stuff that feels like business deals".
He knows very little about government and policy, but tariffs and dollars and percentages feels familiar to him. He's got a lever, and he can't resist yanking on it to show that he's in charge.
Whether yanking on the lever actually benefits the country or him is entirely besides the point. He's a narcissist and narcissists can't let go.
The reason they have reduced all tariffs back down to 10% even for the countries that were obviously transshipping (Vietnam, Myanmar, Thailand, Cambodia) is that they need time to negotiate with those countries, to make sure these countries now put similarly high tariffs (100%+) on China, so that transshipping is reduced to nothing
If China doesn’t counter whatever the F we “counter” that would significantly weaken its position with every other country… and the wheel turns with this line of thinking…
except of course Trump brought a knife to a gunfight :)
Only, China isn't actively negotiating tariffs with every other country right now, so whether they retaliate won't impact their situation the same as it does from the US's point of view.
I really hope you are joking thinking China isn’t negotiating everything with everyone other than USA right now, starting with the very today publicly EU…
Idiots, all. This feels like the sort of mistake I'd make. As in, me, myself, without a team of people planning and reviewing who could comfortably doublecheck when they thought I was getting something a little wrong in my orders. Which suggests to me that this is being done by one or two guys who do not have such a team. Which is insane.
Seems they reversed course on that. Or, they don’t know what they’re doing.
> It's been a confusing day.
> As Verity said, it turns out Canada and Mexico are not getting a new 10 per cent tariff after all.
> The White House reversed its earlier announcement in a new statement just now. Here's the bottom line: No new developments for Canada and Mexico today.
> That means there are still worldwide 25 per cent tariffs on steel and aluminum, on some auto parts in North America, and on some goods traded within North America outside the rules of the Canada-U.S.-Mexico Agreement on trade (CUSMA).
> The bottom line here: Trump is starting an economic war on China, and U.S. allies are all taking some friendly fire. But a large swath of Canadian trade is spared.
They know what they are doing. The goal is decoupling from China. They raised tariffs on everyone to see which countries stood with US and which stood with China. Once each country has made their allegiance clear, they delay the deadline to give more time for negotiation. They likely want every ally to raise their tariffs on China to be very very high, to avoid any more transshipping from China.
Presumably because those were in retaliation for the steel and aluminum tariffs, not the reciprocal tariffs. It takes them time to respond because the EU members must vote on it. We have yet to see what their action will be with the reciprocal tariffs.
You’re joking, but it’s true. I’ve been living in Turkey on and off and I’m convinced that slow changing rules are indeed a blessing.
Unlike Europe, in Turkey rules and everything is changing all the time, you can’t count on anything to be the same the next 5 years. No one in the institutions knows how everything works, they only follow the computer instructions. You are getting a loan? its a mystery if you will be able to get the stated amount because if you are buying a house down the road the computer may ask for the energy efficiency rating and limit the amount based on that. They will say that it is to promote energy efficient buildings but that regulation will remain only for a year or two- not enough to change buildings practices but enough to limit the loans given without explicitly limiting the loans given.
It’s a horrible thing, you can’t plan anything and those with connections end up catching all the good temporary situations because the got tipped. The moment the masses start realizing the opportunity, the rules chage.
It has become a tool for giving favors to loyalists and created a lot of horrible people who got “lucky” with their investments. When the politicians feel like paying loyalists, they will change something in the law that will allow for previously non-developable land to become developable and loyalist will get tipped that they should buy the land before prices increase. It will be something non-obvious, like something about changing the category of a road or something that changes the status of the land when appealed.
UK has had a stable system for many hundreds of years. I don't think it's something that can't be done at the country level, you don't need the EU to do this too!
I find it curiously useful that Trump’s blatant lying can be used as a shibboleth. E.g.: they’re not reciprocal tariffs, so almost everyone calling them that is a “true believer” that accepts Trump at his word.
Ok, what do you call them so you don't confuse that round of tariffs with other ones? "April 2 tariffs" doesn't work because, while that day was when they were announced, the steel and aluminum tariffs also went into effect on that same day.
> they’re not reciprocal tariffs, so almost everyone calling them that is a “true believer” that accepts Trump at his word.
I disagree. Non Trump aligned media called them reciprocal tariffs. I don't know if identifying the lie was too controversial or they couldn't understand the equation the administration published. And non Trump aligned people called them reciprocal tariffs because they heard or read the phrase.
I’m not sure they need to coordinate, except for the state of US Politics. Take the hit now, then seek a long term better deal elsewhere, with more stable policies.
The U.S. ambassador to Canada has since informed the government that this is not the case, and the tariff's currently in place will remain unchanged for now[1].
However, with this administration, who really knows?
Perhaps Trump is staying quiet to avoid aiding Carney in the election. Perhaps he'll announce harsher tariff's on Canada tomorrow. Canada did retaliate and hasn't been hit with retaliation for retaliating, which gives the lie to Trump's statements that countries should refrain from retaliating if they don't want to be treated even worse.
There is not one whit of consistency or logic on display here.
This seems to have been clarified to not be the case, as of 30m ago -- no change to Canada/Mexico:
>There’s no change to Canada and Mexico tariffs, indicating that their levies aren’t going down to the 10% baseline. Recall that Trump initially threatened a 25% surtax on each of them. That morphed over time to affect non-USMCA compliant goods -- and it’s not crystal-clear exactly what proportion of Canadian and Mexican shipments that then affects. Canadian energy products also got a smaller rate.
Possibly because lawsuits challenging the power of the President to impose tariffs under the Emergency Economic Powers Act are underway.[1] GOP support for Congress taking back control of tariffs is building.[2] At some point, Congress or the courts will take his toys away.
I've seen relatively little discussion about these lawsuits, but I do think there is a pretty good chance that SCOTUS will rule these tariffs unconstitutional. (It's certainly more likely than Congress rescinding the powers they've ceded to the presidency.)
Constitutionally, the power to set tariffs resides with the Legislative branch, not the Executive branch. Congress has delegated some authority to set tariffs under certain conditions (namely, emergencies and matters related to national security). But the Court is clear that one branch cannot delegate all of its powers to another. The Court is pretty deferential to the Executive branch, especially in matters of national security. But no matter how much you squint, it's hard to see how setting broad based tariffs on all goods from every foreign countries qualifies under the Emergency Economic Powers Act.
It is a sound analysis but I think there are other non-legal factors at play.
If the president tries to do X, then the lawyers block X, then in political game theory the president "wins" in the eyes of the electorate because the president can argue "my plan was perfect, the execution failed due to the opposition, so I am not accountable to what has now happened".
The left might want to see a disaster play out to capitalize in the mid-term elections, laying the accountability directly on the president. The right might not have freedom of action because they fear a well-funded challenger for their seat.
In am interested in other people's opinions and ideas in this area. I agree it is too little discussed and analyzed. Please share your insights!
If judiciary blocks X, then trump will say "these are the real bad guys, they are as worse as the dems, lets remove them". And BAM ! You have a dictator.
The sad part is that one of the most powerful nation in the world is filled with idiots who will lap up the above argument.
I would say that all this current situation is because of corporate greed, leading to a skewed distribution of wealth, leading to the evolution of a class of voters who are desperate, gullible and mis-informed.
The people on the left who want to see a disaster play out are mostly accelerationists. I think most on the left would worry more about the harm that economic disaster would be inflicted on people.
And more pragmatically, I think that Trump is so committed to causing disasters that he's likely to succeed at enough of his attempts that there should be pushback to as much of it as possible.
People on the RIGHT want to see this. The younger cohort of republican voters were HAPPY to see the stock portfolios and retirement savings burn up in a puff of smoke, because at least now older cohorts knew their pain.
They have each independently, on different cases, voted against the administration. Except one I think, but it’s also only been three months. And John Robert’s just rebuked trump. It seems they have enough backbone to not care about his ire, and have their own independent minds. Thankfully more than congress does.
The Supreme Court, in a 5-4 shadow docket decision, just enabled the Trump administration to deport people under the Alien Enemies Act -- a law that requires a declared war or an "invasion or predatory incursion...by a foreign nation or government." So I wouldn't get too excited about the idea that they're going to make a big stand on tariffs.
The Supreme Court, on its shadow docket, did not decide any such thing. It stated very clearly that it was not rendering an opinion on that subject. What it did decide was that due process applies, even to illegal aliens, even under the Alien Enemies Act.
Granting the Trump administration “extraordinary relief” to continue deporting people is absolutely a decision. You can say “we didn’t rule on that issue” a hundred times in a row if it makes you feel better, but if you go out of your way to make sure the government can continue to exercise power under an absurd legal justification, you’re making a very explicit choice.
It’s this kind of legal storytelling, by which you pretend you didn’t authorize something, while actually taking actions that ensure it’s authorized in practice, that is the worst enemy of the rule of law.
I have this "fear" of being in a situation where a judge has to form judgments about code i wrote, even when relying on an "expert".
For the same reason that i believe a situation like that could play out, i don't think i should judge a judges understanding of, dedication to work through, and knowledge about– the laws.
I actually studied law for a few years. And i am baffled by the confidence of laymen about court rulings. It's almost like a client explaining to me how easy it is to fix this small bug.
It decided that deportations can continue, removing the temporary restraining order. And the administration claims that they are irreversible because those people are no longer in US custody. Such wonderful due process we have...
Then when you look at how SCOTUS justified it, they basically claim that the petition is invalid if it's not filed where the detainees are currently held. So how is it supposed to work if the feds just keep shuttling them around?
The past tariffs (including from Trump's first term) were targeted at specific industries like steel or aluminum so you could make a case that it was necessary for national security. Other trade deals that set a broad set of tariffs (like NAFTA) were ratified by the Senate.
Roman dictators have always fascinated me. It worked (for a while at least) because both sides agreed it was necessary and temporary. The people who appointed the dictator knew extreme measures were needed to navigate them through some crisis. The dictator knew if they tried to hold on to power longer than was necessary they would simply be removed or killed, their supreme power only extended through the crisis in which they were needed.
I mean, it may not be a completely solved problem, but you don't have to be too clever to think that perhaps rules similar to the War Powers Act ought to also apply to the President's authority to apply tariffs.
It's a foundational part of the sickness in people like Trump that anything bad is by definition somebody else's fault, and clearly his cultists just keep lapping up his lies no matter how insane and transparent.
This. Anything (accidentally) good was totally intended by Trump. Anything bad was because of evil ultra-leftists sabotaging his intended good, and not because Trump made even the tiniest of mistakes.
To an extent, since we’re all human. But conservatives, regardless of nationality, are unified by one characteristic that makes them more susceptible to this kind of propaganda.
Conservatives lack the ability to empathize abstractly. Due to their extreme emphasis on being self-centered, they are deficient in understanding that what happens to another can happen to them.
Once something bad happens to them, they are able to start to see the threads that bind them to others and society. But it’s only once it’s been made personal that there’s a chance of this recognition occurring.
So “us good, them bad” style of mob thinking is more common in conservatives only because they systematically do not ask themselves “are we actually different from them?”
It's interesting to see it as an answer to the question, how long does it take to turn a well regulated democracy with a powerless head of state into an autocracy.
We've all been learning just how much of the US system runs on assumption of there being some baseline level of competence and good faith. It hasn't been a pretty lesson.
I'm honestly not sure there is another way since laws can't cover all possible future edge cases with effective enforcement mechanisms. The simpler fix is to not elect blatantly corrupt and incompetent leaders, but voters failed that task and now the country is paying the price.
Is it just the historical legacy of international trade that tariffs apply only to physical goods, but not to something like software-as-a-service subscriptions, digital media, or intellectual property?
As the latter categories are more representative of US exports, it would surely be an interesting escalation if other countries were to start including them in their “retaliatory” tariffs.
It would be a just a hefty fee for most EU companies and not much more. From what I've seen Azure is pretty popular in most bigger companies and smaller shops and websites use often AWS or Google cloud. Microsoft Windows and Office is also everywhere - it would be a tax on European business with little effects on the USA because moving away from big clouds won't happen because there is no realistic alternative.
Last I've looked "Lidl Cloud" from Schwartz-IT that is often mentioned as alternative is basically managed Kubernetes for more than double the price of Azure/AWS before rebates. They have that idiotic meaningless TÜV button on their websites and unfortunately it's not technical excellence but rather a trap for boomer CEOs...
Europe missed that boat unfortunately and I don't see that changing soon. Hetzner/OVH and so on only provide bare metal or virtual machines for little money but there is no European cloud with serious IaC and managed services that are stable and battle tested as far as I know.
Changing taxation rules is the interesting topic but unfortunately EU countries are competing on that and that would destroy the business model of countries like Luxembourg or Ireland - I'm all for changing it and it would be better in the long-term but it's probably impossible to pull off at the moment.
It seems to me that replacing foreign computer services is actually easy compared to physical goods: no need to build factories, no need to buy expensive machinery etc, just wrap some open source solution and sell it. For example, China has domestic computer services, from messengers to AI models. And by observation, once you ban foreign services, local competitors start appearing like mushrooms after rain.
It's this attitude that is common in Europe, at least in Germany that is the reason we are so behind. Worked for so many companies that just wrapped some open-source and sold it. Never worked well, nobody understood how it worked. No money for competent devs and so on. Both times the product was what made the company money. Say what you want about USA tech companies but at least some actually have technical excellence. I've lost hope that Europe, especially Germany will understand that.
Yeah sure but then you do promote EU alternatives out of necessity.
On the long term this can really make EU more sovereign, less dependent and it's not a crazy thing.
I have never understood the argument of "yeah tariff would hurt us because we are dependent on foreign tech". Yeah that's precisely a problem at a country level. Promoting local alternative is best than winner takes all.
There's also a price in not looking tough when you're getting bullied sometimes.
Both OVH and scaleway provide managed k8s (and both have terraform providers). But yes, definitely much less sophisticated than the hyperscalers. But if you use k8s, maybe s3 and Kafka, and some databases, it's definitely possible to do the switch.
Swapping an enterprise’s cloud provider is at least a 6 month endeavor and that would be with all hands on deck, I estimate two years at least and that’s still with significant tail wind. While things are crazy, best bet is to hold tight and sign the checks and prepare.
My experience is that it can be anything from relatively easy to frocking impossible. Very hard to put a timeline on.
But if we are talking about tariffs (and not a ban) then a partial move is also relevant. And, at least in my anecdotal experience, a non-trivial fraction of our cloud-cost is pretty simple services which can be moved. It's almost like a 95/5 kind of thing, moving 95% of the stuff would take 5% of the time.
Having a hybrid cloud setup is clearly more hassel, but it's doable.
Say an American multinational like Microsoft provides some SaaS. They have a division in Europe where their developers help make their products. They have offices, customer support, servers, etc. in Europe. Do they pay a partial tariff based on what fraction of the development of their software happened in the US? What if they sell the rights to the European version of their software to their European division?
It would need to be a tax on money transfer to the American counterpart. Cash repatriation or payment for IP rights comes to mind.
Of course, the multinational could also use the funds to invest in Europe, build warehouse or commercial real estate or acquire European startups. I think they already do this to some extent to avoid US tax.
Using these to fund free credits to European cloud providers could be a good way to build up a local alternative. I think we underestimate the importance of free credits in the reliance on the 3 US hyperscalers, especially for startups.
Some part of me feels like (and hopes?) this could create a golden era for tech in the EU. Competing operating systems, productivity software, SaaS solutions. If I had any say in the EU right now, I'd look at ways to increase visa access for disaffected tech workers looking to leave the US turmoil.
If you have a job offer for 50k and a university degree you can get an EU "blue card". Went through the process and it's pretty easy, I don't think this visa is a big issue for tech workers
> If I had any say in the EU right now, I'd look at ways to increase visa access for disaffected tech workers looking to leave the US turmoil.
We're lacking VC funding, not skilled tech workers. Increasing visas for tech workers without increasing the funding just lowers wages which are already low.
That might be true, I wouldn't know -- but I do know a lot of EU countries have visas for skills shortages and software is listed among those skills. I assumed that meant there's an opportunity to expand and expedite access if the need was more imminent.
Just because companies say they have skilled shortage doesn't make it true. They're mostly just picky and want to put pressure on wages. I also have a Ferrari shortage, so we need to make more Ferraris.
Plus, EU visas are basically just rubber stamps anyway compared to how hard getting an H1B is.
Actually here's another unused pressure point, the EU can retaliate by making it as difficult for Americans to work in the EU as it is for EU citizens to work in the US. Why isn't it already reciprocal?
What I don't understand is why other countries didn't make the threat to make any tariffs hold for a year or longer. That would scare Trump away from doing these stupid experiments.
Why would other countries inflict that sort of self harm? It would be a bluff, and everyone knows it. If it wasn't a bluff, you would be out next election.
There is something to be said for stable economic policy making. EU could say that they're not going to be a leaf in the wind, and it would be a totally understandable position.
The whole point of imposing retaliatory tariffs is that it puts pressure on the aggressor to give up, on the basis that you will then immediately drop the retaliatory tariffs. The point is to produce a quick end. Retaliatory tariffs with a _minimum_ duration would be counterproductive.
I suppose you could have a kind of tariff equivalent of the doomsday machine from Dr Strangelove, in principle; a set of automatic measures to come into force if the adversary does [whatever]. However, Trump strikes me as a bit of a General Ripper, so it might not be a _great_ idea.
The EU effectively backdoors tariffs against US software vendors via fines and the occasional if ineffective subsidy for local competitors in the local language.
No, fines are for breaking the law, if they don't break the law there's no way for the EU to collect the money. It's like speed traps, people can be mad at them because they broke the law and were caught, it doesn't alleviate the fact they could have just followed the rules.
They have laws like GDPR where they try to assert jurisdiction outside of their borders. Not sure if fines collected through that have been a significant cost of doing business but my point is they definitely can take money from you in situations where you aren't breaking laws that you are nominally under the jurisdiction of.
Yes but only for the sake of the business conducted in that jurisdiction. The GDPR, according to the EU, applies to anybody anywhere in the world. You can have information on an EU citizen stored outside of the EU and they can fine you under GDPR. You don't even need to have ever been to an EU member state at any point in your life-they still claim to have jurisdiction over you if you have information stored on a computer they want deleted.
Most foreign extradition courts would laugh in their face for trying to use that, but if you have any assets in the EU (as most corporations inevitably will if they get big enough to go international) they can seize those as punishment for not following EU laws related to business conducted outside of the EU and that goes back to what OP tried to argue:
>if they don't break the law there's no way for the EU to collect the money
they actually can, because they can say you broke their law while conducting business outside of their jurisdiction that wasn't even illegal in the coutnry that actually had jurisdiction over that transaction.
Collecting something of value as a condition of service is conducting business. It was decided years ago the a transaction's location is the payer's location. Collecting information with or instead of money does not change this. Moving money or information to another jurisdiction and using it there does not change this.
GDPR covers people in the EU. Not EU citizens. Non EU companies can avoid GDPR liability complying with the law or not conducting business there.
Global companies have assets in the EU because they conduct business in the EU. International companies which do not conduct business in the EU do not have assets in the EU generally. And having assets in a jurisdiction subjects you to the laws of that jurisdiction obviously.
Sadly this is not the case in relation to EU laws.
In the US system of law, it is based on codified "rules". If you follow the letter of the rules you are fine - no fines.
The system of regulation at play here is the EU digital markets act. These laws are based on the effect of your actions, not the specific actions you undertake.
If the effect of the steps you take produce unacceptable outcomes, you pay fines even if you follow the requirements. The converse applies as well. If you ignore the rules but the outcome is in the spirit of the laws, then no fine.
The idea is to avoid malicious compliance but the cost of this is ambiguity in interpretation and also the market response to your actions might be genuinely surprising.
Here is a technical example to highlight the problem:
Apple were asked that you should allow independent browser technology implementations. They did this (to allow Google's technology to be employed as an example).
But due to practical complexity they could not make progressive web apps work on iPhone (since they would need to route through the API which can be provided by Google's browser technology). So to comply with the rules, Apple disabled full screen PWAs and instead allowed them instead the web view area inside a browser, not full screen like a native app is experienced.
The EU regulatory body said revert that, and allow PWAs despite their own rules being then violated (as it would be using only Apple's browser technology) because the effect of allowing PWAs is a competitive marketplace for native app alternatives (web apps).
I prefer a system of rule of law that covers the spirit of the law rather than the letter.
I do not like the idea that law can become a game of finding loopholes that go against the spirit of it, it's whack-a-mole that costs the State a lot to keep patching. I much rather have the system most of the EU has where subjectivity can play into decisions since some loopholes can be clever enough to work around terminology, jargon, and non-specificities to skirt around what's written while being opposed to the intent of the rule.
Companies can still contest, and bring forth cases to be reviewed to check if those solutions comply with the law, their lack of cooperation is a choice to drive a wedge between the citizenry and the regulations by non-complying and crying foul to the public to gather sympathy. That's an active choice, the companies could work with regulatory bodies to cooperate, and find a solution (I work at a company who did that for DSA) but most would much rather give a bad rap to regulations to turn the public against it.
What's a better system that allows patching loopholes of the letter without requiring extensive bureaucracy and potential gridlock in legislature?
There's no mind reading, most of EU's fines only happen after a pattern of non-compliance, complain as much as you want about EU's bureaucracy but it's quite cooperative if you want to figure out a solution. I prefer this system than one where the written laws are worth nothing since well paid corporate lawyers can figure a way out, or hell, they might even be paid to write the laws themselves as it happens in the US.
=> subsidy for local competitors in the local language
I'd like to know if you know what's you're talking about. In france the local subsidies are really low and the inversely the big rebates like "Tax Credit For Research & Dev" are for everybody, US companies like EU ones.
Physical goods you can hold until tariffs are paid.
Services are paid for by invoices between two corporate entities whose legal domicile may have nothing to do with the real country of origin of the services.
Lots of European SaaS providers invoice US customers from their US subsidiary - impossible to distinguish the transaction in order to put a tariff on it.
The EU is discussing it, but are currently debating if that would be seen as an escalation of the conflict.
Yes it would be a strong response, but unlike the US we are not interested in appearing like the strongest idiots, the EU would rather we all get along and trade. We'd rather work on real issues instead of this self damaging garbage.
Yes, that makes sense for Europe but it doesn't help China, because China already prevents a considerable amount of US media consumption and much of what is consumed is bootlegged anyways.
You can tax the "intellectual property" payments that the subsidiaries make to the USA parent, or you can pick some other criterion. Or you can just create a new sales tax for any one part of the transactions you want. It's tricky but it can be done.
I think partly the historical legacy, but also the ease of enforcement and the fact that lower tariffs and services have trended together.
Collecting taxes on goods flowing through a limited number of physical locations is much much easier than trying to audit the client list of a huge number of foreign service providers.
You don't need to hit a huge number of service providers because the USA market is highly concentrated.
That's why you read things like «The Anti-Coercion Instrument (ACI), a nuclear option that has yet to be deployed, would empower the EU executive to hit U.S. service industries such as tech and banking».
https://www.politico.eu/article/eu-trade-bazooka-anti-coerci...
You can just pick the top 10 biggest financial and tech firms and be done with it.
I'm curious what sort of "as a service" things you would have applied this to in the past? Seems like a simple answer of "yes" as to whether how we collected taxes in the past were largely a legacy of how trade happened?
I'm also not sure why other countries aren't moving to criminalize trading crypto to try to tank him and his cronies since the US has given up on preventing presidential conflict of interest.
uhhhhh if you want bitcoin and etherium to moon the best thing you could do for the crypto-community would be to present it as a tangible threat to your country's political and financial elite due to existing outside the confines of their regulatory powers.
When the IRS left it in the grey zone it wasn't really going to the moon because every financial advisor couldn't say 5% of you retirement should be in an investment we can't sell you. It would take a lot more and richer people with oppositional disorders to make up for some universal retirement "just in case" advice.
That's my point, for the first decade or so they didn't even bother considering it to be a taxable form of income, which sent out the message that it's not a significant threat to the US government. In the time since all they've done is tax it the same way they tax conventional fiats; it's never been treated as a credible threat by the United States government.
I think there are some sound-bites from Trump-45 calling it a scam (in strong contrast to Trump 47) but even then then he never tried to do anything about it. If trump gets on Truth social tommorrow and fires off a tweet about how Bitcoin is a chinese threat designed to destablize US hegemony and circumvent tariffs and he's going to sign a legally-questionable EO to ban it, bitcoin's price would go up "bigly". Same would apply to the EU or any other major economy, although i will grant that it might not be to the same degree since nobody pisses people off the way trump does.
I think you place too much emphasis on US spam.. It's had its day and anyone susceptible to it is heavily in crypto that existing holders go heavier if they have more money to allocate to it is still a fragmentation away from actual usage where normal funds and banks add small percentages in longterm funds as a precaution.
I.e. GameStop is all very impressive until you compare it to anything finance actually dumps money in by default.
If the pyramid is isolated it tops out somewhere a lot higher than now and then collapses for lack of a place to sell to next or an actual return.
With the whiplash of tariffs, upping tariffs, pausing tariffs, I don't know how companies can do any planning.
A lot of earnings are coming out next couple of weeks. Take Apple for example, how would they forecast Q2 numbers? They have 125% tariffs on all imports from China. Maybe it'll go up more as China increases their own. Or maybe it gets paused. I feel for the FP&A team there.
They can't. They're saying it out loud updating their guidance.
In polite terms, on earnings calls you're going to hear "we don't know what the fuck to predict".
Follow Bloomberg and you'll hear bank CEOs saying the same thing about the markets, they have no idea what to predict or how to price anything. Right now the line is that America looks like an emerging market with unpredictable wild swings based on policy changes. That is going to drive everyone away from the US, industries, customers, and trade partners.
No, apple only has 125% tariffs on imports from China to the US. They can send them elsewhere (or parts) and send India-made devices to the US instead for example.
This is pure manipulation. It was engineered to just that from the start. Since it's America, no investigation will be done to look into who profited here - possibly billions off regular people who had margin calls. 3rd world country.
> possibly billions off regular people who had margin calls.
Regular people have no business gambling with levered bets on publicly traded equities. Those losses are their own fault, and they should sell gambling treatment.
12:18PM "I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!"
Assuming this was planned so insiders can buy the dip (and let's be honest, he's not clever enough for this, but any crypto bro is), his announcement serves the insiders perfectly as plausible deniability.
What's even wilder is this random Twitter account that 'leaked' the 90 days pause two days ago, got picked up by the news as truth, caused the market to recover by trillions of dollars temporarily... and now this...
There were people buying 18,000 SPY 510 calls at noon due to expire yesterday at 4pm. That is an absolutely insane thing to do unless you had very sure insider information of an incoming spike
My take is that’s probably for plausible deniability. “The prophet told all true believers, how could there have been insider trading.” The volume on the markets picked up twenty minutes before not hours.
Indeed, the 90 days delay leaked in the morning before being denied and at the end of the day there was the official announcement. So some people new before the official announcement and shared the information.
I am beginning to wonder if there is an actual plan behind these moves beyond creating uncertainty in trading partner's minds.
The stated goal of the administration is to 'reindustrialize' the US by manufacturing more of the goods consumed within the US itself. To get to that goal, tariff barriers are just one part of the story. For tariffs to be effective towards getting to the strategic goal, they need to be coupled with sound industrial policy and a long term execution framework. The three legs of the stool, so to say.
So far, there has been no mention of the other two legs. There is currently no serious bill proposed that aims to apply the required industrial policy and all of these tariffs being imposed under executive orders mean that instability in tariff rates and application is pretty much guaranteed. The very opposite of the stable, long term approach that is needed.
Without the other parts, there is a very high chance that the US will bear the brunt of the short term damage, but with none of the long term benefits.
There isn’t a serious plan to bring manufacturing back. You can debate whether there is a plan for high-pressure negotiations, insider trading or kickbacks (e.g. Nvidia’s successful deployment of a million dollar dinner at Mar-a-Lago), etc. but you can tell that it’s not a good-faith attempt to invest in American industry because that would start with the two things you mentioned: you’d see the investment in those industries now and a commitment to raising taxes on foreign competition in 2030 or so when people have had time to actually be able to meet demand.
What we’re seeing now makes as much sense as a middle-aged laptop jockey deciding that they want to be in better shape – and then quitting their job to run in the Badwater Ultramarathon the next week.
It looks like the administration is filled with people more interested in making a buck for themselves, rather than do what is best for the country.
Everyone knows that getting another trump may not be possible for at-least another 10 or so years (I don't mean the dems will win, just that republicans may put forth a saner version of trump just to save the party)
I hate to bring up Hitler but that's how he gained much of his power. He was a "useful idiot". The people that helped him were looking out for themselves. They thought they could use Hitler to grab power/wealth.
Why does the market like this? Tariffs are in place and unpredictability is now the norm. Tomorrow something new crazy will come out and then the next day and the next day. Even if US markets like this right now, the long term damage has been done. Betting on the medium-long term seems questionable at best.
The market doesn't like this. All the professional investors got out ages ago (check out Berkshire's dumping) and are dumping to bagholders. Large fund holders are hanging on because they still make fees and it keeps their AUM up there and everyone else is dying at the same rate. Foreign investors are pulling bonds out because the currency is at risk. The market is being manipulated daily and there is no involvement from SEC. There is only risk left. Confidence is gone.
It is the textbook definition of a fucking shit show.
You're making me feel better about missing the bump today. I got out over a week ago before things went completely bonkers. Was planning on getting back in when I had a sense the volatility had diminished.
Came back from a meeting to find things were halfway back to where I sold and started to feel bummed.
The market doesn't know anything, the people who are trading are trading on FOMO and sentiment, because valuation is completely unpredictable when the global economy is being dictated by one man.
It doesn't; S&P500 is now at like 5400 vs nearly 6200 a couple of months ago. It's just that it is clearly not _as_ bad as it was earlier in the week.
And honestly you'd wonder how much this is being held up by confused retail traders; looking at WSB, say, many of them seem to think that tariffs are back where they were a few weeks ago (they're not; the 10% thing is staying, and of course there's China).
The unpredictability was already priced in. Markets were down substantially from january even on april 2nd. The tariffs are also being priced in, since the markets are still down from april 2nd. Nothing trump has done is good, it just isn't as bad as it could have been.
Seldom a dull moment with the present government. He's still saying 125% on China so it's not back to normality. Also I guess the penguins still face 10%.
Congress does have the power (article I, section 8), however it delegated this power to the president for "extraordinary" situations with certain laws.
"Extraordinary", such as a fictional fentanyl emergency at the northern border (despite the fact that a trivial amount of fentanyl enters the U.S. from Canada, and more enters Canada from the U.S.).
Of course, you have Congress to keep the President in check that these are real emergencies. Which is why the House will definitely be bringing S.J.Res. 37 to the floor, right? Because it's their sworn duty to act as a check on executive power, right?
There's a reason the saying, "in America we have three coequal branches of government: the Supreme Court rules, the President crimes, and Congress is just for fun" has become popular since some time after his first inauguration.
He first announced tariffs on China over fentanyl something like 2 or 3 days after pardoning the biggest heroin by mail operator in world history (Ross Ulbricht).
> The nondelegation doctrine is rooted in certain separation of powers principles.1 In limiting Congress’s power to delegate, the *nondelegation doctrine exists primarily to prevent Congress from ceding its legislative power to other entities* not vested with legislative authority under the Constitution. As interpreted by the Court, the doctrine seeks to ensure that legislative decisions are made through a bicameral legislative process by the elected Members of Congress or governmental officials subject to constitutional accountability.2 Reserving the legislative power for a bicameral Congress was "intended to erect enduring checks on each Branch and to protect the people from the improvident exercise of power by mandating certain prescribed steps."
The list of law firms with the expertise, resources, and will to take on the administration is getting shorter and shorter, because he's targeting the ones that piss him off with EOs aimed to wreck them if they don't pay up and shut up, and that strategy is working.
Agreed however this court has shown it can dance between originalism, textualism, and tossing both of those to the wind (Trump v Anderson) when it aligns with policy goals.
Also it probably wouldn't even fly with anyone since so many other emergency powers are generally accepted as necessary (i.e. defense). The immunity decision is full of rhetoric about the legislature being too slow for crises.
Their best bet is to invent a time machine, go back to Obama, have Obama pass emergency tariffs, then lobby to repeal that act.
They need to take it back, regardless. It's proven that Americans can't be expected to elect adults to the Presidency any longer, they no longer use logic or emergency situations, they use it for egotistical narcissistic feelings of being important by playing red light, green light on a trade war between the two most dangerous countries in the world
I wrote my congressperson (house and both senators) to take back the power. If enough others do the same they will, but if it is just talk on forums they assume nobody cares.
I wrote my Senator, Dick Durbin, prior to the November 2024 election, begging him to do something to shore up the legislature, prior to Trump's possible return to office.
He responded that he's not allowed to discuss campaigning and that I can instead donate to his 'friends' network (PAC?)
I don't think the Dem establishment really opposes Trump at all...
Do you think normal people (think, your average investing American) are trading based on this news? They probably shouldn't be... I would think that by far most of the trading these past few days has been institutions, so, a big transfer from some financial institutions to others?
Yeah, Trump basically told before he announced the pause. I made a lot of money in the past week doing very little but pay close attention to this flaky dude.
Shaking the economy like a snowglobe is sure to make businesses conservative and fearful of spending. There is no path to this being a good thing for the United States.
10% only applies to countries that have not retaliated. I assume (dangerous in these times) that any retaliation will cause reinstatement of the previous rates.
Well if the countries don't take any action, doesn't it mean that they believe current situation is better than any other choice (and anyway, the tariffs will be paid by American buyers) and therefore the previous tariffs were too low?
You’ve been repeating that a lot but as many people have corrected you, they’re nothing like this broad or high: only 1%, and that’s balanced by the EU’s trade deficit on services since we don’t make things like good cars for Europe but they buy a lot of software, entertainment, etc.
It's not like the tariffs are gone. It's still 10% for everyone but China. That only seems small in comparison to what was being proposed before.
I wonder will EU and others wait out 90 days while negotiating or match the 10% in kind
That seems to be the current strategy, and I happen to appreciate it.
I'm pretty mad a the US for fucking up the entire world right now, but I also realise that acting on that anger is a bad idea. I appreciate the EU having some long discussions while the emotions fade.
There's actually some confusion about that. They said they paused the global tariffs but didn't mention the Canada and Mexico tariffs.
If the 10% global tariff is in addition to the Canada and Mexico tariffs, the net tariff rate on those countries could be quite high. Combined with 125% tariffs on China and we would have very burdensome tariffs on 3 of our largest trading partners.
The rally is because Trump caved to pressure and is backtracking earlier claims that he wasn't going to change his policy.
I obviously can't say for sure, but my guess for why you're being downvoted: we don't need humans telling us what the AIs think. We're all capable of knowing that for ourselves.
What I'd guess most of us are interested in is what you have to say.
In the context of Hacker News, when the "worked conclusions" are that of an AI (however accurate or well trained), yes, I suspect that people tend to prefer that less than the opinion of a random stranger.
I'm here for the people. No AI is going to tell me what you think about something.
If USA keeps 10% tariffs for everyone equally, why should we interfere? Serious question.
I believe that Trump is shaking things off, but his goal is to introduce a fixed "tariff" like a soft VAT.
He is just testing (and profiting with $$$$$) what happens when you do things like 30% there, 24% there, etc. But his long term goal is a fixed tax. In that context, who are we to judge them? We also have VAT on imports.
I think you misunderstood: VAT is applied to (approximately) everything a citizen of a country buys: imports and domestically produced products. Exports from a country are entirely irrelevant to whether applying VAT to imports is unfair to US imports to that country, as compared to the US charging a “VAT” on _only_ its imports.
VAT is applied to services too, at least here in Europe.
Now, if we were to split VAT in two: 1. tax on imports, 2. tax on whatever goods/services people in that country pay/buy, you could keep just the 2 and have free trade with other countries with zero tax. Or the opposite, do tax on imports and free trade inside your country.
The fact that VAT has always been like that (1 and 2 together), it doesn't mean it has to stay that way.
Not sure why we should care about how a country decides to apply taxation in their own country, especially if that country sets a more or less equal tax for everyone - that's understandable.
> 1. tax on imports, 2. tax on whatever goods/services people in that
> country pay/buy, you could keep just the 2 and have free trade with
> other countries with zero tax.
That is completely ridiculous. Why would there a VAT on, say, domestically produced pasta on the grocery shelf, while the Italian import pasta right next to it has none?
It's how the EU today works BTW. In german shops you can buy locally produced pasta or imported Italian pasta (no import tax), both with 7% vat on it. Now you can claim "but this is EU...".
Why can't this free trade be done with individual countries for specific products then?
You and the parent poster are talking past each other. They asked:
> Why would there a VAT on, say, domestically produced pasta on the grocery shelf, while the Italian import pasta right next to it has none?
You answer (correctly) that that isn't the case, both boxes of pasta have the same VAT applied to it.
In light of this, I think people are really struggling to understand what you're arguing for or against here. The whole subthread started by someone pointing out that the 10%-for-everyone version of trump's tarrifs is very different from European VAT, since European VAT applies to all products sold to consumers, regardless of whether they are imported or not. That is, indeed, a vital difference. You seem to argue that it's not the case, while giving examples of how it is the case, leaving everyone confused.
To allow free trade of certain goods which your country needs more.
This is why tariffs are much more flexible, because they allow you to, let's say, trade oil at a cheaper price, while pasta (widely produced in europe) at a higher price.
There a lot to be said for ignoring other countries tariffs and just having free trade. Hong Kong and Singapore basically did that for decades and grew fast and became wealthy. Tariffs mostly hurt the countries introducing them.
There are some exceptions. Sudden changes can be painful if you built a factory to service some market and they block the sales all of a sudden. But a 10% across the board tariff may not make it worth retaliating.
VAT applies equally to domestic and imported products and doesn't affect the balance. Tariffs only apply to imports, thus giving domestic producers an advantage (either lower prices or higher profit margins).
It's like saying income taxes and tariffs do their damage in similar ways. They do. Income taxes are another thing that mostly just hurts the country introducing them.
What does VAT have to do with anything? What are you even trying to say? It applies both to domestically produced products and imports in the same way..
> Why forgive VAT what we can't stand in tariffs
Now replace VAT in that sentence with incomes tax, alcohol duty, property taxes.. makes no sense.
It's not a fixed tax where there is the same rate everywhere: when you check the tariff table, you can see that there is a different rate for each item (e.g. 9.4% for Cotton Jeans) and then it says in Chapter 99 that you pay "9.4% + xxx%" where xxx is the special rate for the country.
So it's xx% that goes on top of a rate defined by the type of the item.
Importers care because unlike VAT or sales tax, it makes them x% more expensive than competitors. Consumers care because tariffs paid are in addition to sales taxes or VAT.
Per ratio closer to about 1 to 1.5 percent. It differs a bit per country due to deduction rules and additional tariffs. If you leave those out and only look at regular tariffs it is 1.39%.
What percentage is VAT in Europe? Typically around 20%? Maybe Trump should enact a 10% sales tax instead of a tariff and then everyone would obviously be completely fine with it, problem solved.
Maybe you should learn how VAT work? If you actually know better then all the economists, explain in detail how VAT is like a tariff instead of repeating this trite lie?
The world wouldn't care if he introduced a federal 10% sales tax (provided it was implemented similar to VAT, ie. non-protectionistic)
The WH repeats this lie constantly. Anytime they get pushed on the absurdity of tariffs they mention VAT like it's in anyway related. The right wing outlets then amplify and we further dumb down America.
MAGA really has gotten people to believe all the VAT BS. VAT is basically a sales tax for all products. It does not typically advantage import or domestic products.
If Trump wants to implement a 10% sales tax on everything purchased in the US that would not be considered a tariff and no one would retaliate.
Because it would reduce US consumption of their exports. Just as a tax on consumption of up to 27% in Europe massively reduces Europe's consumption of US exports.
No, it does not seem fair for Europe to take measures to dramatically reduce European consumption of US exports when the US does not take measures to dramatically reduce consumption of European exports. To be fair, the US would need to do something to dramatically reduce US consumption of European exports.
it is however unfair that the US takes advantage of europe by mot having proper food and safety standards, not to mentioning using slave and undocumented labour.
same thing with privacy, the US is abusing europe by not having comprehensive privacy standards equivalent to the GDPR. only california is not defrauding the EU
> Just as a tax on consumption of up to 27% in Europe massively reduces Europe's consumption of US exports.
Uhm, it also reduces consumption of locally produced goods, not just something imported into Europe. Its like...a sales tax, the only reason it is treated differently from a sales tax at all is because of its more fair rebate system.
In China, we called this battle as hypoglycemia (China) versus hypertension (USA), but, what do all the grand narratives have to do with me, I just want to live a good life.
The blatant market manipulation is what really kills me about this. Just 2 hours prior he posted on Truth Social that it's a "good time to buy". Nothing really matters anymore, and 90-day pause is already showing his cards that the same bear-bull market run is happening in July. It's just crazy to discredit the full faith and credit of the US Stock Market and dollar in such a brazen fashion.
Not to mention, with increasing China's tariffs - he STILL hasn't made compelling domestic policy to bring manufacturers here, and has put the cart before the horse by punishing U.S. companies for doing offshoring, before giving them a chance to build domestically. He's only made the super-cheap offshoring approach more expensive (but not more expensive than domestic production). Post-tariff offshoring is STILL a lower expenditure than (A) the investment of domestic infrastructure, (B) the runway of cash it takes before becoming sustainable, and (C) the ongoing wages, maintenance, and taxes to continually maintain it.
Does someone know how companies handle these short-term changes of tariffs? Like, when your shipment from oversees eventually arrives, a 50% tariff is due that makes your entire accounting unprofitable, e.g. a contract with another party to sell it to might already been signed. Do the companies usually ensure against these kind of things?
When you say "buddies" what you really mean is "banks", "hedge funds" and "people to whom it was obvious that announced tariffs were bonkers". If you had the foresight and market sense, you could have made money, too. But you were scared, sold low, and now when it came back up, you suddenly found yourself at a loss (or the so-called "unrealised profit")
Of course they were bonkers. You still had to know when the bottom was and when he was going to announce the reversal. Many people assumed he would keep it up for at least a week before pulling back. If he had the market would have pulled back even more. It's easy to time the market when you're from the future.
Honestly, HN is obsessed with finance; it seems at times like it's all you think about. But when it comes to basic trades, suddennly it's all excuses and "easy to time the market when you are from the future".
A lot of people made money today; no, they are not all Trump "buddies"
Common sense is a kind of skill. You don't have to make "optimal" trade, too, so the true dip doesn't matter only thing that matters is recognising that a ticker is undervalued.
There's markets can be irrational angle, of course, but it doesn't apply here.
Trump delaying the tariffs was only common sense after Trump delayed the tariffs. Before Trump delayed the tariffs, common sense was that Trump would not delay the tariffs.
Again, you're just taking pure luck and rebranding it as common sense, using survivor bias.
If you still insist you had a crystal ball, then I ask you: Did you predict the 125% non-delayed tariffs on China, or did you think he would delay all the tariffs? Are you still predicting the 125% tariffs on China will be delayed?
Using "common sense" to both divine that Trump is so incredibly stupid as to suggest obviously bad economic policy but simultaneously smart enough to revert it is gambling.
There is no 5D chess going on. There is entropy, Trump is an agent of chaos. He is not stupid, nor is he intelligent, he is destructive.
You have better odds sticking to cartomancy or other forms of divination. I have no issue with gamblers, but I do take issues with gamblers who are so delusional as to think they can see that which is unseen.
I wouldn't call it the lede but also in this article is that he increased China tariffs to 125% which is funny. Let's just keep it going, 200% China tariffs! Why not? People weren't going to do business at the 54% tariff anyway.
Mid term elections are November next year. Some time between now and then, republican house and senator members will start getting more than a little bit anxious about not losing their seats. The current chaos is not great for their chances. The closer that election gets, the more likely it is that something like what you suggest might happen.
The problem of course is that any move like that is going to result in chaos inside the republican party. I imagine that might delay the moment before e.g. Mike Johnson (speaker of the house) puts such a thing up for vote in the house. Because it sounds like that would be a career ending move for him. Until that changes, Trump can do as he pleases essentially unopposed.
What's quite impressive, is that people are so relieved now. The base scenario must have been really bad.
As it is, we get:
- 10% of tarrifs on everybody, 25% on several big sectors, 125% on China. Which is absolutely massive
- any confidence in the sanity of the government absolutely destroyed - 90 days ? He can change his mind tomorrow, or in 90 days. Entirely possible that he forgets this whole thing during the 90 days. How is the tough negotiation with Russia going btw ?
- China that showed it's not afraid of Trump. Trump fired all the bullets he had on China, he can increase the tarrifs to 1000%, it doesn't change a thing. Other than convincing other countries to openly joint US trade war on China, or use of military force, he cannot do anything more I believe.
China on the other hand can wreck havock in many, many different ways. Just look at the bond markets yesterday - nobody knows if it was China or not. But everybody knows China could make it much worse.
Same goes for US businesses. Safety inspection in Tesla or Apple suppliers factory ? Why not.
I don't mind the China tariffs. They have been abusing US interests for years and scoffed at promises they made when they entered into WTO and any IP is fair game for their corporate spies, and US companies would be laughed at to try and litigate any of it inside their borders. Something does need to happen with China, but the vast majority of Trump's tariffs were indeed as if he is stupid as a sack of rocks.
If this pattern holds (high tariffs on China, low tariffs everywhere else) there will be a booming industry of pass-through "factories" that receive shipments from China and then re-sell them as having come from Vietnam or some other intermediary country.
This exact thing happens frequently at scale. When countries put export controls in place on shipments to Russia recently, they had a sudden spike in exports to a number of countries known to re-ship products into Russia.
I bought ocean fish roe from my local Euro store. “Product of Belarus” which is of course landlocked.
I thought it was highly suspicious when I noticed, like evasion of sanctions on Russia. However, food products aren’t covered by sanctions in Canada and apparently, the Belarus packaging is to make it easier to sell German fish in Russia!
I still wouldn’t want to buy food that is packaged with the intent to trick people, even if the tricksters were German. (I think Germany is a pretty trustworthy and transparent country but that doesn’t apply to every single individual there).
China has already been transshipping saying they assemble in vietnam with the only thing being done is stuff like taking labels that say made in china off the products.
Vietnam does not care as long as vietnamese people are getting paid something.
Does the US Customs office have inspectors that go to Vietnamese factories and check that the factory exists, and that 51% of the assembly was actually performed there?
If not, what stops a Vietnamese shell company from sending "Vietnamese" goods through a port in China, or worst case, a port in Vietnam?
You need a few people in a "living room" to put "made in Vietnam" stickers on things. That makes the living room a factory and so you are not legally tricking anyone even though your only part in the process is putting that sticker on.
Reminds me of the old rumor that the city of Usa, Japan exists so they can print "Made in Usa" on exports. They actually don't do that and Usa has held its name longer than the actual United Stats has existed but it still makes for a good story.
Who is incentivized in this system to say that this product is actually coming from China? Is it the US government regulators who just lost their jobs? Or the Businesses themselves who don't want to pay higher tariffs? Is it China who avoids the tariff? Is it Vietnam who just got paid for doing nothing?
The answer would typically be that the US gov't would monitor this. But that is not a muscle this administration is capable of. That would require nuance and strategy, and it's very clear from this move that this administration doesn't have that capability.
“The people who care don't know, and the people who know don't care.” The Lord of War, describing military corruption in the aftermath of the fall of the USSR.
I feel like people need to understand how they are impacting the path of least resistance when they make a change. Your change is only successful if the path of least resistance must now go where you want it to go.
if tariffs are applied based on the date of departure and not the date of arrival you can definitely get away with falsifying the date. And on the off-chance you get caught you feign confusion on account of the rapidly fluctuating circumstances and the customs guy lets you just pay whatever you owe without sanction because he has a million other people saying the same thing and even if he can tell you're lying he really doesn't care anyways.
I have a friend who had to get something shipped from Australia to Germany via freight, he told me intercontinental freight shipping generally takes multiple months if you aren't Wal-Mart/Amazon and you aren't willing to pay out the ass for express handling.
>The foreign factory system is already in place for those that use it
ah but there's the small kernel of genius within the corncob that is trump's insanity: which foreign factories do you use and who will they take the shipment from and and wait fuck he just gave a 90-day extension less than a week in, will the factory let me have my money back if i cancel?
Thinking of tariffs as a _sales_ tax, while it seems to be quite popular on this 'ere orange website, is both incorrect and very dangerous. Sales taxes, generally, are paid by the final consumer. Tariffs are paid at point of importation. This makes a big difference; if your factory makes, say, computers, sales tax impacts the (consumer) cost of the computer, but tariffs impact the cost of _all of your imported components_.
I'm only "celebrating" congress getting more time to reel this chaos in. Hopefully we have 20 pissed off enough GOP senators to realize that they never should have let Trump singlehandedly start yet another tarriff war.
It's not like people stopped being mad or are calling this good. Starting with a big number and dropping lower (temporarily!) was not a good negotiating strategy here.
i wonder why the rest of the world doesn't just come together for a while and stop trading / providing raw materials to the u.s. for let's say a year or so.
The "Global Reserve Currency" privilege of the US dollar has been blown into bits, it's all a matter of time until our standards of living here in the US get cut by 75%.
What a clown. Luddite level of policy making, inspired by "Ron Vara" aka Peter Navarro, who in a Kafkian fashion quoted himself as a backing for his lunatic theories.
>How are businesses supposed to plan anything in this environment?
They're not supposed to. The only people who are planning anything in this scenario are Whitehouse insiders coordinating stock frontrunning from Signal group chats.
It'll be "fun" to see all the "negotiations" that happen with other countries, where they offer a crazy array of bribes / emoluments to WH insiders.
Which is perfectly fine, now that we have Executive Order 63, Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security. This is no longer something the DOJ looks for or tracks, with AG Pam Bondi having to sign off on any potential investigations after a 180-day pause.
> How are businesses supposed to plan anything in this environment?
Who cares? Business leaders & the politicians they helped elect are stripping the copper from the country. Whatever's left when they're done is someone else's problem.
I care?? Much of my family works in trades, have their own small businesses with employees and are very much subject to tariffs for their supplies. They did not vote for any of this.
If they voted for Republicans, they did in fact vote for this. It doesn’t need to be like this, congress and specifically the Republican majority which controls it can act to reclaim the power of tariffs from the president _at any time_.
All of this chaos is specifically because they have chosen to be complicit instead of opposing the president. If you want the madness to stop, call your representatives. Speak to your family and ask them to do the same.
Also note that they could also impeach Trump at any time. The sort of crimes that justify impeachment are pretty easily demonstrable at this point so all they need are the votes. They'll have just under half in the House and Senate from the Democrats, so they only need a handful of Rs in the House and (the hard part) a bit over 1/3rd of the Rs in the Senate.
So if they can find like 20 R senators who realize that they no longer support a Mad King, they're all set.
If it passes under a Republican Congress and it's a simple bill (primarily revoking presidential emergency tariff authority), then it'll probably have enough bipartisan support in the Senate, but maybe not House, to be veto proof.
Democrats need about 4 GOP senators to get the bill passed.
Theyll need 19 or 20 to get the inevitable veto override. I guess we'll see how these events have shaken congress and if thars enough to take trumps toys away.
Trump has been spewing financially illiterate nonsense about tariffs for literally 40 years, and was very explicit that he wanted to do this in the election campaign.
I think the "who cares?" was rhetorical. I suspect the commenter you're responding to is in the same place that am - politically exhausted and, for the time being, apathetic.
We didn't vote for any of this to happen. We voted for the adult. But the reality is that this country held fair elections and the population democratically elected someone that is a somewhat ambiguous melange of amoral, stupid, craven, venal, and selfish.
Many of us knew shit like this was going to happen and that it's going to be a very long 4 years. We are getting exactly what we collectively asked for.
I'll poke my head out for the 2026 elections and see if there's anything worth saving...
I also presumed the elections were fair, but there is evidence that they weren't (beyond the usual tactics of disinformation and voter disenfranchisement). Analysis of voting patterns in swing states looks pretty suspicious, to the extent that a pretty simplistic algorithm could even be deduced[0].
Maybe not all of them as individuals, but them as a public. It's not just a fluke of the last election, over the past two decades the u.s. has given control of all branches of government to Trump.
Beyond that, IMO, the public doesn't really care about tariffs. Right now there is a lot of noise because this kind of capricious threat/application of tariffs is something new, but the tariff chaos will become boring background noise in a few months and people will move on to the next thing.
Yes, but the big problem is that these same business leaders and politicians are going to be the ones who get first bite at the apple. And so how they plan is going to impact what's left for everyone else.
I don't care because they burned the system to the ground, I care because they're gonna salvage what they need and nothing else.
I guarantee lots of people in The Swamp are getting word on planned announcements so they can make their stock market bets before the news is announced.
You should care because uncertainty leads to cancelled & deferred projects, which leads to reduced demand, which leads to reduced jobs.
If I don't know if Trump is literal or serious about re-shoring to normalize trade deficits, or its just a revenue gimmick, or if its all going to be delayed, or negotiated away ... am I moving any production back to the US? No.
Plants are cancelling orders as they are uncertain what the tariff might be by the time goods ship.
Woo, I get to vote for yet another slate of billionaire-picked, barely functional, walking corpses repeating the same bland pro-corporate slogans and accomplishing nothing of value for four years before we hand the country back over to the nutjobs for another round. So engaging.
If everyone who stayed home had voted for a third party that party would have won. Even if they split between two third parties, they would have sent a powerful message. Instead they made it clear they don't care. Now add in those who thought the major party was the only way to make a difference. BTW, if you votes for Harris you wouldn't have lost anything by voting third party and it would have sent a message to the Democrats.
If everyone who stayed home had voted for the same third party, it would have won. That's unlikely.
It's also unlikely that it would have been split between only two additional parties. In my state we had 5 parties on the ballot. Colorado (to pick one at random) had 12.
If there was any real movement to get non-voters to vote for a third party, there would likely be even more of them. As it is, each of those parties took a fair bit of effort to get on the ballot, knowing that at best they would "send a message".
If the message is "we don't like you", then the message has been received, for many years. But the reply is "OK, go get people to agree on somebody else", and that's the sticking point.
Oh, I looked. To my knowledge, Harris was the best choice even including third parties. Stein and West are both whackos and no one else even made it on enough ballots to win.
>I'm more focused on upping my cash reserves and bracing myself for a recession.
I'm doing the same because I'm legitimately in fear of both economic troubles and/or losing my job as a result of all this uncertainty.
I have cut my personal spending to nearly zero aside from essentials and have been hoarding my money. It's the only sensible option when planning for one's future becomes impossible.
We have nine months of expenses in cash outside of retirement accounts and working up to 12 by the end of next year. But besides that, I’m not changing anything about our investment plans or our travel plans.
I have been in the job market since 1996 and had to find a job both last year and the year before. I’m on my 10th job. None of the fundamentals ever change:
Live below your means so you can take a job that pays less than you are making, keep an emergency fund, keep an updated resume and career document. Also keep an active network and always be interview ready.
Also play the political game at your job and be sure to be in profit centers not cost centers. Market yourself both internally and externally.
We are in for this ride, at indefinite intervals, for the next 3.75 years. Well, unless congress grows a collective sack (unlikely) or President Trump comes to his senses on macro economics (past experience suggests this is impossible).
> How are businesses supposed to plan anything in this environment?
They cannot. This is how you can tell Trump was never a real businessman, but rather a TV host and a celebutante. I'd venture nearly all major American business, public and private, depend on stability in the American government. Trump's actions make it painfully clear he is not, and never was, really part of the "business" or "deal making" world.
> Well, unless congress grows a collective sack (unlikely) or President Trump comes to his senses on macro economics
We in Argentina feel for you: it's exactly the same for us, replacing Trump with Milei. And with the added humiliation of Milei being a lapdog to Trump.
This phrase of yours "unless congress grows a sack" is exactly how we feel about our own congress in Argentina.
I joked to a friend that Trump is going to cause a new religion to start. One that makes people pray that today he does what they want (e.g. just shut up and not yell "China, 500% tariffs!")
Or one that makes people pray that one of those cheeseburgers he's been eating finally does something...
That's a Stephen Miller passion project, Trump only cares about it in so much as it get's him votes for his real passion project: the money grift with a side of staying front & center in the news.
As someone semi-retired, I was already reasonably conservatively invested. When all this kicked off dumped some more equities. Maybe I could have done a bit better waiting. Who knows? I know I’m happy being that much more liquid.
The President can only legally set tarrifs in an "emergency". Planning tarrifs 90 days out is really stretching the definition--I'm not holding my breath, but maybe the courts will uphold the constitution on this one?
Normally there are rules regarding how long an emergency can last. This is why, I kid you not, the Republican controlled Congress declared there are no more calendar days in this session of Congress. Every day is March 11. So they'll let him do it as long as he likes.
Notably, not the first time this legal fiction has been used, but I don’t really get what the previous uses were for. E.g., for the 2021–2022 Congress, section 7 of the War Powers Resolution[1], as well as House rules[2] XIII clause 7, XXII clause 7(c)(1), and XV clause 7 (all of which require something to be done within a prespecified number of either calendar or legislative days) were all suspended[3]
from 2021-01-03 to 2021-01-28 by HR 8 [4],
from 2021-03-13 to 2021-04-22 by HR 118,
from 2022-08-01 to 2022-09-30 by HR 1289,
from 2022-10-03 to 2022-11-11 by HR 1396,
from 2022-11-21 to 2022-11-28 by HR 1464,
from 2022-12-22 until the end by HR 1529,
which looks like vacations, campaigning and such? I’m not really sure, but it’s evident the formula had already been out there and was not a momentary fit of insanity and/or legislative genius (the Congress before that one used it too, for example), I’m just not sure what it was used for before.
> Each day for the remainder of the first session of the 119th Congress shall not constitute a calendar day for purposes of section 202 of the National Emergencies Act (50 U.S.C. 1622) with respect to a joint resolution terminating a national emergency declared by the President on February 1, 2025.
Referring to 50 U.S.C. 1622(c) [2]:
> (1) A joint resolution to terminate a national emergency declared by the President shall be referred to the appropriate committee of the House of Representatives or the Senate, as the case may be. One such joint resolution shall be reported out by such committee together with its recommendations within fifteen calendar days after the day on which such resolution is referred to such committee, unless such House shall otherwise determine by the yeas and nays.
> [and so on and so forth with fairly stringent time limits all the way through the legislature]
(As somebody who’s never been to the US—come on, am I the only one who finds legal questions like this to be basically irresistible RTFM bait?)
For the extended RTFM: IT's another country's laws and politics. Why am I expected to read their laws and logs of their whatever houses they have to understand something that would not even improve my life? Let alone when their own citizens would have trouble finding these an understanding the meaning down below?
I've seen my share of "well ackshually, this cool technical hack will circumvent the law and outsmart the judges", but thought judges wouldn't fall for such bullshit. Now, I'm not so sure. This is the stupidest thing I've seen in a long time.
This is not quite like the stereotypical case of that, as the legislature first said it wants something to happen one way, and then—later and with a different set of lawmakers, but still—the same institution effectively said that, on second thought, no, just in this case it wants it to work another way. Which seems like a simple case of the legislature changing its mind, something it should definitely be able to do as a matter of course?..
And I mean, both of the houses participated in the first part but only the lower house in the second (AFAICT), so maybe there’s something iffy about that for example. Then of course there are all the suggestions about how the statute these tariffs were ostensibly instituted under (the IEEPA) may not actually authorize tariffs; or that if it does authorize that, then it effectively amounts to the legislature delegating all of its power over tariffs to the executive, which does not entirely sound in tune with the Constitution.
But you see how this starts to look like something you’d want to consult an actual expert on constitutional law about, not dismiss out of hand or listen to random opinions on the Internet on. It’s not immediately clear what even a perfect court would decide here.
This is also how this shambling ghoul gets what any actual citizen of earth would consider a third term. It's already done! This is why he said "you'll won't have to vote again."
The president is only 50 days into his term forever; time is stopped. Hell upon us eternal.
Cash often refers to Money Market funds and the interest they pay tends to track inflation. There are also ibonds but you can invest a fairly limited amount in them.
I was getting 5% until recently which isn’t that far off of where inflation hit. Of course, as you say, some things are higher although a normal age retired person isn’t that exposed to them.
Responding in good faith to other countries’ willingness to negotiate fair trade terms isn’t exactly flip flopping. In fact he did the same thing with Mexico. If the market was paying attention it would have accounted for this…
> other countries’ willingness to negotiate fair trade terms
This is a fabricated justification. There has been literally zero public reporting of any trade negotiations post-tarifpocalypse. The only people saying there are deals being made are the White House, who have produce zero evidence of deals.
No, Trump was responding[1] to the movement of the market and in particular to the sudden spike in federal bond rates. This was absolutely not a win for Art of the Deal. There was no Deal.
> How are businesses supposed to plan anything in this environment?
Honestly, that's one thing that makes me happy about these tariffs: big business is used to getting its way, and tariffs are very much not what they wanted. I've enjoyed the articles about Wall Street Billionaires getting mad and feeling helpless.
Even if that was the idea, the agreements are worth less than the paper they are written on. He is boo-ing and shredding trade agreements that he made himself during his first term. He says one thing one day and the complete opposite the next day.
The fact that what they’ve been saying all along is that the goal of the reciprocal tariffs is to renegotiate with all countries for a more fair economic playing field. Many people aren’t so fickle as to just assume everything the party they don’t like is doing is insane and a big conspiracy to insider trade and ruin the world.
The President's advisors are saying multiple contradictory things. You're right that they're saying that the reciprocal tariffs are a negotiating ploy, which implies that they'll negotiate a much lower rate. But at the same time they're also saying that they're going to use the tariffs to raise enough revenue to replace income taxes as the main way of funding the government, which implies that the tariffs will stay high. Then they're also saying that the tariffs will be used to support domestic manufacturing, which implies that the tariffs will stay high and predictable.
It doesn't make sense that the tariff policy can be both leverage in a negotiation with the ultimate goal eliminating trade barriers and also so high and predictable that they can raise something the 10-20% of GDP.
The logical conclusion is that there is no plan here - we're living in a world like England under Henry VIII, where everything is done based on the whim of the king, and the advisors try to justify it ex post facto.
That's what they say but we literally went through this whole mess not even two months ago with Canada and Mexico. He's already showed he's insane and cannot be negotiated with.
While also saying they were going to be a replacement for the IRS and to stop illegal immigrantion and drugs and force Canada to become the 51st state.
The administration has signaled that they expect to negotiate acceptable balance-of-trade deals with the US's Asian allies over the next few weeks. If that happens, I can see businesses being certain enough to make investments. Until then I'm bracing for a recession too.
The EU is very slooow to act. It might happen during the next administration but only if each 27 of them are convinced it's a good idea. Like the 2% fot NATO which now is insufficient. How about 5%, since Russia is prepared for war and we have China to worry about.
I feel like you're arguing against something I didn't say. I agree there's a good chance the president will make up new tariffs or fail to negotiate some of the current ones. If that happens then trade deals with Asian allies won't reassure anyone. That's why I'm still preparing for a recession.
I don’t get this take. We already negotiated trade agreements. That’s what got ripped up with all this tariff nonsense. Why would anyone expect the US to respect the next negotiation? The damage here was reputational. That can only be repaired with time. It can’t be negotiated.
It's easy for us on the Internet to talk about how untrustworthy the US is and how little a negotiation means. It's a lot harder for trade authorities in a country to tell all their US exporters "hey, the Americans are being obnoxious, so your business is probably going to fail and we're not gonna do much about it". If you asked me to negotiate with the US in this situation, I absolutely would refuse, but that doesn't seem to be what's happening in practice.
You'll definitely be hit one way or another. The question is whether businesses can predict what their tariff hit will look like next year and plan around it, or can't and need to hold onto their cash until they know which investments are or aren't worth it.
The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs. Money collected on tariffs would be redistributed in the form of tax cuts.
The end goal would be 0% corporate and income taxes, funded with high tariffs. Over time the US re-industrializes.
> The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs.
Building a factory is a 3-5 year task, with a decade-long payback time. And at any point, tariffs can be removed, making all that investment futile.
And even then, there's no guarantee that the factory is going to help people. If it's a lights-out facility staffed with robots, then it'll just be producing more expensive goods, with all the profits staying in its owners' pockets.
Who would trust the US after this? Why would a company build a factory in a lawless state run by a moron like this who thinks blanket tariffs work and could replace taxes?
> The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs.
Right, because the US doesn't have diamonds, vanilla, coffee beans or the many other things it needs? How do you avoid tariffs like this?
The US still needs fish from the penguins. What's the plan? To tell penguins to stop fishing and come to the US and work in factories?
> The end goal would be 0% corporate and income taxes, funded with high tariffs.
Well you have that right. When there's 0% of the people working no 1 will be paying corporate and income tax. It'll just crash.
> Over time the US re-industrializes.
Like it's gone? You do know the US is the 2nd largest global manufacturer right? That is even today. So do we need to blow that up 1st in order to re-industrialize?
The reality is that countries like spain have come out and said they need to move closer to China as USA is not a stable trading partner, within 24hrs of this Trump has back tracked, I'm sure MAGA will say this is all part of the mega master plan but at least to me its more the realisation this was turning into a car crash and he still has a window to somehow in trumps mind blame it all on the chinese
Regardless of whatever happened today, it's never a good time to buy $DJT because 1) it's not profitable and 2) holders are slowly continually liquidating in a complicated manner explained by past Money Stuff articles.
The actual quote is "THIS IS A GREAT TIME TO BUY!!! DJT", which makes DJT either a signature and a call to buy the market if he can form a valid sentence, or a call to buy NASDAQ:DJT if he can't form a valid sentence. Take your pick. It's market manipulation either way.
Lots of stocks are up 10-15% instantly after this announcement. Curious if we'll get reports of suspicious options volume capitalizing on this information.
As easy as winning the presidency and having enough loyalty within your base to say "I could stand in the middle of 5th Avenue and shoot somebody and I wouldn't lose voters." then win reelection just 8 years later?
Because even with crises, over the long term the only direction is up.
Its probably not so much that people trust it but either you invest broadly (index funds) and trust long historical data that the likely direction is up or you think you have more information than other people and can beat the market.
Only if you look at American stock market data. And that's extreme cherry-picking, because the American stock market is by far the best performing over the last century. What are the chances the American stock market will be the best performing next century?
The standard claim is that "even if you bought at the absolute worst time, if you held for 10 years you would have been positive after inflation". This statement is true for the US stock market, but not true for many other stock markets.
There's "lost decade" periods in the US market as well, that's why you shouldn't invest in a single market, and should apply unit cost averaging instead of dumping all your money at once.
In nominal terms it always goes up. In real terms, like priced in gold, DJIA is cheaper today than in 1929. (13 ounces of gold today vs. 14 ounces of gold in 1929).
But how often is that true? Gold prices doubled in the past 5 years, with 10% of that coming in the past few months, after declining for most of the 2010s.
To be clear, here, this form of "manipulation" is kind of impossible to really deal with? Or do you have something in mind that should be able to more smoothly work with this?
From the president of the united states? Especially knowing that controlling tariffs and such are easily argued to be in his core powers, in the current setting, what authority would they possibly have to do something on this?
But they would have to prove insider info? Which would require discovery against communications to/from the president. Which you know they would argue against.
So, let me rephrase, do you think it is likely that they would do anything?
Any action they are taking around deciding whether or not there is a national security interest in managing tariffs is easily covered by everyone's understanding of what is in the presidential duties. As such, it is fully off limits for any review, per last year's immunity ruling. No?
Now, congress can take away that delegation. They could also cancel any declarations. But actions taken by the admin in pursuing this will almost certainly be seen as core duties by the supreme court. As such, I don't see any real opening for review in this?
I trust the stock market only after at least 5 years have passed, preferably 10. Short term (less than that) the stock market has always been about popularity, but long term the most profitable companies always rise to the top.
Traditionally US stockmarkets are not that easily manipulated. This type of blatent grift and insider trading was for banana republics, and that's why stock markets in those places aren't serious.
Well I bought this morning (not a large trade), based not on insider information but on the obvious outcome. Also the dynamic signal that Trump spent 2h spewing utter nonsense at a donor dinner last night, but the market didn't go down this morning. Signaling that something was in the works one way or another.
Edit: best to note that Trump is still doing plenty to destroy the US economy, so be careful out there.
Frankly, everything is “obvious” in retrospect. I assumed Trump would triple down regardless of the consequences. My only conclusion is that the fluctuations of the market are going to be completely arbitrary during this administration.
Notably, there was a headline that went viral on Twitter earlier this week that the White House was considering this, but after they denied it it was widely understood at the time to be fake news. How many of the people spreading it, I wonder, knew it was really true?
I remember how Jimmy Carter had to sell the family farm because it was viewed as a potential conflict of interest and how Mitt Romney's father, when making his run, when asked for a single year of tax returns made them all public, arguing that a single year could easily be manipulated to show anything, and that only by seeing the entirety of multiple years could an accurate evaluation be made.
You do not become a billionaire unless you have a pathological obsession with obtaining wealth. They have structured their entire lives, often at the expense of everything else, to increase their wealth. It isn't a goal, its a lifestyle. There is no number that is "enough".
Indeed. But the path he chose since 2016 is a bit suboptimal for making money. Don’t you think? Or do you think the long con was to become president for this week?
I’m not trying to ascribe moral character either. Power, status, fame, etc are just so much more compelling.
Didn't his first term get his son in law a multi billion dollar deal with the Saudis? Along with all the other bullshit like getting paid because the secret service has to stay at his properties. This isn't the long con, this is just a continuation. He's a lot more organized this time around.
I agree, which is why I used "wealth" and not "money", since power/status/fame is just another form of wealth. Trump seems to be a special mix of rich kid who didn't get hugged enough as a child.
That is easily disproved. A good counterexample is in the book Copy This by Paul Orfalea. He had trouble in school and couldn't hold a job so he started a copy place. This became Kinko's after his nickname and grew large in part because of his systematic way of having employees and customers all treated with respect. When he got tired of the business he sold it to FedEx and shared he five billion with his family.
We need to do something about out of control inequality, such as in the past when we had strong regulations on industry, high taxes on the rich, and pervasive union membership, but lying about what is going on helps no one.
I’m trying to address the narrative I’ve seen a bunch lately that billionaires in this administration already have enough, so we can trust that they wont be financially motivated.
I bought VOO and AMZN yesterday. First time buying an individual stock since pandemic. Kicking myself for not buying more. Still waiting a week to possibly buy more if there's another shock, but if the market's up, I'll buy less.
Feels equally plausible that there would have been an across the board increase in tariffs just to look tough. There is no logical analysis of the current situation.
I just buy during big fucking crises, either individual stocks or index funds. Front page of the NYT type shit, "existential threats" to 100+ year old concerns. Boeing, Toyota, pandemic. Such opportunities only come up every 2-3 years or so. Sell after 1-2 years to get the lower tax rate.
DCA and time in market beat trying to time the market. If you're doing nothing all day but refreshing Twitter and Robinhood maybe there's some alpha but that's too much involvement for me.
The first sentence is a thought-terminating cliche and is not true. Correctly guessing the shape of the Trump tariff crash was worth an entire year in the market. Crashes that don't instantly reverse themselves tend to be more like ten years.
The entire concept of "official act" does not actually exist. It wasn't defined in the Constitution, and neither was it defined by the Supreme Court when they invented it from whole cloth.
The first order fraud would be market manipulation run by the commander in chief.
The second order play would be for Trump to tip his associates off that he was going to do this and let them profit handsomely from the bump. Congratulations Mr President: your lackies love you because they profited from fraud but moreover you now have grade A kompromat on all of them in the form of your Signal chat records showing they were complicit in market fraud!
Actually you did have advance warning because there has been several days of wall-to-wall finance bro and republican heads on TV saying the tariffs were batshit crazy. Under those conditions there are only two outcomes: 1. the tariffs were rolled back or 2. Trump is removed from office (and the tariffs rolled back).
Those aren't guaranteed. I do believe Trump is in danger of being removed if the economic damage of the tariffs becomes too great since the one thing truly sacrosanct in America is the economy.
But the timeline would hardly be immediate. We'd have to go through considerable pain before the government would act.
Yeah, if we lived in that world, Trump would have been removed from office during his first term for all the crimes.
It's worth noting that impeaching and removing Trump from office now would actually take fewer votes than the business of overriding the import taxes he's trying to impose with "Canadian fentanyl is scary" emergency powers.
As a big bonus, voting to remove him entirely leaves everyone far safer. He's gonna have a guaranteed tantrum of scorched-earth revenge no matter what you do, but this way he won't have official power to do it with.
3. Carve outs are made for high dollar donors like AAPL (which went up with everything else even though it is now subject to an even more terrific tariff)
Trump's whole schtick was that #1 - - get countries to negotiate.
Except China. The USA gets 25% of it's bandages from there, and that's no way to prepare to defend Taiwan.
In the EU you commonly see unemployment rates around 10% and that is even after rather massive reeducation programs.
Why is this seen as such a big problem that these 3,4% pretty much get to decide the entire US policy?
In the EU that would be a great number and mostly normal considering that people that switch jobs or just finished studying or are just generally unemployable is counted towards that numer.
You sure its just the 3.4%? 5% is considered 'full employment' so 3.4 should be some of the best times in history.
How many people are employed but are in a job that barely provides enough money to survive? How many people are working 2 or even 3 jobs just to barely survive? Those people would be counted as 'employed'. You should look at these other groups of people before making judgement.
The issue is timing. He needed to paydown debt before imposing tariffs which will lower bond demand raising interest rates. You can't inshore industries from everyone and rely foreign debt to prop up the dollar.
My takeaway from what I've read and heard in the last few weeks is that his only actual motivation is to 'win'. He bragged yesterday that other countries are kissing his ass to negotiate deals on the tariffs. I think that was all he wanted, I think he now thinks that this whole tariff thing was a success and he's going to move on to the next crazy idea.
The rest of us suffer for it, except for the sad portion of the republican party who's only motivation is to own the libs and who now are congratulating themselves on how thoroughly the libs have been owned.
This is about the yuan not the euro. Devaluation doesn't make it easier to pay debt. It helps foreign countries to pay down dollar denominated debt more easily. Meanwhile, the DXY is structurally way higher than average right now. The USD remains very strong compared to historical exchange rates despite its recent drop.
>He once told me: “I won’t make a deal just to make a profit. It has to have flair.” Another Manhattan developer said it differently: “Trump won’t do a deal unless there’s something extra — a kind of moral larceny — in it. He’s not satisfied with a profit. He has to take something more. Otherwise, there’s no thrill.” [0]
It's literally in his book. He does a crazy thing. Big. Massive. Then gets the other party to negotiate it down to what he really intended. 10% is a lot, but now it looks smaller. He's also fighting back very hard on a few fronts, as per the book.
Exactly. I would be surprised if most kings and prime ministers haven't hired a Trump expert by now. If there's one skill democratic leaders are good at, it's figuring out what the other party wants. It probably just plays out like a game of checkers.
aestheticism is a feature of fascism. the late night phone call, the strong words in the oval office, boarding air force one with retinue in tow, hurry hurry... it's less about what is being achieved, and more about the pageantry that something is being achieved. change, action, disruption, violence (metaphorical or not) are good in and of itself, pomp is the reification of these impulses. i disliked succession precisely for this reason, the idolization of these processes (whether it was under the guise of irony is irrelevant).
these fetishes can start to supplant material reality, real banana republic stuff. we should give the wasps and neoliberals credit to always have been somewhat immune to and disdainful of these practices.
I like to believe that no other countries are kissing his ass and all the calls were from the few true patriots that are hiding out in his administration.
"Hello President Trump, I am the leader of Bigorgia. I know you are a big strong manly man and I will beg you to stop the tariffs please."
But I agree, Xi Jinping is a real strongman, not a sad old man with delusions of grandeur.
Permanent damage has been done to our relationships with countries that have always been our allies.
Permanent damage has to our economic markets, since everyone now knows that everything can change on the whim of a single man.
Permanent damage has been done to any reputation we've had as a supporter of democracy worldwide now that we've abandoned our support of Ukraine.
Permanent damage has been done to our own faith in our country. Any pride I had in our values and democracy has slipped away, now I know that they were all illusions.
> Permanent damage has been done to our own faith in our country. Any pride I had in our values and democracy has slipped away, now that I know that they were illusions.
I understand this feeling but this quote has been helpful to me.
“Patriotism is supporting your country all the time, and your government when it deserves it" - Mark Twain
This is a dark time for America. But we shouldn’t turn our backs. The next few years will be painful. As patriots we need to work toward making it better. Take care of your neighbors. Work toward seeing the change you want in the midterms. Demand accountability from your representatives.
Pre-orders in a lot of businesses have been paused because with the tariffs volatile, stores can't guarantee they won't lose their shirts if they promise product to customers that is later unaffordable to sell (or cannot be sold at that agreed-upon pricepoint).
China is also likely to continue selling off US treasuries; even if that wasn't an immediate way to disrupt the American economy by itself, it's a sound idea if their trust in the stability of the US as a sovereign nation has gone down. China is also, historically, the second-largest buyer and holder of US T-bills; if that changes, it will have consequences in terms of America's deficit.
The fundamental problem is that tariffs are a tax on the citizens of the country that charges them. Retaliatory tariffs that are high enough or specific enough to shape immediate consumption decisions can move the needle (which is why you do see such responses happening). A universal 10% tariff can affect its target in the long term, but as a short term measure it does nothing but take money out of the pockets of local businesses.
Without global regulation? I think you'd need a lot of luck to survive in that environment.
Even with global regulation. I think it would take a decade to do what the federal governments could otherwise do in a year. The EU is an instructive example here.
I think it's not that bad, when you consider all goods ands services:
"For technical reasons, there is not one “absolute” figure for the average tariffs on EU-US trade, as this calculation can be done in a variety of ways which produce quite varied results. Nevertheless, considering the actual trade in goods between the EU and US, in practice the average tariff rate on both sides is approximately 1%. In 2023, the US collected approximately €7 billion of tariffs on EU exports, and the EU collected approximately €3 billion on US exports."
We don’t want a race to the bottom when it comes to agricultural products. American products are cheap but they suck. Ours are better but more expensive. Making American crap expensive is good for us. That’s a good use of tariffs: avoiding flooding the market with inferior products at the cost of local made.
Volvo and Mercedes (freight liner) trucks are popular in the US. Truckers tell me Peterbuilt makes a good truck and compete well, but since I don't drive a truck I can't tell you what makes them better. I can tell you that Volvo and Mercedes are considered basic trucks for companies to own, while those who own their own truck like pay extra for luxury features in a Peterbuilt. (the only luxury I can see though is chrome decorations, again not being a trucker I have no clue if anything else is better or not)
And offered 0% tariffs on all physical goods (that includes agriculture) weeks ago. But no, Trump is financially illiterate and doesn't understand the concept of VAT.
How can anyone take him seriously on this sort of stuff? He flip/flops constantly. If he isn't a serious negotiator, other countries/companies aren't going to take his threats seriously.
But he's also brought the whole of the US down to the mud that he enjoys fighting in.
The US shouldn't be taken seriously any more, world wide. Trump, and his Project 2025 conspirators, have proven that the US system of government had a loophole, and have taken full advantage of it to perform a hostile take over.
US soft-power was what allowed the US to dictate US law to other countries. US law doesn't even mean anything in the US itself, so the rest of the world should be suddenly ignoring a whole bunch of historic US-pressured behaviours.
Given the deportation discussions, I'd say one of the first things to go would be extradition treaties. I'm hoping copyright duration madness retracts entirely back within US borders as well.
> Confidence in the US economy is plummeting as investors dumped government debt amid growing concerns over the impact of Donald Trump's tariffs.
> Governments sell bonds - essentially an IOU - to raise money from financial markets for public spending and in return they pay interest.
> The US does not normally see high interest rates on its debt as its bonds are viewed as a safe investment, but on Wednesday rates spiked sharply to touch 4.5%
If Trump is hoping to push the 10 year treasury rate down so he can roll the 9 trillion coming due in June, he is in for a wakeup. China is selling their holdings and driving the rates up. He is going to actually have to have a grownup negotiation with them rather than going scorched earth.
It's not a prisoners dilemna because you also lose by defecting while everyone else is cooperating.
The thing to recognize and internalize is that the world is a lot more win-win than our psychology has been evolved to recognize. Nationalism, realpolitik, xenophobia - all of these are ideologies that make you poorer and worse off, not giving you some secret insight into the truth of human nature.
Everyone else is not cooperating though. Just because you think nationalism, realpolitik, and xenophobia (and slave labor, for that matter!) are all bad things that one shouldn't partake in, doesn't mean the rest of the world feels the same way, such that they will extend you the same courtesy.
My country is now doing badly just because an impressive gathering of idiots from across the Atlantic voted for an egotistical maniac.
I do not care about turning the other cheek, I want him gone. This will not get fixed until Americans understand that fascism only leads to ruins and suffering.
The best way to stay clear from this insanity is to divest from the US as much as possible / reasonable. It won’t help second-order effects, but it reduces your exposure.
I wouldn't go that far (there's still the possibility that things change for the better for whatever reason), but those 60%-70% of the US in global stock indices really do look like single country risk now.
The stock exchange and the tariffs are not the battleground.
Asia started dropping US treasury bills. 30 year bills reached a max in decades
Trump blinked.
Edit: this was front and center in Financial Times, WSJ three hours ago. Now suddenly pushed back, exchange rally being front page news. People don’t understand how close to financial apocalypse we have been. Somebody in the WH scared the shit out of Trump.
You will never convince any of his apologists that this is the case.
His first round with Canada back in February, and MAGA insisted "he won"
Then came back and tried the same thing again two months later. Same response from the Canadian side. Same slight backing off, reorganizing, but confusion, and nobody seems to actually know which tariffs apply and which do not.
It sounds now like 10% for the whole world, but still 25% steel and aluminum and other tariffs on Canada, the US's biggest trading partner and customer? How insane is that?
They're "flooding the zone" with confusion and chaos, and making money in the process. Anybody who wants to maintain power and influence and money has to get close to him, avoid criticizing him, and then they get the inside scoop.
Incredible write up. I don't understand a lot of it, but:
> "Hedge funds have trillions tied up in this kind of strategy,” he said. "As things spiral, they’re being forced to sell anything they can — even good assets — just to stay afloat . . . if the Federal Reserve doesn't step in soon, this could turn into a full-blown crisis. It’s that serious."
> One hedge fund manager said: "Those huge hedge funds with trillions of dollars of Treasuries relative value trades will blow up today if the Fed doesn’t bail them out."
It brought a large number of countries to the negotiating table, and shows he’s willing to execute on threats of keeping tariffs high for an individual country.
Now is the ripe time, 90 days, to make a deal with the US and offer the best terms.
The whole point of Trump is to leverage uncertainty, make an unrealistically high water mark, then go down from there (to a point thats still very favorable)
This rationale can explain many actions he’s taken. Is it reckless? Risky? For sure. Does it work? It has in the past, let’s hope it does for the global financial system, for everyone’s sake.
> It brought a large number of countries to the negotiating table
Did it? They said it did, but I wouldn’t trust a word they say.
What concessions has he actually got from the rest of the world? Was it worth it? It seems to me the two biggest trading ‘partners’ (China and EU) were escalating, not conceding.
> Are you really doubting that countries wouldn't negotiate? Seriously?
Yes. Trump and his administration lie more often then they tell the truth. There's virtually no reason to negotiate under those conditions, as random decisions will often have indistinguishable outcomes.
All the countries who chose to do nothing, evidently, came out on top. Because the decision was reversed. Those attempting to conform to the chaos will be whiplashed around, like fish in a Tycoon. Doing nothing at all proves to be an equally effective strategy, on average.
> Now is the ripe time, 90 days, to make a deal with the US and offer the best terms.
What terms? Remember, the tariffs were not reciprocal -- that was a boldfaced lie. They were based on trade imbalance. So what, Cambodia is supposed to pledge to buy ... what exactly? ... from the US in order to balance its trade?
The reason Cambodia or Vietnam have a trade imbalance is because US/other companies have factories there to produce the goods. You think those companies are going to set up garment and shoe factories in the US? With what labor?
The whole thing reeks of a shockingly inept understanding of global trade and economics.
This rationale can explain many actions he’s taken. Is it reckless? Risky? For sure. Does it work? It has in the past, let’s hope it does for the global financial system, for everyone’s sake.
Global financial reacted to the idiocy adequately enough to tell you what it thinks of it… You are trying to rationalize something that is as far from rational as it gets…
This reckless way of negotiating has a cost: our trustworthiness. The more recklessness Trump does, the more other nations will strongly consider naming some other currency the global reserve currency, such as the euro, the yuan, or something else, maybe even something new.
This isn't 1946 when the United States was heads-and-shoulders the most prosperous nation on earth, with most other developed countries having to rebuild. Other regions such as the European Union, China, and the bloc of East Asian democracies (Japan, South Korea, Taiwan) also have strong, competitive economies with a high standard of living for many of their residents. If they got together, it's possible that they could move to some alternative to the US dollar should they wish, and with Trump's bullying, this might just be the push.
It will be very interesting to see what deals are made in the next 90 days. There is a lot of speculation that the US will push to isolate China as part of any deals made.
The Chinese are warning their citizens about travel to the U.S.
> China issued an alert warning its citizens and students of the potential risk of traveling in the U.S. and attending schools there.
>
> “Recently, due to the deterioration of China-US economic and trade relations and the domestic security situation in the United States, the Ministry of Culture and Tourism reminds Chinese tourists to fully assess the risks of traveling to the United States and be cautious,” the ministry said in an alert.
Many EU countries have done the same in recent weeks. This is less about putting diplomatic pressure, and more about warning people to avoid traveling to the US due to real danger.
The US government has already been rounding people up who haven’t committed a crime. Most notably a student from Columbia college. This is a real danger.
They've also been shipping people off to a prison in El Salvador without due process and, according to them, no way to bring them back if they send the wrong person.
Avoiding travel to the US right now is a perfectly reasonable decision.
I have a trip to China on Saturday and I'm worried about:
a. Chinese retaliation. I don't think they are going to start arresting Americans, but it might get uncomfortable if I don't have my passport in the subway station.
b. American retaliation. My wife has a greencard, this is actually worrying me more than anything, although as far as I have heard so far, we should be OK.
Trip is still on. I'm really interested in how China has changed since I left 8 years ago.
I don't think you have lived experience to back that up. There are definitely people being turned away at customs in the US, and China has targeted nationals of other countries they have disputes with (e.g. during the Huawei daughter incident and putting two Canadians in jail for two years while she got house arrest in her mansion). And anyways, having your passport in a Beijing subway station is just the way things are now (never was needed before, but they random check all the time before I left in 2016).
There have been people turned away at customs for as long as you have been alive. These are only stories because they're effective at manipulating you into believing the narrative du jour.
Yes, and I've always been the "it could never happen to me" person. But now things are volatile and chaotic. That is elevated risk, and you just shouldn't ignore it.
The citizens of other countries should be concerned too. Even short term plans could end badly for some disruptive measure Trump because whatever, as he did basically every week since he got in charge.
Genius move. Set the trap (massive global tariffs that seem irrational) and wait for target (china) to retaliate. Once the bait is taken, alienate china and take the pressure off everyone else. New reality still departure from previous order but feels better and gives everyone 90 days to figure it out. Meanwhile china is trapped and isolated.
I don't believe it's being done so strategically. He's not Franklin D Roosevelt.
I forget all the details, but some constituency once came to FDR to ask him to do something. He likely leaked that he was planning on doing so to major Catholic organizations in America, and when there was outrage, turned to the first party and told them that he'd love to, but his hands were tied. He never intended to do anything in the first place, he just wanted a convenient scapegoat.
This doesn't make any sense. Why not just go with 10% tariffs across the board? There wasn't going to be any pushback, it should be clear at this point. Or why not just leak the plan, and then say "I guess it has to be 10% because business leaders won't accept higher."
This isn't masterful juggling, it's improv comedy.
Except they implemented the decision and are responding to countries’ willingness to negotiate fair trade terms, just like with Mexico. Nobody is saying “just joking”. If people weren’t 1000% dismissive of the leader’s stated intentions they might be able to follow along. It’s been crystal clear to me that the goal has always been to renegotiate trade terms not to live in a world with persistent reciprocal tariffs.
This is a hilarious assertion. Their stated objectives have been all over the map, so any outcome can fit at least some of their statements.
Admin proxies have said tariffs are to pay for tax cuts, they've stated they're intended to bring back manufacturing jobs, they've stated we should prepare for a lengthy trade war and accept the higher prices like men, and while some proxies have said this is a negotiation tactic others have stated unequivocally that this is not a negotiation tactic.
Bold assertions like yours are easy to make with the benefit of hindsight. What do you predict tariff rates to be in a week? A month? A year?
You can get rich this way, but you can't get respect. The fact that half of a respected nation opted for this approach continues to baffle me.
And maybe I should say "formerly respected nation", the global perception of the US goes rapidly down. I guess the question now is will the nation actually profit from that.
So much different analysis for something as simple as insider trading. Remember, Trump always said stock market performance was everything. Then this week suddenly, stock market doesn't matter. In retrospect, it's all so obvious. Neither me nor anyone else could expect them to be so bold about it.
In short he argues that there is no point in making $50 chinos. Similarly to Italy, the US should focus on regional branding and high-end artisanal products.
I would argue that ship has sailed under Trump. The US was in a prime position to brand itself via soft power and the media, and now it's actively being boycotted.
Doesn't help America as much as some people might think. The world has seen that Trump is erratic, and America imports too much from China to just ignore the 125% (!!!) tariff on the country.
Exactly. The damage has been done; the fact that economic policy could dramatically change day-by-day makes investing and planning very difficult. In addition, the tariffs on China are insane.
One of my biggest concerns is the value of the dollar. If foreigners are discouraged from doing business with America either due to tariffs or due to other matters, how does this affect the dollar, which is a fiat currency? The US dollar is currently the world's reserve currency, which is the result of the United States' emerging victorious from WWII while Britain, holder of the world's previous reserve currency (the pound), had to contend with rebuilding as well as dealing with the loss of its empire. Fiat currencies, by definition, are not backed by assets, but are instead backed by "faith"; not in the religious sense, but in the faith that people have in the government issuing the currency. How will the world keep the faith if the custodian of the dollar acts so recklessly?
For many years I've been concerned about deficit spending and easy-money policies from central banks. However, for the past few months I've become very concerned about Trump's policies that alienate our allies and partners. What Trump and the rest of MAGA simply do not understand is that the United States is part of an interconnected world. American strength is more than just weaponry; it's also in our economy and our reputation.
Unfortunately Trump and his cabinet have done extraordinary damage to our nation in less than three months. He's like an angry man with a baseball bat smashing up irreplaceable artifacts in a museum, and sadly there is no police to stop him, because he is the chief of police. He is by far the worst president America has ever had to endure, and if this continues our nation will end up at war, either with itself or with other nations.
> “This was his strategy all along,” Bessent said at the White House, where officials, including him, had denied for days that the tariffs would be suspended.
And why should we believe them? If it was the strategy, you could have made the tariff announcement into an acrostic or something.
Hypothetically, assume for the moment Bessent is telling the truth. Now let's try to pencil in what the administration's reasoning might be. Here's my best guess at how the conversation in the White House went:
Advisor A: So we're all agreed then. 10% tariffs across the board is our strategy, except China, because Xi is a special boy.
Advisor B: If we announce that, everyone will freak out. There will be rage and panic.
Advisor A: That's where the tactics come in. We announce greater tariffs first, according to this super sketchy formula my intern cooked up with ChatGPT.
Advisor C: That's not what we agreed!
Advisor B: How will that stop the rage and panic?
Advisor A: It's tactics not strategy. We walk it back just before it hits. People will be too busy being relieved to be raged and panicked about 10%. We get the policy we want; the people / markets / etc. will only freak out for a few days and then go back to normal.
Trump: I like it. (Opens Resolute desk drawer.) Here's a signed copy of the Art of the Deal.
Advisor A: Thank you sir! I will cherish it for the rest of my days.
Again, the above is my guess as to what happened, under the (perhaps questionable) assumption that Bessent is telling the truth. ("How likely is this assumption?" is a question orthogonal to the point I'm trying to make, and therefore, out-of-scope for this post.)
Probably the bond market reaction caught the admin off-guard, possibly indicating a liquidity crisis. As usual, wont someone think of the overleveraged hedge fund managers?!
Too late for everyone who spent massively on flying in stock ahead of the tariff deadline. Too late for those forced to sell financial assets in order to pay margin calls. Too late for those working on projects involving foreign manufacturers which have now been cancelled due to tariff uncertainty. Too late for those who lost sales while they figured out pricing. Too early for the people fundraising to build US manufacturing capabilities. What a mess.
Is there any reliable instrument to find out? This seems so obvious, given the only alternative option seems to be believing they are completely insane.
You could look at https://www.capitoltrades.com/ in a few days. Of course you'd probably expect the average senator/congressional representative to be smart enough not to go insider trading on their own monitored account...
Buy the NASDAQ at 1:17PM. Sell at 2PM. You’ve just made 10% without doing any work. If you’re doing any kind of leveraged play, you can get even higher returns.
my point is that's the exact same if its a random microcap, just massively magnified. The president can easily cause triple digit swings. Doing a broad market movement is inefficient from this point of view.
He owns his own social media stock (DJT), where he post this morning "THIS IS A GREAT TIME TO BUY!!! DJT" to his followers. Attracting more to his social media company.
He has a meme coin in cryptoland, and now via tariff manipulation, he can guide select people to place big bets on the largest derivatives market.
Derivatives had huge moves based on these announcements. Out-of-the money SPX E-mini puts went up 10x after tariffs were announced. Near-the-money E-mini calls doubled after today's announcements. These are zero-risk insider strategies.
It’s worse than that. Everything leading up to this and this reversion right now is a perfect demonstration that the current US administration cannot be trusted and behaves in irrational ways. You cannot expect consistency and enduring policies. It’s all fickle and capricious. How are you supposed to do any planning with this?
This is all so obviously dumb and I’m frankly astounded by so many people (especially here on HN) playing devils advocate or, I don’t know, honestly believing that this all makes sense.
Even if you agree with the stated (also somewhat incoherent, by the way) goals why do you think this implementation can achieve any of that?
I believe the point is power, and from that lens everything makes perfect sense. Trump is exercising available levers of global influence -- for good or for bad -- in a way that hasn't occurred since Hitler initiated World War II.
Tariffs are appealing to him because they are incredibly forceful blunt instruments over which he alone has almost complete control. They give him immense, immediate influence over the entire world. What we're seeing is that the US President today, if the full capacities of that office are pushed as far as possible without violence, is arguably one of (if not the) most powerful human beings ever.
Beyond this, Trump has said that one of his greatest weapons is uncertainty. He wants to be feared. Having people genuinely afraid of you is the next step of power that he is already flirting with by posting videos of people being blown up in warfare on social media.
And what will he do when China and rest of the world tired of his untreated Narcissistic Personality Disorder will start selling US debt, like $trillions in bonds in say less than a week? I bet you finally someone broke the secret to him today, so he reverted the policy.
The White House can pressure red states to offer companies sweetheart deals so the President can take credit. If they refuse, he pulls his support for them come election time.
Yes they will, because when industry can't bet on being tariff free outside the US, they'll hedge their bets and have at least some manufacturing here. The damage is already done in that regard. The instability is the warning across the bow for companies that import.
> Too late for those forced to sell financial assets in order to pay margin calls.
That's the true aim behind all of this constant course shifting. The ultra rich, those who have large amounts of liquid assets or outright cash, can make bank at the moment... buy the dip. Even if the markets dip another 20%, they'll rebound soon enough.
>Too early for the people fundraising to build US manufacturing capabilities.
It's a good idea to hedge against future trade uncertainties.
After COVID some Danish and German companies began looking for non-Chinese alternatives for electronics manufacturing. The only area where China is the absolute better alternative is PCB manufacturing without mounting chips/components. The Danish and German companies get tens of thousands of these bare PCBs from China. The chips/components are from Taiwan, South Korea, the US, Italy, and Germany and can be cost effectively mounted in Denmark and Germany.
Not really sure why you left out the tens of thousands of people who were almost immediately laid off when companies and their suppliers idled factories?
In the automotive sector alone - GM, Ford, and Stellantis all flipped the master breaker to "off" on a number of plants and sent everyone packing.
That hire-back will not be instant. People are going to miss payments for rent/mortgage, car loans, utility bills, etc.
Let's not forget that many companies hit the brakes, hard, on exporting goods to the US - so there's going to be the shipping equivalent of those traffic "waves" because two hours ago someone on the highway panic-braked
In my defence I mentioned it was "Too late for those working on projects involving foreign manufacturers which have now been cancelled due to tariff uncertainty" which I think covers these auto workers?
Still I'm sure I unintentionally missed many examples of people who've been negatively affected by this saga. I didn't mean anything by that, it's just ignorance or lack of thought on my part.
Markets are celebrating. How long before they realize that the China tariffs will destroy the profits of companies like Walmart, Apple, Dollar Store, Harbor Freight, etc, and a 10% tax hike on consumers across the board on all other imports? We are still headed for a recession, and the destruction from the greatest deal maker who ever lived will be lasting.
Let's not forget everything else he's doing because there is nothing good in the plan.
Not many companies have the margins to shrug off 10%, and if there isn’t a cheap domestic alternative everyone in the market will be raising prices.
Take coffee, tea, or chocolate: Americans buy a ton of those, there’s almost no domestic production, and most of the market lives on tight margins. Trump’s tax hike means that the average consumer’s choices devolve to paying more or buying less.
If they raise prices by 10%, consumers will buy significantly less. There's a sweetspot somewhere for max profit, it's not 10% and probably not 0% either.
Coffee and tea are very cheap when you buy from a retailer and make it yourself, 10% is nothing anyway. Stuff like starbucks have crazy profit margings. Chocolate is a delicacy that shouldn't be consumed in large quantities anyway. That shit should have a 200% tax.
trump's base is seniors counting down to social security, the rich, malcontents, and feds (his staff in other words) have gov pension plan. none of those care about the 401k people.
There is also a bond market collapse for those people not invested in stocks precisely because they're close to retirement.
I think that was the real reasons that tariff effects were postponed, the increase in interests in the bond markets would have been too fatal too quickly.
The stock market is a barometer for future predictions.
Stocks going down meant we were on track for everyone to have reduced buying power, which would impact company's bottom lines, which would make them less valuable.
Trying to see this as class warfare between investors and average people is missing the point.
Furthermore: Stocks are up, but yields did not drop. If this holds, it's still not good for the average person. Expect mortgage and auto rates to go up, combined with that 25% tariff on autos that wasn't delayed.
I almost bought some bluechip stocks yesterday but changed my mind thinking it may dip further. But my luck is such that it would have actually dipped if I had bought. With my luck these days no matter what I choose, I lose. ¯\_(ツ)_/¯
In China, we called this battle as hypoglycemia (China) versus hypertension (USA), but, what do all the grand narratives have to do with me, I just want to live a good life.
So if you cozy up to the mad king, he'll tell you what he plans to do with appropriate notice. This is the least American tyrannical bullshit I've ever seen in this country, and nobody should be condoning it.
The most important thing that can be done for the prosperity of America right now is to put an end to the senseless fraud and nonsensical policy promoted by the snake oil salesman of the MAGA movement.
The stock market today seriously reeks of insider trading. Most stocks were down pre-market, but suddenly went up at 9:30 when the big boys joined the trading. And that right after the announcement of further escalation with China. I was really wondering about that, but it seems clear in retrospect that some people were ahead of the curve by a few hours.
Trump posted on social media this morning that it was a great time to buy. A couple of days ago, he said people should be buying low and that it was a great time to get rich.
I’m convinced this was his plan all along, and his friends were all in it.
One thing companies love is lots of uncertainty like this. It keeps their accountants entertained! "Maybe we should build a factory in the US" ... 24 hours later ... "well, not today".
What's really amazing is all the muttering from "Very Important Wall Street" type people who are saying that he's insane. Like... with that kind of salary, weren't you paying attention? We've known he wasn't right in the head for a while now. Maybe they should be replaced by AI.
Why would a company go through the trouble of building a factory when the next administration could just reverse the decision four years from now? Building factories will take years
How confident are we that there is a "next administration... four years from now"? I don't know what the number is, but it ain't 100% like it used to be.
The market is huge enough that the fact that something is being considered somewhere doesn’t mean much, right? If I consider building a factory in the woods, but I don’t have two pennies to clack together, does anybody hear it?
That was part of the entire purported purpose of this lunacy. They went on TV and everything about having people operating robots screwing in iphone screws and stuff.
Whether anyone bought into it is another matter, but opening factories is part of what they said they wanted.
Thailand is a good example. They have about $40b (USD) in balance of trade going the wrong way. Their initial ideas were simply to import more american petroleum, vehicles and aircraft. This likely could have accounted for more than half the difference and significantly reduced their tariff rate by just changing suppliers of already imported products.
The US news is pretty useless here. It's more nuanced than they would like to admit. Foreign sources of news are the most instructive as they're actually covering the options realistically.
At this point, I do wonder if long-dated (2-3 months) American-style Puts are a good idea.
The weirdness of this administration has created a lot of volatility. With American-style options you are allowed to exercise early, so if you think there's going to be a ton of ups and downs in the next few months, I wonder if this could be lucrative.
I might try this just as an experiment with one of the cheaper options.
Exercising early only makes sense in some pathological examples that do occur but practically never happen. In general, very loosely, a put is worth something for the hedge plus the amount you could get for exercising it right now. Thus, if you want to exercise it right now, you just sell it and get the hedge premium.
Also, the current VIX is the same as January of 2020. If you believe the current state of the world is less certain than the outbreak of a global pandemic, I have some options to sell you.
Yeah, misspoke, I meant selling the option, not exercising.
> Also, the current VIX is the same as January of 2020. If you believe the current state of the world is less certain than the outbreak of a global pandemic, I have some options to sell you.
I don't know if it's more volatile, BUT it it has shot way up since yesterday, and it doesn't seem too weird to think that it will go down to the numbers we had yesterday.
The number of people who are paid to be "professional knower of things" and "professional predictor of things" who are now saying "I never could have predicted that Trump would do something as crazy as this" is just baffling.
In a sane world all these people would be ignored by media outlets moving forward.
The media outlets are part of the problem. Lots of sanewashing and "both sides". Many of them also love "CEO says a thing" articles where they act as stenographers. You see that with a certain car company's wild promises.
I sold my stocks just barely in advance of this whole debacle. I remain confused that it wasn't already priced in by that point. I am not a savvy investor by any standard.
It's a confirmation to those that still needed it that finance people are stupid and ideologically blinded. Trump's been speaking of tariffs for years, what made them think his mandate would be good for them?
If I had any appreciable assets in the stock market OTHER than my retirement savings, I would sell like hell right now.
The market is absolutely delusional right now. It's not pricing in how devastating this general uncertainty is, nevermind the fact that massive tariff hikes are still in effect.
Trump has now shown his hand. Even with the tariffs on China remaining, it’s clear that Trump will back down on any extreme positions he takes. So, expect the china tariffs to be backed off soon too (once he gets some concession that he can brandish as a win).
In 3 months, sell your positions, let him play his stupid games and re-buy once he backs down, because he will. Or just hold and ride it out.
10% sounds like where we’ll default to in the long-term because that was the ‘base rate’ for everybody anyway. He just wants to rattle his sabre, especially with China.
It’s quite pathetic, really, but weirdly I feel slightly more calm about the situation now that I realise he hasn’t got the bottle to follow through.
I think that’s a fair comment. The only reason why I was not entirely convinced that that would be the case is that tariffs seem to be one of the positions that Trump was truly ideologically bound to.
I couldn’t tell whether he would really go through with this or not. Now it’s clear he has no bottle at all. So weirdly is more of a comfort.
He literally did a pump and dump crypto scam on his first day in office. That he is a scam artist only motivated by personal wealth and power gain is obvious to any and all remaining sane individuals on this planet. Too bad the majority of American voters aren't.
Trump is like your father who overreacts to everything but changes his mind when he calms down. "You're grounded for a year!". 1 hour later. "Ok, you're not grounded. But you can't go out with your friend this weekend".
I'd liken him more to some rich kid trying to show off some made-up street cred by going over the top on everything. Eventually walking everything back while shouting dumb threats once he realizes he's in over his head. Then somehow he forgets it all and does the same dumb thing the next day. Every single time.
On the one hand, this entire exercise has been (and continues to be) batship insane
....Otoh this is good in a meta sense, tells about the level of resilience of the capitalist system, I think we should treat this entire fiasco as one of those controlled forest fire sort of things.
Like...anytime someone tries to mention JIT or other corporate 'efficiency' nonsense, we can refer to these sort of shenanigans and shut them down.
At least we got the Gulf of America. The only question now is, now that we've alienated our allies, shown our unwillingness to cooperate on anything, demonstrated our inability to back up our show of strength, openly laid out our lack of solidarity, and established our irrationality and volatility to the world, how long will it take China to decide to waltz a few battleships into Hawaii and claim the Pacific as the Gulf of China.
I assume it was part of the deal he made to get elected: Take the US out of the game internationally, and you can be in charge of whatever's left over. Nothing else adequately describes his actions.
Because he can, and because "owning the libs" is the whole modus operandi of the Republican Party that put him there. Seems obvious to me that the reason Trump uses tariffs is simply because that's the only tool available to him to exert his power.
Tariffs let him wave his dick around. Cutting taxes requires passing legislation. Raising other taxes requires passing legislation.
Would that be worse? Compared to drastically increasing the number of people who are able to afford to put food on the table, that's downright whimsical.
Imagine being able to trade, knowing what he was about to say.
On margin.
Both the ups, and the downs (short trades).
Imagine being able to make it an open secret that if someone pays you and publicly kisses your ass a little, you'll send some of those advance hints their way.
Imagine how much money you could make in a matter of weeks.
Are we really going to not consider Trump really being a Russian Asset and this is just WAI (destroy America's credibility) as far as he is concerned? What else even makes sense at this point?
Trump being a Russian asset is so tiring and wildly invalid.
He's threatening Iran because he's a Russian asset right? Bombing Houthis too? No, someone else benefits from those, maybe he's an asset of that country?
Very sad to see what is happening to the US. Sadder still to see it celebrated and defended by a large portion of the country. From over here in Europe, the apparent lack of accountability in the US right now is unbelievable. Where are the adults?
It is sad that opposition is not being acknowledged. There was a determined effort to restore Canada's tariffs to what they were that passed the Senate and was then blocked by an unusual maneuver from the speaker of the house which in turn got him excoriated by some Republicans in congress. Some of the biggest conservative power players and possibly the most famous and successful conservative lawyers are teaming up to challenge emergency executive tariff powers in court. Meanwhile US citizens retain high confidence in elections and Republicans nationwide are complaining in a panic that these moves will turn their precincts Democratic for decades.
But of course you are totally right. No adults anywhere. Keep thinking that Europe can count on others to pay for its defense while buying all the energy they need from Moscow. At least you have adults in the room, right?
It's true that Europe has its own problems. There are problems everywhere, at every level, from small towns to continents to the planet as a whole. This post is about the erratic actions of the current US administration. My comment is a small reflection about political trends in the US. What does Europe have to do with this?
It does not accomplish much when you try to redirect people with what-aboutisms. Mostly it just betrays your own biases and politics.
It hasn’t. Europe is still functioning perfectly well.
Let’s not start echoing far right talking points. Immigration is a topic that should be approached with measured language. Terms like ‘decimated’ is not helpful.
> We can argue about the merits of his plan, but dismissing him and his advisors as stupid or insane is underestimating them.
Pretending the man didn't repeatedly bankrupt his own companies and stiff his vendors is underestimating him. We've decades worth of knowledge about how "his plan" goes.
Exactly. He has run a lot of businesses in the past, with consistent results. When running the US, he'll apply similar strategies, and we'll have a similar result.
It is absolutely not textbook. It is massively self-destructive. In no universe is this a win.
This is a retreat by Trump. It's him losing. It makes him look like a joke. Or, more correctly, more like a joke.
Trump desperately wants tariffs. He thinks they're free money. He has been saying this for years and still people desperately try to sane wash it into some masterful 4D chess. The only reason this laughable 90-day pause happened is because the US house of cards is on the precipice of absolute collapse, so Trump had to bow into Bessent's attempts to turn this into some sort of China containment.
So are all those factories coming back...or aren't they? Are tariffs going to replace income tax, or aren't they? Something something war with China. Just absolute insanity by a group of charlatans, self dealers and clowns who have no idea what they're doing.
On the contrary, I think he got everyone's attention and they're coming to the bargaining table willing to make a good deal for the US. It's exactly the tactics espoused in Art of the Deal.
I think there are two things at play here.
1) Narrow the gap between the wealthy and the rest: attempt to reduce the US public sector, backtrack on globalization, and enact policies to benefit the median American, not the mean American [1].
2) Prepare the US for possible conflict with China (maybe over Taiwan) and avoid supply chain disruption that would make Covid look mild.
I think both of these things are sensible positions to take.
When you look at it through this lens, it starts to have some logic to it. Again we can debate the merits and drawbacks of this strategy, but I think it's what is behind everything. Things like his stance on Panama start to fit into the picture when you look at it this way.
It is not the actions of someone stupid or insane.
Eliminating entitlements and deregulating (particularly consumer protection) is not a great way to narrow the wealth gap. Nor is semi-firing the federal workforce and advocating for onshoring of unskilled jobs. Nor is demanding interest rate cuts. Nor is treating the stock market like a yo-yo. Nor is ignoring people without medical insurance. Nor is attempting to eliminate social security.
This could absolutely be all about asserting dominance over China. It could be a great way to deter or blunt the threat of war. It might backfire horribly. We shall see.
He is stupid. You just have to listen to him speak to understand that. But he doesn't invent policy, he has people for that.
Absolutely nothing was accomplished but the undermining of the US as a stable partner. US treasuries and the US dollar both have taken a colossal hit that is going to reverberate into much greater consequences. It is the hit on TBills that forced Trump's retreat, which his weird cult now need to spin into some 4D chess.
Like, listen to what Trump himself says to justify the pause-
This man's absurdity never ceases to amaze me. How can his supporters appreciate all this - constant - chaos?
Moreover, from the outside (European here), it looks like the US president can literally do whatever he wants without being subject to regulations or facing any consequences - pretty much like a dictatorship. No discussion, no parliament, no opposition taken into account. Crazy.
We're witnessing that there doesn't need to be any single clever actively exploited loophole. A two-party presidential system can become a dictatorship if one party holds just enough power across all branches of government to not resist what their leader wants.
How can his supporters appreciate all this - constant - chaos?
"Burn it all down" is popular on both the far right and far left.
it looks like the US president can literally do whatever he wants without being subject to regulations or facing any consequences
Yes, presidents have been given far too much power to do whatever they want by declaring a fake "emergency". It's inexcusable that Congress hasn't put a stop to this.
> How can his supporters appreciate all this - constant - chaos
A lot of people in USA felt they were entitled to their slice of the American dream, did not achieve it because we stopped building houses therefore you can't buy one on a high school education like our parents and grandparents did. Add in what appears to be somewhat of a collapse in people starting relationships/families and you suddenly have a massive segment of the population with little to lose.
I presume many on the HN community are insulated from this reality of life in USA.
There's some truth to that, but then the solution is to build more housing, not impose tariffs which only make houses and everything else less affordable.
For real, what would an election look like if one party was proposing building 5 million housing units, overriding local zoning when it's in the way, making preferential deals for bulk construction materials, training a workforce, and some mechanism to not erode existing equity ¯\_(ツ)_/¯
"some mechanism to not reode existing equity" is doing a lot of heavy lifting here. 65% of the households are homeowners, who financially might easily be convinced they have nothing to gain and much to loose by building more housing.
Which also shows that lack of home ownership cannot be the driver of this situation. It might be one of the lies of the left, their "trans" story. Where I'm from the left is also pushing this housing narrative but it's not pulling in the votes, its impossible to solve, and i dont know if its the problem enough people have.
In the US the problems are at a state level, and the federal government mostly doesn't have the direct constitutional power to do anything.
Though details like what color your house is arguably are first amendment protected speech and so the federal government could do something (but out likely go to the supreme court - in turn depending on the justices not the election results.)
Evidently Congress gave the presidency emergency powers to do what he wants with tariffs, all he has to do is declare an emergency. Just one more example of how Congress is completely broken.
He literally created the emergency himself. What the hell. I can't understand how one of the most powerful countries in the world doesn't have a system in place to prevent the president to act like a dictator
Classic right wing playbook. Here they defunded immigration services and then called for a crisis because there was not enough space to put all asylum seekers and there was too great a backlog to get it all processed in time.
That power is only supposed to last for some number of days before review by Congress. But Congress decided a day isn't a day anymore, at least for the rest of the year.
This is also how it looks from the inside. It's baffling. Apparently all our vaunted checks and balances are useless if one vindictive and incompetent political party controls all three branches of the government.
Mass immigration in EU is a result of US wars in middle east. It was not some kind of a plan by EU. It was just a reaction to shit that is happening. They were put in this position because they had too much faith in US.
I can see that you are just focused on racist talking points about immigration and any discussion here will be very unproductive and just a wast of our bandwidth.
Every racist that has ever existed also drank water. So what?
To me it sounds like you are insinuating that wanting to preseve your culture is racist - I don't see any other point to your comment. Correct me if I'm wrong.
No, however WHY you want to preserve your culture and HOW you intend to do it is what determines if it's racist.
A lot of people want to preserve their culture because they view it as superior. Historically, they view other cultures as lower-level, that of savages. They think themselves civilized. This is, obviously, racism.
And in regards to the how, what is the methodology? Do we perhaps build camps to put people of a certain brown complexion in? Do we round them up in the streets? How do you even tell who is who - by their skin tone? As you can see, there's a lot of potential for racism there.
People want to preserve their culture for the same reasons, because it is their culture, it is their identity. How? Simple. Stop bringing in people that do not share your culture inside your country in large numbers.
Historically, they thought other cultures to be not as civilized/savages because often those cultures were not as developed, or as civilized, and often contained human sacrifice rituals. Regardless, forcing their culture on them was wrong just like it is now.
The first step is stop mass immigration. Then revoke all non-highly-skilled labour visas etc. Then add a $50k/yr additional tax to all work related visas, paid by the employee.
Also, not talking about US since they made their bed by bringing in through slavery, but talking about majority of Europe.
It feels like you are so scared of being seen as racist that you will sacrifice your culture just so you don't get called a racist.
> Also, not talking about US since they made their bed by bringing in through slavery, but talking about majority of Europe.
The majority of Europe is composed of formally colonialist nations. I am sorry, but to quote you, "they have made their bed".
> It feels like you are so scared of being seen as racist that you will sacrifice your culture just so you don't get called a racist.
I don't have a strong tie to my culture because I don't care much. My culture is lame, mostly. I already left my culture behind when I entered the melting pot. And, there is no American culture. We are a mixed and varied people.
You're proposed a lot of ideas here and, well, they're kind of shit. You're forgetting one teensy little detail - why are they good? Who does this help, and how? Okay, we revoke a bunch of work visas and make a bunch of people's lives worse... and then what? How does that bring economic and social prosperity to your nation?
See, you can't speak about mass immigration being a problem like that's a foregone conclusion. The US has had immigration on a level most European nations couldn't even fathom, and yet, economically we run laps around them.
Don't worry, we have our own anti-immigration people here. And yes, they're just as stupid and short-sighted. Trump is so anti-immigration he's willing to destroy our economy for a goal he cannot even articulate.
> The majority of Europe is composed of formally colonialist nations. I am sorry, but to quote you, "they have made their bed".
Colonized, but majority did not bring people over like US did with slavery. Colonizing a country in the past does not mean that country can now invade you. Anyone that was brought over during colonization time can stay, but that number is tiny.
> And, there is no American culture. We are a mixed and varied people.
Not anymore. Used to be a Christian nation with a mix of European culture - that's what it was founded on. This started to change after 1965 Immigration Act.
> why are they good? Who does this help
They are good because they preserve the nation's people. They help the nation.
> How does that bring economic and social prosperity to your nation?
Regarding social prosperity, take a look at London, Paris, NY, SF, Brussels, Berlin vs Warsaw, Prague, Helsinki. See which one is safer, see which one people are happier in, see which one is more socially prosperous.
Economic prosperity at the cost of your nation is not worth it. We don't need cheap food delivery.
> The US has had immigration on a level most European nations couldn't even fathom, and yet, economically we run laps around them.
And what has this economical prosperity brought you? Rampant crime, homelessness, zombie cities, healthcare accessible only to the wealthy, one of the biggest wealth inequality in the developed world.
Is it worth, sacrificing your country's identity so that the banker numbers go up? So that wall street makes more money?
> Not anymore. Used to be a Christian nation with a mix of European culture - that's what it was founded on. This started to change after 1965 Immigration Act.
1. America was never a Christian nation. That's a far-right populist rewriting of history.
2. 1965 was quite a while ago! But even before then, European culture is extremely varied. Not to mention Chinese and Japanese immigrants before. It was a melting pot even then.
> They are good because they preserve the nation's people. They help the nation.
This means nothing, by the way. This is the problem with populist messaging. It's populist because it sounds good, but it also has to appeal to the lowest common denominator.
There's no substance, no logic, no reasoning. Just promises, built on appealing to emotions. A sense of national pride, of sovereignty. Past that, the details are TBD.
> Economic prosperity at the cost of your nation is not worth it. We don't need cheap food delivery.
Once again, this means nothing. "At the cost of your nation" is just a populist message, something a bit Hitler-y. But it's not an actual argument. What, specifically, is being lost?
> And what has this economical prosperity brought you? Rampant crime, homelessness, zombie cities, healthcare accessible only to the wealthy, one of the biggest wealth inequality in the developed world.
On the topic of crime because far-right populists just can't help but lie - crime in the US is down and has been trending down for decades. People like Trump will claim the opposite, because they are liars and in order to form a populist message you have to appeal to emotions (see above).
It's easy to convince people something needs to be done when you cater to their sense of survival. Of course, it's just not true, blatantly. It's not misinformation or disinformation - it is dishonesty. The same is true for many European nations. You're free to look at crime statistics. But, more importantly than being dishonest, the horse begets the carriage. Why does removing brown people fix crime? What's the mechanism for that? Is it because you propose, by their blood, they are more susceptible to crime? Ah, and there comes the racism I mentioned earlier. With far-right populist ideology, it always comes, if you just give it a squeeze. I have no doubt now you will say no, that's not the reason why, but I don't really care.
And, on some other topics:
1. Healthcare is the most accessible it's ever been in the US takes to the ACA. The far-right wants to dismantle this. This isn't a matter up for debate either, so please don't bother.
2. Wealth inequality is high because of the far-right repeatedly failing to tax the rich and letting them engage in anti-competitive behavior. Under populist far-right leaders like Trump, the wealth inequality will only increase.
True, because if Democrats had an anti-American POTUS hell-bent on destroying the country they would be helping the impeachment process, not defending them
I have no idea how Republicans still make that claim with a straight face. We literally have someone who doesn't know what groceries are running the country right now.
If you put Joe Biden and Trump side by side, and asked a random person who didn't know either who was the most likely to have dementia, they would pick Trump. I'm not sure I've ever heard him say something that didn't sound like word salad.
From the outside, it looks like he's doing whatever he wants without control.
He starts to tell that everyone is maintained by the US - lol what?
He starts blaming Europe for being a parasite (thanks!) and treating Zelensky like everyone has seen live.
No one is telling him that his actions will have consequences for the US in their international credibility (gone) and relationships with partners (ruined)?
One day, he does a totally broken linear regression and applies no sense tariffs to every country in the world (no Russia - weird enough).
It's well known that tariffs are not a way to attract investment in your country - there's a lot of theory and historical examples that demonstrate that.
Moreover, it's just absurd to think that these kinds of actions are going to make American (!) corporations, now producing elsewhere, back in the US. No supply chain ready, lack of resources, ...
I don't know - it looks like a single man has too much power and no one around him is helping him make better decisions (for the country) in the long term.
On the contrary, it looks like all the decisions are pretty much market manipulations in order to make some "friend" get some money.
But again, this is what it looks like from the outside - and it's quite worrying
There are structural differences between the US and Chinese stock markets that remain unchanged. The policy changed but the relationship between the President and the stock market did not change.
Legally no, but normatively, yes. It was previously expected that the president wouldn't deliberately ruin the American economy for his own ego. That can no longer be expected.
>He's turned the US stock market into the same model as China's - the entire up/down rests on the leaders words.
Not only stock market. The whole "Project 2025" point is to turn everything from the "rule-based" approach to "unitary-executive's-really-a-King's-whim" approach.
Just today - the export control or lack of it on specific Nvidia chips isn't really result of security needs of US, instead it is just a result of Jensen getting a dinner at Mar-a-Lago. Just like in Russia.
I remember reading Unqualified Reservations ten years ago and thinking "this guy is a fucking nut!" and now his (Curtis Yarvin's) monarchist ideology seems to have walked right into the white house
Trump 2 isn't Trump 1. These are uncharted waters indeed
US is the biggest consumer market, the most dynamic economy, and the wealthiest country in the world. No real world metric would ever implicate US as uninvestable. What this move is doing is making a few things very clear
1. US is decoupling full on from China. Any ally negotiating will have to show that they are not helping china to export, by putting up similar tariffs on China. Basically, declare your allegiance. And so far, no one has unexpectedly sided with China.
2. For the laggards who are waiting until the last seconds to move away from Chinese supply chain, trump is giving them more time but also telling them, hey it’s your last chance
3. Short squeeze for those who dare attack US economy
4. Navarros is the chief architect and his vision is aligned with trump to fully execute his plan. Just go read his book, he lays it all out
You also cant actually legally own most Chinese stock. IE "internet" stocks. What you can buy is an instrument intended to track them. Its called a VIE.
That Alibaba stock you have? No, its a share from a seperate company setup in the Cayman Islands which should track the Alibaba stock. They are circumventing a Chinese law that makes foreign investment in Chinese companies illegal. It's a bad idea to own these.
That doesn't stop people from trying -- according to Yahoo Finance, FXI (iShares China Large-Cap ETF) was one of the most-traded (by volume) ETFs yesterday.
I'm well aware--not saying it's a good idea to invest in China, but many investors are trying it now thanks to the success of companies like DeepSeek. I have a feeling many of them will be eating large losses in the not-so-distant future.
The Chinese stock market...is not a fun place. It hasn't done very well in the last 5 years (unlike the US stock market) and is still way too subject to insider trading to be very accessible to most people. You can go with an emerging markets fund, but I would only do that as a hedge.
It's amazing what Trump's accomplished for the US, isn't it.. he's dragged the country so fast downhill that China is looking more and more the better business partner.
The Chinese stock market is flat while their GDP rises because their economy is not based around the stock market. US economic management is entirely based around pumping the stock market.
Very sure that he (or family members) are shorting stocks and then rebuying. This really feels like somebody deliberately creating market reactions, to benefit from them.
> A Wall Street Journal poll released Friday[1] found 52 percent disapprove of Trump’s handling of the economy, compared to 44 percent who approve. The disapproval is 12 points higher than the 40 percent who said in October that they had an unfavorable view of Trump’s economic plans.
> Pollsters found 54 percent said they oppose placing tariffs on imported goods, while the percentage who said tariffs will raise prices on consumer products rose from 68 percent in January to 75 percent in March.
>Despite the media tantrum the market only dropped back to early 2025 levels at the most.
A) This is obviously wrong if you spend even 5 seconds looking it up, unless you misspelled "2024"
B) You can't just ignore that they spent several days telling financial journalists it was just a negotiating tactic and leading them to believe this might be peeled back quickly.
Yes, but I don't think we've ever had a president pop a market bubble at a date & time of his choosing. Funny for the party of "don't let the government choose winners & losers" and all that.
Insider trading, pure and simple. You can bet his son-in-law and all his buddies made hundreds of millions here. America is a 3rd world country, nothing else.
The situation is so absurd that I’m starting to believe the entire Musk vs. Navarro feud was just a ploy, and they’re all popping champagne bottles together now.
I appreciate the art and craft of UK swearing as much as anyone, but please don't post flamewar comments here, especially not denunciatory ones on divisive topics. It just makes the threads worse.
There were a lot of smart things that could be done "about China" and then there are a lot of dumb things...we chose the dumb things.
We could...oh...increase are R&D on automation, AI, green energy, electric vehicles dramatically, we could focus on better education and better infrastructure for our cities (like lightrail in Seattle to where I live that doesn't take $200 billion and 2 decades to build). We could have just fought China with a better product. We could lean into our chip advantage that will only last at most a decade anyways. And many of those fit in with Conservative philosophy even (who doesn't want less regulation and cheaper/quicker construction, well, at least moderates like me would).
But no, we doubled down on culture wars and going back in time to when America was more self sufficient but less rich.
i dont want china to be some colony of the west. i want china to become as rich as the west so that they can have clean domestic consumption with strong worker protections and rights
You said Trump sided with the working man and against Wall Street. Which is really cute because actually thousands of auto workers have been put on leave [1]
whereas the market volatility is expected to drive bumper profits for banks [2]. I am starting to doubt you are being serious but if you aren't then I'm humbled by the quality of the satire.
I think he's well aware that the reasons he is giving for his actions make no sense. That doesn't mean he doesn't have a plan, he's just lying about it.
As for the actions themselves, they're pretty much his standard operating procedure:
> I think I can get away with bullying these people, so I will
When he talks about the existing agreements being unfair, he means that we have leverage that we're not using. The proposed tariffs are proportional to the trade deficit because the trade deficit is a reasonable proxy for how invested that country is in its economic relations with the US. You can extort more from somebody who is heavily invested, and less from somebody who is lightly invested. It's a classic protection racket, just on a sliding scale.
He's trying to look ignorant because it's at least a better look than showing the malice that actually drives him.
Ever since the tariffs were first announced I've been trying to understand if there is any method to the madness.
There is sound reasoning behind the tariffs, and I can at least understand the motivations. However, to execute the vision behind the tariffs would be tantamount to severely contracting the American economy, and the voters would never agree to go hungry in order to militarily independent.
He knows what he's doing, but him and his ilk are openly lying to the American public because no one would ever agree to it.
I voted for Trump and I would again in a heartbeat if faced with the same options but this has been dumb. Whole of the Right is running around screaming the "Art of the deal" when literally nothing has been accomplished. Market is still down, bond rates are still high. We trashed relationships with other countries and not a single trade deal has been signed. And he clearly backed down. We still have no idea what the end goal is. Its just dumb. We are objectively worse off than we were a week ago.
He is still delivering for me on the reasons I voted for him but this chapter has been a debacle. Fun part is with Trump as president every week is a chapter, for most presidents a chapter is 2 years. So excited to see what's next.
If he delivers on China and effectively resets the world financial and trade picture in our favor then well done but so far not impressed.
Whole world celebrating the guy who started the fire putting it out.
Irrespective of what you think of Trump, decentralization of production capacity is a good thing — maybe even essential. If this continued for, say, another twenty years, the West and the rest of the world would be completely stripped of all ability to defend themselves. Literally everything from picket fences to rolling stock to tableware is coming from one country.
This is not a contrarian opinion. This is a problem that was recognized long ago and production capacity for strategically important industries has been in the buildup both in Europe and the US.
Trump's actions will probably boost European, Canadian and Australian industries a bit more now. Investment in the US will be a hard sell for companies that care about the stability and level-headedness of governments where they operate.
Well, the contrarian opinion is that this (whatever he did) is a good thing - whether decentralisation happens into the US, Europe or wherever. It's one thing to recognise the problem, and another to attempt to change an uncomfortable status quo.
Every other approach attempted to date has been milder, and hasn't worked. But we'll see if he sticks to it.
> Every other approach attempted to date has been milder, and hasn't worked.
A lot of things were working even if they did not change everything overnight.
And the changes that will come to the world order and industries following this administration will on the whole be detrimental for the US economy and position in the world.
> A lot of things were working even if they did not change everything overnight.
We can disagree. The frog was slowly getting cooked.
China's trade surplus has reached 1 Trillion dollars, and has seen consistent YoY growth for decades. Such asymmetry is dangerous in the long run. Now, none of this is China's fault. They did the right thing for their country and their population.
> And the changes that will come to the world order and industries following this administration will on the whole be detrimental for the US economy and position in the world.
That remains to be seen. I have no way of knowing, but I would assume that it isn't just the US which is concerned about this.
I don’t get the outrage. Trump did this with Mexico. He imposed tariffs and then immediately eased them when Mexico started negotiating. It worked. Wouldn’t a rational market understand his behavior by now (not agree with it, but understand it). Especially since his stated goal has been “impose tariffs to spur renegotiation of trade terms”. Why would a rational market actor be acting like Trump isn’t doing what he’s said he’s doing?
Sure. Trump is trying to renegotiate the trade deals with Mexico and Canada that he himself negotiated during his last term, by unilaterally imposing massive tariffs. Why are you pretending that this makes any sense?
Serious question: what's with the wave of utterly stupid comments on HN?
Is it yuppie college grads working in silicon valley startups who have always had a thick abstraction layer between them and the system that gives them their paycheck? Is it trolls? Is it lifelong diehard contrarians (the same thing as trolls really)? Is it something else?
Because it's not the country getting rich - it's the government getting rich from its citizens. It's another form of taxation, but one with no plan and crazy fluctuations day to day that affect first and foremost businesses, who will put off investments are start layoffs in order to make themselves more resilient to the chaos, which affects the whole economy. And this long term downturn in the economy doesn't make the country rich, but rather poor.
If what Trump was saying about making the country rich were true, then sure, why would people complain? But it's not true; just a lie told to placate his followers. It's another version of "diamond hands" or "ride the dip" that you hear from people pumping and dumping crypto stocks.
This is where I don't follow Trump's logic. Trump and Musk were claiming that the US will push super high tariffs, that it will make the US rich, and hinting that it will maybe even be possible to suppress the income tax.
Musk to his credit is pretty anti-tariff, and has touted a 0% tariff environment with Europe. It's Navarro and Lutnick that are the devil's whispering into his ear on this policy.
Art of the deal. 10% seems "reasonable" to everyone now. That was not the case a week ago. Meanwhile a bunch of overleveraged stock market buffoons were taken to the cleaners.
"It’s the T-bills wot dun it."
That’s my read on why the U.S. just paused the global tariff hike to 10%.
From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury. Why? Because Uncle Sam has to refinance a mountain of debt this year, and the cost of that depends heavily on Treasury yields — especially the 10-year. That’s the rate that sets the tone for everything from mortgages to corporate borrowing.
So they tried to spook markets. Introduce global tariffs. Stir up uncertainty. And it worked—at first. Yields dipped. Traders moved to Treasuries as a typical flight-to-safety.
But then something flipped.
Instead of being seen as a safe haven, U.S. debt itself started to look shaky. Maybe it was the deficit outlook, maybe the global response to tariffs — but whatever it was, yields started climbing. Fast.
At that point, the strategy backfired. The executive branch had no choice but to walk it back. So they paused the tariffs.
Because when your national budget depends on cheap debt, you can't afford a crisis of confidence in your bonds.
> Instead of being seen as a safe haven, U.S. debt itself started to look shaky
There's also a more basic answer to why US debt got more expensive. There is no such thing as a "trade deficit". You cannot import something without exporting something else. That something else, in almost 100% of the situations, is dollars. What do you do with dollars, if there's nothing you want to buy? You buy debt. So, every trade deficit ultimately tends to export debt. We have long known that government debt is proportional to trade deficits.
The problem with tariffs, in this context, is that they are being used as a signal that we don't want to sell people dollars anymore, explicitly saying "no more trade deficits". In doing so we are choking off the supply of dollars used to buy debt (rather abruptly), so that US debt is chasing fewer dollars and has to give a bigger yield as a result.
What's worse, is that because we are signalling that the tariffs are meant to be permanent, and we're seeing reciprocal tariffs as a result. When that happens, it means that using dollars in the future will purchase fewer US goods, so the time discount of money has gone up too. Further driving up yields to make bonds attractive enough to sell.
US debt was mostly being bought because "safe". The US being seen as politically and economically stable and the center of the world. Right now that argument is much harder to make.
And meanwhile there is always a lot of US debt that needs to be rolled over (i.e. re-issued to a willing buyer.)
Except for the data point of today's 10-Year Treasury Auction which had a normal, usual result.
Why do people keep repeating this nonsense? 2008? Every "recession" for the last 50 years? Nobody was under the impression that the US was economically stable. Go press max on the 10 year bond yields and tell me what you see. The "crash" puts it to where it was not even a year ago. For 10-year bonds.
The main point is during every recession for the last 50 years, the US government has never missed a loan payment on its debt, even during recessions. It has a near perfect credit score.
Compared to literally every other economy in the planet, the US is economically stable.
Was
Compared to every other developed democracy in the planet, the US is politically unstable with its two party democracy.
Trump is just a product of this right-vs-left volatile maximalism, represented as woke-vs-maga, which is fully on-track to get worse. Try guessing who will be the next woke maximalist and maga maximalist candidate, and what Executive Orders it leads to, which the US is pretty much ruled by at this stage.
Good luck with flip-flopping maga and woke Executive law as a country.
I'm not sure where you've seen left maximalism in the government so far. You get a choice between right and "let's not disturb the status quo" centrish party. There were barely any strong left-ish opinions for quite a while. That whole idea of a conflict seems really artificial, looking at the news from the outside. Let's hear about the left once someone actually manages to force through things like: more residential buildings overriding nimbys, progressive tax without trivial loopholes, wealth tax, kill gerrymandering, federal level build-out of trainlines, etc.
> Compared to every other developed democracy in the planet, the US is politically unstable with its two party democracy.
I don't think this holds up to any sort of scrutiny. Brexit, plenty of other examples across the world
Somewhat tangential: I see two serious flaws with the US democratic system: (1) The supreme court is too powerful. If you look at many other highly developed, democratic nations, their supreme court (or equivalent) is much less powerful, and they are no worse for it. I have seen that in both semi-presidential and parliamentary systems. (2) The US president is too powerful.
But the country is polarized. So this woke/MAGA maximalist seesaw is what you’d expect if democracy was working.
The two-party angle really has very little to do with it, because there’s not that many “true moderates” in the electorate. Research shows that the “center” is comprised of people with a heterodox mix of views, but they’re not particularly mushy about any specific view.
Well I can accept that argument, it's interesting, but I think I want to disagree. I'm not American, I'm French and I live in China, and in both countries I know so well, the population seem to have many spectrums: young vs old, moderates vs angry, rich vs poor, nature-driven vs success-driven, tired vs energetic etc. So with all those dimensions, France ended up with 12 parties at the presidential election, from royalists to anarchists, going through greens, communists, centrists etc. China ended up with one.
France embraced the chaos and made it a point of pride, while China finds it absolutely terrifying and unproductive - but my point is that the population is exactly the same, scarily similar, in all its funny diversity, but the system is not a mirror of it, just an awkward model built on compromises: France wants to maximize representability and China wants to maximize order.
The US system is pragmatic: need to win, need to give the people a feeling of choice but not give them any sort of real power of structural change, and they split on a strange line, for most of the world, that I have even trouble to describe myself. I think Trump pleases people there because he pretends to be a structure reformist, which sounds fresh.
It's not the people who can't be diverse politically exactly, it's more complex.
Trump is a new experience for America, but you don’t have to go back far pretty much anywhere else to have similar examples.
Trump is notable because he is unusual for the US.
Parent is saying two party systems produce this and next will be even worse.
The 2 party system has existed for the vast majority of the time the country has been around. Now isn't even the most polarized period of it (though it's certainly up near the top). It's not always worse the next round but it's not always better the next round either.
Duh. The US has been this way literally since it was founded, and the poster is moving the goalposts since we were talking economy eh?
As a card-carrying Whig party member I take offense to this. US has had periods of 3 parties, where the 3rd party ousts the 1st or 2nd eventually and we're back to two party, though that's more 1800s.
This is a product of duopolistic parties AND social media algorithms. Outrage. Outrage gets clicks, gets money, gets votes.
I also wish to remember that the Libertarian party exists haha
> We have long known that government debt is proportional to trade deficits.
And so far we've been cool with that because it:
- continues to make the USD the dominant global reserve currency, strengthening our economic and political clout
- allows us to borrow cheaply to finance our military and whatever else we're spending $ on
isn't this also kinda opposed to having the dollar as the dominant world currency?
Lots of countries settle trades between each other using dollars.
Making it harder to get those dollars will leave them seeking to use something else to trade.
Leaving the euro! Authoritarian currency is as good as their word.
Since yuan is pegged to dollar for settling day to day stuff it's roughly as good.
Reluctantly agree.
Can't really count on more and more currencies these days. Including our own here in the US.
BRICs were making plans to introduce their own reserve currency as an alternative to the USD. Trump once threatened 100% tariffs if they did.
https://www.msn.com/en-us/money/markets/aggressive-tariffs-f...
https://www.msn.com/en-us/money/markets/trump-threatens-100-...
https://www.bloomberg.com/news/articles/2024-12-02/south-afr...
These developments are going to be interesting.
The C and the I are at war, R is stuck in a vietnam in Ukraine and South Africa is unstable .Leaving Brazil, which yes, brazil and India alone may hold up a stable reserve currency .
> South Africa is unstable
Is it? They have some intra-government spats, but I hadn't heard that this threatened the stability of the whole country yet.
> which yes, brazil and India alone may hold up a stable reserve currency.
Also several other countries which joined the last year or are in the process of joining. I believe at some point, the official name was also changed to BRICS+
Despite the original naming being initials, there are many other countries who are members and partners of the BRICS:
https://en.m.wikipedia.org/wiki/Member_states_of_BRICS
I seriously doubt Brazil will keep it up if Trump follows through with his threat. Honestly I'm surprised Brazil hasn't been hit hard yet. Brazilian taxes on american products can approach 100%. One for me and one for the government, as we say. A "reciprocal" 10% tariff against brazilian goods is just comical to me. I wish I was paying just 10%.
The biggest things that our dumb oligarchs here profit from are almost 0 or zero.
It's only the shit that we want to buy retail on Amazon US that are crazy expensive. And a big chunk is ICMS, that is state wide, not federal tax.
On top of that DHL charges a premium.
I know because sometimes I can buy directly using my prime subscription my beloved Nintendo games (that I hope I can buy directly from Asia now and cut one big middleman).
Brazil's deficit in the last decade accumulates hundreds of billions USD already, but only benefits a few. Yet as a good dogs we feel relieved that is only 10%. But you forget our biggest export products are already 35% on top what was before (steel).
This is a oligarchy fight that will splat on everyone, including my eggs since we quintupled the exports to cover someone's asses.
By the way, why do we need to buy expensive ethanol abroad since ours is cheaper, but in my state ethanol is never cheaper than gasoline?
That 10% would be over the other taxes.
But Trump also managed to devalue the dollar so much, we won't even feel the difference.
Having dollar being the worlds currency is not necessarily a good thing. Yes, you can borrow at low interests rate for a while. But guess what? Those are still debts. And eventually rates rise due to inflation. Now you have hollowed out your industrial base and you are stuck with tons of debts.
Even if dollar gets weaker, better to have less debts and more industrialization
Inflation reduces the effective cost of debt.
Inflation and the "hollowing of your industrial base" are not inevitably connected, and in the case of the USA, have almost no connection to each other at all.
Not being the world's reserve currency can be argued over but having these massive economy crushing tarrifs is just stupid
Like Germany? Which country do you think did better over the last 20 years and which had barely any growth?
The state printed paper money, he still owns a debt to the forrest donating the tree?
You are exporting services. Vast amounts of highly profitable services.
They really did and then they didn't
This is all correct, but it's a first principles explanation that doesn't explain why US bonds, and in particular the 10-year note, spiked today. Yes, eventually excessive tariffs would have that result. They literally hadn't even taken effect yet. So this doesn't explain the bond motion today.
Someone was dumping, we don't know who or why. But the answer to that question is a lot (a lot) more important than people realize, and certainly more so than the immediate market motion or tariff policy.
Honestly if the answer was "The PRC was unloading bonds to send a message" that's sort of the best option, as they have limited wiggle room to continue to do so without wrecking their own financial situation.
If it's "The market as a whole lost confidence in US debt", then we're fucked no matter what Trump does next.
It's heavily rumored it was Japan.
https://x.com/Nihonpolitics/status/1910096159835594786?t=RWB...
"someone"... Or lots of people looking at US stupidity and deciding that their long term bonds were suddenly looking like a bad investment.
The FT reported that lots of hedge funds were unwinding a bunch of trades as they needed liquidity.
Hmm.
The problem is that China holds only 2.6% of US Debt as of February 2025. Can they leverage that small a percentage to make a market move like that? Especially assuming they didn't dedicate all of their holdings to that action?
It depends entirely on what the trading volume is, and I don't know. But again IMHO it's critically important that someone find out.
You know what the answer is. It’s the global system dumping US debt. Its not like someone knew THIS would be the specific smoke signal that Trump would see and say “oh, lets pump the brakes”
Reversing idiotic decisions after not being able to explain away the backlash they caused is kind of his thing and many people recognized it and expected it before the tariff pause.
I think it’s largely irrelevant now. The cats out of the bag and any country holding large amounts of t-notes and facing hostility from the US will dump them to get Trump to back off.
> we are choking off the supply of dollars used to buy debt (rather abruptly), so that US debt is chasing fewer dollars and has to give a bigger yield as a result
Well, also, the holders of our debt now need liquidity. So they sell this famously-liquid asset we've been selling them for decades.
It's usually not "dollars." It could be any investment or service that could be bought using dollars. And calling foreign investment an "export" is just confusing.
> You cannot import something without exporting something else.
This is incorrect when your national currency happens to be the global reserve currency. All it requires is for the other country to be willing to accept dollars in payment.
[ EDIT: even that's wrong. All it requires is someone being willing to accept dollars, either in payment or as part of a currency exchange. ]
Exporting dollars is exporting something. Combine a constantly depreciating dollar with constant rates of trade and you could end up in a steady state.
However, we define trade deficits to exclude financial transactions for various reasons.
If by "exporting something else" you include dollars then fine, but I don't believe that was what the GP was saying.
I'm pretty sure it's exactly what they were saying.
You cannot import something without exporting something else. That something else, in almost 100% of the situations, is dollars.
Normal economics does not talk about "exporting currency". You generally buy stuff with currency, which when the seller is in another country happens to mean that dollars (probably) move across borders and thus in some odd sense the currency is exported. But this is really not what is generally said in this context. Exporting stuff normally means providing goods and services to willing buyers in other countries.
Normal economics almost certainly does talk about exporting currency. It’s a key point in freshman macro economics, and central to modern keynseian theory. And while there are some solid alternative to keynes, I doubt that even hayak would claim that you can’t export currencies.
Maybe my google-fu is not that great today, but I could no reference to exporting currency online that was about the concept that paying for imports was exporting currency.
I'd be happy to see a link that does.
You’re not going to see it used in such terms because of how economics defines trade. However you will see examples that make it clear currency is a commodity subject to supply and demand when you look into exchange rates. https://www.investopedia.com/ask/answers/041515/how-does-bal...
Trade networks allow for stable equilibriums with no individual country having equal trade with any other county. To simplify, A on net sends money to B, and B buys stuff from C with A’s currency, C then buys stuff from A in A’s currency returning that money to A. However, people want to operate in their native currency and there are a lot more than 3 countries in the real world so you end with intermediary currency exchanges changes going on. In theory supply and demand steps in to balance things, in practice cash flows rarely actually sum to 0.
> Normal economics does not talk about "exporting currency"
International finance is almost entirely about balancing the current and capital accounts [1].
The trade deficit is just one part of the current account [2]. Zeroing out the trade balance ceteris paribus requires a change in the capital account, i.e. foreign ownership of domestic assets and/or domestic ownership of foreign assets. If we’re just reducing the current account with tariffs, that means reducing both. Necessarily. This is one of the closest things to a law economics offers because it’s based on identities. The only run-around to it is the reserve account printing domestic currency, and we know how that goes.
[1] https://www.investopedia.com/ask/answers/031615/whats-differ...
[2] https://en.m.wikipedia.org/wiki/Balance_of_trade
Normal economics misses so many things because of narrow minded mathematical models. Like wealth and income distributions or the fact that currency is just another good with its own supply and demand.
But the person you responded to clearly talked about it. Within two sentences! Right next to each other! Less than a tweet long!
Is it that hard to admit that you didn't properly read the comment you responded to?
I read it accurately. I just don't agree that "paying someone in a different country with my currency" is what is typically, normally meant by "exporting stuff".
> That something else, in almost 100% of the situations, is dollars.
The real issue is people are still treating this reactionary buffoonery as if it's a trade policy that warrants critique. It isn't. Trump is a fucking idiot and he has surrounded himself with other fucking idiots and they and the reactionary base of fucking idiots they've created are cheering him on for doing fucking idiot things.
A journalist successfully reverse-engineered the likely formula used to arrive at the figures for each nation, and it's not only implemented stupidly, it's also wrong from first principles. It's the same thing an actual school child might come up with if you asked them to. This is the same kind of "economic policy" cooked up by dumbasses on reddit who sincerely believe they are qualified to "fix US trade."
If our congress wasn't also packed full of ineffectual liberals and other fucking idiots, he'd be impeached by now for sheer incompetence.
It's the same issue we had in the last Trump admin. This nonsense is elevated to undue credibility by serious people discussing it seriously. It shouldn't be debated, it should be mocked, relentlessly, mercilessly, cruelly. As should Trump himself, as should his supporters, as should his sycophantic followers. Mock, belittle, make fun of, bully, parody, just continuously until every single one of these people refuses to approach a microphone.
It's especially such a farce because what do they expect? If trump said the sky is green and the ocean is red, you'd find scores of these useless faux-intellectuals trying to "prove" the truth, and each data point of evidence would simply be met with various forms of "no it isn't! The sky is green! The ocean is red!"
In their world, any "evidence" to the contrary must be manipulated or misinterpreted, because as we all know the sky is green, the ocean is -- oh, he said it's yellow now? And the sky is red? Hah, of course! We knew it all along, it was the plan, stupid!
And meanwhile...
Most of the democrats' tiny minds struggle to operate outside of a context of rigid rules and procedures. A context of arguing a point and getting at least some degree of fair debate in return.
But this is another age of populism. It doesn't matter what you argue, on either side. Debate transforms, serving only to transmit your message to your side, ideally while inspiring them and demoralizing the enemy. It matters that you seem confident and powerful while you say whatever you're saying. It matters that you seem invincible and indefatigable.
Their world won't be back for quite some time, assuming something at all like it sticks around. They'll keep operating like robots, not understanding why an excellent diss or crude mockery matters more than 1000 additional volumes of "proof" about something in contention.
These are loyalty tests. You prove you belong to the ingroup if you show you believe preposterous things. That's how cults and religions work.
We think this is stupid because it kinda is, but this behaviour is part of the human traits and possibly is adaptive behaviour to enable the very possibility of us living in large societies.
It's a great comment thank you. The part about the changes that would have enabled us to scale as society is really brilliant. I've read a bit about this in historian theories but the focus is often very material (probably because that's what you have evidence of).
I've always been in awe at the (absolutely crazy if you ask me) concept of money. The fact that we accept to give up possessions or time in exchange for the promise that anyone in the future will provide something equivalent because we just show some token/proof (which in itself are intrinsically valueless: sticks, stones, minerals, papers, now bits...).
We've been educated to be a bit suspicious and maybe show a slight contempt for it, probably to avoid being inelegant and also particularly because a lot of big owner of it are seen as not necessarily deserving of it.
But from an evolutionary perspective it's absolutely stupefying. And at its core its extremely positive. It shows absolute trust in our peers. It's probably one of the few behavior that really binds us together.
One could argue that it's the actually one trait that really distinguish us from other animals.
> I've always been in awe at the (absolutely crazy if you ask me) concept of money. The fact that we accept to give up possessions or time in exchange for the promise that anyone in the future will provide something equivalent because we just show some token/proof (which in itself are intrinsically valueless: sticks, stones, minerals, papers, now bits...).
No offense intended, but I think the way you're explaining this is a little overly silly. Value credit was a natural evolution from the barter system and it makes perfect sense. If you wanna run down to the 7/11 for a slushie, do you want to bring a $10 bill, or a live chicken? I definitely vote $10 bill, especially because there's a non zero chance the cashier wouldn't want a chicken anyway, even if it's technically worth enough to trade for a slushie. Money just streamlines this whole process and makes even exchange for goods infinitely more efficient for all parties involved, and I think that's why virtually every organized society we've found evidence of has some type of currency, going back thousands of years.
Now, that's not to say I don't agree that the monetary system as it exists is borderline a crime against humanity. Capitalism and it's various knock-on effects, starting plus or minus with colonialism depending how you want to slice it, is, I think, the most horrific thing we've done to each other in our entire history as a species. But I don't think that's an indictment of money strictly speaking.
That's the thing here. We're so used at the concept of money that you described that it's very hard to reconcile with what money really is.
You can take any introductory banking system course and it will tell the same story. (I recommend Economics of Money and Banking by Perry G Mehrling)
It's not really a finished exchange.
Money represent a debt.
It's a one sided exchange against the promise of the completion of the other side of the exchange in the future (by someone else in this case).
It's like the amount in your bank account is not really money. It's a debt from the bank: the promise that it will deliver this amount as cash if you ask. (M1)
And money is so liquid that we never think about it that way. Except during hyperinflation periods. And bank account are so solid that we think about them as cash. Except during bank runs.
As a side note, the theory that barter really meaningfully took place is being challenged as there is no real evidence of this.
Looking at the fine print of bank accounts, I would assume they completely absolve themselves of responsibility after a catastrophic event (call it C-Day). Or maybe they defer to FDIC insurance which guarantees I will have at least $250,000 after C-Day.
That said, as a consumer, I have no comprehension of how that would actually work. Do I get my guaranteed money 7 days after C-Day or 6 months after C-Day?
If an EMP blitzes my bank's electronic hard-drive records, is it my responsibility to prove I had X dollars in the account? If so, how? I can easily print a statement, but a statement clearly easily be forged. If it's the bank's responsibility, is there any guarantee they maintain physical and up-to-date records? Is there any regulation mandating they keep such records?
What happens if hyperinflation occurs and the 250,000 guaranteed by the FDIC is enough to buy a week's worth of groceries?
There's a lot of unknown variables and potential fragility in the system.
In other complex realms like software engineering, we get evidence that those complex systems really only have the budget to build the "happy path" and lawyers fight the cases when customers get damaged by the "unhappy paths."
It seems like our monetary system is on the happy path and very few times have the unhappy paths been tested.
It's the age were who control the country is the one with most money, not votes, and because company bribery is accepted, don't matter how much Trump get mocked, social media algorithms aren't going to allow that to breach other bubbles, something is clearly wrong when politians ask for money note votesz it isn't a democracy anymlre
It's the age were who control the country is the one with most money, not votes, and because company bribery is accepted, don't matter how much Trump get mocked, social media algorithms aren't going to allow that to breach other bubbles, something is clearly wrong when politians ask for money note votesz it isn't a democracy anymore
Who raised the most money in the last presidential election again?
Literally the funniest thing about it is that LLMs conjure this "solution" when asked to deal with trade deficits using tariffs. It perfectly possible that one of Trump's people just asked ChatGPT and they implemented the answer.
Also the love affair with tariffs comes from a guy that wrote a book with his ideas and in that book he made up economic expert to support his views. (Ron Cara)
The guy he's referring to is Navarro, who invented an economist named Ron Vara to cite in his pro tariff book. He made up hi source using an anagram of his name, that's batshit crazy.
can't edit anymore, but I had a typo, made up expert was named Ron Vara
Bravo!
>>You cannot import something without exporting something else. That something else, in almost 100% of the situations, is dollars.
If you want the world to trade using your currency. You have to give them dollars. That is buy something from them. That is, imports.
All of this comes a section of US politics not being able to understand why the dollar standard even exists.
Boomers really fucked on the economy to Sunday didn’t they?
Yep, and despite the dwindling numbers they just keep on coming up with new ways of fucking it. "When you're a star they just let you do it"
Sadly, this go-round it's Gen X more than Boomers. We voted for Trump disproportionately compared to other age cohorts. I'm embarrassed on behalf of my idiot friends from high school.
Incompetence is way more dangerous than people realize.
These tariffs are China's Four Pests campaign. Mao, a very trump like figure, decided to protect Chinese crops by destroying sparrows that were picking at them. Killing sparrows killed a predator of insects which did more damage to crops. This coupled with reality denying policies and ignoring experts led to one of the most devastating famines the world has ever experienced.
Hand waiving away this policy that denies reality and hurts America as a rational plan that went wrong is absolutely dangerous. Killing sparrows was "rational" in the same way these tariffs are. Authoritarians believe in power over reason. They do not like submitting to the authority of those who have studied problems because it is an attack on their own supremacy, so they fail to predict second order effects, which were likely obvious.
The damage this administration is doing to trust will be felt for generations. An agreement with America will have no value. No world leader will care what we say, they will only look at what we do. They will see power we have not as potentially being used for their own defense, but as a potential attack on their own sovereignty and they will wish to see us weakened so that they can spend less resources trying to determine our intentions.
If we're going full Mao, we'd be remiss if we didn't note that their plan for industry during the cultural revolution was "the proletariat will own small smelting operations next to their house". It checks out ideologically, workers controlling the means of production.. it just didn't work in reality.
Reminds me a lot of the thought process around having more manufacturing in the US by slapping tariffs around.
There is absolutely a Cultural Revolution feel to the communication by and around the president. See e.g. Bill Ackman's fully-prostrated worshipful response on Twitter this morning. The guy is a successful billionaire! And he needs to sound like a literal cult member in public lest he lose influence.
Yes, project 2025[1] is our own cultural revolution/great leap forward.
The authors said: "We are in the process of the second American Revolution, which will remain bloodless if the left allows it to be."[2]
[1]https://en.wikipedia.org/wiki/Project_2025 [2] https://www.washingtonpost.com/politics/2024/07/03/heritage-...
I'd pay serious money to jump 30 years into the future just to read what historians will write about our current time.
Not for investment tips or anything practical - just to satisfy my curiosity about how this bizarre period will be analyzed and understood.
When everyone feels this way instead of fighting for the future they want to make reality... There are journalists, protestors, entrepreneurs, unionists, billionaires, etc, all fighting for what those history books will say. Ukrainians are fighting for what they will say right now.
I think a better question is what do you want them to say. Do you want them to say tyranny triumphed un-resisted?
Assuming it isn't the most sane period for a long time to come.
True.
And … if there is a future at all.
https://www.youtube.com/watch?v=Eghl19elKk8
You should watch this (12min). You just expressed the "politics of eternity."
You should check out Timothy Snyder in general to see what historians are saying about our current times.
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The obeying in advance and reflexive glazing is scary in a Twilight Zone or slow-start-of-a-zombie-movie sort of way, but the fact that Trump is playing very fast and loose with due process, talking seriously about "deporting" American citizens and is actively applying economic death penalties to people on his bad side (like the EO stripping security clearance not only from Chris Krebs, but everyone who happens to work at his current employer) is scary in a "is the US as we know it actually going to survive this?" kind of way.
And I'm just pulling a few things off the top of Many Very Worrying Things here for brevity.
And don’t forget the Jan 6 types. They are the Red Guards of Trump and he used them on Jan 6 as an experiment. Pray we don’t have to witness a new culture revolution in our time!
People are so desperate for this to be rational. Which itself is entirely irrational given the information at hand.
Smart Trumpers are the worst of the bunch. Continuously inventing PHD 5D chess rationalizations for his actions that he immediately invalidates with his next erratic action. Better to just be along for the vibes than to pretend its a strategic, well thought out, well executed plan.
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Aren't we all, as humans?
"very stable genius," indeed
It could be a very straightforward dump and pump scam, as well. We know this admin isn’t above petty monetary graft.
It seems to be the simplest possible explanation, too. Then again, never attribute to malice…
It is very obviously this. These same people made meme coins. Shameful behaviour.
That's not the simplest possible explanation. The simplest explanation is that he did this because he believes in it. Trump has been saying the exact same thing about tariffs since the 1980s—there's video of him talking to Larry King about it in 1987, using exactly the same phrasing and logic that he uses today.
Donald Trump fundamentally believes that everything in life is a zero-sum game, and moreover that everyone is as crooked as him: either you're screwing someone else or you're getting screwed. That's why he's so obsessed with trade deficits specifically, because to him, that negative sign screams "you're getting ripped off."
There are other benefits. By imposing the tariffs like this and wielding them through executive power, he can extort countries and corporations to give him what he wants in exchanging for releasing the hostages, so to speak. And I'm sure people in his orbit _also_ used this as a get-rich-quick scheme, because these people are all grifters. But that is all secondary to the fact that he has believed this for forty years and finally got a chance to do it.
> finally got a chance to do it
He could have done it in his first term.
He tried to, but his advisors stopped him. Bob Woodward reported that Gary Cohn snatched papers off his desk on multiple different occasions to stop him from starting trade wars at the beginning of his first term.
This time around he has made sure there are no advisors strong enough to stop him. That means he is far more dangerous now than he was in the first term. And not just in the area of the economy.
Also, he was concerned about getting re-elected again.
And possibly being prosecuted for crimes, but Republican appointees on the Supreme Court kinda took care of that.
There were adults in the room in the first term. Now, just loyalists, sycophants, and grifters.
In this case, I think it’s fair to say that it’s both incompetence and malice. It doesn’t have to be just one. It can be two things.
I usually dismiss conspiracy theories, but if this were a dump and pump, it would be surprisingly clever. 3 hours before he announced easing tariffs, Trump tweeted that it's a good time to buy stocks. If he gave someone insider information, they could use that tweet as a cover.
> 3 hours before he announced easing tariffs, Trump tweeted that it's a good time to buy stocks. If he gave someone insider information, they could use that tweet as a cover.
Got a link to the tweet? I don't have a Twitter account.
Edit: apparently it is true, and it is on Truth social. Someone sent me a screenshot.
To the downvoters: what is wrong with you? It was an honest question.
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Can not agree more. The guy is dangerous. People who underestimated him have all to pay a heavy price.
If you're gonna use historical analogies, it pays off to be accurate. Marie Antoinette very likely never said "let them eat cake" and she wasn't particularly more detached than aristocrats at the time were generally (which, to be fair, is quite a lot, but not all aristocrats were killed in the revolution).
Marie Antoinette was not killed because she was particularly detached but for treason after plotting against the Constitutional monarchy of 1791 along with Louis XVI and many aristocrats at the time.
wow, fuck. unbelievable crap, but true, nonetheless:
after implying I should be accurate, you go on to make your own statements using weasel words like "very likely never said" and "wasn't particularly more detached" and more on the same lines in the rest of your comment. where is the proof for your weasel words, bro, just like you ask me to be accurate?
weasel words are not accurate words, bro, rather almost the opposite.
”physician, heal thyself” - before you fuck around advising other people what to do or not do.
i see a lot of trends of this on hn too. pathetic.
here is a similar excerpt from your same comment above, with different highlighting by me, which shows even better, your "weaselness" (for lack of a better word - maybe weaselishness or weasel(ish) nature? ):
>wasn't particularly more detached than aristocrats at the time were generally (which, to be fair, is quite a lot, but not all
laughable comment.
iow, what is evident to someone who sees beyond the surface meaning of the words you used, like I can, is that you want to attack someone verbally, without being held responsible for the consequences of your attack. in other words, you are a weakling and a coward.
that is why you waffle or equivocate.
and that is true of a lot of people, not just here but in the world. i have seen enough over my lifetime to know that that is the case.
for a very relevant and important current example, check out the news about the SignalGate scandal involving the topmost echelons of the US govt., how they fucked up, made a fool of themselves in front of the whole world, and then tried, unsuccessfully, like you, to cover it up.
jokers, and beggars, all such people.
update: wow, fuck, again.
proof. some time after writing this comment, on a whim, I thought of googling for the term signalgate, and what was my surprise, to see this Wikipedia page:
https://en.m.wikipedia.org/wiki/United_States_government_gro...
It just goes to show the notability of it, because Wikipedia only allows what they consider notable pages (according to their criteria, of course). iow, the topic is considered important by them.
This is not appropriate language to use on HN and I'm not your "bro".
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also, hn has plenty of such holier-than-thou types, to its discredit.
It’s scary to think that the reality is as simple as “Trump is just an idiot that is incapable of understanding even the fundamentals of global trade and has been obsessed with what he thinks tariffs are for 30+ years and is too stubborn to listen to non-stupid people”, while the rest is just hopeless attempts to rationalize his stupidity. But when you’re in a billionaire bubble isolated from reality, and a dumb grifter who rips off every party in every deal you’ve ever done, it makes sense to assume that global trade is just countries ripping each-other off.
The people around him with zipped mouths who know better could very well be treating it as a pump and dump however.
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I genuinely think it's rational.
Not clever, or justified, or well though out, or based on any solid evidence. But there's probably a rationale behind it.
Now, ideally, we shouldn't have to care what the rationale was if there was any way of just getting back to "normal", but the same way Mao wasn't a flash in the pan, I assume we're looking at a few decades of it for the US as well.
Or this is like the long history of American tariffs which gave it world class industry. We are in the midst of a 4th industrial revolution and all this insane manufacturing tech being developed just gets shipped over to china because nobody in the US wants to touch it for fear of failing.
For every four pests Mao had 100 successful projects that nobody talks about. Harm reduction is not an optimal strategy for any game.
https://en.wikipedia.org/wiki/Great_Chinese_Famine
The Great Chinese Famine was a famine that occurred between 1959 and 1961 in the People's Republic of China (PRC). It is widely regarded as the deadliest famine and one of the greatest man-made disasters in human history, with an estimated death toll due to starvation that ranges in the tens of millions (15 to 55 million).
That's 3% to 10% of China's population starved to death at the time.
Name a couple of those ‘100 successful projects’ eh?
Correction. Mao is Mao like. And you could call Trump a Mao like person, not the other way around.
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Both you and OP are not looking at this from the right angle. The goal here is to decouple US from China. In the meantime, tariffs are raised on every country to gauge which side they are on. Once US knows who the allies are, they will negotiate to have those allies put up massive tariffs on China as well to prevent transshipping.
US wants nothing to do with China. As the biggest consumer economy in the world, the have that right.
And China has shown that agreement with them has no value. Remember that China promised trump in term 1 to massively import US goods and reduce fentanyl, in part to slow trumps tariff down. They did neither of those things. Trump hasn’t forgotten that.
Decoupling from China will lead to China annex Taiwan sooner. China will have the USA and the world by the balls then, so not sure we want that to happen quicker.
And I don't think anyone is calling themselves allies of the USA right now. The whole world is looking to decouple from the USA. Europe is completely over the USA, they can't rely on them for leadership, protection or for trade.
From a tech perspective, expect Europe to decouple from the USA from an economic and cultural perspective in the next decade. Smartest thing Europe can do is to create alternatives to US services, build its own defense industry and stop looking at the USA for any leadership.
is TSMC not currently building a plant in the US? and ASML are Dutch, so they're not at risk. I’m not saying that China taking Taiwan wouldn't be a massive strategic boon, but I don't think it would be "having the world by the balls" by any means
I suggest reading this before getting too excited about shiny new manufacturing plants that will require years to stand up.
https://www.jsonline.com/story/money/business/2023/03/23/wha...
TSMC has not committed to a US plant that applies their most advanced technology. Currently, they are going to produce chips with larger slower features, some generations behind their state of the art -- that's commercially very useful, and a good idea, but in no way replaces the state of the art chips that they produce in Taiwan. Alas.
I think the last 6 years have shown how shakey electronics supply chains are. One factory in the US isn't going to come close to avoiding chaos.
A knowledge economy depends on information. TSMC will keep key knowledge within Taiwan as part of their Silicon Shield[1].
Look closely at a business you know well and notice how much the profits depend upon information in people's heads.
Everything runs on a combination of money (capitalist profits) and non-money gains (other gains that people really care about).
[1] https://duckduckgo.com/?q=tsmc+silicon+shield
do you not think that if China invaded Taiwan, the top minds there would just leave and go elsewhere? the machines they use are built in the Netherlands. I know it's not quite as simple as that, but I don't think it'd be the end of the world like people are saying. I think worse would be the precedent it would set.
Other companies have the same EUV machines. TSMC also made the good decision in hindsight to make an early bet on those machines.
We know TSMC is dominant - the real knowledge of how they are doing that is in the heads of people working at TSMC. Or maybe better to say that something is missing from the competitors? Process? Management? Everything?
Cadence and Synopsys are US companies that need to know many of the technical parameters of TSMC processes. They might know more.
Intel's Tick–tock model has lost it's tick. https://wikipedia.org/wiki/Tick%E2%80%93tock_model
well then the question remains to be: where do the loyalties of TSMC lie, and where do the loyalties of its employees lie?
I think it's three at this point? With the first one coming online this year.
America only cared about Taiwan because it warehoused the exiled American friendly government that had a historical claim to power and could potentially be reinstalled.
As time goes on that becomes less and less relevant. Might be time to cut and run.
> Decoupling from China will lead to China annex Taiwan sooner. China will have the USA and the world by the balls then, so not sure we want that to happen quicker.
That seems to be over-rating the importance of Taiwan. If Taiwan sank into the sea tomorrow that'd be a catastrophe and the world would be worse off. But not that badly worse off. Life would continue. China's main global lever comes from the power of their unparalleled-in-history industrial strength and the aura of leadership they are building up internationally because they are substantially more peaceful than the US.
The peacefulness is probably not going to last, unfortunately, but until they change tack it is what it is.
Ah so now we shouldn't give a shit about country let alone a democratic country being invaded.
Why not turn America then into a nuclear testing site? Since democracies aren't important.
"Ah so now we shouldn't give a shit about country let alone a democratic country being invaded."
After the US's abandonment of Ukraine, I'd say you are well past worrying about that.
No need, the United States of America already has more surface and underground nuclear test locations than any other nation on earth (IIRC), even more if atmospheric tests are included as those drifted fallout onto US ground surface.
~ https://en.wikipedia.org/wiki/List_of_nuclear_weapons_testsOf these, one thousand and thirty two have been US tests (not all within the mainland contiguous USofA).
Air imagery of Yucca Flat looks like a bad case of acne, it's riddled with pockmark craters from underground nuclear tests.
https://en.wikipedia.org/wiki/Yucca_Flat
"The goal here is to decouple US from China. In the meantime, tariffs are raised on every country to gauge which side they are on. Once US knows who the allies are, they will negotiate to have those allies put up massive tariffs on China as well to prevent transshipping." You literally made this up. There has been no announcement about this from the admin. Its all just speculation.
Isn't this what the press secretary said today?
Seeing as there is near total disconnect between what this admin says and what it demonstrably does (let alone the disconnect from reality entirely), why would anyone take anything they say at face value?
There is zero signal coming from any of these folk's mouths.
I'm honestly not sure, I kind of tuned out after I saw her lecturing the press on the art of the deal.
>>> US wants nothing to do with China. As the biggest consumer economy in the world, the have that right.
Yes, they have the right, but it doesn’t mean this is the right way. Consumers don’t suddenly stop consuming, and factories in the world don’t immediately start producing. This is like a slow flywheel; had we been almost spinning and ready to jump, it would make sense. This is not that.
Also, China is a super power which controls more than factories today. I agree they need to be checked, but sudden changes are not the way. I wish we did it by building trust with allies and then pushing China. Right now, even our allies are wary of us.
Isn't this bit naive? Because in order to decouple, one would expect that there would be policies to actually prepare for production inside US and then apply tariffs. Not other way around.
> In the meantime, tariffs are raised on every country to gauge which side they are on
Why on earth would you be on the side of a country like this? Why we should be an ally of the US right now, if Trump can't even uphold agreements he signed himself 5 years ago? What guarantees do we have that, as soon as we decouple from China, the US won't treat us as a vassal because we gave up our only alternative? The only rational choice is to either be neutral or ally with China.
It looks like the consensus response is other countries embracing more multilateralism. This is a huge opportunity for proponents and governments that promote multilateralism to take charge and make it happen. Ex: China has restricted trade with Aus since 2020 because they, essentially, insulted China/didn't restrict their speech in ways that China wanted. This provides an opportunity for this to be rolled back, which is economically win-win (as most free trade is). Expect to see this sort of thing many times over between many countries in the world. Of course this is rooted in the fact that having ex-US trading partners is no significantly more valuable.
There is the second point to mention too though, which is that China is not exactly an exemplar of open markets and free trade, which is why you are not seeing many countries ally with China and form a united front against the US's trade rampage. Looking beyond the deranged policies, there are some truths in saying that China is a currency manipulator, has imbalanced trade to such a degree it causes problems in other economies, and even the somewhat more "far fetched" points about the unsustainability of a permanent trade deficit do have some truth on some level.
That is why, yes, you are seeing the EU normalize trade relations with China, but there are important caveats, like discussions about China having an expert quota and even internally capping production numbers within their own economy are on the table front and center. This would have never happened before, because China's strategy was to peg a low currency, export, and extinguish industries ex-China. Wish to some level is part of free trade, but it is underpinned in China with state sponsorship to a higher degrees in most trading partners are comfortable with (which is of course countered by the allure of cheap goods).
So another view would be that parties like the EU have new leverage against China that they can use to cut trade deals that strip out some of the abusive practices that made them uncomfortable in the past. If China is then willing to move on a bit from these approaches then the net outcome should be beneficial for the world of course.
I think that many players see the dangers of taking binary sides now more than ever. And indeed, skilled negotiators should see the advantages of playing these forces against each other to get what is best for them. In the face of the recent outrageous events, I would expect a sudden outburst of pragmatism elsewhere.
If the goal was to decouple from China then tarrifs would only be on China and we would encourage trade to move from China to other countries. The administrations actions have the opposite effect. It says the US is untrustworthy even to it's allies and maybe siding with China is not so bad. Note I don't like or trust the Chinese government and don't think other governments should try to get closer to them but Trump's actions make such moves much more likely
At the very least any nation that depends on the US for goods should probably be looking to other sources where possible and increasing support for them since even if the US is useful for now, we're clearly unstable and incompetent which makes us unreliable and risky.
ir would be china, and also countries that route chinese goods into the US
> In the meantime, tariffs are raised on every country to gauge which side they are on
Tariffs were raised on Australia, UK, New Zealand and Canada.
It's asinine to say that you can trust these countries with your most secret intelligence (Five Eyes) but not enough to say treat them as allies.
As an Australian who has spent decades watching the trade and resources markets it was notable that Australia, NZ, UK, Canada, and much of the world started taking calls from China and meetings with ambassadors.
The Trump plan to "decouple from China" was verging on dividing the world into the US and everybody else .. a large reason behind the partial rollback.
Countries are now openly rejecting China's offer to join hands .. but still sitting on the possibility of further deals with China should the US tariff insanity continue.
Also, the amount of badmouthing of Japan, Korea, Germany... Especially car companies which have built plants in America.
> Remember that China promised trump in term 1 to massively import US goods and reduce fentanyl
China stopped selling unlicensed fentanyl to the USofA, it later stopped supplying fentanyl to both Mexico and Canada.
The problem was that criminals in the USofA and Mexico purchased precursor chemicals in bulk and made their own fentanyl. Restricting precursors led to pre-precursors being purchased in bulk for drug labs to make their own precursors in order to make fentanyl.
The fentanyl problem continued under Trump and rapidly grew in size during his first term.
~ https://www.nytimes.com/2025/03/18/opinion/trump-china-trade...What has Trump done now he's back in office? Destroyed any cooperation with China on counternarcotics cooperation.
> And China has shown that agreement with them has no value
Unfortunately they still have much more value than agreements with the US and Trump specifically. Which Canada and Mexico found out the hard way.
Of course the probability that Trump actually forgot that he was the one who no signed USMCA and none of his “advisors” dared to tell him is not insignificant..
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has no one considered that it could be simple market manipulation? have Trump's friends and allies been buying stocks in the last week or so?
Did you see this? Unusually good timing… https://www.bloomberg.com/news/articles/2025-04-08/gutsy-tra...
to be fair, I also made quite a lot of profit in stocks in the last few days without any inside knowledge of the whitehouse. it was a fairly safe bet that these tariffs were not going to last forever, and even if they were, there'd be reprieves
Easier to just promote a shitcoin like he did already.
Why not both?
My opinion on this is that the damage has already been done. Successive administrations have already loaded up debt massively and participated in a Ponzi scheme with the Fed to pretend asset valuations in the US make sense. Sooner or later the chickens will come home to roost, and valuation multiples in the US will come to resemble those that have existed throughout history, and those which exist in all other parts of the world currently.
When this happens, there will be a big recession, and that is exactly the moment companies will start deploying AI in earnest to save money. This will create a downward spiral.
Yes, the Trump administration is incompetent. But, if you insist on blaming an administration, I would propose Obama and Biden as more reasonable culprits. It was Obama who presided over the massive Fed intervention into markets that enabled unbridled government spending increases. It was Biden who presided over the most problematic parts of the Covid response. Trump is just an idiot. Obama and Biden are actually bad guys.
> that is exactly the moment companies will start deploying AI in earnest to save money.
Companies are already deploying AI everywhere they possibly can as quickly as they possibly can. They aren't waiting for anything. AI just isn't up to the task of replacing most workers just yet. It's still unclear if it ever will be, but they're shoving AI into everything they can to see how it holds up, to see what it breaks, and to give it more data to work with so that it can hopefully be improved.
I strongly disagree with this point. History shows that most companies don't deploy cost-reduction technologies until forced to by economic conditions. When there's a recession, deployment of AI will be next level.
History shows that companies will do whatever they think will make them the most money. They aren't going to hold off on replacing workers with AI if they think that they can just because it wouldn't be nice or because it isn't recessiony enough. The very instant they think they can get away with firing you and replacing you with software they will do it.
Oh? Then how do you explain massively increased adoption of such technologies right after the financial crisis? You're assuming the world works the way people say it does in a business textbook. The real world is messy, and people don't like replacing employees unless they have to
When the economy slows down companies start getting rid of workers regardless of any technology. It's one of the first levers they pull.
Some companies looking to get rid of even more workers might search for new technologies that they hadn't considered before but which could enable them fire more people, or they might accelerate existing plans to replace workers with technology to get rid of them even sooner.
AI is different though because companies are fully aware of it and they are already moving as fast as they can. They have been salivating at the thought of using AI to fire their workers for years now and they're already making every effort to replace workers anywhere it seems feasible to do so. They are in such a hurry that it sometimes results in embarrassing failures like this one: https://www.motorbiscuit.com/airline-ai-chatbots-refund/
Like you say, the world is messy, which means there is no rule saying that companies must leave massive piles of cash sitting on the table until the economy gets bad enough for them to reach out and take it. Shareholders won't accept that. Any company that sleeps on firing their workers when AI can do the job will get absolutely crushed by their competitors who don't sit on their hands.
The Fed intervention was under Bush. The vast majority of the "COVID response" was under Trump. If you look at deficit spending by administration, you will also see that you have things backwards.
Trump 1 increased the debt more than Biden, and Trump 1 wasn't even mitigating a train wreck of COVID inaction left over from his predecessor.
Yeah, I mean people love playing political games with this stuff. But the actual crime was what happened between 2009-2012. Trump is just a symptom. Yes, he's a bad guy, but what do you expect people to do?
I expect people to not vote for obviously bad guys.
Obama too had to clean up a mortgage crisis from his predecessor's careless deregulation. Not an excuse for his own crimes, like say drone striking US citizens. But Trump is just openly corrupt, inept, praising autocrats and aspiring to be one.
Clean up the crisis, yes. Destroy the future of the US economy by endorsing ZIRP and massive government spending for more than a decade? No.
People give Obama a pass when they shouldn't. This stuff didn't start with Trump. The problem goes back much further.
Obama didn't endorse ZIRP. He wanted to do more stimulus but Congress wouldn't let him.
In that environment ZIRP was the only solution. Ben Bernanke (a Bush appointee, re-appointed by Obama) devoted his academic career to how the Fed could have prevented the Great Recession. He was right.
We should hold Obama to account. But at this point I'd settle for enforcing the Constitution.
No need for false equivalence.
Budget deficits are not the same as trade deficits. Trump barely even mentions the debt and clearly does not care about it one bit.
That doesn't pass muster. If they had much interest in balancing the books, they wouldn't be ripping huge holes in revenue collection.
These "here's the actual reason they're doing this!" things rarely hold up under any amount of scrutiny.
Then again, they're tempting because the things they're doing are also really bad ways to accomplish Trump's stated goals.
Humans struggle to find meaning where there is none to find.
https://en.wikipedia.org/wiki/Pareidolia
The "actual reason" always seems to be virtuous in the end. Like "omg Trump had such good intentions!!! He just made a lil implementation booboo". It's always giving mountains of good faith to people who have lied for decades and lie today. Nothing about the clear market manipulation or greed of the party.
I don't even think the market manipulation argument stands. That gives them too much credit.
Trump's hand was forced and he had to retreat. Like the market kept having little bursts before this, based simply on the core reality that this is a trade war that the US cannot stomach without extraordinary financial damage, so everyone just kept waiting for the out. It is far more exposed and doesn't have the "cards", as Trump says, that they think they have.
The guy really, really wants his tariffs, so who knows where we even are now. He will not, under any circumstance, back down. We saw that with Canada -- various pauses, then steel and aluminum tariffs, then car tariffs, then a 25% across the board tariff for non USMCA compliant goods. First he even targeted USMCA. Based upon a lie. He desperately wants these tariffs, and as the very special person he is, he has learned absolutely nothing from today and will be back at the trough when he thinks he gets another go.
The most amazing thing are the Trump faithful who hold this as a win. This is quite possibly the most disastrous outcome of all -- the uncertainty. It is going to be economic calamity for the US.
But maybe Trump can announce that Uganda has removed a tariff or something.
Agreed - that's a huge indicator that they don't care about fixing the deficit. But they also don't want to be seen making it vastly worse.
I don't think the GP argued they want to balance the books.
In fact, if they wanted to balance the books, they wouldn't care about the interest rate. The only reason to bet your economy into reducing the interest is if you want to go deeply negative on the books.
> If they had much interest in balancing the books, they wouldn't be ripping huge holes in revenue collection
That can be explained by the fact that the cabal also doesn't like paying taxes.
And that they’d use tariffs as a regressive tax to replace income tax increases.
2 step challenge to die downvoters:
1. Find instances where Trump or the billionaires backing him and/or in his cabinet are open to increasing tax as a solution to the deficit
2. Explain why the the administration and it's members are deadset against an effective IRS & Biden's effort to increase staffing at the IRS.
> That doesn't pass muster. If they had much interest in balancing the books, they wouldn't be ripping huge holes in revenue collection.
It's not about balancing the books. It's about not making a problem far worse.
You remember the global financial crisis of 2008? The reason most of the bailed out countries requested bailouts was their bonds spiraling out of control when they had to refinance their debt. That was the primary reason they reached out to the likes of IMF and had to undergo austerity programs.
The Trump administration put the US on that path with their global tarrifs and provoking their main trading partners, specially China.
While I agree on the direction I don't think the specific argument completely holds.
The countries in this situation in 2008 where European countries that forfeited their central banks. Having relatively recently switched to the Euro made this situation relatively novel and those governments not used to not have access to this last resort tool. There was also a lack of legislation at the European level to give the central bank authority to intervene. And culturally some countries where much more scared by their recent history by the inflation risk. Which led to push backs and delays in the face or urgency. It's now probably roughly sorted at the EU level.
The USA don't have and never had this issue. The position of the FED is very clear: it will never let the US govt default. So the only risk for US bond holders is inflation (and price if they want to exit early).
If they wanted to balance the books they'd print money and distribute it to US citizens.
They care about inflation too though. Trump is old enough to remember the high inflation 1970s well so he won't make that mistake. Kids today probably won't remember it other than an item from "ancient history" and might make the mistake, but Trump won't.
If they cared about inflation they wouldn't have instituted massive inflation causing tarrifs. Economists are saying there is a chance 70s style stagflation might come back into fashion
https://www.bloomberg.com/news/articles/2025-04-09/fed-offic...
The money supply figure from his first term makes me doubt this very much.
Any assessment of Trump’s actions that implies that he personally has a cogent strategy immediately loses credibility in my eyes. If you want to say the people around him think or feel a certain way and are influencing him based on that, fine. But he’s clearly just doing things that hit some nexus of “people around me say this will work” and “I personally, on a vibes basis, think this will be fun.”
Or, "everyone is talking about this, so I want it, it's mine"
I think he does whatever he thinks will get the most views.
> Trump is old enough to remember the high inflation 1970s well so he won't make that mistake.
He's already done it; he pioneered the strategy of sending out covid lockdown checks.
> They care about inflation too though.
Trump cares about inflation as a talking point to get elected and for no other reason.
Does he? He really wants the Feds to lower interest rates on top of everything else. He might have gotten that wish if he did absolutely nothing with economic policy and rode off the "bidenomics" he chastised for years.
There's definitely not 100% logic involved in his plans.
I mean he's old enough to remember Biden's inflation, following his trillion dollar spending bills
I mean these tarrifs will cause inflation. We already know that
I would argue there are better and worse kinds of inflation. Wrecklessly printing more money is a worse kind of inflation than a new semi-optional tax, or inflation due to wages rising
The treasury department didn't print money for no reason. Stabilizing the economy during Covid is a much better reason then a pointless and stupid trade war
Inflation is a tax but if there is selective redistribution it is a selective tax.
That's fair but I suggest that they are actually deficit hawks for the long term. In the short term, they've got financing troubles hence they care about the yield.
What if (and I realize this is an extremely pessimistic take) their plan is to just default on the debt and rely on military blackmail? Sure, there's a Constitutional prohibition on questioning the validity of USA debt, but the administration shrugs at the Constitution on a weekly basis. The endless whining about how 'unfairly' other nations are treating the US, 'ripping us off', 'laughing at us' etc is a precursor for aggressive action, and I think it's quite likely that at some point they'll come out and say 'we don't have to pay debts to countries that have been scamming us the whole time.' About one quarter of the population will support MAGA no matter what, and if things get bad enough the administration can just announce they've been 'forced' to take over Greenland and Canada.
A flashing negative warning sign of this would be issue of new kinds of Treasury securities with new complex rules.
That sounds like it would completely destroy the US economy and government budgets (at which point the only thing left to do is to establish a war economy under authoritarian rule and continue war? I don't even know, it sounds completely bananas...)
Didn't they just announce a 1 trillion budget for defense?
Yep, apparently that's in the works. They aren't going to reduce the deficit or debt. It soared during Donald's first term and will again.
Subtext: $1T executive slush fund.
Back to the days of the military acting like thugs, slightly worse than acting as the world police.
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I can't tell if ppl are joking or if they actually believe statements like that when they make them.
There is not going to be a war between Canada and USA.
The worry is that you only said Canada and ignored the other two.
We can’t either.
right, just like all the other crazy things that Trump said he would do, and people dismissed as outside the realm of possibility.
like 100% tariffs on china.
I don't want there to be a war with any of those countries, but if there's one thing we should all have learned by now, it's to take Trump at his word. When he says he wants to do a thing, he's not bluffing.
How can you be so sure? Trump's rhetoric would basically guarantee it.
Just like when Trump said he knows nothing about Project 2025 and has done everything by the book for the past 3 months. Keep cranking that copium.
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Yemen Taiwan Ukraine
Panama Gaza California
Deficit hawks would not lower taxes for richest segment, which were sure money in exchange of maybe money. Nor would they slash IDS
No, they are nor deficit hawks. They don't care about deficit, except when trying to blame it on someone else.
There are very few politicians that are actually deficit hawks. The majority that claims that position are actually entitlement hawks. That is, they use fear of the deficit to talk about the need to reign in social security, medicare, medicaid, food stamps, and any other form of government assistance regardless the size or impact on the government budget.
Meanwhile the DoD, CIA, FBI, NSA, DEA, DHS, and ICE have never had a politician seriously consider reducing their funding.
Gotta be honest, I think it's more likely that Trump just has a strange fixation on tariffs. I don't really think there was a whole lot of planning around them other than "I want them".
How he's deployed them and spoken/written about them makes me think he thinks it's a good way to strong arm countries and he wanted to strong arm everyone.
I think it's because it's one thing he can control all by himself. Look at all the attention he's receiving. The "will he/won't he" reality TV. Put a tweet saying X%. No, they won't be cancelled. Yes I'm suspending them for 90 days. And so on.
Except he can't. They're abusing a legal loophole that probably can be easily defeated in court if anyone interested can actually locate their balls to do it
reasonably he can, even if its illegal. unless he gets inpeached and removed, theres no mechanism to stop him.
even then, congress can vote but who would actually remove him from power?
All the way up to the SCOTUS, at which point it'll be a 7-2 vote in Trump's favor.
I don't believe he can get a 7/2 ruling in SCOTUS. But I do believe he can get Republicans in the current Congress to jump for him, and to try to ensure their majority by disenfranchising people before the midterms.
The are a few republican judges that dont seem too keen on having their names attached to the demise of American empire
Even fewer that won't fall in line if threatened to be doxxed to the MAGA mob via Xitter.
I believe that particular ship has sailed.
How many of them are on the SCOTUS?
maybe 2 which is not enough
I'm not saying he won't win the case but you're daft if you think it won't be 5-4 on the grounds that congress actually has to pass something to signal their intent to the courts.
The question here is not whether congress has to pass something, the question is can congress delegate this authority which is explicitly set by the constitution.
There were a bunch of sentences regarding non delegation of powers of congress, mainly for federal agencies, and courts deciding that congress can't delegate those faculties, so, by the book, this would be a similar situation. There is actually an ongoing case for this aspect of the discussion:
https://www.theguardian.com/us-news/2025/apr/07/trump-tariff...
He has a long record of advocating for tariffs. He thinks they're a good idea.
That's obvious. You can find news clips from the late 80's/early 90's where he is mouthing off about tariffs. That rut is eroded deep in his brain...
He definitely does, and has since at least the '80s.
That and his self-image as The Best Negotiator (while his actual "negotiating tactics" are really just mob-boss intimidation and bullying) are a huge part of what's going on here.
Well congress has until July to reign them in before they (and the people) lose even more money in their savings. They better be swift.
There's no actual commitment here. He could reverse again tonight. He signaled ongoing dissatisfaction with countries that had retaliated, so may well take further action there during the 90 days, which 90 days are, again, meaningless in that they don't bind him at all, and even if they did, he's done a bunch of things he's "not allowed to" and so far has gotten away with tons of it.
You're right. But as we see with TikTok, he loves to talk big but keep kicking thr can down the road instead of backing off. There will inevitably be more spats in the meantime (especially with the EU), but I wouldn't be surprised if he extends it more when July looms (assuming that congress bill is still struggling to pass).
Could you elaborate on what will happen in July?
That's 90 days from today when the tariffs are supposed to take effect again.
What's in July?
That's 90 days from now.
Trump has had a bizarre fixation on trade deficits since the eighties. Back then he blamed Japan. Now it's China. It's his one and only ideological commitment.
> I think it's more likely that Trump just has a strange fixation on tariffs
It's the only "powerful" thing he can use that doesn't require him going back to congress.
Everyone’s a deficit hawk in the long term. It’s easy to talk tough on reducing dept at some non-specific time in the distant future probably after you leave office.
If your rate is 0% fixed (just a hypothetical), you can roll-over your bonds indefinitely for free. This means, in practical terms, your debt is 0.
Donald is weak. He was always going to fold. Once China and the EU called his bluff and retaliated, he was done. Lasted less than 24 hours.
Sir, the tariff on china has just increased to 125%.
I don't know why he held off on the other countries, but choose to go to "war" with China.
I assume because of Peter Navarro (and of course Ron Vara).
They said they were going to war with China over the Panama Canal too, yesterday. Using the "most lethal fighting force", apparently.
14d chess of course.
The tariffs that he kept on would be nothing to sneeze at in more… civilized times. The market overreacted, as was priced in the vix at 50+. We are not out of the woods yet.
125% tariff rate on your biggest importer isn't something I'd say is "nothing to sneeze at" personally. Particularly when the expert economist used to justify it is made up.
Yeah I was wary of saying 'declaration of war' (even though I think it's kinda true), but at least those imports will route themselves through Vietnam or wherever now in a few months.
He didn't even know that the EU had put in tariffs until a journalist asked him at the press conference after he announced the pause.
The EU actually executed some strategy. First they said they would love 0/0 tariffs, which sounds fair to pretty much anyone. And when that didn't fly they put on selective reciprocal 25% tariffs. What Trump did looks even more like a clown show.
They floated 0/0 tariffs before the reciprocal tariffs (and again after), and their tariffs this morning was in retaliation for the steel and aluminum tariffs, not for the reciprocal tariffs.
Nah, no reciprocation. America calling things reciprocation is just America lying.
I am normally all in favor of metonymy, it's perfectly fine and well understood style.
In the case of Trump-as-Mad-King tariffs, it sure would be nice if the world didn't conflate America, the historical land of twisting other nation's arms to reduce tariffs, with Trump and his fake-emergency tariffs.
I can understand if you do, and if America has permanently lost a lot of good will by electing this buffoon for you, I can hardly argue with you.
But still. In my mind, these are Trump's tariffs, not America's.
And specifically the idea that Trump's tariffs are reciprocal, that is even more "Trump is just a liar" than something any honest American would argue.
Even if you call it “Trumps Tarrifs” that means we have a better than even chance of having to deal with this.
If you’ve never elected a buffoon like this it’s easy to believe it’ll never happen. If you’ve done it not once, but twice, it’s really hard to believe it won’t happen again.
Maybe I should write "an American" instead. As in, I assume the person I am responding to is an American and is calling it reciprocal tariffs to propagate the idea that it was reciprocation.
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It's a smart strategy designed to exert maximum pressure on someone who is publicly saying they want to annex some of your territory (Greenland), and generally acting in an irrational manner.
James Carville in the 90s: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.”
I agree. The bond markets are the ultimate heavy hitter. They have government level impact. See also: The French Revolution.
https://en.wikipedia.org/wiki/Bond_vigilante
Or Liz Truss, the shortest serving Prime Minister in British history less than 3 years ago...
The name's Bond, Market Bond.
The T-Bill auction today went off without issue and that was before this announcement.
https://www.barrons.com/articles/treasury-bond-auction-today...
so the uncertainty in the market drove investors to T-Bills, driving up their price and lowering their yield, effectively making servicing the national debt marginally cheaper. By 0.03%, which I imagine stacks up with trillions of dollars compounding.
> T-Bill auction today went off without issue and that was before this announcement
We're nowhere near the primary auctions failing. That would literally require a full financial crisis.
That's a great data point. Thanks!
This makes some sense... but they didn't pause the tariffs. There's still a 10% tariff on everybody (including on top of Mexico and Canada, who were previously exempted from the tariffs announced last week) and the tariff on China continues to rise to preposterous proportions.
exactly and I think it's shocking that everyone is just repeating lies without putting them in context.
Would it have been too inflationary/recessionary to impose these crazy tarrifs on 'rest of world' AND increase china to 125% at the same time so he simply had to sacrifice one to do the other?
Sounds like a sage take (where do I study economics?), but why do people doubt the meaning is as straightforward as the messaging: during campaigning trump said he would rectify the unfair tariffs, and in the lead-up and since election he has talked lovingly about tariffs, with the goal being (as almost everything trump) domestic fortification through jobs, industry, and generating revenue from those who have abused the US largesse to enrich themselves - and now balk at a just correction.
I think there is a backdrop/larger picture (probably nuanced and multifaceted levers against all other parties negotiating), but the main I think is to shake up the global economic landscape to make it easier to improve it. Reset.
I see a lot of complex takes on here that require quite a lot of sophisticated theories...and while I enjoy the complexity and the perspectives (and - wish I had studied economics to really grok them), I think it's really just as simple as they say. And what they say they're doing makes sense.
Maybe the truth is no one really knows what will happen, and so it's a bold move but we'll see. But I believe they're doing what they think is right for America to strengthen the country, just as they say - not some 3 degree removed chess strategy, just simple.
Genuinely wondering why so many people are still giving the Trump administration this much benefit of the doubt that their moves are strategically sound? We're really still doing the whole "3D chess" thing with this guy after he has shown over and over again that he mostly just acts on impulse and the primary qualification for his advisors is loyalty over any type of intelligence or expertise?
Baffles me too. His ignorance is astonishing.
I dunno. Somebody literally wrote a guidebook for him to follow, but I haven't even glanced over it.
The stuff I've seen people quote from the book have all been stupid, but the kind of stupidity seems to be a "do X, so you'll get Y" where "Y" is really bad and the author thinks it's good. So I guess I do expect some kind of coherence from him.
That said, I don't remember anybody claiming Project 25 talks about tariffs.
Here you go...
https://en.m.wikipedia.org/wiki/Project_2025#:~:text=Project...
Well, looks like it's divided between carefully placing tariffs or extinguishing them all. So yeah, this one action is completely off the book.
I don't think that Trump himself is competent, but I'm not be so sure about the people around him. The effort it took to put him above the law was at least a decade in the making, so clearly someone knows what they're doing.
I don't think it's a coincidence, for instance, that Steve Banon's strategy of "flooding the zone" looks exactly as the type of chaos currently coming from the White House.
> Genuinely wondering why so many people are still giving the Trump administration this much benefit of the doubt that their moves are strategically sound?
Since I'm one of 'those people' who's been willing to grant Trump some benefit of the doubt in the past, I'll respond with my take. tl;dr Trump's handling of the tariffs have been such disaster, there's simply no possibility it was based on a strategically sound plan. So, in answer to your question, this episode has caused me to substantially foreclose my prior willingness to grant Trump some benefit of the doubt.
To be clear, while I've tried to remain open-minded re: Trump I've never felt that he's especially smart and certainly not someone I'd ever personally like or hang out with but I'm also one of those contrarians who doesn't think every politician or public figure needs to be someone I personally like or approve of in a moral sense. I've also been willing to concede that some things done by the executive branch during his first term were generally positive (whether because of or in spite of Trump isn't clear). I also think his policies and statements have been subject to an unprecedented degree of negative spin in the media - sometimes well-deserved but always hyped overwhelmingly to the negative. So I made an effort to look past the constant headlines of, essentially, "orange man bad in all possible ways." I also decided to ignore Trump's own bizarrely extreme pronouncements and focus only on what he really put into practice and, most importantly, the tangible real-world impact of those actions on the broad population and economy over time (not the extrapolated predictions in the media).
However, even to me, how he's handled this tariff thing has been a complete shit show. I've spent a fair bit of time trying to understand the various explanations, contextualizations and even 'hidden grand plan' theories proposed by some and they simply aren't plausible. It's not a 'master negotiator strategy' because he asked for concessions but never made any concrete proposals of quid pro quo. There was no attempt at serious negotiation with most major trading partners (according to the WSJ) and thus no possibility of meaningful deals.
Now suddenly (somewhat) reversing course like this a few days after going so extreme and then publicly doubling down on his long-term commitment to the 'grand strategy' is unbelievably damaging to any remaining shred of credibility his administration may have had. It nukes any possibility that he was doing a 'crazy guy on the subway' strategy of punching his adversaries in the face and making them believe he was so nuts he'd saw off his own arm just to keep beating them over the head with it - all to cleverly convince them to make meaningful concessions they'd never make any other way. Yeah, well now that he blinked in less than a week, nothing he can do will ever make them believe that. I mean, if that was the plan, it was a terrible plan and poorly executed to boot, but flipping like this is even worse.
All I can figure is that it was a 'crazy guy' plan but that he intended to keep it going for several months and then, when his opponents were bloodied enough he'd open negotiations and "win" in a master stroke. Except he completely miscalculated the degree of economic destruction he'd cause in U.S. markets and has now had to not only fold but reveal he was playing a weak bluff all along. I'm struggling to come up with any way this could have been worse for the U.S. and Trump's interests. After this, it's hard to imagine any trading partner negotiating in good faith, or perhaps, at all with Trump over tariffs in the next 90 days. The only rational strategy for them is to play along and gather info while conceding nothing meaningful and simply wait and see what Trump's ultimately going to do long term.
As far as I'm concerned, I bent over backward to grant Trump some benefit of the doubt and give him a chance to prove himself but the tariffs have been so bungled they're impossible to put it in any positive light. So far, it appears to be an epic disaster of hubris and naive miscalculation.
Is it possible that Trump is just a stupid person? That he genuinely believes the tariffs will be good, that he's being influenced by stupid people (Navarro) that believe this, and that the reaction of bond markets that didn't follow his overly simplistic model made him hit the brakes?
> the reaction of bond markets that didn't follow his overly simplistic model made him hit the brakes?
It's pretty clear that's essentially what happened. The question is how, why and what Trump's plan was.
> Is it possible that Trump is just a stupid person?
I don't think a simple linear scale between "Stupid" <---> "Smart" is a useful model for predicting likely job performance in complex, multi-function roles. Reality is far more complicated and nuanced. Whether assessing an employee, CEO, politician or spouse, just using an IQ test (or any other single point measure on one dimension) yields only an approximate directional indicator. It's certainly not the optimal model because it's entirely possible for an employee, CEO, politician or spouse who scores meaningfully lower on an intelligence test to substantially outperform a higher scorer in real-world results on the broad composite of job, leadership, governance or spousal metrics you care about.
I've read Trump's "Art of the Deal" book. He thinks he's a gifted negotiator based on the success he had in negotiating commercial real estate deals. However, commercial real estate deals are generally a pretty narrowly specific kind of deal structure. They tend to each be one-off, transactional arrangements which hinge on accurately estimating the value which can be extracted over time from a property and the future performance of the market in that location. Then forming a one-time consortium of financial backers willing to provide the capital on terms which will allow the operator to make a profit. While the amounts can be large and horizons long, these are fairly simple deals with only a few unknown dependent variables everyone is estimating the value of their position on. It's a bit like poker in some ways. It's a bid, counter-bid type of structure with only a few sellers and a few buyers at the table at any given time and each seller is offering something different enough that it's not a true commodity. There's hidden information but the domain is constrained and the unknowns are known. The bidding process reveals some information about how each player has assessed the value of their hand. They can either have a truly strong hand, be bluffing or somewhere in-between.
This is why I think Trump is ill-suited to directly managing complex, multi-dimensional geopolitical negotiations. They are profoundly different. There's far more hidden information, the domain is nearly unconstrained, there are unknown unknowns. However, not being good at negotiating these kinds of deals isn't necessarily a problem for a president. There have been a lot of presidents who've done well in geopolitical negotiations who were similarly ill-suited. They did well because they were good at selecting talent to manage those processes, setting high-level objectives and meta-managing those processes against broad political objectives and policies (Reagan would be an example). The fundamental problem with Trump is that he thinks he's good at all types of negotiation AND that it's important to his self-image to be perceived as directly involved and instrumental in 'winning'. The final nail, as it were, is that it's pretty clear Trump's default model in negotiations, politics, legal strategy, financial deals, etc tends to be "win/lose" vs at least starting out seeking a "win/win". Complicating this is that his projected self-image seeks to be publicly acknowledged as winning by beating his opponent.
This is a bad scenario because every counter-party in geopolitical trade negotiations has a far more detailed psych analysis than what I wrote that's been prepared by experts who've read everything Trump's ever said or written publicly. While Trump's actions in any given moment are certainly unpredictable, that's not generally a good thing. Especially because his internal priorities, self-image and emotional dynamics appear pretty easy to read and fairly predictable. Whether they're right or not, the counter-parties almost certainly believe they have a fairly solid take on Trump's psychological drivers. Appearing "scrutible" wouldn't necessarily be a bad thing (in fact it could be quite good), except that these psych evals are both high-confidence AND they say Trump is unpredictable, sometimes acts out emotionally, is swayed by personal loyalty over strategy, can perceive negative outcomes as personal attacks, reflexively seeks retribution for personal attacks, is strongly influenced by the immediate feedback of a couple dozen people and has few strongly-held philosophical or political premises. Whether all of these things are entirely true or not doesn't much matter. Trump has projected them so consistently over so many decades others believe they're true.
That's why when Trump said yesterday that he intends to personally be "deeply involved" in the negotiations with trading partners, I sighed. He has virtually no credibility as someone willing to stick by any framework that might be developed in private negotiations. He also has no patience for the long, painstaking process involved. No matter how good the Treasury and State negotiating teams are, their own boss has convinced the counter-parties that these teams have little real influence or ability to strike a deal. To me, that means the odds of any meaningful deals being negotiated where counter-parties are willing to 'horse trade' elements of significant value is between slim and none.
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That's not it at all. I'm sure there's lots of sycophants out there, but a lot of people just don't find "he's stupid and it's random" a satisfying explanation for his actions, even if they disagree with them.
That's weird, cause they sure smeared millions of people real fast as undesirables trans/illegals/DEI/woke, but Trump gets a million chances and coup do-overs and please explain take your time sir: What is the amazing 4D strategy behind telling people to drink bleach?
Nepotism feels good all the way until it sinks your company.
A lot of this stuff is on a YouTube education level, not even a degree. I would be shocked if the US does not have a bunch of economic advisors who tell them what problems there are and what should be done. They've probably mapped out all the next steps. Most US presidents are Harvard-level smart, but the White House has been around long enough to find a way to deliver reports to the simpler ones.
There's a lot of obvious big problems - confidence in the USD, debt rising faster than GDP can catch up, military overextension, China's rise outpacing US, inequality, inaccessible education and health care, opioid crisis, etc.
Trump has a good eye for identifying this - that's why he won the election despite all his weaknesses. It's clear he knows some of this but doesn't understand it - his comments on a BRICS currency, for example. Yes, a "BRICS currency" would threaten Pax Americana but it's on literally nobody's mind.
I feel like, if anything, he's an overplanner. A smarter leader would think, these moves will have unplanned side effects. Trump makes a lot of roundabout moves like DOGE. These moves have a target, but he hasn't thought about the side effects. And when a crisis like COVID hits, it disrupts the complex plans, which is why he reacts so poorly to them.
<< I would be shocked if the US does not have a bunch of economic advisors who tell them
Oh, US does have its share of economic advisors[1] of all stripes. And, I would love to be corrected on this, when SHTF, they immediately argue for NOT the very thing they normally argue for. They can tell what should be done for sure.. just not when it comes to their money..
(edit)Therein lies the issue or at least a part of the it.
[1]https://www.forbes.com/sites/mattnovak/2023/03/12/larry-summ...
>I feel like, if anything, he's an overplanner.
Trump is famous for ad libbing and making up whatever he wants in the moment. His first administration was not prepared to govern. I'm not sure how this is seen as over planning.
This just reads like pure fantasy to me. Have you not seen the account from numerous former Cabinet and White House officials about how lazy and incurious he is or how difficult it is to get him to read the reports put in front of him? Have you missed the way he has forced countless career officials out of the government through layoffs, firings, or pushing people to resign in protest? I don’t even know what to say to the idea that Trump is an “overplanner”, you even literally said “he hasn't thought about the side effects” a few sentences later. That’s “overplanning”?
I'm saying he thinks 4 steps ahead but not the next step.
I don't know how that is supposed to work or counts as an "overplanner". That sounds to me more like someone who has goals but doesn't actually have a plan on how to reach that goal.
That sounds contradictory and doesn't make sense to me...
I can’t help but think of the classic Southpark 4-step plan – just with a missing Step 2 as well as Step 3.
1. Step 1
2. ???
3. ???
4. Profit!
https://knowyourmeme.com/memes/profit
that assumes a massive amount of economic understanding and intelligence on the part of the President that has simply been completely unobserved for his entire career.
occam's razor provides much better explanations here. He's an idiot obsessed with dominance games and thinks a tariff on a country means that country pays a tax to the US. He thinks trade deficits are bad, just like if I buy a toaster from Target, now I have a "trade deficit" with Target and I need to find something they'll buy from me.
He's a total dangerous moron and these attempts to come up with 11-dimensional chess rationalizations are misguided.
Being boring is profitable.
You want to do tariffs for national security reasons? Okay. I get it. Now get congress to pass a bill levying the tariff, have that bill be smart, encourage not just on-shoring, but also near-shoring (Mexico, Canada) of key manufacturing and minerals, apply the tariffs more strongly against the key geopolitical rivals (China), implemented in a graded, predictable manner. Do not piss of every ally in the world, in general pursuing this hierarchy U.S. > Mexico, Canada > European, African, and Pacific Allies > China, Russia. Finally, for key , and highly specific strategic industries, provide subsidies.
>Because when your national budget depends on cheap debt, you can't afford a crisis of confidence in your bonds.
Well the US is still having a dick measuring contest with its largest importer, so no worries. We'll still get plenty of crisis from that alone.
I'd believe you if he hadn't already flipflopped on tariffs recently. I think it's much simpler than that: he's pulling whatever levers he has to squeeze everyone and then letting up the pressure on people who do what he wants. He already did this with Canada and Mexico, using tariffs to get them to make a show of border secy=urity.
> Instead of being seen as a safe haven, U.S. debt itself started to look shaky.
Owning US debt is also simply less relevant to countries that are going to be trading less with the US. Countries which are ratcheting up tariffs with the US, for example.
What about the insider trading that this facilitated? A few parties made HUGE profits with last-minute option trades today.
This makes too much sense to be the real reason, if you ask me.
I think it’s being reversed because it cratered global oil prices and that would be a terrible horrible very bad thing _for Russia_.
im not an economist, I have no valid opinion on if this is right or not.
BUT, I actually started looking at moving more of the stable bond/treasury holding bit of my portfolio to foreign funds recently (in addition to moving more of the stock/mutual fund balance to international stuff).
If I'm thinking about that as an individual private citizen of the US, I can't imagine what actual professionals are thinking about.
Most foreign mutual funds and ETFs are classified as Passive Foreign Investment Companies (PFICs). PFIC investments face complex and often punitive tax treatment. Gains may be taxed at the highest marginal ordinary income tax rate (not the lower capital gains rate). Additional interest charges may apply. Annual filing requirements via Form 8621 for each PFIC
They likely mean US-domiciled ETFs which hold foreign shares. The big providers (BlackRock, Vanguard and friends) typically have copies of their big funds domiciled in, at least, the US and Ireland (or sometimes Luxembourg); the European versions are UCITS-compliant, and often offered in an accumulating variant (not tax efficient in the US, but it is in some European counties), but otherwise basically the same thing.
For instance, here are two BlackRock ETFs tracking the MSCI emerging markets index, one US-domiciled and one Ireland-domiciled: https://www.ishares.com/us/products/239637/ishares-msci-emer... , https://www.ishares.com/uk/individual/en/products/251857/ish...
They are for practical purposes the same thing.
This again sees more logic in this than there exists.
America doesn’t have ANY issue refinancing that debt. US treasury is the risk free rate. It’s the basis of an infinite number of financial models as the baseline level of risk people will tolerate. Every single analyst from here to China works on that basis.
This idea that you can’t refinance debt is nonsense. American firms are wildly profitable, and America used to be the safest bet to set up a new firm, or do ground breaking research.
If you wanted to make more money, increase taxes, and you can refinance debt even faster than this. Shifting the yields is … how does that apply to new bonds which would be auctioned??? The face value and rate are set anyway.
I don’t think this checks out. They didn’t walk any tariffs back until after the auction saw strong demand. It went opposite the way one would think setting the fall in bond prices the previous night.
I think this would be expected though, no? Sure, there's flight to safety, but you're also reducing exports to the US, reducing the number of dollars flowing to foreign nationals, which reduces the demand for treasury bills, which an excess of dollars would often be used to buy to have an inflation-"proof" store for your dollars without currency risk. You would also expect devaluation of the dollar from tariffs / trade-war, which I would also expect to cause selling of t-bills in favor of local currencies
Trump's obsession with tariffs dates back to 1988 when he lost an auction for the piano from the movie Casablanca to a Japanese buyer. Afterwards, he started complaining about how all these other countries are ripping America off, and here we are.
One Source: https://www.wita.org/trade-news/trumps-love-for-tariffs-bega...
sigh
"From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury. Why?"
None of leaked conversations or prior discussions indicate anything like this. Peter Navarro has no even slightly nuanced agenda. He's been on record for years about this. I think their position was much more that they'd drive foreign tariffs down and would be able to make other demands against other countries, and they underestimated the tolerance even their base would have.
I find the most consistent explanation for Donald Trump is he does whatever is going to keep himself the top news story in the media. I don't think there's any deeply held belief other than if he doesn't think people are talking about him that's bad
I start with this explanation too.
In his interview yesterday he mentioned that he won his weekend golf tournament. Of course he did, otherwise it wouldn’t be newsworthy (still isn’t, but oh well).
Then he asked the reporter if she saw that he won. I think he asked twice.
I look at that simple interaction as the most accurate model of his behavior. Are people talking about me? Good. Why aren’t people talking about me? I need to do something to make sure they do. He may very well have actual intelligence but it doesn’t seem obvious that it is the catalyst of anything he does.
>From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury
You're making it seem that there's a plan ... but what if this is just regular incompetence coupled with capricious behavior from a chaos agent?
I'm watching various officials give interviews and all of them are non-committal as it pertains to expectations. Why? Because none of them actually know!!! Trump has arbitrarily and capriciously changed "the plan" many times.
I'd like to expand out why I hold this belief.
The political cohort behind the president is roughly in two halves. The first half are the original MAGA crowd (looking out for the working class, pro-liberty, anti-woke, etc.). The second half are the billionaire crowd.
The second group are active on pod casts, on Twitter/X, and are partly represented in government (directly or as advisors). An easy way to follow up on these people is to watch the All In Podcast or their related social media connections.
What these folks have said for a long time is that if USA stay on the same path, the USA goes broke after 10 years. So if you have long term investment in the USA, you lose your fortune in 10+ years.
This is the key motivation for their involvement in the current executive branch of government. This is why the DOGE program is so well supported by them.
If you lose the battle to reduce the 10-year Treasury yield, you lose the billionaires because they stand to make meaningful losses on a 10 year horizon.
I recognize the plight of the common citizen here; they are the plurality. But the big political levers come from these billionaires (absent a grass roots supported leader in the wings).
If the goal to drive the yield on T-notes down, then cut spending and raise taxes. Get the budget into something like balance and the Fed will cut rates, and borrowing costs will fall. You don't need some 3D chess with a manufactured financial crisis.
When your rational explanation involves people shooting themselves in the head to cure a headache, something's off. There's nothing to explain here besides a weak and incompetent leader with a deep need for attention, surrounded by lots of enablers.
I think only thing likely to make US go broke is Trump's actions.
DOGE doesn't save any money. Not only because it's created many legal messes that will take forever to work out in court but because most of those jobs are important and will eventually need to be replaced at great cost and with worse results. Also some of those jobs are for auditing inefficiency and prosecuting corruption resulting in more money spent. And on top of it all they'll be using these non existent savings to justify much larger tax cuts for the rich.
The reason it looks stupid is because it is. It's not that Trump is purely dumb he's just intellectually lazy and doesn't care about policy. He long ago decided he likes tarrifs on instinct so he put massive tarrifs despite the warnings that they would be disastrous
I wonder who of those will prevail, a second Röhm purge maybe?
This belief seems to disregard the fact that the billionaire crowd hates markets being spooked far more than it cares about 10 year Treasury yields (which in any case went up precisely because markets were spooked; if you wanted to do something about reducing long term bond yields, committing to just about any other economic policy would be more credible). Even some of the most sycophantic billionaires were evidently furious about the tariff policy.
Also, Trump has been obsessed with the idea of tariffs since the 1980s.
My listening to such billionaires explains a different attitude.
Small investors, and medium investors hate market turbulence for sure. But when you are a billionaire, you can easily profit from short term uncertainty. For example, Chamath recently disclosed a (potentially large) Credit Default Swap position (meaning he makes huge upside if USA debt position deteriorates). But he was the same person deeply concerned about USA long term debt. He is a well connected person to the executive branch.
The reason is that if you are a billionaire (tied to the USA financial system) then you can't escape the system when the entire system falls due to (God forbid) a collapse of the USA financial system in 10 years time. It is like they are the dinosaurs worried about a Meteor strike, but not worried about tigers and snakes (that can't hurt them).
If the billionaires were genuinely concerned about a complete collapse of the USA financial system in 10 years, they wouldn't have bet on a president with a track record of expanding debt to pump the stock market in the first place, and it would be hard to imagine anything less likely to stave off a crash than launching a trade war or threatening to annex your neighburs. Frankly the only only credible cause of the US economy completely collapsing within a decade is called Donald.
Getting a short term interest rate cut makes very little difference to the robustness of the US economy in a decade's time, and even if it did, there are many ways of getting a short term interest rate cut that don't involve massive economic disruption and permanently sabotaging US trading relationships (most obviously, the president nominates the chair of the Fed...). You could see what the likes of Ackman and Elon actually thought about the tariffs from them breaking ranks to moan about them.
The billionaires who backed Trump like standard right wing stuff like tax cuts, deregulation and/or racism, or figured he was going to win anyway so they might as well get credit for being seen as his ally. Some of them might actually be well informed enough to place shorts (and hey, the ones who own trading shops rather than manufacturing and services companies might be able to win more than they lose in equity value that way) but that's a completely separate issue from the idea that chaos now could have positive effects in a decade's time, which only one billionaire in the world is dumb enough to believe...
They could just raise taxes. Detonating a bomb under the global financial system just to avoid raising taxes is still stupid. Trump is stupid.
> But then something flipped.
The bond market is always the adult in the room. The UK PM lasted like 44 days when the bond market pushed her out [1]. In this case, the flip was that all the chaos led to people leaving behind the USD completely. Trumps view of the US/World is ~30+ years out of date. There are other stable places to put money now where it used to only be USD.
[1] https://www.cnbc.com/2022/10/20/uk-prime-minister-liz-truss-...
The cabbage outlasted her...
https://x.com/jaayjayAT/status/1908793907976040839?t=aP60h4w...
It was lettuce, an iceberg lettuce, the fastest wilting lettuce money can buy.
Isn't iceberg lettuce so common in part because it's one of the most stable lettuces? Still absolutely hilarious that Truss was outlasted by a head of lettuce, but I want to make sure that we're being accurate.
You have got me, I was making shit up on the fly.
Iceberg lettuce is a cultivar known for its longer shelf life and higher water content. Romaine lettuce is another lettuce cultivar famous for its crunchy texture and higher vitamin content.
I am switching to Romaine for the vitamins now I know (have read a single headline on the internet) better.
>something flipped.
China dumped 500B in treasuries and the basis trade blew up is what happened
Tariff deals were still going to happen regardless. The pause is a stop gap for the basis trade (20+x levered), of which an uncontrolled unwinding threatens the entire financial system. Fed already had a bailout facility ready as a plan B. Too big to fail and all that
It's okay, the Fed has been insolvent at least two years now https://thehill.com/opinion/finance/3955889-the-fed-is-bankr...
Calling the Fed bankrupt isn't a close to accurate description of what was described in the column. The post describes a unhealthy balance sheet, but the Fed can't go "bankrupt" in the common sense, as it banks itself, with the assets held on it's ledgers purchased and backed by the hypothetically infinite monetary supply. All that was described in the column wasn't bankruptcy as they put it, but how the Fed organizes assets by their quality.
It's scary to think he's just not got a clue and doing whatever he thinks of in the moment isn't it?
I mean the guy who doesn't understand tariffs, at all, but has publicly loved tariffs for 40 years in charge of tariff policy. That's disturbing to contemplate head on.
Much better to invent some comforting fantasy of secret plots being carried out semi-competently to achieve nebulous but vaguely noble goals.
The refinance is a real issue, but it doesn't matter too much cause the Fed can (and will) always intervene. They can soak up any supply to push the 10 year down.
Same reason why it doesn't matter if China etc.. wants our treasuries. Fed is always there to buy them.
I'm not an economist but I believe this is only the case so long as USD is the global reserve currency. If that ceases to be the case, the Fed has a lot less power to print money and inflate debt away. I believe this is the case Ray Dalio has been making for some time now:
https://www.youtube.com/watch?v=xguam0TKMw8
Every country has the ability to print money and buy its own debt. Japan has printed billions and bought equities.
Being a global reserve currency only increases the extent of that printing, not the ability itself.
Uncertainty is a massive problem and may itself bring on a recession more than any tariffs. It's a huge factor in the oil market crash that's currently going on. I've seen one oil expert say that Obama was the best president for the oil industry because he did... nothing. There were no kneejerk policy changes on a weekly basis. And anything requiring large capital investments thrives on certainty.
As for Treasury yields spiking, that was no accident. As part of China's (justified) retaliation to the tariffs, they started selling off 10 year Treasuries intentaionlly to spike the rates because that's one thing the Trump administration seemed to care about.
I still don't know what the endgame is/was here. Some seem to think devaluing the dollar was the goal to boost exports but also to effectively devalue US soverieng debt. There's precedent for this eg FDR's sovereign devaluation of the dollar and Reagan's Plaza Accord.
This makes a lot of sense, although I wouldn't give them the credit of being so coherent in their understanding/targeting of what they were doing.
In my opinion the reason it backfired, what they proposed wouldn't merely cause a confidence in crisis, but also implied a fundamental shift in the market and the way it worked, this would also have to be priced in, hence the drop. There was no longer necessarily a "buy the dip, the market will go up at some point".
It remains to be seen to what extent this restores confidence.
The T-bill strategy wasn't a secret. Why they walked it back could also be attributed to bringing trade partners to heel at a point of maximum leverage. Or a lack of resolve in leadership. Or messaging and opportunism.
Will it pay off? Who knows. If it does, it will go down as one of the greatest gambits in modern history. If not, perhaps the end of dollar hegemony? End of the Global American Empire? Or nothing at all?
No. This isn't an economic policy.
It’s time to stop bending over backwards pretending that Trump’s tariff threats are part of a coherent economic strategy. They’re not.
When you drop the economic lens and view tariffs as a political tool for consolidating power, everything suddenly makes sense.
Here’s how it works: - Tariffs hurt corporations. They jack up costs, raise costs. Executives know this. The markets know this. - But there’s a loophole: carve-outs. Trump has the power to exempt individual companies or industries from these tariffs. That means if you’re a CEO and your business is on the line, your only option is to go to Trump and ask for mercy. - That’s not policy. It’s leverage. It creates a system where corporate leaders must show loyalty to get relief. Not because it’s good for the economy, but because it’s good for Trump. Maybe it's public support for his initiatives, attacks on his enemies. Whatever it is, it gives him political power.
This mirrors the playbook used by authoritarian leaders throughout history. Look at Putin. His use of tariffs wasn’t about growing Russia’s economy—it was about punishing enemies, rewarding loyalty, and projecting control. Tariffs became a way to rewire power dynamics.
Also, this trade war pushes the USA close to a war with China over Taiwan and maybe Panama Canal, which is exactly what you want as an authoritarian to stay on longer. Find an enemy and use emergency powers to maintain control.
You are assigning too much rationality to this group of people. The cruelty is the point, not some hare-brained scheme to push down yield or whatever.
I'm not saying you're wrong. But 10-year yields are up for the day, so if he was trying to calm the bond markets, it didn't work.
The only aggregate alternative to holding T-bills is to hold dollar bank accounts. At which point the bank holds the T-bills instead or the Fed does as balancing assets to the account liability.
It could all be refinanced to three month bills without any issue at all.
Ultimately balance sheets have to balance. In a floating exchange rate system there is no aggregate out.
You are correct on the mechanism here. But my point is adjacent to that. Whilst you always get a buyer for the debt (here the bank), it is the yield that matters as the re-financing cost cannot be escaped irrespective of the owner.
Trump has been on Team Tariff for 40 years. “There is no 3D chess, he’s just eating the pieces.”
Or maybe investors didn't buy treasuries because they were in on the scam all along. They wanted to stay liquid because the plan was always to crash the markets and spook foreign investors while US investors are informed to wait for the tweet about the 90 day delay and buy cheap stocks.
Yeah but the damage is done.
A safe haven isn’t much of a safe haven if that’s where the fire has started.
Trump floating the idea of defaulting on debt on purpose certainly did not helped.
Generally the president acting like an insane maniac about to become dictatoe makes bonds look less trustworthy.
> Because when your national budget depends on cheap debt, you can't afford a crisis of confidence in your bonds.
True. The odd thing is that the previous tariffs announcements on supposed allies, plus all the other sabre-rattling that Trump has been doing, NATO-bashing, flipping on Ukraine, etc., had already triggered a crisis of confidence. So what did they expect? That unexpectedly unleashing of wildly unreasonable and poorly-calculated tariffs would inspire _more_ confidence? If getting investors to flock to T-bills was the goal, it was always bound to fail. (It only worked in the short term because T-bills are the default in a time of market uncertainty; but when it became clear that the uncertainty was caused not by the market, but by the government's behavior, well then T-bills don't look so good anymore).
> Maybe it was the deficit outlook, maybe the global response to tariffs
Maybe it was the idea of 4 more years of shenanigans like this that freaked everyone out.
>Instead of being seen as a safe haven, U.S. debt itself started to look shaky. Maybe it was the deficit outlook, maybe the global response to tariffs — but whatever it was, yields started climbing. Fast.
Seems pretty simple to me - bond yields moved up sharply because they follow inflation expectations. Bond holders take on inflation risk, so when future inflation is expected to increase, yields go up to compensate. Out of control tariffs equals out of control inflation, which equals rocketing bond yields. The fact that Trump's team didn't realize this would happen is both hilarious and frightening. This is Econ 101 stuff.
Yeah, the bond market started saying firmly "stop fucking around" and an adult seemingly appeared in the room
I realise I'm asking for an imagined scenario but- who would this adult be, that somehow escaped the purge of competence and oversight in favour of sycophants, and how would they broach the topic with Trump (who of course wants to be the Big Boy and loves supplication)?
Interesting theory. China might have seen through this ploy and that's why they dumped treasuries.
I am extremely skeptical that a president and a party that massively increase the national debt every time they hold unified control, and whose single legislative goal this year is to do exactly that once again, is engaging in a sophisticated conspiracy to lower interest payments. If Trump and the GOP actually cared about the debt payments they wouldn't be arguing about how many trillions of dollars to add to it this year.
The much more likely scenario is that this is exactly what it looks like: an incompetent and corrupt president flailing around. Tariffs are an excellent tool for soliciting bribes since there are any number of ways various groups can be exempted, and this type of abuse has often happened historically. The ham-fisted way they have been implemented has done a great job of getting Trump attention. I've never seen anything to make me think that Trump cares more about the long term health of the country over getting bribes and attention for himself.
> Maybe it was the deficit outlook, maybe the global response to tariffs
Or, maybe, and hear me out on this, maybe it was Donald Trump literally saying he might default on US debt.
Maybe.
Just four hours before the U.S. administration announcement, posts here were already calling the surge in U.S. bond yields a "non-event." ( and being flagged..)
https://news.ycombinator.com/item?id=43630672
It was indeed about T-bills. Something Trump probably doesn't even know what it is. There’s no strategy, no objective, just sheer, unfiltered incompetence.
The stock market’s reprieve will be short-lived. In just eight days, this administration erased $5 trillion in market value, insulted its primary trading partner using language deeply offensive in Asian cultures, and made it clear to investors that it has zero credibility.
Futures are already negative, which is exactly what you'd expect. The market is responding. And let’s be honest: the claim about 75 countries eager to negotiate is a pure lie. The EU has publicly stated the U.S. administration was not even returning their calls.
"Trump economic advisor says bond market added ‘a little more urgency’ to tariff decision" - https://www.cnbc.com/2025/04/10/china-trump-tariffs-live-upd...
Correct. It seems to me the increased bond yields payments will significantly exceed revenue raised from tariffs. This is imho a bad long-term signal. I very much doubt the markets will just return to normal after the extreme volatility of the last few days - the huge tariffs on China will cause a lot of economic pain within weeks, and the administration's bellicosity toward Canada and NATO do not project stability and rational decision-making.
Besides the financial uncertainty, I doubt businesses want to make huge capital investments within the US to re/build factories in such a febrile environment. Will they be 'encouraged' to make 'donations' or purchase Trump golf club memberships? Will their foreign management staff be abruptly deported if someone in the administration sours on their country of origin? Will they wake up one day to find they've been denounced by conservative influencers?
Yeah... if that was their reasoning then they are as dumb as a sack of rocks. The rates went up further after the tariffs pause today.
> Instead of being seen as a safe haven, U.S. debt itself started to look shaky.
No shit. Having an inconsistent policy because of clear incompetence (xx Dimensional chess) is a very bad sign for the world largest economy. At some point this will hit the bonds which is the foundation of this economy.
That seems to be confirmed by el presidente:
Bessent said the decision had nothing to do with the markets.
“This was driven by the president’s strategy,” he told reporters outside the West Wing. “He and I had a long talk on Sunday, and this was his strategy all along."
Trump later contradicted Bessent.
“I was watching the bond market," he said. “That bond market is very tricky.”
(https://www.yahoo.com/news/week-trump-pushed-global-economy-...)
The idea that Trump had a goal as sophisticated as that is just hilarious.
This sounds sensible but that's not what happened. The government debt is not an issue. Trump is more concerned about the stock market, and the market sent him a clear message.
> From the beginning, I’ve believed the executive branch's real goal was to push down the yield on the 10-year Treasury.
The "executive branch" is Trump. Everyone else is just running around making up excuses for whatever his last decision was.
The "goal" is whether Trump feels like (not) having tariffs and whatever value he feels they should be.
There is no "they": it's just Trump (or maybe whomever he last spoke to that could change mind).
this seems like an awfully convoluted and self defeating way to drive down bond yields....
I honestly don't think this was their overall goal (it doesn't logically make sense, given tax receipts dip during recessions and governments often take on even more debt,) but I do think that is why they blinked.
> But then something flipped. > Instead of being seen as a safe haven, U.S. debt itself started to look shaky. Maybe it was the deficit outlook, maybe the global response to tariffs — but whatever it was, yields started climbing. Fast.
So, it's not this unstable president, his insult-spewing vice-president and his buddy the hyperactive billionaire manipulating a social network for Russia and China that makes the rest world want to avoid the USA for the next few years?
These complex 4D chess strategies never really pan out. Maybe someone in the administration thinks that was the goal but not Trump.
During the campaign Trump said he wanted 10 percent tariffs on the world and 60 percent tariffs on China. After all the noise we are now at… 10 percent tariffs with the world and 125 percent tariffs on China (pending negotiation with China).
Can someone ELI5 this?
Trump has been in love with tariffs since at least 1988. See https://www.wita.org/trade-news/trumps-love-for-tariffs-bega....
Yeah, that seems accurate.
"Alarm inside the Treasury Department over signs of distress in the US government bond market played a key role President Donald Trump’s decision to hit pause on his “reciprocal” tariff regime, according to three people familiar with the matter.
Treasury Secretary Scott Bessent raised those concerns directly to Trump in their meeting that preceded the announcement, underscoring the concerns shared by White House economic officials who had briefed the president on the accelerating selloff in the US Treasury market earlier in the day.
The market turmoil has rattled administration officials and market participants because it’s the exact opposite of what historically occurs in moments of global economic crisis or volatility. US Treasuries are considered the safest corner of the market. It’s the place investors across the globe flee toward with the assurance that the dominant US role in the global financial system will ensure asset safety.
But at the same moment Trump’s tariffs were causing foreign leaders to question the durability of longstanding US security and economic alliances, the rapid selloff of safe-haven assets raised concern that financial markets have similar concerns.
Trump acknowledged he’d been watching the bond market, telling reporters after the announcement the market is “very tricky.”
A spike in yields in the 10-year benchmark was of particular concern for Treasury officials. When the yields rise, US consumers face higher costs on things like mortgage rates for homes and financing costs for businesses."
https://www.cnn.com/politics/live-news/trump-tariffs-cnn-tow...
The yield really isn't that big a deal. It's hundreds of billions of dollars over decades if it moves by 1 percent. Compare that to tax cuts leading to trillion dollar annual deficits.
I mean, it could well be that they are risking the stability of the US economy to save money on refinancing the debt, but that would be a stupid thing to be doing.
Trump formulated his ideas on tariffs in the 1980s. He talked about them with Oprah in another ero. He didn't do this in preparation for some realization of the bond situation in 2025.
> But then something flipped.
All those long 8 weeks that people spent complaining about soft power, and the US government spent trying to gaslight people saying that they don't even use the power... The people complaining were talking about something real.
Why is this weird conspiratorial 5d chess theory voted to the top?
You read too much into it. Trump is manipulating the market for personal enrichment, in the most mundane manner.
Most upvoted comment is AI generated slop.
I disagree. Trump has been threatening tariffs since 2016. Each step he gets closer to significant tariffs. This time he stepped back after they seemed real.
Now businesses know he really, super means it this time, so they get another reprieve. But next time it would be hard to claim Trump didn’t warn them.
I agree it's classic brinksmanship and the tariff views he has are genuine and long held. But his numerous signals to the Fed to ask to lower interest rates and the commitment to DOGE (which has the effect of lowering yields) is another strand in his thinking. The two are in conflict causing the flip-flop effect in short term policy.
Trump has been talking about tariffs since the eighties.
I have a feeling the real reason is just that trump is a moron. I think a lot of people are reading it like poop sneered on the bathroom wall.
I think you’re projecting more advanced thinking here than you can give them credit for. The administration doesn’t have military guys keeping discipline.
You have Trump who has an instinctive affinity for tariffs, and a wack pack of various characters doing whatever. I’d guess they thought the Chinese would roll over rather that start dumping bonds.
If your goal is 'lower the rate at which you'll refinance a bit of debt by a quarter of a percentage point', blowing up your export economy, import and tourism industry, and introducing a national 40% sales tax seems like a really weird way to achieve it.
Given that all of those things would torpedo your ability to actually service debt, both new and old.
But what do I know? /s
The 10% apparently also apply to Canada and Mexico now, which they didn’t before:
> In a strange turn of events, the president seems to have added another 10 percent tariff to Canada and Mexico. Asked earlier if the 10 percent tariff extended to those countries, Scott Bessent, the Treasury secretary, said that it did. And a White House official clarified for me just now that that was the case. Previously, Canada and Mexico had been exempted from this round of “reciprocal” tariffs, though they still faced a 25 percent tariff that the president imposed last month on many of their goods.
https://www.nytimes.com/live/2025/04/08/business/trump-tarif...
Also china has 125% tarriff but the reason that they couldn't originally give 10% to Vietnam was trans-shipment of Chinese goods.
If it wasn't happening before, it certainly will be now.
What's actually wrong with them.
> What's actually wrong with them.
Market manipulation. 1. Sell. 2. Threaten tariffs. 3. Buy. 4. Walk back tariffs threats. 5. Repeat.
With the secret step 0: Pay enough of an Indulgence to get in the loop of when those are going to happen, and to stay in their good graces so the DoJ doesn't hit you for insider trading.
"Gutsy Traders Make $1.5 Billion Triple-Leveraged Bet on Nasdaq 100" [0]
This was Monday morning when it was trading ~$40. It is at $53 now. What is 20% increase on $1.5 Billion? $300,000,000.
[0] https://www.msn.com/en-us/money/markets/gutsy-traders-make-1...
I wonder how many executive branch staffers and their kin and kind bought the dip?
It's a pretty gross thing to think about.
That doesn’t make sense to me.
Money is not an end. It’s a (one) tool to get there. To the ends you want. To some sort of change in the world you want to achieve.
On that front this is incoherent. I vote incompetence.
I think you're operating in Marx's C-M-C circuit. Nothing wrong with that, of course (I'm that way too).
A lot of the finance folks work in an M-C-M' world, where Money (M) is the alpha and the omega, so you see this kind of (IMO) perverse behavior.
I've found this mental model helpful in explaining these kinds of behavior.
>Money is not an end. It’s a (one) tool to get there. To the ends you want. To some sort of change in the world you want to achieve.
Maybe for the overwhelming majority of the population, but it simply isn't the mindset of the billionaire class that supports Trump.
I'm coming to the conclusion that the tariffs are a distraction. The 10% across the board appears more like a tax hike without calling it one while the focus on China is just the same old trade war from the first term with louder chest-beating.
I believe at this point it's a simple game of leverage. Look how much damage I can inflict. Now let's negotiate.
This is like shooting yourself in the foot to splatter blood on your opponent. It "works" in a sense, but is about the stupidest approach possible.
There's a reason the dollar weakened in this crisis instead of strengthening like usual. Everyone can see that the US will be hurt far more by this idiocy than other countries will.
There's a saying in Russian: "beat your own to make the others afraid".
Maybe there's something to this theory of Trump being on the dole in Kremlin... ~
The US has crashed its own stock market, tanked its own government's approval ratings, and had its own business leaders speak out against the government. This definitely does not increase leverage.
>The US has crashed everyone's stock markets
look at global trends. no one thinks anyone can make money without the world's leading per capita consumer spender fully on-board. That is leverage.
Was the plan to incentivise Korea, China and Japan to work together? You know you've screwed up when bitter rivals decide to cooperate together.
Every government that has to do something undesirable to their citizens have been given something to blame: a beautiful excuse that will be milked relentlessly to the disadvantage of the US.
Businesses get screwed by flaky management - and now we get to see the US get screwed by its unreliable self-centered Prez.
make as much money which by the way is totally obvious. FTSE was down 3.2% at it's worst.
This.
If anything, it showed the leverage the US has.
Even countries like Singapore, hit with a 10% tariff (marginal, and far lower than most countries) absolutely panicked.
Interestingly, I looked up the size of consumer markets - the US is twice the size of the next biggest market, the EU.
So I don’t blame countries for panicking.
And if you’re really conspiratorial, one could question whether the push for free trade was really an attempt to put the US into a situation where it had leverage against most of the globe.
But these are all internal to the US. Trade partners still have to deal with the current administration and don't have any recourse.
With the bounce back the Dow Jones lost 400 points. For comparison, the German DAX lost 900 points, but is only half the size. It is a reckless and probably counter-productive strategy, but I do think Trump will be able to extract short-term benefits from a number of countries. I just hope the EU will finally decrease reliance on the US going forward. Our extreme reliance on US tech and defense makes us easy marks.
How is this a negotiation tactic.
"I bought $200 worth of stuff from your store and the store bought $0 worth of stuff from me. To punish them, I'm going to pay myself $100 every time I buy anything from the store in the future - that will show them!"
He only has political leverage over Congress. If they chose to act, they could stop him. Seems weird to kick off negotiations with them by inflicting damage on their constituents.
I’m going to keep punching myself in the nuts until you do what I say.
damage to himself you mean? he came with a knife to a gunfight…
And then decided to stab himself for some reason.
But a distraction from what? There doesn't seem to be any kind of obvious other thing they're trying to do with the cover. They're not exactly being secretive with ICE arrests, the mass layoffs from the federal government, or their weird campaign against DEI that the administration seems to have all but forgotten about.
They literally have no idea what they doing from one moment to the next. Obviously they are making up facts and strategies on the fly maybe minutes before press conferences. Just look all the math errors, irrational formulas and tariffing penguins. The malevolent incompetence is staggering.
I think they're distracting from the fact that it's a huge tax on the general public. You might say it's obvious, but people just don't process it the same way even though that's what a tariff is.
Ok, but why would you tarrif friendly nations who you have a surplus with?
If you tarriff them 10% they'll tarriff you 10% which means your companies lose out more than theirs and you've also pissed off an ally?
Why?
I'm thinking about Australia, UK those kind of folks.
Broadens the tax?
You know how in a game of Risk, at the early stages you form strategic alliances, but toward the end you inevitably have to break them because eventually someone has to win?
That's a little like what's going on now.
Pissing off your allies is good because if they're happy, that means you didn't squeeze them enough.
And it may hurt us and our companies more than theirs, but it doesn't hurt Trump personally, and that's all he cares about. He's going to be fine, so he's more than happy to cause us pain if it cause them pain as well.
Do you not believe that there can be mutually beneficial trade situations where both/all parties involved might be happy?
Is incredibly simple minded, self centered, and also just not true.I of course believe that. But Trump does not. Trump believes a good deal is one in which he gets everything he wants, and the opposing party gets nothing. It's a philosophy of domination and control.
It's the reason a "trade deficit" is seen as a bad thing by him. Trade deficits are the result of a mutually beneficial transaction, but that's not enough for Trump. It can't just be mutually beneficial, it has to be beneficial more in our direction than theirs.
Or look at how he treats contractors. He hires a person to do a job, they agree and deliver the work, and that should be the end of the mutually beneficial deal.
But not for Trump, his MO is to stiff contractors, force them to sue, mire them in a legal quagmire, and get them to settle at a loss. This is the kind of deal Trump likes because it's a win for him -- he gets the contracted work at a fraction of the price; and a loss for them -- they probably wouldn't have agreed to do the work had they known what they were in for upfront.
Is this a great way to run the largest economy in the world? Of course not! But that's how it's happening now because that's the kind of guy who is in charge.
The fact that opponents haven't successfully branded this as a tax is remarkable.
Trump thinks of himself as a powerful, insightful deal-maker. He pathologically needs to feel like he is doing something and his comfort zone for what kinds of things to do is "stuff that feels like business deals".
He knows very little about government and policy, but tariffs and dollars and percentages feels familiar to him. He's got a lever, and he can't resist yanking on it to show that he's in charge.
Whether yanking on the lever actually benefits the country or him is entirely besides the point. He's a narcissist and narcissists can't let go.
The reason they have reduced all tariffs back down to 10% even for the countries that were obviously transshipping (Vietnam, Myanmar, Thailand, Cambodia) is that they need time to negotiate with those countries, to make sure these countries now put similarly high tariffs (100%+) on China, so that transshipping is reduced to nothing
Wouldn't it be smarter to do that before increasing the tarriff to 125%? That doesn't make sense to me either..
The user you’re replying to is a brand new account with MAGA written all over them.
There are many people supporting MAGA here (who have their own goals) but seeing true believer, with naive takes, is not that common.
If Trump did not counter China's retaliation, then that would've significantly weakened the US's position with every other country.
If China doesn’t counter whatever the F we “counter” that would significantly weaken its position with every other country… and the wheel turns with this line of thinking…
except of course Trump brought a knife to a gunfight :)
Only, China isn't actively negotiating tariffs with every other country right now, so whether they retaliate won't impact their situation the same as it does from the US's point of view.
I really hope you are joking thinking China isn’t negotiating everything with everyone other than USA right now, starting with the very today publicly EU…
That's like saying China's strategy is to get Ecuador and El Salvador to inflict high tariffs on the USA.
Idiots, all. This feels like the sort of mistake I'd make. As in, me, myself, without a team of people planning and reviewing who could comfortably doublecheck when they thought I was getting something a little wrong in my orders. Which suggests to me that this is being done by one or two guys who do not have such a team. Which is insane.
Seems they reversed course on that. Or, they don’t know what they’re doing.
> It's been a confusing day.
> As Verity said, it turns out Canada and Mexico are not getting a new 10 per cent tariff after all.
> The White House reversed its earlier announcement in a new statement just now. Here's the bottom line: No new developments for Canada and Mexico today.
> That means there are still worldwide 25 per cent tariffs on steel and aluminum, on some auto parts in North America, and on some goods traded within North America outside the rules of the Canada-U.S.-Mexico Agreement on trade (CUSMA).
> The bottom line here: Trump is starting an economic war on China, and U.S. allies are all taking some friendly fire. But a large swath of Canadian trade is spared.
https://www.cbc.ca/news/world/livestory/trump-pauses-most-gl...
> Or, they don’t know what they’re doing.
Occam's Razor.
They know what they are doing. The goal is decoupling from China. They raised tariffs on everyone to see which countries stood with US and which stood with China. Once each country has made their allegiance clear, they delay the deadline to give more time for negotiation. They likely want every ally to raise their tariffs on China to be very very high, to avoid any more transshipping from China.
But the EU announced retaliatory tarrifs, just they weren't yet in effect. Why did they get off scot free?
Presumably because those were in retaliation for the steel and aluminum tariffs, not the reciprocal tariffs. It takes them time to respond because the EU members must vote on it. We have yet to see what their action will be with the reciprocal tariffs.
Finally EU bureaucracy saves the day!
You’re joking, but it’s true. I’ve been living in Turkey on and off and I’m convinced that slow changing rules are indeed a blessing.
Unlike Europe, in Turkey rules and everything is changing all the time, you can’t count on anything to be the same the next 5 years. No one in the institutions knows how everything works, they only follow the computer instructions. You are getting a loan? its a mystery if you will be able to get the stated amount because if you are buying a house down the road the computer may ask for the energy efficiency rating and limit the amount based on that. They will say that it is to promote energy efficient buildings but that regulation will remain only for a year or two- not enough to change buildings practices but enough to limit the loans given without explicitly limiting the loans given.
It’s a horrible thing, you can’t plan anything and those with connections end up catching all the good temporary situations because the got tipped. The moment the masses start realizing the opportunity, the rules chage.
It has become a tool for giving favors to loyalists and created a lot of horrible people who got “lucky” with their investments. When the politicians feel like paying loyalists, they will change something in the law that will allow for previously non-developable land to become developable and loyalist will get tipped that they should buy the land before prices increase. It will be something non-obvious, like something about changing the category of a road or something that changes the status of the land when appealed.
UK has had a stable system for many hundreds of years. I don't think it's something that can't be done at the country level, you don't need the EU to do this too!
Sure, I'm just pointing out the wonders of a slow and stale bureaucracy
> reciprocal tariffs.
I find it curiously useful that Trump’s blatant lying can be used as a shibboleth. E.g.: they’re not reciprocal tariffs, so almost everyone calling them that is a “true believer” that accepts Trump at his word.
Ok, what do you call them so you don't confuse that round of tariffs with other ones? "April 2 tariffs" doesn't work because, while that day was when they were announced, the steel and aluminum tariffs also went into effect on that same day.
> they’re not reciprocal tariffs, so almost everyone calling them that is a “true believer” that accepts Trump at his word.
I disagree. Non Trump aligned media called them reciprocal tariffs. I don't know if identifying the lie was too controversial or they couldn't understand the equation the administration published. And non Trump aligned people called them reciprocal tariffs because they heard or read the phrase.
They are gambling that the rest of the world aren't going to coordinate against USA, let's see
I’m not sure they need to coordinate, except for the state of US Politics. Take the hit now, then seek a long term better deal elsewhere, with more stable policies.
The U.S. ambassador to Canada has since informed the government that this is not the case, and the tariff's currently in place will remain unchanged for now[1].
However, with this administration, who really knows?
Perhaps Trump is staying quiet to avoid aiding Carney in the election. Perhaps he'll announce harsher tariff's on Canada tomorrow. Canada did retaliate and hasn't been hit with retaliation for retaliating, which gives the lie to Trump's statements that countries should refrain from retaliating if they don't want to be treated even worse.
There is not one whit of consistency or logic on display here.
[1]https://www.theglobeandmail.com/politics/article-canada-will...
Like when an LLM does a tiny coding error that isn't too noticeable though.
"Oh! Well this is not a mundane detail, Michael!"
This seems to have been clarified to not be the case, as of 30m ago -- no change to Canada/Mexico:
>There’s no change to Canada and Mexico tariffs, indicating that their levies aren’t going down to the 10% baseline. Recall that Trump initially threatened a 25% surtax on each of them. That morphed over time to affect non-USMCA compliant goods -- and it’s not crystal-clear exactly what proportion of Canadian and Mexican shipments that then affects. Canadian energy products also got a smaller rate.
https://www.bloomberg.com/news/live-blog/2025-04-08/trump-ta...
Possibly because lawsuits challenging the power of the President to impose tariffs under the Emergency Economic Powers Act are underway.[1] GOP support for Congress taking back control of tariffs is building.[2] At some point, Congress or the courts will take his toys away.
[1] https://www.newsweek.com/trump-tariffs-hit-lawsuit-group-his...
[2] https://thehill.com/homenews/senate/5236142-congress-tariff-...
I've seen relatively little discussion about these lawsuits, but I do think there is a pretty good chance that SCOTUS will rule these tariffs unconstitutional. (It's certainly more likely than Congress rescinding the powers they've ceded to the presidency.)
Constitutionally, the power to set tariffs resides with the Legislative branch, not the Executive branch. Congress has delegated some authority to set tariffs under certain conditions (namely, emergencies and matters related to national security). But the Court is clear that one branch cannot delegate all of its powers to another. The Court is pretty deferential to the Executive branch, especially in matters of national security. But no matter how much you squint, it's hard to see how setting broad based tariffs on all goods from every foreign countries qualifies under the Emergency Economic Powers Act.
It is a sound analysis but I think there are other non-legal factors at play.
If the president tries to do X, then the lawyers block X, then in political game theory the president "wins" in the eyes of the electorate because the president can argue "my plan was perfect, the execution failed due to the opposition, so I am not accountable to what has now happened".
The left might want to see a disaster play out to capitalize in the mid-term elections, laying the accountability directly on the president. The right might not have freedom of action because they fear a well-funded challenger for their seat.
In am interested in other people's opinions and ideas in this area. I agree it is too little discussed and analyzed. Please share your insights!
It can be more sinister.
If judiciary blocks X, then trump will say "these are the real bad guys, they are as worse as the dems, lets remove them". And BAM ! You have a dictator.
The sad part is that one of the most powerful nation in the world is filled with idiots who will lap up the above argument.
I would say that all this current situation is because of corporate greed, leading to a skewed distribution of wealth, leading to the evolution of a class of voters who are desperate, gullible and mis-informed.
> lets remove them
How?
The people on the left who want to see a disaster play out are mostly accelerationists. I think most on the left would worry more about the harm that economic disaster would be inflicted on people.
And more pragmatically, I think that Trump is so committed to causing disasters that he's likely to succeed at enough of his attempts that there should be pushback to as much of it as possible.
People on the RIGHT want to see this. The younger cohort of republican voters were HAPPY to see the stock portfolios and retirement savings burn up in a puff of smoke, because at least now older cohorts knew their pain.
> I do think there is a pretty good chance that SCOTUS will rule these tariffs unconstitutional.
Unlikely. SCOTUS is cowed, as shown by the latest batch of rulings (https://www.npr.org/2025/04/08/nx-s1-5351799/scotus-probatio...). They want to avoid his ire, and interference.
Possibly, they are saving dry powder for a bigger fight.
They have each independently, on different cases, voted against the administration. Except one I think, but it’s also only been three months. And John Robert’s just rebuked trump. It seems they have enough backbone to not care about his ire, and have their own independent minds. Thankfully more than congress does.
The Supreme Court, in a 5-4 shadow docket decision, just enabled the Trump administration to deport people under the Alien Enemies Act -- a law that requires a declared war or an "invasion or predatory incursion...by a foreign nation or government." So I wouldn't get too excited about the idea that they're going to make a big stand on tariffs.
The Supreme Court, on its shadow docket, did not decide any such thing. It stated very clearly that it was not rendering an opinion on that subject. What it did decide was that due process applies, even to illegal aliens, even under the Alien Enemies Act.
Granting the Trump administration “extraordinary relief” to continue deporting people is absolutely a decision. You can say “we didn’t rule on that issue” a hundred times in a row if it makes you feel better, but if you go out of your way to make sure the government can continue to exercise power under an absurd legal justification, you’re making a very explicit choice.
It’s this kind of legal storytelling, by which you pretend you didn’t authorize something, while actually taking actions that ensure it’s authorized in practice, that is the worst enemy of the rule of law.
I have this "fear" of being in a situation where a judge has to form judgments about code i wrote, even when relying on an "expert".
For the same reason that i believe a situation like that could play out, i don't think i should judge a judges understanding of, dedication to work through, and knowledge about– the laws.
I actually studied law for a few years. And i am baffled by the confidence of laymen about court rulings. It's almost like a client explaining to me how easy it is to fix this small bug.
It decided that deportations can continue, removing the temporary restraining order. And the administration claims that they are irreversible because those people are no longer in US custody. Such wonderful due process we have...
Then when you look at how SCOTUS justified it, they basically claim that the petition is invalid if it's not filed where the detainees are currently held. So how is it supposed to work if the feds just keep shuttling them around?
I think that is true, strictly speaking.
But how do you justify all of the other trade deals made by other presidents?
Were those also unconstitutional? Or just Trump's because they went up not down.
Were they negotiated by the president, and then ratified by the Senate? Then no problem.
Are there any examples pre-Trump that were not ratified by Congress?
To find another example of that, you’d have to go as far back as…Biden last year with tariffs on China.
The past tariffs (including from Trump's first term) were targeted at specific industries like steel or aluminum so you could make a case that it was necessary for national security. Other trade deals that set a broad set of tariffs (like NAFTA) were ratified by the Senate.
Seems kinda crazy that so much power was ever vested in the president.
https://www.congress.gov/crs-product/R48435
How to handle emergency authority in a democracy has been a hard problem back to the Roman Empire. Read up on Roman dictators.[1]
[1] https://en.wikipedia.org/wiki/Roman_dictator
Roman dictators have always fascinated me. It worked (for a while at least) because both sides agreed it was necessary and temporary. The people who appointed the dictator knew extreme measures were needed to navigate them through some crisis. The dictator knew if they tried to hold on to power longer than was necessary they would simply be removed or killed, their supreme power only extended through the crisis in which they were needed.
I mean, it may not be a completely solved problem, but you don't have to be too clever to think that perhaps rules similar to the War Powers Act ought to also apply to the President's authority to apply tariffs.
Laziness and fear of the closet monster beget tyrants.
The best way to sabotage Trump is doing exactly what he wants (and make sure he takes all the credit).
How would you manage the bit in parenthesis?
It's a foundational part of the sickness in people like Trump that anything bad is by definition somebody else's fault, and clearly his cultists just keep lapping up his lies no matter how insane and transparent.
This. Anything (accidentally) good was totally intended by Trump. Anything bad was because of evil ultra-leftists sabotaging his intended good, and not because Trump made even the tiniest of mistakes.
please keep in mind that everybody is vulnerable to this mindset -- not just conservatives
To an extent, since we’re all human. But conservatives, regardless of nationality, are unified by one characteristic that makes them more susceptible to this kind of propaganda.
Conservatives lack the ability to empathize abstractly. Due to their extreme emphasis on being self-centered, they are deficient in understanding that what happens to another can happen to them.
Once something bad happens to them, they are able to start to see the threads that bind them to others and society. But it’s only once it’s been made personal that there’s a chance of this recognition occurring.
So “us good, them bad” style of mob thinking is more common in conservatives only because they systematically do not ask themselves “are we actually different from them?”
...yeah so this is exactly what I was talking about
Sure if you have no skin in the game, but I however live in the US and also own stock so that's not going to work for me.
It's interesting to see it as an answer to the question, how long does it take to turn a well regulated democracy with a powerless head of state into an autocracy.
We've all been learning just how much of the US system runs on assumption of there being some baseline level of competence and good faith. It hasn't been a pretty lesson.
I'm honestly not sure there is another way since laws can't cover all possible future edge cases with effective enforcement mechanisms. The simpler fix is to not elect blatantly corrupt and incompetent leaders, but voters failed that task and now the country is paying the price.
I'm starting to subscribe to the idea this was blatant market manipulation.
Trump is only out to make money, the guy never had any other thought in life since money gives him status, fame, and power.
It's a grift, as any other of his grifts, but now he can manipulate the whole stock market with his power.
There's nothing else that I can rationally come up with to explain this absurdity.
There's your problem - the word "rationally". NOTHING about MAGA / Trump is rational - it's all based on feelings.
> Trump is only out to make money
Nope. Not even close. He's all about power, and the appearance of strength. It's no coincidence that he looks up to Putin.
Money is almost always a means to an end, and this is no exception.
Is it just the historical legacy of international trade that tariffs apply only to physical goods, but not to something like software-as-a-service subscriptions, digital media, or intellectual property?
As the latter categories are more representative of US exports, it would surely be an interesting escalation if other countries were to start including them in their “retaliatory” tariffs.
I still wonder why this was not done instantly by EU.
US has an imbalance on goods that was used to calculate the tariff amount, but it has the opposite imbalance on service from what I've read
It would be a just a hefty fee for most EU companies and not much more. From what I've seen Azure is pretty popular in most bigger companies and smaller shops and websites use often AWS or Google cloud. Microsoft Windows and Office is also everywhere - it would be a tax on European business with little effects on the USA because moving away from big clouds won't happen because there is no realistic alternative.
Last I've looked "Lidl Cloud" from Schwartz-IT that is often mentioned as alternative is basically managed Kubernetes for more than double the price of Azure/AWS before rebates. They have that idiotic meaningless TÜV button on their websites and unfortunately it's not technical excellence but rather a trap for boomer CEOs...
Europe missed that boat unfortunately and I don't see that changing soon. Hetzner/OVH and so on only provide bare metal or virtual machines for little money but there is no European cloud with serious IaC and managed services that are stable and battle tested as far as I know.
Changing taxation rules is the interesting topic but unfortunately EU countries are competing on that and that would destroy the business model of countries like Luxembourg or Ireland - I'm all for changing it and it would be better in the long-term but it's probably impossible to pull off at the moment.
It seems to me that replacing foreign computer services is actually easy compared to physical goods: no need to build factories, no need to buy expensive machinery etc, just wrap some open source solution and sell it. For example, China has domestic computer services, from messengers to AI models. And by observation, once you ban foreign services, local competitors start appearing like mushrooms after rain.
It's this attitude that is common in Europe, at least in Germany that is the reason we are so behind. Worked for so many companies that just wrapped some open-source and sold it. Never worked well, nobody understood how it worked. No money for competent devs and so on. Both times the product was what made the company money. Say what you want about USA tech companies but at least some actually have technical excellence. I've lost hope that Europe, especially Germany will understand that.
Well the "wrapping open source" model doesn't give you anything to export
Yeah sure but then you do promote EU alternatives out of necessity.
On the long term this can really make EU more sovereign, less dependent and it's not a crazy thing.
I have never understood the argument of "yeah tariff would hurt us because we are dependent on foreign tech". Yeah that's precisely a problem at a country level. Promoting local alternative is best than winner takes all.
There's also a price in not looking tough when you're getting bullied sometimes.
Both OVH and scaleway provide managed k8s (and both have terraform providers). But yes, definitely much less sophisticated than the hyperscalers. But if you use k8s, maybe s3 and Kafka, and some databases, it's definitely possible to do the switch.
Swapping an enterprise’s cloud provider is at least a 6 month endeavor and that would be with all hands on deck, I estimate two years at least and that’s still with significant tail wind. While things are crazy, best bet is to hold tight and sign the checks and prepare.
My experience is that it can be anything from relatively easy to frocking impossible. Very hard to put a timeline on.
But if we are talking about tariffs (and not a ban) then a partial move is also relevant. And, at least in my anecdotal experience, a non-trivial fraction of our cloud-cost is pretty simple services which can be moved. It's almost like a 95/5 kind of thing, moving 95% of the stuff would take 5% of the time.
Having a hybrid cloud setup is clearly more hassel, but it's doable.
How would it work?
Say an American multinational like Microsoft provides some SaaS. They have a division in Europe where their developers help make their products. They have offices, customer support, servers, etc. in Europe. Do they pay a partial tariff based on what fraction of the development of their software happened in the US? What if they sell the rights to the European version of their software to their European division?
It would need to be a tax on money transfer to the American counterpart. Cash repatriation or payment for IP rights comes to mind.
Of course, the multinational could also use the funds to invest in Europe, build warehouse or commercial real estate or acquire European startups. I think they already do this to some extent to avoid US tax.
Using these to fund free credits to European cloud providers could be a good way to build up a local alternative. I think we underestimate the importance of free credits in the reliance on the 3 US hyperscalers, especially for startups.
Easy: because next to 100% of EU government computers run Windows and MS Office.
Not true. The European Union runs RHEL, OpenShift and some SUSE.
Seems like a vulnerability
Some part of me feels like (and hopes?) this could create a golden era for tech in the EU. Competing operating systems, productivity software, SaaS solutions. If I had any say in the EU right now, I'd look at ways to increase visa access for disaffected tech workers looking to leave the US turmoil.
If you have a job offer for 50k and a university degree you can get an EU "blue card". Went through the process and it's pretty easy, I don't think this visa is a big issue for tech workers
> If I had any say in the EU right now, I'd look at ways to increase visa access for disaffected tech workers looking to leave the US turmoil.
We're lacking VC funding, not skilled tech workers. Increasing visas for tech workers without increasing the funding just lowers wages which are already low.
That might be true, I wouldn't know -- but I do know a lot of EU countries have visas for skills shortages and software is listed among those skills. I assumed that meant there's an opportunity to expand and expedite access if the need was more imminent.
Just because companies say they have skilled shortage doesn't make it true. They're mostly just picky and want to put pressure on wages. I also have a Ferrari shortage, so we need to make more Ferraris.
Plus, EU visas are basically just rubber stamps anyway compared to how hard getting an H1B is.
Actually here's another unused pressure point, the EU can retaliate by making it as difficult for Americans to work in the EU as it is for EU citizens to work in the US. Why isn't it already reciprocal?
Any solution would need to be multi-faceted
One facet could be increasing investment, VC and otherwise
_How_ you do that? I'm not sure, but I also doubt it's a completely unsolvable problem
It's Ubuntu time !
What I don't understand is why other countries didn't make the threat to make any tariffs hold for a year or longer. That would scare Trump away from doing these stupid experiments.
Why would other countries inflict that sort of self harm? It would be a bluff, and everyone knows it. If it wasn't a bluff, you would be out next election.
There is something to be said for stable economic policy making. EU could say that they're not going to be a leaf in the wind, and it would be a totally understandable position.
The whole point of imposing retaliatory tariffs is that it puts pressure on the aggressor to give up, on the basis that you will then immediately drop the retaliatory tariffs. The point is to produce a quick end. Retaliatory tariffs with a _minimum_ duration would be counterproductive.
I suppose you could have a kind of tariff equivalent of the doomsday machine from Dr Strangelove, in principle; a set of automatic measures to come into force if the adversary does [whatever]. However, Trump strikes me as a bit of a General Ripper, so it might not be a _great_ idea.
Well, you could make the duration of the retaliation short. The point is that you make clear that you don't tolerate being played.
The EU effectively backdoors tariffs against US software vendors via fines and the occasional if ineffective subsidy for local competitors in the local language.
No, fines are for breaking the law, if they don't break the law there's no way for the EU to collect the money. It's like speed traps, people can be mad at them because they broke the law and were caught, it doesn't alleviate the fact they could have just followed the rules.
They have laws like GDPR where they try to assert jurisdiction outside of their borders. Not sure if fines collected through that have been a significant cost of doing business but my point is they definitely can take money from you in situations where you aren't breaking laws that you are nominally under the jurisdiction of.
Conducting business in a jurisdiction subjects you to the laws of that jurisdiction.
Yes but only for the sake of the business conducted in that jurisdiction. The GDPR, according to the EU, applies to anybody anywhere in the world. You can have information on an EU citizen stored outside of the EU and they can fine you under GDPR. You don't even need to have ever been to an EU member state at any point in your life-they still claim to have jurisdiction over you if you have information stored on a computer they want deleted.
Most foreign extradition courts would laugh in their face for trying to use that, but if you have any assets in the EU (as most corporations inevitably will if they get big enough to go international) they can seize those as punishment for not following EU laws related to business conducted outside of the EU and that goes back to what OP tried to argue:
>if they don't break the law there's no way for the EU to collect the money
they actually can, because they can say you broke their law while conducting business outside of their jurisdiction that wasn't even illegal in the coutnry that actually had jurisdiction over that transaction.
Collecting something of value as a condition of service is conducting business. It was decided years ago the a transaction's location is the payer's location. Collecting information with or instead of money does not change this. Moving money or information to another jurisdiction and using it there does not change this.
GDPR covers people in the EU. Not EU citizens. Non EU companies can avoid GDPR liability complying with the law or not conducting business there.
Global companies have assets in the EU because they conduct business in the EU. International companies which do not conduct business in the EU do not have assets in the EU generally. And having assets in a jurisdiction subjects you to the laws of that jurisdiction obviously.
Sadly this is not the case in relation to EU laws.
In the US system of law, it is based on codified "rules". If you follow the letter of the rules you are fine - no fines.
The system of regulation at play here is the EU digital markets act. These laws are based on the effect of your actions, not the specific actions you undertake.
If the effect of the steps you take produce unacceptable outcomes, you pay fines even if you follow the requirements. The converse applies as well. If you ignore the rules but the outcome is in the spirit of the laws, then no fine.
The idea is to avoid malicious compliance but the cost of this is ambiguity in interpretation and also the market response to your actions might be genuinely surprising.
Here is a technical example to highlight the problem:
Apple were asked that you should allow independent browser technology implementations. They did this (to allow Google's technology to be employed as an example). But due to practical complexity they could not make progressive web apps work on iPhone (since they would need to route through the API which can be provided by Google's browser technology). So to comply with the rules, Apple disabled full screen PWAs and instead allowed them instead the web view area inside a browser, not full screen like a native app is experienced.
The EU regulatory body said revert that, and allow PWAs despite their own rules being then violated (as it would be using only Apple's browser technology) because the effect of allowing PWAs is a competitive marketplace for native app alternatives (web apps).
I prefer a system of rule of law that covers the spirit of the law rather than the letter.
I do not like the idea that law can become a game of finding loopholes that go against the spirit of it, it's whack-a-mole that costs the State a lot to keep patching. I much rather have the system most of the EU has where subjectivity can play into decisions since some loopholes can be clever enough to work around terminology, jargon, and non-specificities to skirt around what's written while being opposed to the intent of the rule.
Companies can still contest, and bring forth cases to be reviewed to check if those solutions comply with the law, their lack of cooperation is a choice to drive a wedge between the citizenry and the regulations by non-complying and crying foul to the public to gather sympathy. That's an active choice, the companies could work with regulatory bodies to cooperate, and find a solution (I work at a company who did that for DSA) but most would much rather give a bad rap to regulations to turn the public against it.
"Why don't you just read my mind and do what I wanted you to do in the first place?"
Rule by law rather than rule of law?
What's a better system that allows patching loopholes of the letter without requiring extensive bureaucracy and potential gridlock in legislature?
There's no mind reading, most of EU's fines only happen after a pattern of non-compliance, complain as much as you want about EU's bureaucracy but it's quite cooperative if you want to figure out a solution. I prefer this system than one where the written laws are worth nothing since well paid corporate lawyers can figure a way out, or hell, they might even be paid to write the laws themselves as it happens in the US.
I mean it's never going to be perfect right away tho. Trying to mitigate outcomes is still better than being an law autist.
=> subsidy for local competitors in the local language
I'd like to know if you know what's you're talking about. In france the local subsidies are really low and the inversely the big rebates like "Tax Credit For Research & Dev" are for everybody, US companies like EU ones.
Much harder to enforce against services.
Physical goods you can hold until tariffs are paid.
Services are paid for by invoices between two corporate entities whose legal domicile may have nothing to do with the real country of origin of the services.
Lots of European SaaS providers invoice US customers from their US subsidiary - impossible to distinguish the transaction in order to put a tariff on it.
The EU is discussing it, but are currently debating if that would be seen as an escalation of the conflict.
Yes it would be a strong response, but unlike the US we are not interested in appearing like the strongest idiots, the EU would rather we all get along and trade. We'd rather work on real issues instead of this self damaging garbage.
Yes, that makes sense for Europe but it doesn't help China, because China already prevents a considerable amount of US media consumption and much of what is consumed is bootlegged anyways.
This is exactly what EU is discussing
Indeed. There are many options on the table.
https://www.politico.eu/article/belgium-brussels-amazon-goog...
https://www.politico.eu/article/eu-trade-bazooka-anti-coerci...
https://www.euractiv.com/section/tech/news/france-singles-ou...
The Brazilian Congress finished approving a law yesterday granting the president powers to retaliate by voiding intellectual property.
>software-as-a-service subscriptions
when people in other countries use that at a non-trivial scale, aren't the servers on the other end of the connection still located in their region?
Sure, but when we pay our AWS bills, that money still goes to Amazon which is US-based, even though we servers we rent are in Frankfurt.
Does it actually go to the US corporation, or to some European subsidiary?
For hyperscalers, to some EU subsidiary first. Then it depends on the transfer pricing applied. https://en.wikipedia.org/wiki/Transfer_pricing
You can tax the "intellectual property" payments that the subsidiaries make to the USA parent, or you can pick some other criterion. Or you can just create a new sales tax for any one part of the transactions you want. It's tricky but it can be done.
I think partly the historical legacy, but also the ease of enforcement and the fact that lower tariffs and services have trended together.
Collecting taxes on goods flowing through a limited number of physical locations is much much easier than trying to audit the client list of a huge number of foreign service providers.
Agreed that other countries are considering this.
You don't need to hit a huge number of service providers because the USA market is highly concentrated.
That's why you read things like «The Anti-Coercion Instrument (ACI), a nuclear option that has yet to be deployed, would empower the EU executive to hit U.S. service industries such as tech and banking». https://www.politico.eu/article/eu-trade-bazooka-anti-coerci...
You can just pick the top 10 biggest financial and tech firms and be done with it.
Enforcement will be the issue here.
If I order physical goods from a foreign nation it's gonna have to somehow get into my hands, and can be withheld until i pay tariffs
If a irish subsidiary invoices me subscription prices for intangible services, there's no way in the current legal world to enforce a tax on my end
I'm curious what sort of "as a service" things you would have applied this to in the past? Seems like a simple answer of "yes" as to whether how we collected taxes in the past were largely a legacy of how trade happened?
I'm also not sure why other countries aren't moving to criminalize trading crypto to try to tank him and his cronies since the US has given up on preventing presidential conflict of interest.
uhhhhh if you want bitcoin and etherium to moon the best thing you could do for the crypto-community would be to present it as a tangible threat to your country's political and financial elite due to existing outside the confines of their regulatory powers.
When the IRS left it in the grey zone it wasn't really going to the moon because every financial advisor couldn't say 5% of you retirement should be in an investment we can't sell you. It would take a lot more and richer people with oppositional disorders to make up for some universal retirement "just in case" advice.
That's my point, for the first decade or so they didn't even bother considering it to be a taxable form of income, which sent out the message that it's not a significant threat to the US government. In the time since all they've done is tax it the same way they tax conventional fiats; it's never been treated as a credible threat by the United States government.
I think there are some sound-bites from Trump-45 calling it a scam (in strong contrast to Trump 47) but even then then he never tried to do anything about it. If trump gets on Truth social tommorrow and fires off a tweet about how Bitcoin is a chinese threat designed to destablize US hegemony and circumvent tariffs and he's going to sign a legally-questionable EO to ban it, bitcoin's price would go up "bigly". Same would apply to the EU or any other major economy, although i will grant that it might not be to the same degree since nobody pisses people off the way trump does.
I think you place too much emphasis on US spam.. It's had its day and anyone susceptible to it is heavily in crypto that existing holders go heavier if they have more money to allocate to it is still a fragmentation away from actual usage where normal funds and banks add small percentages in longterm funds as a precaution.
I.e. GameStop is all very impressive until you compare it to anything finance actually dumps money in by default.
If the pyramid is isolated it tops out somewhere a lot higher than now and then collapses for lack of a place to sell to next or an actual return.
With the whiplash of tariffs, upping tariffs, pausing tariffs, I don't know how companies can do any planning.
A lot of earnings are coming out next couple of weeks. Take Apple for example, how would they forecast Q2 numbers? They have 125% tariffs on all imports from China. Maybe it'll go up more as China increases their own. Or maybe it gets paused. I feel for the FP&A team there.
>I don't know how companies can do any planning.
They can't. They're saying it out loud updating their guidance.
In polite terms, on earnings calls you're going to hear "we don't know what the fuck to predict".
Follow Bloomberg and you'll hear bank CEOs saying the same thing about the markets, they have no idea what to predict or how to price anything. Right now the line is that America looks like an emerging market with unpredictable wild swings based on policy changes. That is going to drive everyone away from the US, industries, customers, and trade partners.
No, apple only has 125% tariffs on imports from China to the US. They can send them elsewhere (or parts) and send India-made devices to the US instead for example.
Its possible they will learn to live with the ebb and tide and ride along. What else can you do?
Apple is perhaps already hiring a fleet of planes and ships to transport iPhones from all over the world to the US.
Is anyone sure this is not stock manipulation? Honest question.
This is pure manipulation. It was engineered to just that from the start. Since it's America, no investigation will be done to look into who profited here - possibly billions off regular people who had margin calls. 3rd world country.
> possibly billions off regular people who had margin calls.
Regular people have no business gambling with levered bets on publicly traded equities. Those losses are their own fault, and they should sell gambling treatment.
> billions off regular people who had margin calls
Thanks, Robinhood!
I like the ironic name. Robinhood is where the poor go to send their money to the rich.
The president told his Truth Social followers that it's a great time to buy stock just a few hours before this announcement: https://truthsocial.com/@realDonaldTrump/posts/1143082727259...
It's probably many things, but one part of it is for sure stock manipulation.
This is wild.
8:37AM "THIS IS A GREAT TIME TO BUY!!! DJT"
12:18PM "I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!"
Assuming this was planned so insiders can buy the dip (and let's be honest, he's not clever enough for this, but any crypto bro is), his announcement serves the insiders perfectly as plausible deniability.
What's even wilder is this random Twitter account that 'leaked' the 90 days pause two days ago, got picked up by the news as truth, caused the market to recover by trillions of dollars temporarily... and now this...
Taking the source for what it is, if this is true then some people made some crazy money today.
https://old.reddit.com/r/wallstreetbets/comments/1jve86e/tin...
There were people buying 18,000 SPY 510 calls at noon due to expire yesterday at 4pm. That is an absolutely insane thing to do unless you had very sure insider information of an incoming spike
My take is that’s probably for plausible deniability. “The prophet told all true believers, how could there have been insider trading.” The volume on the markets picked up twenty minutes before not hours.
"...I guess they say it was the biggest day in financial history,"
A finance whiz could tell you that it wasn't the biggest day in the market's history, but maybe a cause for extra celebration among a more select few.
Indeed, the 90 days delay leaked in the morning before being denied and at the end of the day there was the official announcement. So some people new before the official announcement and shared the information.
https://www.reddit.com/r/wallstreetbets/s/TJ1DEjUEk9
No. Honest answer.
Hanlon's Razor? /shrug
Anything world leaders do impacts the market.
Its stock manipulation all the way down, if you’re inclined to see it that way.
I am beginning to wonder if there is an actual plan behind these moves beyond creating uncertainty in trading partner's minds.
The stated goal of the administration is to 'reindustrialize' the US by manufacturing more of the goods consumed within the US itself. To get to that goal, tariff barriers are just one part of the story. For tariffs to be effective towards getting to the strategic goal, they need to be coupled with sound industrial policy and a long term execution framework. The three legs of the stool, so to say.
So far, there has been no mention of the other two legs. There is currently no serious bill proposed that aims to apply the required industrial policy and all of these tariffs being imposed under executive orders mean that instability in tariff rates and application is pretty much guaranteed. The very opposite of the stable, long term approach that is needed.
Without the other parts, there is a very high chance that the US will bear the brunt of the short term damage, but with none of the long term benefits.
There isn’t a serious plan to bring manufacturing back. You can debate whether there is a plan for high-pressure negotiations, insider trading or kickbacks (e.g. Nvidia’s successful deployment of a million dollar dinner at Mar-a-Lago), etc. but you can tell that it’s not a good-faith attempt to invest in American industry because that would start with the two things you mentioned: you’d see the investment in those industries now and a commitment to raising taxes on foreign competition in 2030 or so when people have had time to actually be able to meet demand.
What we’re seeing now makes as much sense as a middle-aged laptop jockey deciding that they want to be in better shape – and then quitting their job to run in the Badwater Ultramarathon the next week.
How about facilitating a monster load of insider trading?
At this point I don't see how anyone can look at what they're doing and not smell insider trader/pump and dump.
It's super obvious.
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I'm sorry, but only in April of 2025 you are wondering if there is an actual plan? Were you paying any attention at all from 2016-2020?
I mean, Peter Navarro's tariff plan is a plan. It's just an absurdly fringe/incompetent plan.
It looks like the administration is filled with people more interested in making a buck for themselves, rather than do what is best for the country.
Everyone knows that getting another trump may not be possible for at-least another 10 or so years (I don't mean the dems will win, just that republicans may put forth a saner version of trump just to save the party)
That's the Hallmark of a fascist leader.
I hate to bring up Hitler but that's how he gained much of his power. He was a "useful idiot". The people that helped him were looking out for themselves. They thought they could use Hitler to grab power/wealth.
Up and down and up again. The entire US economy is being used as a pump & dump scam.
Yup. The next 3.75 years are going to suck. Thank you, GOP, for completely shirking your responsibility to keep this kind of garbage in check.
Why does the market like this? Tariffs are in place and unpredictability is now the norm. Tomorrow something new crazy will come out and then the next day and the next day. Even if US markets like this right now, the long term damage has been done. Betting on the medium-long term seems questionable at best.
The market doesn't like this. All the professional investors got out ages ago (check out Berkshire's dumping) and are dumping to bagholders. Large fund holders are hanging on because they still make fees and it keeps their AUM up there and everyone else is dying at the same rate. Foreign investors are pulling bonds out because the currency is at risk. The market is being manipulated daily and there is no involvement from SEC. There is only risk left. Confidence is gone.
It is the textbook definition of a fucking shit show.
You're making me feel better about missing the bump today. I got out over a week ago before things went completely bonkers. Was planning on getting back in when I had a sense the volatility had diminished.
Came back from a meeting to find things were halfway back to where I sold and started to feel bummed.
Guess we'll see what tomorrow brings.
Never feel bad for what you didn’t make.
The market doesn't know anything, the people who are trading are trading on FOMO and sentiment, because valuation is completely unpredictable when the global economy is being dictated by one man.
> Why does the market like this?
It doesn't; S&P500 is now at like 5400 vs nearly 6200 a couple of months ago. It's just that it is clearly not _as_ bad as it was earlier in the week.
And honestly you'd wonder how much this is being held up by confused retail traders; looking at WSB, say, many of them seem to think that tariffs are back where they were a few weeks ago (they're not; the 10% thing is staying, and of course there's China).
The market is still down 10% from 45 days ago.
It's no longer down 20%.
I think that's why it's called day-trading and not "long term strategic trading"
Dead cat bounce.
The markets likes this relative to the alternative of even larger tariffs.
The unpredictability was already priced in. Markets were down substantially from january even on april 2nd. The tariffs are also being priced in, since the markets are still down from april 2nd. Nothing trump has done is good, it just isn't as bad as it could have been.
Seldom a dull moment with the present government. He's still saying 125% on China so it's not back to normality. Also I guess the penguins still face 10%.
Few dull moments in Mobutu's time in Zaire too I hear.
Lot of whiplash with these tariff policies. I'm wondering if maybe it'd be a better idea to give* Congress this power instead.
Congress does have the power (article I, section 8), however it delegated this power to the president for "extraordinary" situations with certain laws.
"Extraordinary", such as a fictional fentanyl emergency at the northern border (despite the fact that a trivial amount of fentanyl enters the U.S. from Canada, and more enters Canada from the U.S.).
Of course, you have Congress to keep the President in check that these are real emergencies. Which is why the House will definitely be bringing S.J.Res. 37 to the floor, right? Because it's their sworn duty to act as a check on executive power, right?
https://www.govtrack.us/congress/votes/119-2025/s160
There's a reason the saying, "in America we have three coequal branches of government: the Supreme Court rules, the President crimes, and Congress is just for fun" has become popular since some time after his first inauguration.
The only search results for this allegedly popular saying were your comment and a comment elsewhere which quoted you.
My greatgrandfather used to say it all the time
He first announced tariffs on China over fentanyl something like 2 or 3 days after pardoning the biggest heroin by mail operator in world history (Ross Ulbricht).
> The nondelegation doctrine is rooted in certain separation of powers principles.1 In limiting Congress’s power to delegate, the *nondelegation doctrine exists primarily to prevent Congress from ceding its legislative power to other entities* not vested with legislative authority under the Constitution. As interpreted by the Court, the doctrine seeks to ensure that legislative decisions are made through a bicameral legislative process by the elected Members of Congress or governmental officials subject to constitutional accountability.2 Reserving the legislative power for a bicameral Congress was "intended to erect enduring checks on each Branch and to protect the people from the improvident exercise of power by mandating certain prescribed steps."
https://constitution.congress.gov/browse/essay/artI-S1-5-1/A...
Any democrats with working brain stems and genitals should be taking this to supreme court.
The list of law firms with the expertise, resources, and will to take on the administration is getting shorter and shorter, because he's targeting the ones that piss him off with EOs aimed to wreck them if they don't pay up and shut up, and that strategy is working.
Agreed however this court has shown it can dance between originalism, textualism, and tossing both of those to the wind (Trump v Anderson) when it aligns with policy goals.
Also it probably wouldn't even fly with anyone since so many other emergency powers are generally accepted as necessary (i.e. defense). The immunity decision is full of rhetoric about the legislature being too slow for crises.
Their best bet is to invent a time machine, go back to Obama, have Obama pass emergency tariffs, then lobby to repeal that act.
They need to take it back, regardless. It's proven that Americans can't be expected to elect adults to the Presidency any longer, they no longer use logic or emergency situations, they use it for egotistical narcissistic feelings of being important by playing red light, green light on a trade war between the two most dangerous countries in the world
I wrote my congressperson (house and both senators) to take back the power. If enough others do the same they will, but if it is just talk on forums they assume nobody cares.
I wrote my Senator, Dick Durbin, prior to the November 2024 election, begging him to do something to shore up the legislature, prior to Trump's possible return to office.
He responded that he's not allowed to discuss campaigning and that I can instead donate to his 'friends' network (PAC?)
I don't think the Dem establishment really opposes Trump at all...
Oh boy, HFTs made a fuck ton of money in the last few days. Probably as much as they make in a year even
Maybe, just maybe, this is all about a secret wealth transfer.
Do you think normal people (think, your average investing American) are trading based on this news? They probably shouldn't be... I would think that by far most of the trading these past few days has been institutions, so, a big transfer from some financial institutions to others?
> Do you think normal people (think, your average investing American) are trading based on this news?
We ~know that they were: https://finance.yahoo.com/news/the-market-pummeled-401k-acco...
As always, normal people sell low and likely buy high (I'd bet that a lot of the already-fading market euphoria yesterday was retail trading).
Aren't your 401k's tied up in stocks and bonds? Index funds too will probably have been fleeced too on the volatility.
But surely you didn't sell off your 401k.
Managed funds and ETFs will have needed to rebalance, buying and selling assets to get the proportions back to what they are supposed to be.
Yeah, Trump basically told before he announced the pause. I made a lot of money in the past week doing very little but pay close attention to this flaky dude.
Shaking the economy like a snowglobe is sure to make businesses conservative and fearful of spending. There is no path to this being a good thing for the United States.
10% is still a lot. Counter tariffs will still happen.
10% only applies to countries that have not retaliated. I assume (dangerous in these times) that any retaliation will cause reinstatement of the previous rates.
The UK and Australia, which had 10% from the start, and didn't retaliate, get... 10%. Brilliant.
Gangs typically don't respect you if you don't fight back. This is a mob administration at this point.
Well if the countries don't take any action, doesn't it mean that they believe current situation is better than any other choice (and anyway, the tariffs will be paid by American buyers) and therefore the previous tariffs were too low?
Would triggering counter tariffs be deflationary as net result will be less money coming into the US?
EU and many other counties have already had tariffs on the US for a long time.
You’ve been repeating that a lot but as many people have corrected you, they’re nothing like this broad or high: only 1%, and that’s balanced by the EU’s trade deficit on services since we don’t make things like good cars for Europe but they buy a lot of software, entertainment, etc.
https://ec.europa.eu/commission/presscorner/detail/en/qanda_...
* EU and many other counties have had comparatively small and targeted tariffs on the US for a long time
Just like the US has had small and targeted tariffs on the EU for a long time (such as pickup trucks).
On specific products
Wait, I thought true random numbers were hard to generate?
Nothing is truly random. It's all just an illusion!
I'm pretty sure radioactive decay is truly random in the deepest possible sense.
It could be a simulation
It's not like the tariffs are gone. It's still 10% for everyone but China. That only seems small in comparison to what was being proposed before. I wonder will EU and others wait out 90 days while negotiating or match the 10% in kind
Hopefully EU will still go ahead with the tariffs. We should not be dancing at the tune of the mad king.
Yes, but what's the rush here?
The EU should do what does best: make things boring.
If retaliatory tariffs is the way to go, maybe do it the boring way: considered bit by bit, no flashy announcement.
Or just make a 10 year deal on LNG so Trump can say we're paying the US money every year.
That seems to be the current strategy, and I happen to appreciate it.
I'm pretty mad a the US for fucking up the entire world right now, but I also realise that acting on that anger is a bad idea. I appreciate the EU having some long discussions while the emotions fade.
> The EU should do what does best: make things boring
Exactly, the absolute best thing the EU could do right now is project stability
You think that's gonna be the best outcome?
EU already had 10% tariffs on all US autos. (Though tbf most other things were near zero.)
> It's still 10% for everyone but China.
There's actually some confusion about that. They said they paused the global tariffs but didn't mention the Canada and Mexico tariffs.
If the 10% global tariff is in addition to the Canada and Mexico tariffs, the net tariff rate on those countries could be quite high. Combined with 125% tariffs on China and we would have very burdensome tariffs on 3 of our largest trading partners.
The rally is because Trump caved to pressure and is backtracking earlier claims that he wasn't going to change his policy.
Didn’t the global “reciprocal” tariffs exempt Canada and Mexico?
Mexico and Canada are still at 25% apparently.
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I obviously can't say for sure, but my guess for why you're being downvoted: we don't need humans telling us what the AIs think. We're all capable of knowing that for ourselves.
What I'd guess most of us are interested in is what you have to say.
Hmm ... so the worked conclusions of professional economists are less interesting than the opinion of a random stranger on the internet?
In the context of Hacker News, when the "worked conclusions" are that of an AI (however accurate or well trained), yes, I suspect that people tend to prefer that less than the opinion of a random stranger.
I'm here for the people. No AI is going to tell me what you think about something.
If USA keeps 10% tariffs for everyone equally, why should we interfere? Serious question.
I believe that Trump is shaking things off, but his goal is to introduce a fixed "tariff" like a soft VAT.
He is just testing (and profiting with $$$$$) what happens when you do things like 30% there, 24% there, etc. But his long term goal is a fixed tax. In that context, who are we to judge them? We also have VAT on imports.
You have VAT on more or less everything, imported or not. A “VAT” that _only_ applies to imports absolutely still deserves retaliatory measures.
Not true. VAT is not applied on exports outside of EU.
I think you misunderstood: VAT is applied to (approximately) everything a citizen of a country buys: imports and domestically produced products. Exports from a country are entirely irrelevant to whether applying VAT to imports is unfair to US imports to that country, as compared to the US charging a “VAT” on _only_ its imports.
VAT is applied to services too, at least here in Europe.
Now, if we were to split VAT in two: 1. tax on imports, 2. tax on whatever goods/services people in that country pay/buy, you could keep just the 2 and have free trade with other countries with zero tax. Or the opposite, do tax on imports and free trade inside your country.
The fact that VAT has always been like that (1 and 2 together), it doesn't mean it has to stay that way.
Not sure why we should care about how a country decides to apply taxation in their own country, especially if that country sets a more or less equal tax for everyone - that's understandable.
It's how the EU today works BTW. In german shops you can buy locally produced pasta or imported Italian pasta (no import tax), both with 7% vat on it. Now you can claim "but this is EU...".
Why can't this free trade be done with individual countries for specific products then?
You and the parent poster are talking past each other. They asked:
> Why would there a VAT on, say, domestically produced pasta on the grocery shelf, while the Italian import pasta right next to it has none?
You answer (correctly) that that isn't the case, both boxes of pasta have the same VAT applied to it.
In light of this, I think people are really struggling to understand what you're arguing for or against here. The whole subthread started by someone pointing out that the 10%-for-everyone version of trump's tarrifs is very different from European VAT, since European VAT applies to all products sold to consumers, regardless of whether they are imported or not. That is, indeed, a vital difference. You seem to argue that it's not the case, while giving examples of how it is the case, leaving everyone confused.
To allow free trade of certain goods which your country needs more.
This is why tariffs are much more flexible, because they allow you to, let's say, trade oil at a cheaper price, while pasta (widely produced in europe) at a higher price.
So what you are suggesting is a reverse tariff? Punish local producers for manufacturing goods that we’d rather import.
Well.. that’s an idea.. I suppose..
Then you would just not tax those goods. We already do this with basic foodstuffs; this has nothing to do with tariffs.
VAT doesn't affect free trade in any way though. You're mixing up unrelated concepts.
VAT is never universal, different products already get different rates.
You cannot possibly make imports VAT excempt, that's just instantly destroying your domestic market for no gain anywhere.
There a lot to be said for ignoring other countries tariffs and just having free trade. Hong Kong and Singapore basically did that for decades and grew fast and became wealthy. Tariffs mostly hurt the countries introducing them.
There are some exceptions. Sudden changes can be painful if you built a factory to service some market and they block the sales all of a sudden. But a 10% across the board tariff may not make it worth retaliating.
> Hong Kong and Singapore basically did that for decades and grew fast and became wealthy. Tariffs mostly hurt the countries introducing them.
Wouldn't you say the same thing about VAT?
VAT is basically just a fancy sales tax. You've got to get money for education, health and the like somehow.
HK and Singapore did have low tax and small government which probably helped them.
So... VAT is a better approach than tariffs because it does a lot more economic damage? That's not very compelling.
Why forgive VAT what we can't stand in tariffs?
VAT applies equally to domestic and imported products and doesn't affect the balance. Tariffs only apply to imports, thus giving domestic producers an advantage (either lower prices or higher profit margins).
This is like saying income tax is a tariff because it stops people from buying more imported product.
It's like saying income taxes and tariffs do their damage in similar ways. They do. Income taxes are another thing that mostly just hurts the country introducing them.
Lets extend your logic then: VAT is another thing that mostly just hurts the country introducing them.
Is the United States trying to free Europeans from the tyranny of their government? Americans should also stop paying sales tax and income tax.
Not true. VAT does way less economic damage. Tariffs introduce massive distortions in the market.
What does VAT have to do with anything? What are you even trying to say? It applies both to domestically produced products and imports in the same way..
> Why forgive VAT what we can't stand in tariffs
Now replace VAT in that sentence with incomes tax, alcohol duty, property taxes.. makes no sense.
It's not a fixed tax where there is the same rate everywhere: when you check the tariff table, you can see that there is a different rate for each item (e.g. 9.4% for Cotton Jeans) and then it says in Chapter 99 that you pay "9.4% + xxx%" where xxx is the special rate for the country.
So it's xx% that goes on top of a rate defined by the type of the item.
> We also have VAT on imports.
And the US has sales tax.
VAT is paid on all products, it doesn't matter if it's domestic or imported!
Who cares? From the standpoint of someone selling you something, their product will be sold for 20% more (and they don't get 1 cent out of it).
Importers care because unlike VAT or sales tax, it makes them x% more expensive than competitors. Consumers care because tariffs paid are in addition to sales taxes or VAT.
So the US should drop the sales tax then?
> We also have VAT on imports.
Maybe you should not repeat these nonsensical talking points?
VAT applies to everything, both imports and domestically produced goods. This reasoning makes even less sense than Trump’s ChatGPT tables…
> but his goal is to introduce a fixed "tariff" like a soft VAT.
You really don’t understand at all what VAT is?
EU has already had tariffs on US goods for a long time.
Those amount to only around 3% on average.
Per ratio closer to about 1 to 1.5 percent. It differs a bit per country due to deduction rules and additional tariffs. If you leave those out and only look at regular tariffs it is 1.39%.
* The EU has had comparatively very small and targeted tariffs on US goods for a long time
Just so we're all on the same page, instead of maga talking points.
Not as broadly to that extent though. Trump's tariffs are 10% of anything, so Europe will reciprocate in kind.
>> Trump's tariffs are 10% of anything
What percentage is VAT in Europe? Typically around 20%? Maybe Trump should enact a 10% sales tax instead of a tariff and then everyone would obviously be completely fine with it, problem solved.
Maybe you should learn how VAT work? If you actually know better then all the economists, explain in detail how VAT is like a tariff instead of repeating this trite lie?
The world wouldn't care if he introduced a federal 10% sales tax (provided it was implemented similar to VAT, ie. non-protectionistic)
> repeating this trite lie
The WH repeats this lie constantly. Anytime they get pushed on the absurdity of tariffs they mention VAT like it's in anyway related. The right wing outlets then amplify and we further dumb down America.
VAT are not tariff, we pay it on domestic products as well.
I would presume that EU products sold in the US are charged sales tax already(for those states that have it).
The difference between sales tax and tarrifs is it applies to all products within the same category irrespective of its origin.
Yes, because that would apply equally to US businesses.
MAGA really has gotten people to believe all the VAT BS. VAT is basically a sales tax for all products. It does not typically advantage import or domestic products.
If Trump wants to implement a 10% sales tax on everything purchased in the US that would not be considered a tariff and no one would retaliate.
At the risk of stating the obvious, most states already have a sales tax.
Obviously other countries would be fine with Trump enacting a sales tax / VAT on everything. Why wouldn’t they be?
Because it would reduce US consumption of their exports. Just as a tax on consumption of up to 27% in Europe massively reduces Europe's consumption of US exports.
> Just as a tax on consumption of up to 27% in Europe massively reduces Europe's consumption of US exports.
Same way it reduces the consumption of domestic goods? Seems like fair level?
>> Seems like fair level?
No, it does not seem fair for Europe to take measures to dramatically reduce European consumption of US exports when the US does not take measures to dramatically reduce consumption of European exports. To be fair, the US would need to do something to dramatically reduce US consumption of European exports.
And I happen to know just the guy to do it.
Seems like fair level?
I think you have the wrong understanding, VAT is applied irrespective of origin, so the same reduction would apply to domestic products.
To simplify,
US product for sale for £100, then VAT would be £20 ( assuming 20% rate)
UK product for sale for £100, then VAT would be £20 ( assuming 20% rate)
it is however unfair that the US takes advantage of europe by mot having proper food and safety standards, not to mentioning using slave and undocumented labour.
same thing with privacy, the US is abusing europe by not having comprehensive privacy standards equivalent to the GDPR. only california is not defrauding the EU
> Just as a tax on consumption of up to 27% in Europe massively reduces Europe's consumption of US exports.
Uhm, it also reduces consumption of locally produced goods, not just something imported into Europe. Its like...a sales tax, the only reason it is treated differently from a sales tax at all is because of its more fair rebate system.
VAT applies equally to both domestic and imported products, unlike tariffs that apply only to imports.
In China, we called this battle as hypoglycemia (China) versus hypertension (USA), but, what do all the grand narratives have to do with me, I just want to live a good life.
fxxk xi, fxxk trump
VIX is still at 35%. We are still in quite unstable territory, just not insanely unstable.
I didn't know about VIX ("volatility index" I presume from a quick Google), thanks for posting this.
Interesting(?) that the only two previous spikes higher than the current one are COVID and the 2008 GFC.
The blatant market manipulation is what really kills me about this. Just 2 hours prior he posted on Truth Social that it's a "good time to buy". Nothing really matters anymore, and 90-day pause is already showing his cards that the same bear-bull market run is happening in July. It's just crazy to discredit the full faith and credit of the US Stock Market and dollar in such a brazen fashion.
Not to mention, with increasing China's tariffs - he STILL hasn't made compelling domestic policy to bring manufacturers here, and has put the cart before the horse by punishing U.S. companies for doing offshoring, before giving them a chance to build domestically. He's only made the super-cheap offshoring approach more expensive (but not more expensive than domestic production). Post-tariff offshoring is STILL a lower expenditure than (A) the investment of domestic infrastructure, (B) the runway of cash it takes before becoming sustainable, and (C) the ongoing wages, maintenance, and taxes to continually maintain it.
I believe it's some bizarre ploy so his supporters will say, "You should listen to Trump!"
Does someone know how companies handle these short-term changes of tariffs? Like, when your shipment from oversees eventually arrives, a 50% tariff is due that makes your entire accounting unprofitable, e.g. a contract with another party to sell it to might already been signed. Do the companies usually ensure against these kind of things?
I think this is risk og doing business.
I can, as shown, also go the other way, where tarrifs are removed under shipments.
Regardless, the core is exactly that people don't send things overseas in this environment.
Announce tariffs, the buddies buy. Announce pause, the buddies sell. Someone just made a truckload of money.
The stock market got almost down to reasonable values based on price to earning ratios.
Nevertheless, it was still a good time to buy, and also a good time just to ignore it and go about your daily business.
When you say "buddies" what you really mean is "banks", "hedge funds" and "people to whom it was obvious that announced tariffs were bonkers". If you had the foresight and market sense, you could have made money, too. But you were scared, sold low, and now when it came back up, you suddenly found yourself at a loss (or the so-called "unrealised profit")
Don't blame the markets.
Of course they were bonkers. You still had to know when the bottom was and when he was going to announce the reversal. Many people assumed he would keep it up for at least a week before pulling back. If he had the market would have pulled back even more. It's easy to time the market when you're from the future.
Honestly, HN is obsessed with finance; it seems at times like it's all you think about. But when it comes to basic trades, suddennly it's all excuses and "easy to time the market when you are from the future".
A lot of people made money today; no, they are not all Trump "buddies"
That's the nature of randomness, yes. You can roll a 6 or a 1.
Only people with insider knowledge reliably made money. You either knew Trump would say the thing about the tariffs, or you guessed it and got lucky.
People who get lucky in certain endeavours like to proclaim they have some kind of skill.
Common sense is a kind of skill. You don't have to make "optimal" trade, too, so the true dip doesn't matter only thing that matters is recognising that a ticker is undervalued.
There's markets can be irrational angle, of course, but it doesn't apply here.
Trump delaying the tariffs was only common sense after Trump delayed the tariffs. Before Trump delayed the tariffs, common sense was that Trump would not delay the tariffs.
Again, you're just taking pure luck and rebranding it as common sense, using survivor bias.
If you still insist you had a crystal ball, then I ask you: Did you predict the 125% non-delayed tariffs on China, or did you think he would delay all the tariffs? Are you still predicting the 125% tariffs on China will be delayed?
"If you're so clever, why are you so poor?"
Ever heard this saying?
> Common sense is a kind of skill.
Using "common sense" to both divine that Trump is so incredibly stupid as to suggest obviously bad economic policy but simultaneously smart enough to revert it is gambling.
There is no 5D chess going on. There is entropy, Trump is an agent of chaos. He is not stupid, nor is he intelligent, he is destructive.
You have better odds sticking to cartomancy or other forms of divination. I have no issue with gamblers, but I do take issues with gamblers who are so delusional as to think they can see that which is unseen.
But Trump's buddies and hench creatures made sure zero-risk money.
Which is absolutely catastrophic for all kinds of reasons.
Why is that?
I wouldn't call it the lede but also in this article is that he increased China tariffs to 125% which is funny. Let's just keep it going, 200% China tariffs! Why not? People weren't going to do business at the 54% tariff anyway.
Congress could end this in 24 hours with a one paragraph/page bill
and regardless who is in power next decade the dems should anyway
It's like some blackhat is trying to find every loophole in government and exploiting it, like a fuzzer test
Mid term elections are November next year. Some time between now and then, republican house and senator members will start getting more than a little bit anxious about not losing their seats. The current chaos is not great for their chances. The closer that election gets, the more likely it is that something like what you suggest might happen.
The problem of course is that any move like that is going to result in chaos inside the republican party. I imagine that might delay the moment before e.g. Mike Johnson (speaker of the house) puts such a thing up for vote in the house. Because it sounds like that would be a career ending move for him. Until that changes, Trump can do as he pleases essentially unopposed.
The democrats has the president for 4 years, and plenty of power in congress. If they cared they would have done something.
Chaos agent. It's great to go through this every month.
Month?
Day at best, hour at worst.
What's quite impressive, is that people are so relieved now. The base scenario must have been really bad.
As it is, we get:
- 10% of tarrifs on everybody, 25% on several big sectors, 125% on China. Which is absolutely massive
- any confidence in the sanity of the government absolutely destroyed - 90 days ? He can change his mind tomorrow, or in 90 days. Entirely possible that he forgets this whole thing during the 90 days. How is the tough negotiation with Russia going btw ?
- China that showed it's not afraid of Trump. Trump fired all the bullets he had on China, he can increase the tarrifs to 1000%, it doesn't change a thing. Other than convincing other countries to openly joint US trade war on China, or use of military force, he cannot do anything more I believe.
China on the other hand can wreck havock in many, many different ways. Just look at the bond markets yesterday - nobody knows if it was China or not. But everybody knows China could make it much worse. Same goes for US businesses. Safety inspection in Tesla or Apple suppliers factory ? Why not.
I don't mind the China tariffs. They have been abusing US interests for years and scoffed at promises they made when they entered into WTO and any IP is fair game for their corporate spies, and US companies would be laughed at to try and litigate any of it inside their borders. Something does need to happen with China, but the vast majority of Trump's tariffs were indeed as if he is stupid as a sack of rocks.
This is a money grab. Someone or a bunch made a lot of money
Threaten people with a 49% national sales tax, and suddenly they celebrate when it's only 10%.
It also makes it easy for Chinese manufactures to circumvent tariffs. Completely pointless theater for the MAGA crowd.
How though? Obviously there will be tariff evasion but doing so at scale is impossible.
If this pattern holds (high tariffs on China, low tariffs everywhere else) there will be a booming industry of pass-through "factories" that receive shipments from China and then re-sell them as having come from Vietnam or some other intermediary country.
This exact thing happens frequently at scale. When countries put export controls in place on shipments to Russia recently, they had a sudden spike in exports to a number of countries known to re-ship products into Russia.
I bought ocean fish roe from my local Euro store. “Product of Belarus” which is of course landlocked.
I thought it was highly suspicious when I noticed, like evasion of sanctions on Russia. However, food products aren’t covered by sanctions in Canada and apparently, the Belarus packaging is to make it easier to sell German fish in Russia!
I still wouldn’t want to buy food that is packaged with the intent to trick people, even if the tricksters were German. (I think Germany is a pretty trustworthy and transparent country but that doesn’t apply to every single individual there).
This already happens but we actually can observe this quite easily and apply expanded tariffs to any country which attempts this.
China has already been transshipping saying they assemble in vietnam with the only thing being done is stuff like taking labels that say made in china off the products. Vietnam does not care as long as vietnamese people are getting paid something.
https://redarrowlogistics.com/international/dodging-tariffs-...
Does the US Customs office have inspectors that go to Vietnamese factories and check that the factory exists, and that 51% of the assembly was actually performed there?
If not, what stops a Vietnamese shell company from sending "Vietnamese" goods through a port in China, or worst case, a port in Vietnam?
Sounds like they’ll have to rehire some of the federal employees fired by DOGE.
They setup more factories in vietnam to assemble chinese parts. But this isn't really a thing they can do in 90 days.
You just need a address in Vietnam, who checks if the factory exists?
You need a few people in a "living room" to put "made in Vietnam" stickers on things. That makes the living room a factory and so you are not legally tricking anyone even though your only part in the process is putting that sticker on.
Reminds me of the old rumor that the city of Usa, Japan exists so they can print "Made in Usa" on exports. They actually don't do that and Usa has held its name longer than the actual United Stats has existed but it still makes for a good story.
Fraud is fraud no matter what. But I don't think Vietnam will risk America's ire if they help China cheat.
How would they be risking it?
Who is incentivized in this system to say that this product is actually coming from China? Is it the US government regulators who just lost their jobs? Or the Businesses themselves who don't want to pay higher tariffs? Is it China who avoids the tariff? Is it Vietnam who just got paid for doing nothing?
The answer would typically be that the US gov't would monitor this. But that is not a muscle this administration is capable of. That would require nuance and strategy, and it's very clear from this move that this administration doesn't have that capability.
“The people who care don't know, and the people who know don't care.” The Lord of War, describing military corruption in the aftermath of the fall of the USSR.
I feel like people need to understand how they are impacting the path of least resistance when they make a change. Your change is only successful if the path of least resistance must now go where you want it to go.
Why 90 days ? Don’t the tariffs take effect now - although with the flip-flopping who even knows anymore
The foreign factory system is already in place for those that use it
if tariffs are applied based on the date of departure and not the date of arrival you can definitely get away with falsifying the date. And on the off-chance you get caught you feign confusion on account of the rapidly fluctuating circumstances and the customs guy lets you just pay whatever you owe without sanction because he has a million other people saying the same thing and even if he can tell you're lying he really doesn't care anyways.
I have a friend who had to get something shipped from Australia to Germany via freight, he told me intercontinental freight shipping generally takes multiple months if you aren't Wal-Mart/Amazon and you aren't willing to pay out the ass for express handling.
>The foreign factory system is already in place for those that use it
ah but there's the small kernel of genius within the corncob that is trump's insanity: which foreign factories do you use and who will they take the shipment from and and wait fuck he just gave a 90-day extension less than a week in, will the factory let me have my money back if i cancel?
Apple has been preparing in this exact manner since Trump was POTUS last time.
They literally just declare the item at a lower value. It isn't hard.
Import to another country then the US?
Chinese manufacturers don't pay US tariffs, the entities importing the goods do.
They will still play games to access a large-but-protectionist market at a discount.
With their prices do they need to make a discount?
Huh? What prices?
The discount is from importing/re-exporting to access your market for cheaper than they otherwise would.
How so? By lying about the country of origin?
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And China which accounts for about 20% of our imports have 130% tariffs.
Brings the average rate up to 33%.
The Administration confirmed that the tariff on China is 145% so the average rate is now 37%.
Thinking of tariffs as a _sales_ tax, while it seems to be quite popular on this 'ere orange website, is both incorrect and very dangerous. Sales taxes, generally, are paid by the final consumer. Tariffs are paid at point of importation. This makes a big difference; if your factory makes, say, computers, sales tax impacts the (consumer) cost of the computer, but tariffs impact the cost of _all of your imported components_.
I'm only "celebrating" congress getting more time to reel this chaos in. Hopefully we have 20 pissed off enough GOP senators to realize that they never should have let Trump singlehandedly start yet another tarriff war.
It's not like people stopped being mad or are calling this good. Starting with a big number and dropping lower (temporarily!) was not a good negotiating strategy here.
Well we now know which countries are willing to work with the United States.
i wonder why the rest of the world doesn't just come together for a while and stop trading / providing raw materials to the u.s. for let's say a year or so.
isn't this all just a huge pile of bluff poker?
A lot of people have jobs dependent on business as usual. You don't want to just fire the workers for a year.
the u.s. is not the only country other countries trade with so firing people should not have to be the result as long as you divert?
this is what BRICS floated trying to remove the USD as reserve currency. now they gone all quiet when trump threatened 100% tariffs.
plus remember trump could threaten nuclear attack on the ringleader.
The USD will be removed at some point if trump keeps his dumb antics.
Because their economies would suffer heavily? That's why they are upset about the tariffs in the first place.
they don't have TDS
The only people who suffer from TDS are those who voted for him.
> stop trading to the u.s.
That makes as much sense as a hunger strike over food rations.
because the u.s. is the only country the rest of the world can trade with?
The "Global Reserve Currency" privilege of the US dollar has been blown into bits, it's all a matter of time until our standards of living here in the US get cut by 75%.
What a clown. Luddite level of policy making, inspired by "Ron Vara" aka Peter Navarro, who in a Kafkian fashion quoted himself as a backing for his lunatic theories.
So we're all in for another ride like this in 3 months? How are businesses supposed to plan anything in this environment?
As nice as this surge is, I'm more focused on upping my cash reserves and bracing myself for a recession.
>How are businesses supposed to plan anything in this environment?
They're not supposed to. The only people who are planning anything in this scenario are Whitehouse insiders coordinating stock frontrunning from Signal group chats.
https://bsky.app/profile/unusualwhales.bsky.social/post/3lmf...
It'll be "fun" to see all the "negotiations" that happen with other countries, where they offer a crazy array of bribes / emoluments to WH insiders.
Which is perfectly fine, now that we have Executive Order 63, Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security. This is no longer something the DOJ looks for or tracks, with AG Pam Bondi having to sign off on any potential investigations after a 180-day pause.
Trump also all but disbanded the DOJ Public Integrity Section, that watches for public corruption. https://www.nbcnews.com/politics/justice-department/justice-...
Trump tweeted "it's a good time to buy" right before the tariff drop announcement.
I guess truth social is now a critical investment tool as well?
Guess so, for serious speculators.
> How are businesses supposed to plan anything in this environment?
Who cares? Business leaders & the politicians they helped elect are stripping the copper from the country. Whatever's left when they're done is someone else's problem.
I care?? Much of my family works in trades, have their own small businesses with employees and are very much subject to tariffs for their supplies. They did not vote for any of this.
If they voted for Republicans, they did in fact vote for this. It doesn’t need to be like this, congress and specifically the Republican majority which controls it can act to reclaim the power of tariffs from the president _at any time_.
All of this chaos is specifically because they have chosen to be complicit instead of opposing the president. If you want the madness to stop, call your representatives. Speak to your family and ask them to do the same.
Also note that they could also impeach Trump at any time. The sort of crimes that justify impeachment are pretty easily demonstrable at this point so all they need are the votes. They'll have just under half in the House and Senate from the Democrats, so they only need a handful of Rs in the House and (the hard part) a bit over 1/3rd of the Rs in the Senate.
So if they can find like 20 R senators who realize that they no longer support a Mad King, they're all set.
> congress and specifically the Republican majority which controls it can act to reclaim the power of tariffs from the president _at any time_.
After overriding a veto, which Trump has already stated he'll use, to block Congress taking back the power of tariffs:
https://bsky.app/profile/sahilkapur.bsky.social/post/3lmak2w...
If it passes under a Republican Congress and it's a simple bill (primarily revoking presidential emergency tariff authority), then it'll probably have enough bipartisan support in the Senate, but maybe not House, to be veto proof.
Democrats need about 4 GOP senators to get the bill passed.
Theyll need 19 or 20 to get the inevitable veto override. I guess we'll see how these events have shaken congress and if thars enough to take trumps toys away.
> They did not vote for any of this.
Me either. I'm afraid you'll have to ask the people who did elect the copper thieves for an explanation.
The US did vote for this.
Well, they voted for Trump but I'm not sure the random tariff generator was mentioned as part of the platform.
He definitely yelled the word tariff a lot and has a reputation for being an rng.
Trump has been spewing financially illiterate nonsense about tariffs for literally 40 years, and was very explicit that he wanted to do this in the election campaign.
I don't think Trump was known for being an exceptionally stable candidate.
I think GP meant, "Who in power cares"
I think the "who cares?" was rhetorical. I suspect the commenter you're responding to is in the same place that am - politically exhausted and, for the time being, apathetic.
We didn't vote for any of this to happen. We voted for the adult. But the reality is that this country held fair elections and the population democratically elected someone that is a somewhat ambiguous melange of amoral, stupid, craven, venal, and selfish.
Many of us knew shit like this was going to happen and that it's going to be a very long 4 years. We are getting exactly what we collectively asked for.
I'll poke my head out for the 2026 elections and see if there's anything worth saving...
I also presumed the elections were fair, but there is evidence that they weren't (beyond the usual tactics of disinformation and voter disenfranchisement). Analysis of voting patterns in swing states looks pretty suspicious, to the extent that a pretty simplistic algorithm could even be deduced[0].
[0] https://electiontruthalliance.org/clark-county%2C-nv
Sounds like the same cope with MAGA claiming 2020 election was stolen
That's thought-terminating. Remember that basically every MAGA accusation has been a confession.
That's funny, MAGA says the same about the "democracts"/"left"
I haven't heard that actually.
It might be time for you and your family to consider moving to a more stable country.
Maybe not all of them as individuals, but them as a public. It's not just a fluke of the last election, over the past two decades the u.s. has given control of all branches of government to Trump.
Beyond that, IMO, the public doesn't really care about tariffs. Right now there is a lot of noise because this kind of capricious threat/application of tariffs is something new, but the tariff chaos will become boring background noise in a few months and people will move on to the next thing.
(2^ that was sarcasm)
I'm gonna say 'yes, but' instead of 'yes, and'.
Yes, but the big problem is that these same business leaders and politicians are going to be the ones who get first bite at the apple. And so how they plan is going to impact what's left for everyone else.
I don't care because they burned the system to the ground, I care because they're gonna salvage what they need and nothing else.
I guarantee lots of people in The Swamp are getting word on planned announcements so they can make their stock market bets before the news is announced.
I think this makes my comment more relevant. I have no doubt this administration is telling the people it likes, ahead of time, what they're doing.
You should care because uncertainty leads to cancelled & deferred projects, which leads to reduced demand, which leads to reduced jobs.
If I don't know if Trump is literal or serious about re-shoring to normalize trade deficits, or its just a revenue gimmick, or if its all going to be delayed, or negotiated away ... am I moving any production back to the US? No.
Plants are cancelling orders as they are uncertain what the tariff might be by the time goods ship.
Etc.
Burn it all down is not a governing philosophy.
I'm not a billionaire. What I care about doesn't matter.
It's a democracy still and we do get to vote, so hopefully we can remain engaged
Is it? I feel like that depends on whether you take a prescriptive or descriptive point of view.
Woo, I get to vote for yet another slate of billionaire-picked, barely functional, walking corpses repeating the same bland pro-corporate slogans and accomplishing nothing of value for four years before we hand the country back over to the nutjobs for another round. So engaging.
If everyone who stayed home had voted for a third party that party would have won. Even if they split between two third parties, they would have sent a powerful message. Instead they made it clear they don't care. Now add in those who thought the major party was the only way to make a difference. BTW, if you votes for Harris you wouldn't have lost anything by voting third party and it would have sent a message to the Democrats.
If everyone who stayed home had voted for the same third party, it would have won. That's unlikely.
It's also unlikely that it would have been split between only two additional parties. In my state we had 5 parties on the ballot. Colorado (to pick one at random) had 12.
If there was any real movement to get non-voters to vote for a third party, there would likely be even more of them. As it is, each of those parties took a fair bit of effort to get on the ballot, knowing that at best they would "send a message".
If the message is "we don't like you", then the message has been received, for many years. But the reply is "OK, go get people to agree on somebody else", and that's the sticking point.
Oh, I looked. To my knowledge, Harris was the best choice even including third parties. Stein and West are both whackos and no one else even made it on enough ballots to win.
individually, sure, but maybe you have some friends and family that feel the same way?
Sadly, trickle down economics does work for headwinds. Us private citizens feel the full windfall when the stocks and businesses are down.
We don't necessarily feel it when it's up though. As seen from 2024.
>I'm more focused on upping my cash reserves and bracing myself for a recession.
I'm doing the same because I'm legitimately in fear of both economic troubles and/or losing my job as a result of all this uncertainty.
I have cut my personal spending to nearly zero aside from essentials and have been hoarding my money. It's the only sensible option when planning for one's future becomes impossible.
We have nine months of expenses in cash outside of retirement accounts and working up to 12 by the end of next year. But besides that, I’m not changing anything about our investment plans or our travel plans.
I have been in the job market since 1996 and had to find a job both last year and the year before. I’m on my 10th job. None of the fundamentals ever change:
Live below your means so you can take a job that pays less than you are making, keep an emergency fund, keep an updated resume and career document. Also keep an active network and always be interview ready.
Also play the political game at your job and be sure to be in profit centers not cost centers. Market yourself both internally and externally.
I'd say you should brace yourself for rides like this for the next 45 months.
What makes you think OP will die in 45 months?
Rides like this have happened regularly for longer than I can remember. The details always change, but there is nothing new.
Aren't you optimistic!
> focused on upping my cash reserves and bracing myself for a recession.
And exactly there is a recipe for recession. A self fulfilling prophecy.
Not that you are to blame but the reason why politicians usually avoid projecting uncertainty.
We are in for this ride, at indefinite intervals, for the next 3.75 years. Well, unless congress grows a collective sack (unlikely) or President Trump comes to his senses on macro economics (past experience suggests this is impossible).
> How are businesses supposed to plan anything in this environment?
They cannot. This is how you can tell Trump was never a real businessman, but rather a TV host and a celebutante. I'd venture nearly all major American business, public and private, depend on stability in the American government. Trump's actions make it painfully clear he is not, and never was, really part of the "business" or "deal making" world.
> Well, unless congress grows a collective sack (unlikely) or President Trump comes to his senses on macro economics
We in Argentina feel for you: it's exactly the same for us, replacing Trump with Milei. And with the added humiliation of Milei being a lapdog to Trump.
This phrase of yours "unless congress grows a sack" is exactly how we feel about our own congress in Argentina.
Wait, so all those stories about Argentina doing better under Milei aren't true ? What's going on over there ?
I joked to a friend that Trump is going to cause a new religion to start. One that makes people pray that today he does what they want (e.g. just shut up and not yell "China, 500% tariffs!")
Or one that makes people pray that one of those cheeseburgers he's been eating finally does something...
It seems unlikely that the next 90 days will remain calm and stable.
The 125% on Chinese imports effective immediately in itself doesn't seem that calm or stable.
Ya, I don't know what Trump is going to do in the next 90 days, but it will probably not just be working on his golf game (although we can hope).
He needed to take some time to work on his other passion project, kidnapping US citizens and disappearing them permamently into third world gulags[1].
[1] https://www.usatoday.com/story/news/politics/2025/04/07/trum...
That's a Stephen Miller passion project, Trump only cares about it in so much as it get's him votes for his real passion project: the money grift with a side of staying front & center in the news.
I used to criticize trump for playing so much golf while in office. Now I wish he'd spend a lot more time playing golf.
As someone semi-retired, I was already reasonably conservatively invested. When all this kicked off dumped some more equities. Maybe I could have done a bit better waiting. Who knows? I know I’m happy being that much more liquid.
The President can only legally set tarrifs in an "emergency". Planning tarrifs 90 days out is really stretching the definition--I'm not holding my breath, but maybe the courts will uphold the constitution on this one?
Normally there are rules regarding how long an emergency can last. This is why, I kid you not, the Republican controlled Congress declared there are no more calendar days in this session of Congress. Every day is March 11. So they'll let him do it as long as he likes.
Notably, not the first time this legal fiction has been used, but I don’t really get what the previous uses were for. E.g., for the 2021–2022 Congress, section 7 of the War Powers Resolution[1], as well as House rules[2] XIII clause 7, XXII clause 7(c)(1), and XV clause 7 (all of which require something to be done within a prespecified number of either calendar or legislative days) were all suspended[3]
which looks like vacations, campaigning and such? I’m not really sure, but it’s evident the formula had already been out there and was not a momentary fit of insanity and/or legislative genius (the Congress before that one used it too, for example), I’m just not sure what it was used for before.[1] https://www.law.cornell.edu/uscode/text/50/1546
[2] https://www.govinfo.gov/content/pkg/GPO-CLERK-RULE-PAMPHLET-...
[3] https://www.congress.gov/quick-search/legislation?wordsPhras...
[4] https://www.congress.gov/bill/117th-congress/house-resolutio... (mutatis mutandis for the others)
As a European I have no idea what that means. How and why that kind of decision can be taken?
House Resolution 211 of the current Congress[1]:
> Each day for the remainder of the first session of the 119th Congress shall not constitute a calendar day for purposes of section 202 of the National Emergencies Act (50 U.S.C. 1622) with respect to a joint resolution terminating a national emergency declared by the President on February 1, 2025.
Referring to 50 U.S.C. 1622(c) [2]:
> (1) A joint resolution to terminate a national emergency declared by the President shall be referred to the appropriate committee of the House of Representatives or the Senate, as the case may be. One such joint resolution shall be reported out by such committee together with its recommendations within fifteen calendar days after the day on which such resolution is referred to such committee, unless such House shall otherwise determine by the yeas and nays.
> [and so on and so forth with fairly stringent time limits all the way through the legislature]
(As somebody who’s never been to the US—come on, am I the only one who finds legal questions like this to be basically irresistible RTFM bait?)
[1] https://www.congress.gov/bill/119th-congress/house-resolutio...
[2] https://www.law.cornell.edu/uscode/text/50/1622#c or https://uscode.house.gov/view.xhtml?req=(title:50%20section:...
For the extended RTFM: IT's another country's laws and politics. Why am I expected to read their laws and logs of their whatever houses they have to understand something that would not even improve my life? Let alone when their own citizens would have trouble finding these an understanding the meaning down below?
I've seen my share of "well ackshually, this cool technical hack will circumvent the law and outsmart the judges", but thought judges wouldn't fall for such bullshit. Now, I'm not so sure. This is the stupidest thing I've seen in a long time.
This is not quite like the stereotypical case of that, as the legislature first said it wants something to happen one way, and then—later and with a different set of lawmakers, but still—the same institution effectively said that, on second thought, no, just in this case it wants it to work another way. Which seems like a simple case of the legislature changing its mind, something it should definitely be able to do as a matter of course?..
And I mean, both of the houses participated in the first part but only the lower house in the second (AFAICT), so maybe there’s something iffy about that for example. Then of course there are all the suggestions about how the statute these tariffs were ostensibly instituted under (the IEEPA) may not actually authorize tariffs; or that if it does authorize that, then it effectively amounts to the legislature delegating all of its power over tariffs to the executive, which does not entirely sound in tune with the Constitution.
But you see how this starts to look like something you’d want to consult an actual expert on constitutional law about, not dismiss out of hand or listen to random opinions on the Internet on. It’s not immediately clear what even a perfect court would decide here.
Ah. So that's why it looks like the Groundhog day with the tariffs.
/s
This is also how this shambling ghoul gets what any actual citizen of earth would consider a third term. It's already done! This is why he said "you'll won't have to vote again."
The president is only 50 days into his term forever; time is stopped. Hell upon us eternal.
> Planning tarrifs 90 days out is really stretching the definition
Anything that distracts the president from playing golf is an "emergency".
Why cash when inflation is coming?
You need liquidity when recessions come. Less liquid assets go for lower than usual since cash is king during those times.
But nobody can predict recessions.
Cash can bleed slower than the others, especially if there's stagflation. Liquidity is nice too during uncertain times.
Also nearly 100% tariffs on one of the biggest trading partners is unlikely to hold for very long. There's probably a lot of options because of that.
Cash often refers to Money Market funds and the interest they pay tends to track inflation. There are also ibonds but you can invest a fairly limited amount in them.
Money market funds haven’t tracked inflation for people living in higher prices areas for a long time.
Maybe if you already owned your final house and didn’t need healthcare or education.
I was getting 5% until recently which isn’t that far off of where inflation hit. Of course, as you say, some things are higher although a normal age retired person isn’t that exposed to them.
> How are businesses supposed to plan anything in this environment?
Plan on relying less on the US market. Grow customers elsewhere.
There's definitely going to be another change before 3 months are up.
Yep. He flip flops like a dying fish. There is no way to predict what idea he's going to have 90 days from now.
Responding in good faith to other countries’ willingness to negotiate fair trade terms isn’t exactly flip flopping. In fact he did the same thing with Mexico. If the market was paying attention it would have accounted for this…
It's interesting how person's nakedly obvious dump and pump corrupt opportunism is another's "responding in good faith."
The problem remains. Anyone who imports from China - which covers a lot of the economy - is screwed.
And Rest of World no longer trusts anything he says.
Good faith would have included
- not lying about tariffs being taxes on other countries that would replace us paying taxes
- not calling trade deficits tariffs and pretending to impose reciprocal tariffs
- negotiating ahead of time like normal people and clearly communicating the path forward
He is pathologically incapable of operating in good faith.
> other countries’ willingness to negotiate fair trade terms
This is a fabricated justification. There has been literally zero public reporting of any trade negotiations post-tarifpocalypse. The only people saying there are deals being made are the White House, who have produce zero evidence of deals.
No, Trump was responding[1] to the movement of the market and in particular to the sudden spike in federal bond rates. This was absolutely not a win for Art of the Deal. There was no Deal.
[1] In "good faith", to be sure.
Bessent said this was the strategy from the beginning.
> How are businesses supposed to plan anything in this environment?
Honestly, that's one thing that makes me happy about these tariffs: big business is used to getting its way, and tariffs are very much not what they wanted. I've enjoyed the articles about Wall Street Billionaires getting mad and feeling helpless.
Think the hope and idea is there’s concrete agreements established before the 90 days are up
Even if that was the idea, the agreements are worth less than the paper they are written on. He is boo-ing and shredding trade agreements that he made himself during his first term. He says one thing one day and the complete opposite the next day.
The USMCA agreement wasn't worth the paper HE SIGNED on when he decided he wanted to change the terms of that concrete agreement.
And if he has one of his McDiarrhea's, what's going to stop him from using that newest agreement as toilet paper?
Oh, like CUSMA/USMCA/T-MEC/NAFTA2? Canada and Mexico say hi.
What makes you think this?
Separate, possibly unrelated question: what was trump’s goal when he created and rug pulled the Trump coin?
The fact that what they’ve been saying all along is that the goal of the reciprocal tariffs is to renegotiate with all countries for a more fair economic playing field. Many people aren’t so fickle as to just assume everything the party they don’t like is doing is insane and a big conspiracy to insider trade and ruin the world.
The President's advisors are saying multiple contradictory things. You're right that they're saying that the reciprocal tariffs are a negotiating ploy, which implies that they'll negotiate a much lower rate. But at the same time they're also saying that they're going to use the tariffs to raise enough revenue to replace income taxes as the main way of funding the government, which implies that the tariffs will stay high. Then they're also saying that the tariffs will be used to support domestic manufacturing, which implies that the tariffs will stay high and predictable.
It doesn't make sense that the tariff policy can be both leverage in a negotiation with the ultimate goal eliminating trade barriers and also so high and predictable that they can raise something the 10-20% of GDP.
The logical conclusion is that there is no plan here - we're living in a world like England under Henry VIII, where everything is done based on the whim of the king, and the advisors try to justify it ex post facto.
That's what they say but we literally went through this whole mess not even two months ago with Canada and Mexico. He's already showed he's insane and cannot be negotiated with.
> The fact that what they’ve been saying all along
They weren't saying that all along. They were saying that tariffs are a tool that will be used to reindustrialize the USA.
While also saying they were going to be a replacement for the IRS and to stop illegal immigrantion and drugs and force Canada to become the 51st state.
Full on grandmas off her meds level nonsense.
> How are businesses supposed to plan anything in this environment?
How did they do it in the past?
Do you believe that, if the environment stays this way, businesses will just cease to exist as a phenomenon?
The administration has signaled that they expect to negotiate acceptable balance-of-trade deals with the US's Asian allies over the next few weeks. If that happens, I can see businesses being certain enough to make investments. Until then I'm bracing for a recession too.
Like wanting EU to drop VAT for US import sales or forcing EU to buy oil/gas/coal. None of that is happening.
The EU is very slooow to act. It might happen during the next administration but only if each 27 of them are convinced it's a good idea. Like the 2% fot NATO which now is insufficient. How about 5%, since Russia is prepared for war and we have China to worry about.
None of what I said is happening. It's more likely that we spend a trillion on clean energy, in part on china.
Sure. Thr only thing certain with a character like him at the helm is interesting times, so brace yourself.
You mean like he railed against the Canada/Mexico trade deal that he negotiated during his first term?
I feel like you're arguing against something I didn't say. I agree there's a good chance the president will make up new tariffs or fail to negotiate some of the current ones. If that happens then trade deals with Asian allies won't reassure anyone. That's why I'm still preparing for a recession.
I don’t get this take. We already negotiated trade agreements. That’s what got ripped up with all this tariff nonsense. Why would anyone expect the US to respect the next negotiation? The damage here was reputational. That can only be repaired with time. It can’t be negotiated.
It's easy for us on the Internet to talk about how untrustworthy the US is and how little a negotiation means. It's a lot harder for trade authorities in a country to tell all their US exporters "hey, the Americans are being obnoxious, so your business is probably going to fail and we're not gonna do much about it". If you asked me to negotiate with the US in this situation, I absolutely would refuse, but that doesn't seem to be what's happening in practice.
> If that happens
How does that help? The steel and auto tariffs are still in place. There are plans on tariffs for other industries. You'll be hit 1 way or another.
You'll definitely be hit one way or another. The question is whether businesses can predict what their tariff hit will look like next year and plan around it, or can't and need to hold onto their cash until they know which investments are or aren't worth it.
The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs. Money collected on tariffs would be redistributed in the form of tax cuts.
The end goal would be 0% corporate and income taxes, funded with high tariffs. Over time the US re-industrializes.
> The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs.
Building a factory is a 3-5 year task, with a decade-long payback time. And at any point, tariffs can be removed, making all that investment futile.
And even then, there's no guarantee that the factory is going to help people. If it's a lights-out facility staffed with robots, then it'll just be producing more expensive goods, with all the profits staying in its owners' pockets.
> Over time the US re-industrializes.
Or just becomes another Argentina.
Who would trust the US after this? Why would a company build a factory in a lawless state run by a moron like this who thinks blanket tariffs work and could replace taxes?
No part of your plan will happen.
No such plan has been documented. This is just wishful thinking.
I am giving the steel man of why this may work. Whether it does or not, well, you can play the stock market as well as anyone
You are constructing a fantasy.
> The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs.
Right, because the US doesn't have diamonds, vanilla, coffee beans or the many other things it needs? How do you avoid tariffs like this?
The US still needs fish from the penguins. What's the plan? To tell penguins to stop fishing and come to the US and work in factories?
> The end goal would be 0% corporate and income taxes, funded with high tariffs.
Well you have that right. When there's 0% of the people working no 1 will be paying corporate and income tax. It'll just crash.
> Over time the US re-industrializes.
Like it's gone? You do know the US is the 2nd largest global manufacturer right? That is even today. So do we need to blow that up 1st in order to re-industrialize?
There is zero chance that dude can sit on his hands for 90 days.
He'll have some insane idea to replace it by end of week
lol. More China tariffs. Didn’t even make it 24 hours
The reality is that countries like spain have come out and said they need to move closer to China as USA is not a stable trading partner, within 24hrs of this Trump has back tracked, I'm sure MAGA will say this is all part of the mega master plan but at least to me its more the realisation this was turning into a car crash and he still has a window to somehow in trumps mind blame it all on the chinese
If anyone had advanced warning, you could have made a fortune today:
https://www.marketwatch.com/livecoverage/stock-market-today-...
Like if the president had posted that “now is a great time to buy DJT” 15 minutes before announcing the pause?
Spy went from 497 to 505 by 1:05pm (announcement was later at 1:18pm). Then onwards to 530+.
Clearly some listened or simply had knowledge the announcement was coming.
Regardless of whatever happened today, it's never a good time to buy $DJT because 1) it's not profitable and 2) holders are slowly continually liquidating in a complicated manner explained by past Money Stuff articles.
The actual quote is "THIS IS A GREAT TIME TO BUY!!! DJT", which makes DJT either a signature and a call to buy the market if he can form a valid sentence, or a call to buy NASDAQ:DJT if he can't form a valid sentence. Take your pick. It's market manipulation either way.
On DJT: Donald John Trump.
I'm sure this will be a talking point for the next couple years. "I caused the biggest surge in the stock market in 5 years."
I think he prefers a phrase "in American history ever".
Lots of stocks are up 10-15% instantly after this announcement. Curious if we'll get reports of suspicious options volume capitalizing on this information.
why do people still trust stock markets if manipulating them is that easy?
As easy as winning the presidency and having enough loyalty within your base to say "I could stand in the middle of 5th Avenue and shoot somebody and I wouldn't lose voters." then win reelection just 8 years later?
https://www.snopes.com/fact-check/donald-trump-fifth-avenue-...
Because even with crises, over the long term the only direction is up.
Its probably not so much that people trust it but either you invest broadly (index funds) and trust long historical data that the likely direction is up or you think you have more information than other people and can beat the market.
> over the long term the only direction is up.
Only if you look at American stock market data. And that's extreme cherry-picking, because the American stock market is by far the best performing over the last century. What are the chances the American stock market will be the best performing next century?
The US stock market is exceptional, but that doesn't mean other markets don't grow. The global expected returns are around 4% annually.
The standard claim is that "even if you bought at the absolute worst time, if you held for 10 years you would have been positive after inflation". This statement is true for the US stock market, but not true for many other stock markets.
There's "lost decade" periods in the US market as well, that's why you shouldn't invest in a single market, and should apply unit cost averaging instead of dumping all your money at once.
In nominal terms it always goes up. In real terms, like priced in gold, DJIA is cheaper today than in 1929. (13 ounces of gold today vs. 14 ounces of gold in 1929).
But how often is that true? Gold prices doubled in the past 5 years, with 10% of that coming in the past few months, after declining for most of the 2010s.
Because you don't have to play this game. If you buy and hold long term you could ignore every news article this year and you'd be fine.
To be clear, here, this form of "manipulation" is kind of impossible to really deal with? Or do you have something in mind that should be able to more smoothly work with this?
SEC has reversed suspicious trades in the past.
From the president of the united states? Especially knowing that controlling tariffs and such are easily argued to be in his core powers, in the current setting, what authority would they possibly have to do something on this?
they can reverse the options trades that look like they had insider info. This is a thing that the SEC does.
But they would have to prove insider info? Which would require discovery against communications to/from the president. Which you know they would argue against.
So, let me rephrase, do you think it is likely that they would do anything?
> easily argued to be in his core powers
I'd say arguably. https://en.wikipedia.org/wiki/Tariffs_in_the_second_Trump_ad...
Any action they are taking around deciding whether or not there is a national security interest in managing tariffs is easily covered by everyone's understanding of what is in the presidential duties. As such, it is fully off limits for any review, per last year's immunity ruling. No?
Now, congress can take away that delegation. They could also cancel any declarations. But actions taken by the admin in pursuing this will almost certainly be seen as core duties by the supreme court. As such, I don't see any real opening for review in this?
I trust the stock market only after at least 5 years have passed, preferably 10. Short term (less than that) the stock market has always been about popularity, but long term the most profitable companies always rise to the top.
Your question presupposes something I think that most people do not believe.
I don't think they do and you have to be president or Elon to do it.
Because everything other investment is worse?
Traditionally US stockmarkets are not that easily manipulated. This type of blatent grift and insider trading was for banana republics, and that's why stock markets in those places aren't serious.
Who would report it?
Wouldn't be too suspicious, since Trump people told people to buy into the stock market before announcing this.
https://truthsocial.com/@realDonaldTrump/posts/1143082727259...
Do you really think he didn't tell his friends to buy options an hour before the tweet?
Of course not, he told them to trust/act on his tweets. That way they are acting on public info
Do you have any evidence that he did?
https://bsky.app/profile/unusualwhales.bsky.social/post/3lmf...
Well I bought this morning (not a large trade), based not on insider information but on the obvious outcome. Also the dynamic signal that Trump spent 2h spewing utter nonsense at a donor dinner last night, but the market didn't go down this morning. Signaling that something was in the works one way or another.
Edit: best to note that Trump is still doing plenty to destroy the US economy, so be careful out there.
Yesterday the indexes started up 3-4% and finished down at least as much. Risky move but congrats.
Frankly, everything is “obvious” in retrospect. I assumed Trump would triple down regardless of the consequences. My only conclusion is that the fluctuations of the market are going to be completely arbitrary during this administration.
Probably lots of happy white house staffers and congressmen today.
Notably, there was a headline that went viral on Twitter earlier this week that the White House was considering this, but after they denied it it was widely understood at the time to be fake news. How many of the people spreading it, I wonder, knew it was really true?
Remember how every other President put their assets into a blind trust?
Shit like this is why! It deterred them from firebombing the entire goddamn economy to make a buck for their friends and followers!
I remember how Jimmy Carter had to sell the family farm because it was viewed as a potential conflict of interest and how Mitt Romney's father, when making his run, when asked for a single year of tax returns made them all public, arguing that a single year could easily be manipulated to show anything, and that only by seeing the entirety of multiple years could an accurate evaluation be made.
>I remember how Jimmy Carter had to sell the family farm because it was viewed as a potential conflict of interest ...
Are you sure you remember that? Jimmy Carter put his farm in a blind trust, he didn't sell it.
https://www.usatoday.com/story/news/factcheck/2023/02/24/fac...
Fair.
https://www.tastingtable.com/1204239/why-president-jimmy-car...
notes:
>Carter sold all his personal stocks, and he put his interest in Carter Warehouse and Carter Farms into a blind trust.
I remember when presidents used to divest themselves of their private holdings. That went out the window in 2017
Jimmy Carter's peanut farm remembers.
Trump is already a billionaire and is in his 70s. No explanation of his behavior in terms of gaining money makes sense.
You do not become a billionaire unless you have a pathological obsession with obtaining wealth. They have structured their entire lives, often at the expense of everything else, to increase their wealth. It isn't a goal, its a lifestyle. There is no number that is "enough".
Indeed. But the path he chose since 2016 is a bit suboptimal for making money. Don’t you think? Or do you think the long con was to become president for this week?
I’m not trying to ascribe moral character either. Power, status, fame, etc are just so much more compelling.
Didn't his first term get his son in law a multi billion dollar deal with the Saudis? Along with all the other bullshit like getting paid because the secret service has to stay at his properties. This isn't the long con, this is just a continuation. He's a lot more organized this time around.
I agree, which is why I used "wealth" and not "money", since power/status/fame is just another form of wealth. Trump seems to be a special mix of rich kid who didn't get hugged enough as a child.
Now that contradicts the narrative that the stock market thing is a ploy to make money.
That is easily disproved. A good counterexample is in the book Copy This by Paul Orfalea. He had trouble in school and couldn't hold a job so he started a copy place. This became Kinko's after his nickname and grew large in part because of his systematic way of having employees and customers all treated with respect. When he got tired of the business he sold it to FedEx and shared he five billion with his family.
We need to do something about out of control inequality, such as in the past when we had strong regulations on industry, high taxes on the rich, and pervasive union membership, but lying about what is going on helps no one.
Im sure there are counter examples, of course.
I’m trying to address the narrative I’ve seen a bunch lately that billionaires in this administration already have enough, so we can trust that they wont be financially motivated.
he just wants more social media followers. So people feel like they're not missing out next time he posts something like this.
This is honestly more believable to me than money.
By the same token, 24 hours and a tweet can have it all come crashing down once again. Nothing is real anymore.
Learn about limit and stop loss orders, come in handy in times of high volatility I am finding :)
I bought VOO and AMZN yesterday. First time buying an individual stock since pandemic. Kicking myself for not buying more. Still waiting a week to possibly buy more if there's another shock, but if the market's up, I'll buy less.
That's stock speculation for you, everything you do is wrong in retrospect
Feels equally plausible that there would have been an across the board increase in tariffs just to look tough. There is no logical analysis of the current situation.
I just buy during big fucking crises, either individual stocks or index funds. Front page of the NYT type shit, "existential threats" to 100+ year old concerns. Boeing, Toyota, pandemic. Such opportunities only come up every 2-3 years or so. Sell after 1-2 years to get the lower tax rate.
DCA and time in market beat trying to time the market. If you're doing nothing all day but refreshing Twitter and Robinhood maybe there's some alpha but that's too much involvement for me.
The first sentence is a thought-terminating cliche and is not true. Correctly guessing the shape of the Trump tariff crash was worth an entire year in the market. Crashes that don't instantly reverse themselves tend to be more like ten years.
yes but unfortunately for me, I don't have insider information or a time machine. If you had $10,000 today, where would you put it?
VOO, QQQM, AMZN. Value cost averaging. Put more in as it drops, less if it increases.
Not America any more. That Ponzi scheme has just been popped.
Be careful with Amazon, the algos seem to have not realized China is still being tariffed.*
* Observation valid for the next 30 seconds. Certain restrictions apply.
https://truthsocial.com/@realDonaldTrump/posts/1143082727259...
> THIS IS A GREAT TIME TO BUY!!!
- @realDonaldTrump today at 6:37 AM PST
How is this legal??
It’s not.
> For my friends, anything. For my enemies, the law.
- Oscar Benavidez, Peruvian dictator
Doesn't matter if it is, he would just pardon himself.
Edit: On second thought, he wouldn't even have to, since he already has immunity anyways.
Using a personal account to post comments to social media is not an official act.
The entire concept of "official act" does not actually exist. It wasn't defined in the Constitution, and neither was it defined by the Supreme Court when they invented it from whole cloth.
Courts have already determined it's an official act by Congressman and Senators to shield them from defamation lawsuits.
How sure are you that the supreme court agrees with you?
Dumbasses spent 50 years voting for Republican politicians who refused to hold their own accountable for things like outright fraud and crime.
Who would stop them? Certainly not their voters.
Because US is not a democracy anymore. Checks and balances are gone.
Out of curiosity, on what basis would this be illegal? Given that it was posted publicly and all.
The first order fraud would be market manipulation run by the commander in chief.
The second order play would be for Trump to tip his associates off that he was going to do this and let them profit handsomely from the bump. Congratulations Mr President: your lackies love you because they profited from fraud but moreover you now have grade A kompromat on all of them in the form of your Signal chat records showing they were complicit in market fraud!
Actually you did have advance warning because there has been several days of wall-to-wall finance bro and republican heads on TV saying the tariffs were batshit crazy. Under those conditions there are only two outcomes: 1. the tariffs were rolled back or 2. Trump is removed from office (and the tariffs rolled back).
Those aren't guaranteed. I do believe Trump is in danger of being removed if the economic damage of the tariffs becomes too great since the one thing truly sacrosanct in America is the economy.
But the timeline would hardly be immediate. We'd have to go through considerable pain before the government would act.
> Those aren't guaranteed.
Yeah, if we lived in that world, Trump would have been removed from office during his first term for all the crimes.
It's worth noting that impeaching and removing Trump from office now would actually take fewer votes than the business of overriding the import taxes he's trying to impose with "Canadian fentanyl is scary" emergency powers.
As a big bonus, voting to remove him entirely leaves everyone far safer. He's gonna have a guaranteed tantrum of scorched-earth revenge no matter what you do, but this way he won't have official power to do it with.
3. Carve outs are made for high dollar donors like AAPL (which went up with everything else even though it is now subject to an even more terrific tariff)
Trump's whole schtick was that #1 - - get countries to negotiate.
Except China. The USA gets 25% of it's bandages from there, and that's no way to prepare to defend Taiwan.
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when the market dropped 1100 points in a day was the time to buy. Buy the DIP!!!
Always buy the dip. Because if the dip keeps dipping long enough you got other problems to deal with.
Catch the falling knife!
Uh if tariffs weren't paused it would have kept dipping.
Learned their lesson and formed a whole new Signal group.
One thing that makes me curious.
Pennsylvania unemployment rate is 3,4%.
In the EU you commonly see unemployment rates around 10% and that is even after rather massive reeducation programs.
Why is this seen as such a big problem that these 3,4% pretty much get to decide the entire US policy?
In the EU that would be a great number and mostly normal considering that people that switch jobs or just finished studying or are just generally unemployable is counted towards that numer.
https://www.pa.gov/agencies/dli/newsroom/pennsylvania-s-unem...
You sure its just the 3.4%? 5% is considered 'full employment' so 3.4 should be some of the best times in history.
How many people are employed but are in a job that barely provides enough money to survive? How many people are working 2 or even 3 jobs just to barely survive? Those people would be counted as 'employed'. You should look at these other groups of people before making judgement.
There are several different definitions of unemployment rates: U-3, U-6, etc. Are you sure you are comparing using the same definition? See for instance https://www.investopedia.com/articles/investing/080415/true-...
I don't make judgement. I just read the link, and the source seemed reputable.
But all I hear is "we want factory work back to Pennsylvania".
If the jobs pay too low, why would you want even more low paying jobs back to USA, sewing t-shirts, making sneakers, working in a factory?
And - specifically - why do the people that want that get so much influence?
The issue is timing. He needed to paydown debt before imposing tariffs which will lower bond demand raising interest rates. You can't inshore industries from everyone and rely foreign debt to prop up the dollar.
My takeaway from what I've read and heard in the last few weeks is that his only actual motivation is to 'win'. He bragged yesterday that other countries are kissing his ass to negotiate deals on the tariffs. I think that was all he wanted, I think he now thinks that this whole tariff thing was a success and he's going to move on to the next crazy idea.
The rest of us suffer for it, except for the sad portion of the republican party who's only motivation is to own the libs and who now are congratulating themselves on how thoroughly the libs have been owned.
He also bragged that the tariffs bring 2 billions a day and the crowd cheered.
They do realize who pays that 2 billions?
Or that none of them will ever see any of that money and none of it will ever go towards helping them in any way?
The answer to that is far more complex than you realize. Tariffs generally force export-driven countries to devalue their currencies.
That’s not how it works.
Exhibit 1:
The US Dollar devalues against the Euro.
Some claim that is Trump‘s plan to make easier to pay the US debt.
This is about the yuan not the euro. Devaluation doesn't make it easier to pay debt. It helps foreign countries to pay down dollar denominated debt more easily. Meanwhile, the DXY is structurally way higher than average right now. The USD remains very strong compared to historical exchange rates despite its recent drop.
From an article written in 1979:
>He once told me: “I won’t make a deal just to make a profit. It has to have flair.” Another Manhattan developer said it differently: “Trump won’t do a deal unless there’s something extra — a kind of moral larceny — in it. He’s not satisfied with a profit. He has to take something more. Otherwise, there’s no thrill.” [0]
[0]https://www.villagevoice.com/how-a-young-donald-trump-forced...
Correct take. Any attempt to find a rational objective behind the tariffs is foolish.
It's literally in his book. He does a crazy thing. Big. Massive. Then gets the other party to negotiate it down to what he really intended. 10% is a lot, but now it looks smaller. He's also fighting back very hard on a few fronts, as per the book.
And it is entirely predictable which is why most countries did not kneejerk into action.
Exactly. I would be surprised if most kings and prime ministers haven't hired a Trump expert by now. If there's one skill democratic leaders are good at, it's figuring out what the other party wants. It probably just plays out like a game of checkers.
aestheticism is a feature of fascism. the late night phone call, the strong words in the oval office, boarding air force one with retinue in tow, hurry hurry... it's less about what is being achieved, and more about the pageantry that something is being achieved. change, action, disruption, violence (metaphorical or not) are good in and of itself, pomp is the reification of these impulses. i disliked succession precisely for this reason, the idolization of these processes (whether it was under the guise of irony is irrelevant).
these fetishes can start to supplant material reality, real banana republic stuff. we should give the wasps and neoliberals credit to always have been somewhat immune to and disdainful of these practices.
> other countries are kissing his ass
Notable exception: Xi Jinping. So it's a contest of wills. Trump vs. the man who enforced a "zero-Covid" lockdown on 1.4 billion people.
I like to believe that no other countries are kissing his ass and all the calls were from the few true patriots that are hiding out in his administration.
"Hello President Trump, I am the leader of Bigorgia. I know you are a big strong manly man and I will beg you to stop the tariffs please."
But I agree, Xi Jinping is a real strongman, not a sad old man with delusions of grandeur.
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Permanent damage has been done to our relationships with countries that have always been our allies.
Permanent damage has to our economic markets, since everyone now knows that everything can change on the whim of a single man.
Permanent damage has been done to any reputation we've had as a supporter of democracy worldwide now that we've abandoned our support of Ukraine.
Permanent damage has been done to our own faith in our country. Any pride I had in our values and democracy has slipped away, now I know that they were all illusions.
> Permanent damage has been done to our own faith in our country. Any pride I had in our values and democracy has slipped away, now that I know that they were illusions.
I understand this feeling but this quote has been helpful to me.
“Patriotism is supporting your country all the time, and your government when it deserves it" - Mark Twain
This is a dark time for America. But we shouldn’t turn our backs. The next few years will be painful. As patriots we need to work toward making it better. Take care of your neighbors. Work toward seeing the change you want in the midterms. Demand accountability from your representatives.
I don't buy it anymore. The billionaires are in charge and we can't fight them. Best thing do is run and hide.
It’s very sad you feel that way. It’s ok for you to feel defeated but why go to the trouble of discouraging others?
People who are retired and don’t have multi million portfolios are certainly suffering. I bet this will kill off a lot of small businesses
Pre-orders in a lot of businesses have been paused because with the tariffs volatile, stores can't guarantee they won't lose their shirts if they promise product to customers that is later unaffordable to sell (or cannot be sold at that agreed-upon pricepoint).
China is also likely to continue selling off US treasuries; even if that wasn't an immediate way to disrupt the American economy by itself, it's a sound idea if their trust in the stability of the US as a sovereign nation has gone down. China is also, historically, the second-largest buyer and holder of US T-bills; if that changes, it will have consequences in terms of America's deficit.
Surprise cutscenes can be interesting in games, not so much in reality.
But can you trust him to keep them at 10% for more than 12 hours?
My dream scenario: The rest of the world would band together and upper the mininum tariffs levels against US imports to 10% for 90 days.
The fundamental problem is that tariffs are a tax on the citizens of the country that charges them. Retaliatory tariffs that are high enough or specific enough to shape immediate consumption decisions can move the needle (which is why you do see such responses happening). A universal 10% tariff can affect its target in the long term, but as a short term measure it does nothing but take money out of the pockets of local businesses.
My dream remains a global common market
Without global regulation? I think you'd need a lot of luck to survive in that environment.
Even with global regulation. I think it would take a decade to do what the federal governments could otherwise do in a year. The EU is an instructive example here.
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I think it's not that bad, when you consider all goods ands services:
"For technical reasons, there is not one “absolute” figure for the average tariffs on EU-US trade, as this calculation can be done in a variety of ways which produce quite varied results. Nevertheless, considering the actual trade in goods between the EU and US, in practice the average tariff rate on both sides is approximately 1%. In 2023, the US collected approximately €7 billion of tariffs on EU exports, and the EU collected approximately €3 billion on US exports."
https://ec.europa.eu/commission/presscorner/detail/en/qanda_...
39% on agricultural imports from the US.
Lee Kuan Yew referred to Europe as "fort Europa" for a reason many decades ago..
We don’t want a race to the bottom when it comes to agricultural products. American products are cheap but they suck. Ours are better but more expensive. Making American crap expensive is good for us. That’s a good use of tariffs: avoiding flooding the market with inferior products at the cost of local made.
Most countries have tariffs on the US. The media would have us believe Americans are the first ones to ever do it.
Still much lower than the US tariff on EU cars. (Those remain.)
A reasonable compensation for the trade barriers in the US. If anything, it's too low.
Why do Peterbilt trucks still exist? Don't US truckers deserve to drive Scanias and Volvos?
Volvo and Mercedes (freight liner) trucks are popular in the US. Truckers tell me Peterbuilt makes a good truck and compete well, but since I don't drive a truck I can't tell you what makes them better. I can tell you that Volvo and Mercedes are considered basic trucks for companies to own, while those who own their own truck like pay extra for luxury features in a Peterbuilt. (the only luxury I can see though is chrome decorations, again not being a trucker I have no clue if anything else is better or not)
There's a huge difference on charging tariffs on only cars and charging tariffs on everything.
They EU has a tariff on literally anything that comes in called the Commons Customs Tariff.
You forgot to mention that the tariff is literally zero in many cases (depends on the product and country).
And offered 0% tariffs on all physical goods (that includes agriculture) weeks ago. But no, Trump is financially illiterate and doesn't understand the concept of VAT.
How can anyone take him seriously on this sort of stuff? He flip/flops constantly. If he isn't a serious negotiator, other countries/companies aren't going to take his threats seriously.
But he's also brought the whole of the US down to the mud that he enjoys fighting in.
The US shouldn't be taken seriously any more, world wide. Trump, and his Project 2025 conspirators, have proven that the US system of government had a loophole, and have taken full advantage of it to perform a hostile take over.
US soft-power was what allowed the US to dictate US law to other countries. US law doesn't even mean anything in the US itself, so the rest of the world should be suddenly ignoring a whole bunch of historic US-pressured behaviours.
Given the deportation discussions, I'd say one of the first things to go would be extradition treaties. I'm hoping copyright duration madness retracts entirely back within US borders as well.
*How can anyone take the US seriously?
Also see: https://www.bbc.com/news/articles/c5yrr0e7499o
> Confidence in the US economy is plummeting as investors dumped government debt amid growing concerns over the impact of Donald Trump's tariffs.
> Governments sell bonds - essentially an IOU - to raise money from financial markets for public spending and in return they pay interest.
> The US does not normally see high interest rates on its debt as its bonds are viewed as a safe investment, but on Wednesday rates spiked sharply to touch 4.5%
> How can anyone take the US seriously?
we can wipe out humanity if we get cranky
Yeah, Trump, Putin and Xi Jinping can do that "if they are cranky".
The reasonable world doesn't take Russia or China seriously. US is about to be added to that list.
Also, we're now busy building nukes. Morons.
Any reasonable person does.
And that's a problem... reasonable people now don't.
In the sense that people "take seriously" a drunkard waving a gun around.
Well, we used to.
With today's rollback, the glitz and glam event - Liberation Day - held last week, was not really a Liberation Day? :-)
Does that make today Incarceration Day or Subjugation Day?
Well it was a Day, not Liberation Month or Year.
The stable solution to this problem is infinite tariffs everywhere.
But then these are politicians they will declare 2*infinity tariffs.
If Trump is hoping to push the 10 year treasury rate down so he can roll the 9 trillion coming due in June, he is in for a wakeup. China is selling their holdings and driving the rates up. He is going to actually have to have a grownup negotiation with them rather than going scorched earth.
It's Elon's dogecoin pump & dump all over again. I should have kept an eye on twitter!
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the lesson to be learned is we are all humans and should get rich together, not to lean further into tit-for-tat anti-globalization.
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The thing about stupid policies that make us poorer is they are self-punishing. The same is true of unnecessary retaliation after a backdown.
The Prisoner's Dilemma is a very easy game for everyone to win at if everyone cooperates. Unfortunately, everyone doesn't want to cooperate.
It's a good idea to recognize and internalize this, as it's quite inherent to human nature, and won't be going away during any of our lifetimes.
It's not a prisoners dilemna because you also lose by defecting while everyone else is cooperating.
The thing to recognize and internalize is that the world is a lot more win-win than our psychology has been evolved to recognize. Nationalism, realpolitik, xenophobia - all of these are ideologies that make you poorer and worse off, not giving you some secret insight into the truth of human nature.
Everyone else is not cooperating though. Just because you think nationalism, realpolitik, and xenophobia (and slave labor, for that matter!) are all bad things that one shouldn't partake in, doesn't mean the rest of the world feels the same way, such that they will extend you the same courtesy.
My country is now doing badly just because an impressive gathering of idiots from across the Atlantic voted for an egotistical maniac.
I do not care about turning the other cheek, I want him gone. This will not get fixed until Americans understand that fascism only leads to ruins and suffering.
The best way to stay clear from this insanity is to divest from the US as much as possible / reasonable. It won’t help second-order effects, but it reduces your exposure.
I wouldn't go that far (there's still the possibility that things change for the better for whatever reason), but those 60%-70% of the US in global stock indices really do look like single country risk now.
The dumbest possible timeline.
The stock exchange and the tariffs are not the battleground.
Asia started dropping US treasury bills. 30 year bills reached a max in decades
Trump blinked.
Edit: this was front and center in Financial Times, WSJ three hours ago. Now suddenly pushed back, exchange rally being front page news. People don’t understand how close to financial apocalypse we have been. Somebody in the WH scared the shit out of Trump.
You will never convince any of his apologists that this is the case.
His first round with Canada back in February, and MAGA insisted "he won"
Then came back and tried the same thing again two months later. Same response from the Canadian side. Same slight backing off, reorganizing, but confusion, and nobody seems to actually know which tariffs apply and which do not.
It sounds now like 10% for the whole world, but still 25% steel and aluminum and other tariffs on Canada, the US's biggest trading partner and customer? How insane is that?
They're "flooding the zone" with confusion and chaos, and making money in the process. Anybody who wants to maintain power and influence and money has to get close to him, avoid criticizing him, and then they get the inside scoop.
It's mafia level crap.
Do you have a link or article title for reading about the dropping of tbills
From CNBC: https://www.cnbc.com/2025/04/09/us-treasury-yields-investors...
> "Perhaps even more alarmingly, U.S. Treasury markets are also experiencing an incredibly aggressive selloff..."
> The largest holders of Treasurys are Japan, China and the U.K.,...
The scary part is that it has been scrubbed in many sites
https://www.ft.com/content/0005e091-930d-46ff-9e81-8591704a9...
Incredible write up. I don't understand a lot of it, but:
> "Hedge funds have trillions tied up in this kind of strategy,” he said. "As things spiral, they’re being forced to sell anything they can — even good assets — just to stay afloat . . . if the Federal Reserve doesn't step in soon, this could turn into a full-blown crisis. It’s that serious."
> One hedge fund manager said: "Those huge hedge funds with trillions of dollars of Treasuries relative value trades will blow up today if the Fed doesn’t bail them out."
https://archive.ph/ArGLp
https://archive.is/EPZnP
Because the t-bill auction came in incredibly strong. Their conclusion analysis wuickly looked foolish and their embarrassed.
https://www.marketwatch.com/story/all-eyes-turn-to-treasurys...
30 years ts are at near 20 year max? So incredibly strong is “it did not blow up?”?
And after a few hours this seems to be confirmed
https://www.cnn.com/politics/live-news/trump-tariffs-cnn-tow...
I have a moderate understanding of finances, but for me this was the Siamese cats from the aristocats playing around the nuclear football
It was in the FT but they reported it as rumour.
Trump didn't back down until after the 30 year auction went well, which doesn't support your hypothesis.
Before announcing it he suggested to buy stocks, ie insider trading.
So, it was all a bluff? (As many people suspected it would be.)
It brought a large number of countries to the negotiating table, and shows he’s willing to execute on threats of keeping tariffs high for an individual country.
Now is the ripe time, 90 days, to make a deal with the US and offer the best terms.
The whole point of Trump is to leverage uncertainty, make an unrealistically high water mark, then go down from there (to a point thats still very favorable)
This rationale can explain many actions he’s taken. Is it reckless? Risky? For sure. Does it work? It has in the past, let’s hope it does for the global financial system, for everyone’s sake.
> It brought a large number of countries to the negotiating table
Did it? They said it did, but I wouldn’t trust a word they say.
What concessions has he actually got from the rest of the world? Was it worth it? It seems to me the two biggest trading ‘partners’ (China and EU) were escalating, not conceding.
Are you really doubting that countries wouldn't negotiate? Seriously?
Multiple countries offered no tariffs, like Israel and Vietnam I think? EU offered 0/0 for cars/industrial. SK president said they will negotiate.
> Was it worth it?
Time will tell.
> Are you really doubting that countries wouldn't negotiate? Seriously?
I doubt everything those charlatans say. They are liars and will say anything to maintain the illusion of competence.
> Are you really doubting that countries wouldn't negotiate? Seriously?
Yes. Trump and his administration lie more often then they tell the truth. There's virtually no reason to negotiate under those conditions, as random decisions will often have indistinguishable outcomes.
All the countries who chose to do nothing, evidently, came out on top. Because the decision was reversed. Those attempting to conform to the chaos will be whiplashed around, like fish in a Tycoon. Doing nothing at all proves to be an equally effective strategy, on average.
> Now is the ripe time, 90 days, to make a deal with the US and offer the best terms.
What terms? Remember, the tariffs were not reciprocal -- that was a boldfaced lie. They were based on trade imbalance. So what, Cambodia is supposed to pledge to buy ... what exactly? ... from the US in order to balance its trade?
The reason Cambodia or Vietnam have a trade imbalance is because US/other companies have factories there to produce the goods. You think those companies are going to set up garment and shoe factories in the US? With what labor?
The whole thing reeks of a shockingly inept understanding of global trade and economics.
This rationale can explain many actions he’s taken. Is it reckless? Risky? For sure. Does it work? It has in the past, let’s hope it does for the global financial system, for everyone’s sake.
Global financial reacted to the idiocy adequately enough to tell you what it thinks of it… You are trying to rationalize something that is as far from rational as it gets…
stop normalizing this idiocy. there was no country that wasn't already willing to negotiate trade relations with the US.
This reckless way of negotiating has a cost: our trustworthiness. The more recklessness Trump does, the more other nations will strongly consider naming some other currency the global reserve currency, such as the euro, the yuan, or something else, maybe even something new.
This isn't 1946 when the United States was heads-and-shoulders the most prosperous nation on earth, with most other developed countries having to rebuild. Other regions such as the European Union, China, and the bloc of East Asian democracies (Japan, South Korea, Taiwan) also have strong, competitive economies with a high standard of living for many of their residents. If they got together, it's possible that they could move to some alternative to the US dollar should they wish, and with Trump's bullying, this might just be the push.
It's going to push the EU and China closer together -- exactly the opposite of what the USA should be trying to make happen.
GOLD in Mental Gymnastics
It will be very interesting to see what deals are made in the next 90 days. There is a lot of speculation that the US will push to isolate China as part of any deals made.
Who knows.
The Chinese are warning their citizens about travel to the U.S.
> China issued an alert warning its citizens and students of the potential risk of traveling in the U.S. and attending schools there. > > “Recently, due to the deterioration of China-US economic and trade relations and the domestic security situation in the United States, the Ministry of Culture and Tourism reminds Chinese tourists to fully assess the risks of traveling to the United States and be cautious,” the ministry said in an alert.
Can't blame them honestly
Many EU countries have done the same in recent weeks. This is less about putting diplomatic pressure, and more about warning people to avoid traveling to the US due to real danger.
Nope, all those warnings were basically "make sure your paperwork/visa is in order" and "gender on passport has to be the one assigned on birth"
There is no real danger so this is mostly diplomatic pressure.
German and another Europeans were detained by ICE and ended up spending weeks in solitary confinement, past their plane back.
The US government has already been rounding people up who haven’t committed a crime. Most notably a student from Columbia college. This is a real danger.
They've also been shipping people off to a prison in El Salvador without due process and, according to them, no way to bring them back if they send the wrong person.
Avoiding travel to the US right now is a perfectly reasonable decision.
Have you ever experienced being detained by CBP?
No I haven't because the odds of it happening to an ordinary person are a rounding error, now and at any other point in time.
Nobody wants to be that rounding error.
I have a trip to China on Saturday and I'm worried about:
a. Chinese retaliation. I don't think they are going to start arresting Americans, but it might get uncomfortable if I don't have my passport in the subway station.
b. American retaliation. My wife has a greencard, this is actually worrying me more than anything, although as far as I have heard so far, we should be OK.
Trip is still on. I'm really interested in how China has changed since I left 8 years ago.
Totalitarian countries like China and Russia routinely arrest American visitors to use them as negotiation chips. Be careful.
America's started arresting visitors from any country to use as negotiation chips so is it officially totalitarian now?
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I don't think you have lived experience to back that up. There are definitely people being turned away at customs in the US, and China has targeted nationals of other countries they have disputes with (e.g. during the Huawei daughter incident and putting two Canadians in jail for two years while she got house arrest in her mansion). And anyways, having your passport in a Beijing subway station is just the way things are now (never was needed before, but they random check all the time before I left in 2016).
There have been people turned away at customs for as long as you have been alive. These are only stories because they're effective at manipulating you into believing the narrative du jour.
Yes, and I've always been the "it could never happen to me" person. But now things are volatile and chaotic. That is elevated risk, and you just shouldn't ignore it.
You seem to be asserting that the risk is no higher now than it was last year. I suspect you are in the minority on that one.
What quantitative evidence do you have of that?
Multiple European countries have issued travel warnings for the US too.
Travel warnings like "make sure your paperwork is in order" yeah?
The citizens of other countries should be concerned too. Even short term plans could end badly for some disruptive measure Trump because whatever, as he did basically every week since he got in charge.
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yea the government is scaring them, not anything the US is doing. sure. the mental gymnastics know no bounds
What is the US doing to Chinese visitors?
https://www.theguardian.com/us-news/2025/apr/06/chinese-woma...
The US forced her to overstay her visa and commit suicide?
Genius move. Set the trap (massive global tariffs that seem irrational) and wait for target (china) to retaliate. Once the bait is taken, alienate china and take the pressure off everyone else. New reality still departure from previous order but feels better and gives everyone 90 days to figure it out. Meanwhile china is trapped and isolated.
Why not just skip everyone else to start with
1) USA looks far weaker when everyone is included initially. Emboldens china. Then it’s flipped once they commit.
2) Still have a smaller tariff in place but it doesn’t feel as shocking.
Announce a controversial decision. See if it sticks. If not, claim it was a joke and you never meant that.
Drama, manipulation, and a US government tactic, all in one.
I don't believe it's being done so strategically. He's not Franklin D Roosevelt.
I forget all the details, but some constituency once came to FDR to ask him to do something. He likely leaked that he was planning on doing so to major Catholic organizations in America, and when there was outrage, turned to the first party and told them that he'd love to, but his hands were tied. He never intended to do anything in the first place, he just wanted a convenient scapegoat.
This doesn't make any sense. Why not just go with 10% tariffs across the board? There wasn't going to be any pushback, it should be clear at this point. Or why not just leak the plan, and then say "I guess it has to be 10% because business leaders won't accept higher."
This isn't masterful juggling, it's improv comedy.
Like chess[1], Trump had his finger on his head. Not official move until he removes his finger.
https://www.youtube.com/watch?v=0cv9n0QbLUM
Except they implemented the decision and are responding to countries’ willingness to negotiate fair trade terms, just like with Mexico. Nobody is saying “just joking”. If people weren’t 1000% dismissive of the leader’s stated intentions they might be able to follow along. It’s been crystal clear to me that the goal has always been to renegotiate trade terms not to live in a world with persistent reciprocal tariffs.
This is a hilarious assertion. Their stated objectives have been all over the map, so any outcome can fit at least some of their statements.
Admin proxies have said tariffs are to pay for tax cuts, they've stated they're intended to bring back manufacturing jobs, they've stated we should prepare for a lengthy trade war and accept the higher prices like men, and while some proxies have said this is a negotiation tactic others have stated unequivocally that this is not a negotiation tactic.
Bold assertions like yours are easy to make with the benefit of hindsight. What do you predict tariff rates to be in a week? A month? A year?
Not sure why this is downvoted, this is absolutely the kind of power play Trump did his entire business career on.
It is also a dick move.
You can get rich this way, but you can't get respect. The fact that half of a respected nation opted for this approach continues to baffle me.
And maybe I should say "formerly respected nation", the global perception of the US goes rapidly down. I guess the question now is will the nation actually profit from that.
Brawndo's got what plants crave. It's got electrolytes
— Idiocracy [movie]
So much different analysis for something as simple as insider trading. Remember, Trump always said stock market performance was everything. Then this week suddenly, stock market doesn't matter. In retrospect, it's all so obvious. Neither me nor anyone else could expect them to be so bold about it.
Same guy recommending what the US should do: https://bsky.app/profile/dieworkwear.bsky.social/post/3lmb6y...
In short he argues that there is no point in making $50 chinos. Similarly to Italy, the US should focus on regional branding and high-end artisanal products.
I would argue that ship has sailed under Trump. The US was in a prime position to brand itself via soft power and the media, and now it's actively being boycotted.
Happy ~liberation~ market manipulation day!
And tariffs for Russia are still 0% ?
Doesn't help America as much as some people might think. The world has seen that Trump is erratic, and America imports too much from China to just ignore the 125% (!!!) tariff on the country.
Exactly. The damage has been done; the fact that economic policy could dramatically change day-by-day makes investing and planning very difficult. In addition, the tariffs on China are insane.
One of my biggest concerns is the value of the dollar. If foreigners are discouraged from doing business with America either due to tariffs or due to other matters, how does this affect the dollar, which is a fiat currency? The US dollar is currently the world's reserve currency, which is the result of the United States' emerging victorious from WWII while Britain, holder of the world's previous reserve currency (the pound), had to contend with rebuilding as well as dealing with the loss of its empire. Fiat currencies, by definition, are not backed by assets, but are instead backed by "faith"; not in the religious sense, but in the faith that people have in the government issuing the currency. How will the world keep the faith if the custodian of the dollar acts so recklessly?
For many years I've been concerned about deficit spending and easy-money policies from central banks. However, for the past few months I've become very concerned about Trump's policies that alienate our allies and partners. What Trump and the rest of MAGA simply do not understand is that the United States is part of an interconnected world. American strength is more than just weaponry; it's also in our economy and our reputation.
Unfortunately Trump and his cabinet have done extraordinary damage to our nation in less than three months. He's like an angry man with a baseball bat smashing up irreplaceable artifacts in a museum, and sadly there is no police to stop him, because he is the chief of police. He is by far the worst president America has ever had to endure, and if this continues our nation will end up at war, either with itself or with other nations.
America will get the outcome it deserves.
Trump couldn't care less about America. He treats the presidency as his private business. This was all a ploy to make a lot of money, nothing else.
> “This was his strategy all along,” Bessent said at the White House, where officials, including him, had denied for days that the tariffs would be suspended.
And why should we believe them? If it was the strategy, you could have made the tariff announcement into an acrostic or something.
Not 24 hours ago he said the tariffs were non negotiable, now he says this was always the plan. There's no reason to believe a word he says.
Hypothetically, assume for the moment Bessent is telling the truth. Now let's try to pencil in what the administration's reasoning might be. Here's my best guess at how the conversation in the White House went:
Advisor A: So we're all agreed then. 10% tariffs across the board is our strategy, except China, because Xi is a special boy.
Advisor B: If we announce that, everyone will freak out. There will be rage and panic.
Advisor A: That's where the tactics come in. We announce greater tariffs first, according to this super sketchy formula my intern cooked up with ChatGPT.
Advisor C: That's not what we agreed!
Advisor B: How will that stop the rage and panic?
Advisor A: It's tactics not strategy. We walk it back just before it hits. People will be too busy being relieved to be raged and panicked about 10%. We get the policy we want; the people / markets / etc. will only freak out for a few days and then go back to normal.
Trump: I like it. (Opens Resolute desk drawer.) Here's a signed copy of the Art of the Deal.
Advisor A: Thank you sir! I will cherish it for the rest of my days.
Again, the above is my guess as to what happened, under the (perhaps questionable) assumption that Bessent is telling the truth. ("How likely is this assumption?" is a question orthogonal to the point I'm trying to make, and therefore, out-of-scope for this post.)
SPX E-mini futures calls near the money doubled in the space of 1h. Everyone Trump tipped off potentially doubled their money with zero risk
Probably the bond market reaction caught the admin off-guard, possibly indicating a liquidity crisis. As usual, wont someone think of the overleveraged hedge fund managers?!
if you think he wasn't going to do something like this from the start then I have a bridge to sell you
Who's 'he'? Stephen Miran?
Too late for everyone who spent massively on flying in stock ahead of the tariff deadline. Too late for those forced to sell financial assets in order to pay margin calls. Too late for those working on projects involving foreign manufacturers which have now been cancelled due to tariff uncertainty. Too late for those who lost sales while they figured out pricing. Too early for the people fundraising to build US manufacturing capabilities. What a mess.
It's almost like the whole point is just to enable insider trading on a scale we've never seen before.
https://bsky.app/profile/unusualwhales.bsky.social/post/3lmf...
Seems to show people knew it was going to happen a few minutes before he posted.
Remember that "debunked" rumor tweet on Monday that created a market rollercoaster ride? The one that predicted exactly this?
What the hell is even going on
Just a dry run before the real event. Working as intended, nothing to worry about...
> What the hell is even going on
What if the Stock Market was entirely converted to Meme Stocks?
it is not already?! :)
Apparently not 100%. But they closed that little loophole. :-)
Is there any reliable instrument to find out? This seems so obvious, given the only alternative option seems to be believing they are completely insane.
The independent IGs installed after all Nixon's criming might be in a good position to check up on that.
But he illegally (without required notice period and specific reason provided to Congress) fired them right at the beginning of his term.
You could look at https://www.capitoltrades.com/ in a few days. Of course you'd probably expect the average senator/congressional representative to be smart enough not to go insider trading on their own monitored account...
The alternative you mention is more likely, given all we know. On the other hand, why not both.
Ah, there's the rub. Even with a smoking gun there's no political will to do anything about it.
> are completely insane
More likely detached from reality, laser focused on personal gain, and punishing perceived enemies.
Anybody who could investigate probably got fired. After the pardons of Blagojevich and the Nikola guy it’s pretty clear that scamming is ok now.
TIL that the Nikola guy got pardoned.
I mean it's all right there out in the open. He fired anyone who could hold him accountable and now he is openly manipulating the markets.
Doesn't make much sense, if you're insider trading you profit more if you move one stock a lotlotlot vs all the stocks merely a lot.
Buy the NASDAQ at 1:17PM. Sell at 2PM. You’ve just made 10% without doing any work. If you’re doing any kind of leveraged play, you can get even higher returns.
my point is that's the exact same if its a random microcap, just massively magnified. The president can easily cause triple digit swings. Doing a broad market movement is inefficient from this point of view.
He does all the above!
He owns his own social media stock (DJT), where he post this morning "THIS IS A GREAT TIME TO BUY!!! DJT" to his followers. Attracting more to his social media company.
He has a meme coin in cryptoland, and now via tariff manipulation, he can guide select people to place big bets on the largest derivatives market.
They're also creating a "crypto national reserve".
Grifter crypto scams aren't necessary when it's possible to fleece taxpayers directly.
Derivatives had huge moves based on these announcements. Out-of-the money SPX E-mini puts went up 10x after tariffs were announced. Near-the-money E-mini calls doubled after today's announcements. These are zero-risk insider strategies.
SPY 530 calls for today went from literally 2 cents to $2, $3, maybe $4 if someone timed it right.
They're at $9 on my delayed screen. Obviously I don't have the optimal insider derivatives strategy at the tip of my fingers!
Like I said, on a scale we've never seen before.
https://x.com/Ike_Saul/status/1910028885460148427
https://x.com/Ike_Saul/status/1910028885460148427
https://bsky.app/profile/unusualwhales.bsky.social/post/3lmf...
"Alright, I think people knew of the tariff pause and traded it beforehand ... "
I believe that’s what is going on as well.
Biggest pump and dump ever.
It’s now called just “trading”.
No one will make long-term investments in US manufacturing capabilities in response to policy that will revert in 4 years.
It’s worse than that. Everything leading up to this and this reversion right now is a perfect demonstration that the current US administration cannot be trusted and behaves in irrational ways. You cannot expect consistency and enduring policies. It’s all fickle and capricious. How are you supposed to do any planning with this?
This is all so obviously dumb and I’m frankly astounded by so many people (especially here on HN) playing devils advocate or, I don’t know, honestly believing that this all makes sense.
Even if you agree with the stated (also somewhat incoherent, by the way) goals why do you think this implementation can achieve any of that?
I believe the point is power, and from that lens everything makes perfect sense. Trump is exercising available levers of global influence -- for good or for bad -- in a way that hasn't occurred since Hitler initiated World War II.
Tariffs are appealing to him because they are incredibly forceful blunt instruments over which he alone has almost complete control. They give him immense, immediate influence over the entire world. What we're seeing is that the US President today, if the full capacities of that office are pushed as far as possible without violence, is arguably one of (if not the) most powerful human beings ever.
Beyond this, Trump has said that one of his greatest weapons is uncertainty. He wants to be feared. Having people genuinely afraid of you is the next step of power that he is already flirting with by posting videos of people being blown up in warfare on social media.
And what will he do when China and rest of the world tired of his untreated Narcissistic Personality Disorder will start selling US debt, like $trillions in bonds in say less than a week? I bet you finally someone broke the secret to him today, so he reverted the policy.
The White House can pressure red states to offer companies sweetheart deals so the President can take credit. If they refuse, he pulls his support for them come election time.
Or 4 days
Yes they will, because when industry can't bet on being tariff free outside the US, they'll hedge their bets and have at least some manufacturing here. The damage is already done in that regard. The instability is the warning across the bow for companies that import.
> Too late for those forced to sell financial assets in order to pay margin calls.
That's the true aim behind all of this constant course shifting. The ultra rich, those who have large amounts of liquid assets or outright cash, can make bank at the moment... buy the dip. Even if the markets dip another 20%, they'll rebound soon enough.
>Too early for the people fundraising to build US manufacturing capabilities.
It's a good idea to hedge against future trade uncertainties.
After COVID some Danish and German companies began looking for non-Chinese alternatives for electronics manufacturing. The only area where China is the absolute better alternative is PCB manufacturing without mounting chips/components. The Danish and German companies get tens of thousands of these bare PCBs from China. The chips/components are from Taiwan, South Korea, the US, Italy, and Germany and can be cost effectively mounted in Denmark and Germany.
Not really sure why you left out the tens of thousands of people who were almost immediately laid off when companies and their suppliers idled factories?
In the automotive sector alone - GM, Ford, and Stellantis all flipped the master breaker to "off" on a number of plants and sent everyone packing.
That hire-back will not be instant. People are going to miss payments for rent/mortgage, car loans, utility bills, etc.
Let's not forget that many companies hit the brakes, hard, on exporting goods to the US - so there's going to be the shipping equivalent of those traffic "waves" because two hours ago someone on the highway panic-braked
In my defence I mentioned it was "Too late for those working on projects involving foreign manufacturers which have now been cancelled due to tariff uncertainty" which I think covers these auto workers?
Still I'm sure I unintentionally missed many examples of people who've been negatively affected by this saga. I didn't mean anything by that, it's just ignorance or lack of thought on my part.
Markets are celebrating. How long before they realize that the China tariffs will destroy the profits of companies like Walmart, Apple, Dollar Store, Harbor Freight, etc, and a 10% tax hike on consumers across the board on all other imports? We are still headed for a recession, and the destruction from the greatest deal maker who ever lived will be lasting.
Let's not forget everything else he's doing because there is nothing good in the plan.
It’s clear the China tariffs (in their current form) won’t last the week.
unless President Xi calls him tomorrow invites to Beijing and turns out to be "great guy". Followed by tariffs for China lowered to 20%.
Oh no, not my Apple!
The hike will not be 10% on consumers. In most cases the seller will eat a good chunk of the cost otherwise it won't sell.
Not many companies have the margins to shrug off 10%, and if there isn’t a cheap domestic alternative everyone in the market will be raising prices.
Take coffee, tea, or chocolate: Americans buy a ton of those, there’s almost no domestic production, and most of the market lives on tight margins. Trump’s tax hike means that the average consumer’s choices devolve to paying more or buying less.
Nestle has a profit margin of ~15%.
If they raise prices by 10%, consumers will buy significantly less. There's a sweetspot somewhere for max profit, it's not 10% and probably not 0% either.
Coffee and tea are very cheap when you buy from a retailer and make it yourself, 10% is nothing anyway. Stuff like starbucks have crazy profit margings. Chocolate is a delicacy that shouldn't be consumed in large quantities anyway. That shit should have a 200% tax.
And who knows where his whims will go tomorrow
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Literally anyone with a 401k is an investor.
trump's base is seniors counting down to social security, the rich, malcontents, and feds (his staff in other words) have gov pension plan. none of those care about the 401k people.
If you have a 401K heavily invested in stocks, you should be far enough away from retirement that short term swings don’t matter.
There is also a bond market collapse for those people not invested in stocks precisely because they're close to retirement.
I think that was the real reasons that tariff effects were postponed, the increase in interests in the bond markets would have been too fatal too quickly.
New retirees "should" have 35% or 45% in stocks (using the 100 or 110 rule).
I think GP remark was just a funny take on 'think of the children!'
https://en.wikipedia.org/wiki/Think_of_the_children
For generous definitions of "funny", maybe.
401k is just trickle down economics. Shrink the wealth gap and then this argument holds water.
As it is it lets the billionaires hold us hostage and the wealth gap will continue growing.
> think of the investors!
The stock market is a barometer for future predictions.
Stocks going down meant we were on track for everyone to have reduced buying power, which would impact company's bottom lines, which would make them less valuable.
Trying to see this as class warfare between investors and average people is missing the point.
Furthermore: Stocks are up, but yields did not drop. If this holds, it's still not good for the average person. Expect mortgage and auto rates to go up, combined with that 25% tariff on autos that wasn't delayed.
Oh no. Stock isn’t risk free automatic gains?
I know that with RSUs etc people treat it that way. But no the risk is real.
The US President intentionally crashing the market wasn't part of the risk profile until recently.
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I wouldn’t pretend things that are outside my circle of influence are.
And everything is still inflating in cost.
Source?
> Too late for those forced to sell financial assets in order to pay margin calls
Yea, I want my president looking out for financial vultures leveraged to the hilt
'coming again to save the motherfucking day yeah!'
I almost bought some bluechip stocks yesterday but changed my mind thinking it may dip further. But my luck is such that it would have actually dipped if I had bought. With my luck these days no matter what I choose, I lose. ¯\_(ツ)_/¯
If it was that easy to "catch a falling knife", everyone would do it.
In China, we called this battle as hypoglycemia (China) versus hypertension (USA), but, what do all the grand narratives have to do with me, I just want to live a good life.
fxxk Xi, fxxk Trump,
So if you cozy up to the mad king, he'll tell you what he plans to do with appropriate notice. This is the least American tyrannical bullshit I've ever seen in this country, and nobody should be condoning it.
The most important thing that can be done for the prosperity of America right now is to put an end to the senseless fraud and nonsensical policy promoted by the snake oil salesman of the MAGA movement.
The stock market today seriously reeks of insider trading. Most stocks were down pre-market, but suddenly went up at 9:30 when the big boys joined the trading. And that right after the announcement of further escalation with China. I was really wondering about that, but it seems clear in retrospect that some people were ahead of the curve by a few hours.
Trump posted on social media this morning that it was a great time to buy. A couple of days ago, he said people should be buying low and that it was a great time to get rich.
I’m convinced this was his plan all along, and his friends were all in it.
One thing companies love is lots of uncertainty like this. It keeps their accountants entertained! "Maybe we should build a factory in the US" ... 24 hours later ... "well, not today".
What's really amazing is all the muttering from "Very Important Wall Street" type people who are saying that he's insane. Like... with that kind of salary, weren't you paying attention? We've known he wasn't right in the head for a while now. Maybe they should be replaced by AI.
Absolutely no one was seriously considering building a factory in the US based on the insansity of last week
The market is huge. Absolutely someone was considering it. Whether they had time to put plans in motion is a separate matter altogether.
Why would a company go through the trouble of building a factory when the next administration could just reverse the decision four years from now? Building factories will take years
How confident are we that there is a "next administration... four years from now"? I don't know what the number is, but it ain't 100% like it used to be.
I would put it at less than 50% at this point. It entirely depends on whether or not he's alive.
The market is huge but the actual capital is held (or at least controlled) by relatively few (probably more rational than average) people, no?
The market is huge enough that the fact that something is being considered somewhere doesn’t mean much, right? If I consider building a factory in the woods, but I don’t have two pennies to clack together, does anybody hear it?
Cost differences by everyone's gut estimate is like >10^3 or however many digits. Tariffs are cheaper until it starts T2D3ing.
The costs are huge too which makes the margin small
That was part of the entire purported purpose of this lunacy. They went on TV and everything about having people operating robots screwing in iphone screws and stuff.
Whether anyone bought into it is another matter, but opening factories is part of what they said they wanted.
Thailand is a good example. They have about $40b (USD) in balance of trade going the wrong way. Their initial ideas were simply to import more american petroleum, vehicles and aircraft. This likely could have accounted for more than half the difference and significantly reduced their tariff rate by just changing suppliers of already imported products.
The US news is pretty useless here. It's more nuanced than they would like to admit. Foreign sources of news are the most instructive as they're actually covering the options realistically.
There are more consequences if you change the supplier because different supplier often means different product
Which way is "going the wrong way"?
> Foreign sources of news are the most instructive as they're actually covering the options realistically.
Curious about what your go-to sources are?
At this point, I do wonder if long-dated (2-3 months) American-style Puts are a good idea.
The weirdness of this administration has created a lot of volatility. With American-style options you are allowed to exercise early, so if you think there's going to be a ton of ups and downs in the next few months, I wonder if this could be lucrative.
I might try this just as an experiment with one of the cheaper options.
Exercising early only makes sense in some pathological examples that do occur but practically never happen. In general, very loosely, a put is worth something for the hedge plus the amount you could get for exercising it right now. Thus, if you want to exercise it right now, you just sell it and get the hedge premium.
Also, the current VIX is the same as January of 2020. If you believe the current state of the world is less certain than the outbreak of a global pandemic, I have some options to sell you.
Yeah, misspoke, I meant selling the option, not exercising.
> Also, the current VIX is the same as January of 2020. If you believe the current state of the world is less certain than the outbreak of a global pandemic, I have some options to sell you.
I don't know if it's more volatile, BUT it it has shot way up since yesterday, and it doesn't seem too weird to think that it will go down to the numbers we had yesterday.
You can just sell the options. You don't need to exercise.
Yeah, that's actually what I meant, sell the option. I misspoke.
Given my exposure I've loaded up with long puts right after this news.
Puts are a necessary hedge now for your 401ks or stock grants.
i doubt you're the first person to think of this. not to be an "it's priced in" guy, but... something to consider
The only way to know is to wait 3 months and see.
The number of people who are paid to be "professional knower of things" and "professional predictor of things" who are now saying "I never could have predicted that Trump would do something as crazy as this" is just baffling.
In a sane world all these people would be ignored by media outlets moving forward.
The media outlets are part of the problem. Lots of sanewashing and "both sides". Many of them also love "CEO says a thing" articles where they act as stenographers. You see that with a certain car company's wild promises.
I sold my stocks just barely in advance of this whole debacle. I remain confused that it wasn't already priced in by that point. I am not a savvy investor by any standard.
In a sane world Trump wouldn’t be president
It's a confirmation to those that still needed it that finance people are stupid and ideologically blinded. Trump's been speaking of tariffs for years, what made them think his mandate would be good for them?
They knew he was a moron. Their mistake was thinking he was their moron.
If I had any appreciable assets in the stock market OTHER than my retirement savings, I would sell like hell right now.
The market is absolutely delusional right now. It's not pricing in how devastating this general uncertainty is, nevermind the fact that massive tariff hikes are still in effect.
They always knew he was an idiot, the reason they are muttering is to give ammunition and support to anyone who will push back on this insanity.
Trump has now shown his hand. Even with the tariffs on China remaining, it’s clear that Trump will back down on any extreme positions he takes. So, expect the china tariffs to be backed off soon too (once he gets some concession that he can brandish as a win).
In 3 months, sell your positions, let him play his stupid games and re-buy once he backs down, because he will. Or just hold and ride it out.
10% sounds like where we’ll default to in the long-term because that was the ‘base rate’ for everybody anyway. He just wants to rattle his sabre, especially with China.
It’s quite pathetic, really, but weirdly I feel slightly more calm about the situation now that I realise he hasn’t got the bottle to follow through.
> it’s clear that Trump will back down on any extreme positions he takes.
That has always been the case with him. That's literally his negotiation tactic.
If only someone had written a book on this exact topic, back in the 80s.
I think that’s a fair comment. The only reason why I was not entirely convinced that that would be the case is that tariffs seem to be one of the positions that Trump was truly ideologically bound to.
I couldn’t tell whether he would really go through with this or not. Now it’s clear he has no bottle at all. So weirdly is more of a comfort.
So he's basically gaming the market with insider trading.
Did you expect anything less?
Remember when presidents used to put their family farm into a blind trust to avoid any accusation of impropriety?
He literally did a pump and dump crypto scam on his first day in office. That he is a scam artist only motivated by personal wealth and power gain is obvious to any and all remaining sane individuals on this planet. Too bad the majority of American voters aren't.
He was doing similar stuff during his first term. It's just more blatant now.
This is what immunity buys you.
Great way to get money loving sycophants closer to you and subservient to you and to shut up potential powerful critics.
If you want wealth, stay close to where the secret knowledge is.
Did you expect something else?
Pulling stunts like this just makes the USA even less investable.
Markets operating at the whims of a capricious King (is there even a functioning government right now?)
Yeah, pretty sure the markets will "re-adjust" from their good-news swoon when they realize nothing has really changed.
Do you recommend any alternative markets to be more investable?
Somewhere with a predictable economic policy that doesn't flip flop from week-to-week.
Such as?
Without taking sides, what if we think this wasn't a stunt but a genuine experiment?
What do you propose was learned from it that wasn't already known?
What's the difference?
Or performance art
the chaos goes on
Does Trump seem to be using the country's credit to make money?
So we celebrate 10% tariffs. Lol
Trump is like your father who overreacts to everything but changes his mind when he calms down. "You're grounded for a year!". 1 hour later. "Ok, you're not grounded. But you can't go out with your friend this weekend".
I'd liken him more to some rich kid trying to show off some made-up street cred by going over the top on everything. Eventually walking everything back while shouting dumb threats once he realizes he's in over his head. Then somehow he forgets it all and does the same dumb thing the next day. Every single time.
poor analogy since this implies that Trump has everyone's best interests in his heart
On the one hand, this entire exercise has been (and continues to be) batship insane
....Otoh this is good in a meta sense, tells about the level of resilience of the capitalist system, I think we should treat this entire fiasco as one of those controlled forest fire sort of things.
Like...anytime someone tries to mention JIT or other corporate 'efficiency' nonsense, we can refer to these sort of shenanigans and shut them down.
So Trump destroyed the hard-earned 80-year history of the United States for strength and stability for what exactly?
Apparently he's been bragging today that world leaders are "kissing his ass", which seems to be just as likely to be his motivation as anything else.
He's also planning a $100M military parade in DC, apparently on his birthday (although he denies that point).
He's a wannabe dictator - seems same motivation for Greenland, Panana, Canada (51st state), maybe also strikes on Houthi.
At least we got the Gulf of America. The only question now is, now that we've alienated our allies, shown our unwillingness to cooperate on anything, demonstrated our inability to back up our show of strength, openly laid out our lack of solidarity, and established our irrationality and volatility to the world, how long will it take China to decide to waltz a few battleships into Hawaii and claim the Pacific as the Gulf of China.
> He's also planning a $100M military parade in DC, apparently on his birthday (although he denies that point).
This would be straight Roman Emperor stuff.
Without the slave reminding him of his mortality.
More Kim Jong-Il/Un than Julius Caesar.
Yeah, it's so dumb that it's kinda funny, even if he's wasting $100M on it.
Makes me think of Woody Allen in "Bananas". Maybe Trump will play dress-up as general too? Would a fake Castro beard be too much to ask ?
Strikes on houthi are not because "he's a wannabe dictator", let's be real. US is involved in ME for one reason and one reason only.
I assume it was part of the deal he made to get elected: Take the US out of the game internationally, and you can be in charge of whatever's left over. Nothing else adequately describes his actions.
Apparently, for insider trading
Because he can, and because "owning the libs" is the whole modus operandi of the Republican Party that put him there. Seems obvious to me that the reason Trump uses tariffs is simply because that's the only tool available to him to exert his power.
Tariffs let him wave his dick around. Cutting taxes requires passing legislation. Raising other taxes requires passing legislation.
... and because 75,000,000 voters approved it. I fear what's coming next.
Could be (a bit) worse. Lyndon Johnson named his dick "jumbo", and on occasion would take it out in front of journalists etc.
Would that be worse? Compared to drastically increasing the number of people who are able to afford to put food on the table, that's downright whimsical.
Imagine being able to trade, knowing what he was about to say.
On margin.
Both the ups, and the downs (short trades).
Imagine being able to make it an open secret that if someone pays you and publicly kisses your ass a little, you'll send some of those advance hints their way.
Imagine how much money you could make in a matter of weeks.
Are we really going to not consider Trump really being a Russian Asset and this is just WAI (destroy America's credibility) as far as he is concerned? What else even makes sense at this point?
Trump being a Russian asset is so tiring and wildly invalid.
He's threatening Iran because he's a Russian asset right? Bombing Houthis too? No, someone else benefits from those, maybe he's an asset of that country?
I seem to remember the previous Trump term being a bit nuts too.
Trump is using fuzzing to find weaknesses in global trade. He's basically a security researcher at this point.
Time to delete the production database to test our disaster recovery plan!
Fail early, fail often.
Hmm curious that they gutted SEC before pulling this nonsense rather than afterward.
I think the DOJ handles these things. Oh, also gutted. And also it doesn't matter because immunity.
Pretty clear Trump shorted the market, now going pump and dump
Very sad to see what is happening to the US. Sadder still to see it celebrated and defended by a large portion of the country. From over here in Europe, the apparent lack of accountability in the US right now is unbelievable. Where are the adults?
It is sad that opposition is not being acknowledged. There was a determined effort to restore Canada's tariffs to what they were that passed the Senate and was then blocked by an unusual maneuver from the speaker of the house which in turn got him excoriated by some Republicans in congress. Some of the biggest conservative power players and possibly the most famous and successful conservative lawyers are teaming up to challenge emergency executive tariff powers in court. Meanwhile US citizens retain high confidence in elections and Republicans nationwide are complaining in a panic that these moves will turn their precincts Democratic for decades.
But of course you are totally right. No adults anywhere. Keep thinking that Europe can count on others to pay for its defense while buying all the energy they need from Moscow. At least you have adults in the room, right?
The supposed adults are making bank.
The political subtext is "Follow me and I will make you extremely rich."
Congress, the Senate, and the Supreme Court won't touch him after this.
I'm from Europe. You should be focusing those questions on EU, we have much bigger problems. Mass immigration has decimated Europe.
It's true that Europe has its own problems. There are problems everywhere, at every level, from small towns to continents to the planet as a whole. This post is about the erratic actions of the current US administration. My comment is a small reflection about political trends in the US. What does Europe have to do with this?
It does not accomplish much when you try to redirect people with what-aboutisms. Mostly it just betrays your own biases and politics.
It's not whataboutism since you are the one who brought up Europe.
It hasn’t. Europe is still functioning perfectly well.
Let’s not start echoing far right talking points. Immigration is a topic that should be approached with measured language. Terms like ‘decimated’ is not helpful.
Yeah if you don't attend Christmas markets.
Not wanting your culture to erode is not a "far right talking point". Mass immigration has absolutely decimated Europe.
That’s unworthy rhetoric.
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I'm tired of winning.
At least I'm "winning" my 401k and stock portfolio back...
Sigh
I made a fortune. Sold my play account about 3 weeks ago, put 50% back into the S&P yesterday morning. Just sold it again.
It's great if you're up for some gambling.
No, we have to keep winning. We have to win moooore!
He only wins when his competition throws the game on purpose.
Textbook. His textbook. Art of the deal.
He's not unstable, just very aggressive. He did have a plan.
We can argue about the merits of his plan, but dismissing him and his advisors as stupid or insane is underestimating them.
> His textbook. Art of the deal.
It ain't his. https://en.wikipedia.org/wiki/Tony_Schwartz_(writer)
> We can argue about the merits of his plan, but dismissing him and his advisors as stupid or insane is underestimating them.
Pretending the man didn't repeatedly bankrupt his own companies and stiff his vendors is underestimating him. We've decades worth of knowledge about how "his plan" goes.
Exactly. He has run a lot of businesses in the past, with consistent results. When running the US, he'll apply similar strategies, and we'll have a similar result.
It is absolutely not textbook. It is massively self-destructive. In no universe is this a win.
This is a retreat by Trump. It's him losing. It makes him look like a joke. Or, more correctly, more like a joke.
Trump desperately wants tariffs. He thinks they're free money. He has been saying this for years and still people desperately try to sane wash it into some masterful 4D chess. The only reason this laughable 90-day pause happened is because the US house of cards is on the precipice of absolute collapse, so Trump had to bow into Bessent's attempts to turn this into some sort of China containment.
So are all those factories coming back...or aren't they? Are tariffs going to replace income tax, or aren't they? Something something war with China. Just absolute insanity by a group of charlatans, self dealers and clowns who have no idea what they're doing.
On the contrary, I think he got everyone's attention and they're coming to the bargaining table willing to make a good deal for the US. It's exactly the tactics espoused in Art of the Deal.
I think there are two things at play here.
1) Narrow the gap between the wealthy and the rest: attempt to reduce the US public sector, backtrack on globalization, and enact policies to benefit the median American, not the mean American [1].
2) Prepare the US for possible conflict with China (maybe over Taiwan) and avoid supply chain disruption that would make Covid look mild.
I think both of these things are sensible positions to take.
When you look at it through this lens, it starts to have some logic to it. Again we can debate the merits and drawbacks of this strategy, but I think it's what is behind everything. Things like his stance on Panama start to fit into the picture when you look at it this way.
It is not the actions of someone stupid or insane.
[1] https://youtu.be/bzWrA6jRbTM?si=uwvgpg0RprDBPEeU&t=253
Eliminating entitlements and deregulating (particularly consumer protection) is not a great way to narrow the wealth gap. Nor is semi-firing the federal workforce and advocating for onshoring of unskilled jobs. Nor is demanding interest rate cuts. Nor is treating the stock market like a yo-yo. Nor is ignoring people without medical insurance. Nor is attempting to eliminate social security.
This could absolutely be all about asserting dominance over China. It could be a great way to deter or blunt the threat of war. It might backfire horribly. We shall see.
He is stupid. You just have to listen to him speak to understand that. But he doesn't invent policy, he has people for that.
> Narrow the gap between the wealthy and the rest
Your lens needs cleaning.
> Prepare the US for possible conflict with China…
By pissing off every close ally we have?
Let's see who time proves right
Wait what's been accomplished except huge losses for people trading behind the curve?
See my other comment in this thread.
Absolutely nothing was accomplished but the undermining of the US as a stable partner. US treasuries and the US dollar both have taken a colossal hit that is going to reverberate into much greater consequences. It is the hit on TBills that forced Trump's retreat, which his weird cult now need to spin into some 4D chess.
Like, listen to what Trump himself says to justify the pause-
https://bsky.app/profile/atrupar.com/post/3lmfosw5usb2f
Basically "everyone was saying this was really stupid -- getting "yipeee" -- so I paused it". Not "Haha now I've got them where I want 'em!"
These pauses and this chaos is literally the worst of both worlds. Christ, he would have done better either cancelling them or going full bore.
Congress needs to remove his ability to levy tariffs under his imaginary emergencies.
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This man's absurdity never ceases to amaze me. How can his supporters appreciate all this - constant - chaos?
Moreover, from the outside (European here), it looks like the US president can literally do whatever he wants without being subject to regulations or facing any consequences - pretty much like a dictatorship. No discussion, no parliament, no opposition taken into account. Crazy.
It now feels quaint that, not long ago, people used to speculate what Gödel's loophole was:
https://en.wikipedia.org/wiki/Gödel%27s_Loophole
We're witnessing that there doesn't need to be any single clever actively exploited loophole. A two-party presidential system can become a dictatorship if one party holds just enough power across all branches of government to not resist what their leader wants.
Turns out you only need majority in 4 different contests that are all constantly fluctuating around 50%.
Even if they weren't strongly correlated, you would still be able to do a coup every 200 years or so.
Hey, thanks for the link - I added it to my reading list. From the introduction, it seems to fit the current situation (and that's not good).
How can his supporters appreciate all this - constant - chaos?
"Burn it all down" is popular on both the far right and far left.
it looks like the US president can literally do whatever he wants without being subject to regulations or facing any consequences
Yes, presidents have been given far too much power to do whatever they want by declaring a fake "emergency". It's inexcusable that Congress hasn't put a stop to this.
its reality TV. his supporters are generally insulated from the consequences, but even when affected, get the excitement of participating.
> How can his supporters appreciate all this - constant - chaos
A lot of people in USA felt they were entitled to their slice of the American dream, did not achieve it because we stopped building houses therefore you can't buy one on a high school education like our parents and grandparents did. Add in what appears to be somewhat of a collapse in people starting relationships/families and you suddenly have a massive segment of the population with little to lose.
I presume many on the HN community are insulated from this reality of life in USA.
There's some truth to that, but then the solution is to build more housing, not impose tariffs which only make houses and everything else less affordable.
Nobody was offering that option though.
For real, what would an election look like if one party was proposing building 5 million housing units, overriding local zoning when it's in the way, making preferential deals for bulk construction materials, training a workforce, and some mechanism to not erode existing equity ¯\_(ツ)_/¯
"some mechanism to not reode existing equity" is doing a lot of heavy lifting here. 65% of the households are homeowners, who financially might easily be convinced they have nothing to gain and much to loose by building more housing.
Which also shows that lack of home ownership cannot be the driver of this situation. It might be one of the lies of the left, their "trans" story. Where I'm from the left is also pushing this housing narrative but it's not pulling in the votes, its impossible to solve, and i dont know if its the problem enough people have.
In the US the problems are at a state level, and the federal government mostly doesn't have the direct constitutional power to do anything.
Though details like what color your house is arguably are first amendment protected speech and so the federal government could do something (but out likely go to the supreme court - in turn depending on the justices not the election results.)
Why the poor look at the people sitting on giant piles of money, and believe them when they say that China took the money, is another story.
That explains one part of his base, but not the part that lives in McMansion suburbs.
Evidently Congress gave the presidency emergency powers to do what he wants with tariffs, all he has to do is declare an emergency. Just one more example of how Congress is completely broken.
He literally created the emergency himself. What the hell. I can't understand how one of the most powerful countries in the world doesn't have a system in place to prevent the president to act like a dictator
> He literally created the emergency himself.
Classic right wing playbook. Here they defunded immigration services and then called for a crisis because there was not enough space to put all asylum seekers and there was too great a backlog to get it all processed in time.
That power is only supposed to last for some number of days before review by Congress. But Congress decided a day isn't a day anymore, at least for the rest of the year.
Did he even declare an emergency for the latest near world-wide tariffs? Are they even pretending anymore? If so I missed it.
The US currently has 49 ongoing national emergencies, that are renewed every year by the president
The last 8 or so were created by Trump. Like you said, he's just doing what is already allowed.
https://en.wikipedia.org/wiki/List_of_national_emergencies_i...
This is also how it looks from the inside. It's baffling. Apparently all our vaunted checks and balances are useless if one vindictive and incompetent political party controls all three branches of the government.
> No discussion, no parliament, no opposition taken into account. Crazy.
Is it that much different from EU? Where was the discussion before mass immigration? Where was the opposition taken into account there?
Mass immigration in EU is a result of US wars in middle east. It was not some kind of a plan by EU. It was just a reaction to shit that is happening. They were put in this position because they had too much faith in US.
Didn't know that Indians, Algerians and Nigerians are at war in the middle east.
It's interesting how it's mostly men that flee as well.
I can see that you are just focused on racist talking points about immigration and any discussion here will be very unproductive and just a wast of our bandwidth.
It's racist now to not wanting the indigenous people be replaced by foreigners? Racist for wanting to preserve my culture?
> Racist for wanting to preserve my culture?
I mean, I'm not saying that mentality is racist. But I am saying that every racist who has ever existed has had that exact mentality.
Every racist that has ever existed also drank water. So what?
To me it sounds like you are insinuating that wanting to preseve your culture is racist - I don't see any other point to your comment. Correct me if I'm wrong.
No, however WHY you want to preserve your culture and HOW you intend to do it is what determines if it's racist.
A lot of people want to preserve their culture because they view it as superior. Historically, they view other cultures as lower-level, that of savages. They think themselves civilized. This is, obviously, racism.
And in regards to the how, what is the methodology? Do we perhaps build camps to put people of a certain brown complexion in? Do we round them up in the streets? How do you even tell who is who - by their skin tone? As you can see, there's a lot of potential for racism there.
People want to preserve their culture for the same reasons, because it is their culture, it is their identity. How? Simple. Stop bringing in people that do not share your culture inside your country in large numbers.
Historically, they thought other cultures to be not as civilized/savages because often those cultures were not as developed, or as civilized, and often contained human sacrifice rituals. Regardless, forcing their culture on them was wrong just like it is now.
The first step is stop mass immigration. Then revoke all non-highly-skilled labour visas etc. Then add a $50k/yr additional tax to all work related visas, paid by the employee.
Also, not talking about US since they made their bed by bringing in through slavery, but talking about majority of Europe.
It feels like you are so scared of being seen as racist that you will sacrifice your culture just so you don't get called a racist.
> Also, not talking about US since they made their bed by bringing in through slavery, but talking about majority of Europe.
The majority of Europe is composed of formally colonialist nations. I am sorry, but to quote you, "they have made their bed".
> It feels like you are so scared of being seen as racist that you will sacrifice your culture just so you don't get called a racist.
I don't have a strong tie to my culture because I don't care much. My culture is lame, mostly. I already left my culture behind when I entered the melting pot. And, there is no American culture. We are a mixed and varied people.
You're proposed a lot of ideas here and, well, they're kind of shit. You're forgetting one teensy little detail - why are they good? Who does this help, and how? Okay, we revoke a bunch of work visas and make a bunch of people's lives worse... and then what? How does that bring economic and social prosperity to your nation?
See, you can't speak about mass immigration being a problem like that's a foregone conclusion. The US has had immigration on a level most European nations couldn't even fathom, and yet, economically we run laps around them.
Don't worry, we have our own anti-immigration people here. And yes, they're just as stupid and short-sighted. Trump is so anti-immigration he's willing to destroy our economy for a goal he cannot even articulate.
> The majority of Europe is composed of formally colonialist nations. I am sorry, but to quote you, "they have made their bed".
Colonized, but majority did not bring people over like US did with slavery. Colonizing a country in the past does not mean that country can now invade you. Anyone that was brought over during colonization time can stay, but that number is tiny.
> And, there is no American culture. We are a mixed and varied people.
Not anymore. Used to be a Christian nation with a mix of European culture - that's what it was founded on. This started to change after 1965 Immigration Act.
> why are they good? Who does this help
They are good because they preserve the nation's people. They help the nation.
> How does that bring economic and social prosperity to your nation?
Regarding social prosperity, take a look at London, Paris, NY, SF, Brussels, Berlin vs Warsaw, Prague, Helsinki. See which one is safer, see which one people are happier in, see which one is more socially prosperous.
Economic prosperity at the cost of your nation is not worth it. We don't need cheap food delivery.
> The US has had immigration on a level most European nations couldn't even fathom, and yet, economically we run laps around them.
And what has this economical prosperity brought you? Rampant crime, homelessness, zombie cities, healthcare accessible only to the wealthy, one of the biggest wealth inequality in the developed world.
Is it worth, sacrificing your country's identity so that the banker numbers go up? So that wall street makes more money?
> Not anymore. Used to be a Christian nation with a mix of European culture - that's what it was founded on. This started to change after 1965 Immigration Act.
1. America was never a Christian nation. That's a far-right populist rewriting of history.
2. 1965 was quite a while ago! But even before then, European culture is extremely varied. Not to mention Chinese and Japanese immigrants before. It was a melting pot even then.
> They are good because they preserve the nation's people. They help the nation.
This means nothing, by the way. This is the problem with populist messaging. It's populist because it sounds good, but it also has to appeal to the lowest common denominator.
There's no substance, no logic, no reasoning. Just promises, built on appealing to emotions. A sense of national pride, of sovereignty. Past that, the details are TBD.
> Economic prosperity at the cost of your nation is not worth it. We don't need cheap food delivery.
Once again, this means nothing. "At the cost of your nation" is just a populist message, something a bit Hitler-y. But it's not an actual argument. What, specifically, is being lost?
> And what has this economical prosperity brought you? Rampant crime, homelessness, zombie cities, healthcare accessible only to the wealthy, one of the biggest wealth inequality in the developed world.
On the topic of crime because far-right populists just can't help but lie - crime in the US is down and has been trending down for decades. People like Trump will claim the opposite, because they are liars and in order to form a populist message you have to appeal to emotions (see above).
It's easy to convince people something needs to be done when you cater to their sense of survival. Of course, it's just not true, blatantly. It's not misinformation or disinformation - it is dishonesty. The same is true for many European nations. You're free to look at crime statistics. But, more importantly than being dishonest, the horse begets the carriage. Why does removing brown people fix crime? What's the mechanism for that? Is it because you propose, by their blood, they are more susceptible to crime? Ah, and there comes the racism I mentioned earlier. With far-right populist ideology, it always comes, if you just give it a squeeze. I have no doubt now you will say no, that's not the reason why, but I don't really care.
And, on some other topics:
1. Healthcare is the most accessible it's ever been in the US takes to the ACA. The far-right wants to dismantle this. This isn't a matter up for debate either, so please don't bother.
2. Wealth inequality is high because of the far-right repeatedly failing to tax the rich and letting them engage in anti-competitive behavior. Under populist far-right leaders like Trump, the wealth inequality will only increase.
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Only Republican Presidents get that kind of carte blanche.
They would already be impeaching if it was a Democrat.
True, because if Democrats had an anti-American POTUS hell-bent on destroying the country they would be helping the impeachment process, not defending them
The democrats just allowed a dementia patient to run the country for four years
I have no idea how Republicans still make that claim with a straight face. We literally have someone who doesn't know what groceries are running the country right now.
Cuz it's true? Mind you, the dementia patient did a better job.
If you put Joe Biden and Trump side by side, and asked a random person who didn't know either who was the most likely to have dementia, they would pick Trump. I'm not sure I've ever heard him say something that didn't sound like word salad.
Did you watch the debate between them last year?
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From the outside, it looks like he's doing whatever he wants without control.
He starts to tell that everyone is maintained by the US - lol what?
He starts blaming Europe for being a parasite (thanks!) and treating Zelensky like everyone has seen live.
No one is telling him that his actions will have consequences for the US in their international credibility (gone) and relationships with partners (ruined)?
One day, he does a totally broken linear regression and applies no sense tariffs to every country in the world (no Russia - weird enough).
It's well known that tariffs are not a way to attract investment in your country - there's a lot of theory and historical examples that demonstrate that.
Moreover, it's just absurd to think that these kinds of actions are going to make American (!) corporations, now producing elsewhere, back in the US. No supply chain ready, lack of resources, ...
I don't know - it looks like a single man has too much power and no one around him is helping him make better decisions (for the country) in the long term. On the contrary, it looks like all the decisions are pretty much market manipulations in order to make some "friend" get some money.
But again, this is what it looks like from the outside - and it's quite worrying
He's turned the US stock market into the same model as China's - the entire up/down rests on the leaders words.
Which makes them fairly uninvestable.
There are structural differences between the US and Chinese stock markets that remain unchanged. The policy changed but the relationship between the President and the stock market did not change.
Legally no, but normatively, yes. It was previously expected that the president wouldn't deliberately ruin the American economy for his own ego. That can no longer be expected.
>He's turned the US stock market into the same model as China's - the entire up/down rests on the leaders words.
Not only stock market. The whole "Project 2025" point is to turn everything from the "rule-based" approach to "unitary-executive's-really-a-King's-whim" approach.
Just today - the export control or lack of it on specific Nvidia chips isn't really result of security needs of US, instead it is just a result of Jensen getting a dinner at Mar-a-Lago. Just like in Russia.
I remember reading Unqualified Reservations ten years ago and thinking "this guy is a fucking nut!" and now his (Curtis Yarvin's) monarchist ideology seems to have walked right into the white house
Trump 2 isn't Trump 1. These are uncharted waters indeed
The markets were already like that but with federal reserve dot plots.
US is the biggest consumer market, the most dynamic economy, and the wealthiest country in the world. No real world metric would ever implicate US as uninvestable. What this move is doing is making a few things very clear
1. US is decoupling full on from China. Any ally negotiating will have to show that they are not helping china to export, by putting up similar tariffs on China. Basically, declare your allegiance. And so far, no one has unexpectedly sided with China.
2. For the laggards who are waiting until the last seconds to move away from Chinese supply chain, trump is giving them more time but also telling them, hey it’s your last chance
3. Short squeeze for those who dare attack US economy
4. Navarros is the chief architect and his vision is aligned with trump to fully execute his plan. Just go read his book, he lays it all out
This isn't a good example because a lot investors are (or were) looking at China recently.
You can look at China; however, if you invest in China you're assuming counterparty risk with Xi, as he can destroy any Chines company that he wants.
You also cant actually legally own most Chinese stock. IE "internet" stocks. What you can buy is an instrument intended to track them. Its called a VIE.
That Alibaba stock you have? No, its a share from a seperate company setup in the Cayman Islands which should track the Alibaba stock. They are circumventing a Chinese law that makes foreign investment in Chinese companies illegal. It's a bad idea to own these.
That doesn't stop people from trying -- according to Yahoo Finance, FXI (iShares China Large-Cap ETF) was one of the most-traded (by volume) ETFs yesterday.
I'm well aware--not saying it's a good idea to invest in China, but many investors are trying it now thanks to the success of companies like DeepSeek. I have a feeling many of them will be eating large losses in the not-so-distant future.
The Chinese stock market...is not a fun place. It hasn't done very well in the last 5 years (unlike the US stock market) and is still way too subject to insider trading to be very accessible to most people. You can go with an emerging markets fund, but I would only do that as a hedge.
Idk Xi is much more consistent with the CCP than Trump is with anything.
It's amazing what Trump's accomplished for the US, isn't it.. he's dragged the country so fast downhill that China is looking more and more the better business partner.
The Chinese stock market is flat while their GDP rises because their economy is not based around the stock market. US economic management is entirely based around pumping the stock market.
Very sure that he (or family members) are shorting stocks and then rebuying. This really feels like somebody deliberately creating market reactions, to benefit from them.
Despite the media tantrum the market only dropped back to early 2024 levels at the most.
A president should not be essentially day trading the economy.
The volatility levels are unseen since Covid and GFC.
People’s livelihoods will be at stake soon enough.
> A president should not be essentially day trading the economy.
US voters disagree.
> US voters disagree.
Some polls would disagree with your assessment:
> A Wall Street Journal poll released Friday[1] found 52 percent disapprove of Trump’s handling of the economy, compared to 44 percent who approve. The disapproval is 12 points higher than the 40 percent who said in October that they had an unfavorable view of Trump’s economic plans.
> Pollsters found 54 percent said they oppose placing tariffs on imported goods, while the percentage who said tariffs will raise prices on consumer products rose from 68 percent in January to 75 percent in March.
* https://thehill.com/homenews/campaign/5236712-trump-tariffs-...
[1] "Americans Were Souring on Trump’s Economic Plans Even Before Tariff Bloodbath":
* http://archive.is/https://www.wsj.com/politics/policy/americ...
>Despite the media tantrum the market only dropped back to early 2025 levels at the most.
A) This is obviously wrong if you spend even 5 seconds looking it up, unless you misspelled "2024"
B) You can't just ignore that they spent several days telling financial journalists it was just a negotiating tactic and leading them to believe this might be peeled back quickly.
Oops that was a typo. Yes 2024 levels. Market is unbelievably overvalued anyways.
Yes, but I don't think we've ever had a president pop a market bubble at a date & time of his choosing. Funny for the party of "don't let the government choose winners & losers" and all that.
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Insider trading, pure and simple. You can bet his son-in-law and all his buddies made hundreds of millions here. America is a 3rd world country, nothing else.
He said FAKE NEWS literally just a day ago.... This man cannot be trusted about anything
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- April 7th: Spread rumours of a 90 days tariff pause which immediately triggers a market really, then claim it was "fake new", markets go down
- April 9th: "THIS IS A GREAT TIME TO BUY!!! DJT", then 4 hours later announce a 90 days tariff reduction, markets jump nearly 10%
This level of market manipulation orchestrated directly by a head of state is something you only see in totalitarian states.
The US is moving into a very serious situation. These people won't ever voluntarily leave the Oval Office.
The situation is so absurd that I’m starting to believe the entire Musk vs. Navarro feud was just a ploy, and they’re all popping champagne bottles together now.
Luckily the founding fathers thought of this
If you're referring to 2A then I suggest you start building anti-aircraft weapons in your militias five years ago.
which is what, drone swarms to kill the jet engines?
flying them that high has got to be a pain
Did you forget "/s"?
There is a famous quote from Thomas Jefferson about watering the tree of liberty.
It's direct wealth transfer to his supporters, paid by opponents and people who can't play the market...
What a shit show...
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I appreciate the art and craft of UK swearing as much as anyone, but please don't post flamewar comments here, especially not denunciatory ones on divisive topics. It just makes the threads worse.
https://news.ycombinator.com/newsguidelines.html
That’s a term of endearment if you ask all your exiled prisoners.
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There were a lot of smart things that could be done "about China" and then there are a lot of dumb things...we chose the dumb things.
We could...oh...increase are R&D on automation, AI, green energy, electric vehicles dramatically, we could focus on better education and better infrastructure for our cities (like lightrail in Seattle to where I live that doesn't take $200 billion and 2 decades to build). We could have just fought China with a better product. We could lean into our chip advantage that will only last at most a decade anyways. And many of those fit in with Conservative philosophy even (who doesn't want less regulation and cheaper/quicker construction, well, at least moderates like me would).
But no, we doubled down on culture wars and going back in time to when America was more self sufficient but less rich.
something drastic to do what about china?
i dont want china to be some colony of the west. i want china to become as rich as the west so that they can have clean domestic consumption with strong worker protections and rights
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What countries lowered their tariffs? I've only seen other countries apply their own back.
Does the cognitive dissonance come bundled with the Chinese made red hat or is it sold separately?
What countries have lowered their tariffs?
Source?
Source?
...he didn't. The EU just announced retaliatory tariffs a few hours ago. China is also retaliating in a big way.
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You said Trump sided with the working man and against Wall Street. Which is really cute because actually thousands of auto workers have been put on leave [1] whereas the market volatility is expected to drive bumper profits for banks [2]. I am starting to doubt you are being serious but if you aren't then I'm humbled by the quality of the satire.
[1] https://edition.cnn.com/2025/04/03/business/tariff-related-l...
[2] https://www.thebanker.com/content/250b43e2-67e2-46ba-93ea-8a...
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Please don't break the site guidelines like this.
I'm not saying you owe the person in question better, but you owe this community better if you're participating in it.
https://news.ycombinator.com/newsguidelines.html
I think he's well aware that the reasons he is giving for his actions make no sense. That doesn't mean he doesn't have a plan, he's just lying about it.
As for the actions themselves, they're pretty much his standard operating procedure:
> I think I can get away with bullying these people, so I will
When he talks about the existing agreements being unfair, he means that we have leverage that we're not using. The proposed tariffs are proportional to the trade deficit because the trade deficit is a reasonable proxy for how invested that country is in its economic relations with the US. You can extort more from somebody who is heavily invested, and less from somebody who is lightly invested. It's a classic protection racket, just on a sliding scale.
He's trying to look ignorant because it's at least a better look than showing the malice that actually drives him.
Ever since the tariffs were first announced I've been trying to understand if there is any method to the madness.
There is sound reasoning behind the tariffs, and I can at least understand the motivations. However, to execute the vision behind the tariffs would be tantamount to severely contracting the American economy, and the voters would never agree to go hungry in order to militarily independent.
He knows what he's doing, but him and his ilk are openly lying to the American public because no one would ever agree to it.
Being an illiterate moron isn't fringe. It's quite commonplace. Educated and intelligent is fringe.
I think he knows exactly what he is doing. Him and his friends are making boatloads of money doing it.
Unfortunately, there's a number of folks that think otherwise and they're more than a fringe.
>Or is there a fringe number of folks that think otherwise?
If about 30 million people count as a fringe number, yes.
Illiteracy is common.
If social confirmation of your worldview is what you seek, you're certainly in the right place.
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I voted for Trump and I would again in a heartbeat if faced with the same options but this has been dumb. Whole of the Right is running around screaming the "Art of the deal" when literally nothing has been accomplished. Market is still down, bond rates are still high. We trashed relationships with other countries and not a single trade deal has been signed. And he clearly backed down. We still have no idea what the end goal is. Its just dumb. We are objectively worse off than we were a week ago.
He is still delivering for me on the reasons I voted for him but this chapter has been a debacle. Fun part is with Trump as president every week is a chapter, for most presidents a chapter is 2 years. So excited to see what's next.
If he delivers on China and effectively resets the world financial and trade picture in our favor then well done but so far not impressed.
Whole world celebrating the guy who started the fire putting it out.
"Lisan Al Gaib" JFC
Art of the deal. Thank you President Trump!
Gotta be careful -- Poe's Law is in full force rn in American Politics. People might read this seriously
So much stability
Contrarian opinion.
Irrespective of what you think of Trump, decentralization of production capacity is a good thing — maybe even essential. If this continued for, say, another twenty years, the West and the rest of the world would be completely stripped of all ability to defend themselves. Literally everything from picket fences to rolling stock to tableware is coming from one country.
This is not a contrarian opinion. This is a problem that was recognized long ago and production capacity for strategically important industries has been in the buildup both in Europe and the US.
Trump's actions will probably boost European, Canadian and Australian industries a bit more now. Investment in the US will be a hard sell for companies that care about the stability and level-headedness of governments where they operate.
Well, the contrarian opinion is that this (whatever he did) is a good thing - whether decentralisation happens into the US, Europe or wherever. It's one thing to recognise the problem, and another to attempt to change an uncomfortable status quo.
Every other approach attempted to date has been milder, and hasn't worked. But we'll see if he sticks to it.
> Every other approach attempted to date has been milder, and hasn't worked.
A lot of things were working even if they did not change everything overnight. And the changes that will come to the world order and industries following this administration will on the whole be detrimental for the US economy and position in the world.
There are two parts to what you said.
> A lot of things were working even if they did not change everything overnight.
We can disagree. The frog was slowly getting cooked.
China's trade surplus has reached 1 Trillion dollars, and has seen consistent YoY growth for decades. Such asymmetry is dangerous in the long run. Now, none of this is China's fault. They did the right thing for their country and their population.
> And the changes that will come to the world order and industries following this administration will on the whole be detrimental for the US economy and position in the world.
That remains to be seen. I have no way of knowing, but I would assume that it isn't just the US which is concerned about this.
I don’t get the outrage. Trump did this with Mexico. He imposed tariffs and then immediately eased them when Mexico started negotiating. It worked. Wouldn’t a rational market understand his behavior by now (not agree with it, but understand it). Especially since his stated goal has been “impose tariffs to spur renegotiation of trade terms”. Why would a rational market actor be acting like Trump isn’t doing what he’s said he’s doing?
Sure. Trump is trying to renegotiate the trade deals with Mexico and Canada that he himself negotiated during his last term, by unilaterally imposing massive tariffs. Why are you pretending that this makes any sense?
90% of stocks are owned by 10% of the population... Are you guys crying for the rich?
I wonder if the stock markets will learn to disregard the US president for the next 4 years
His actions have real consequences for all the economy, stock markets can't simply disregard him.
Serious question: what's with the wave of utterly stupid comments on HN?
Is it yuppie college grads working in silicon valley startups who have always had a thick abstraction layer between them and the system that gives them their paycheck? Is it trolls? Is it lifelong diehard contrarians (the same thing as trolls really)? Is it something else?
you re asking a stupid comment for a serious answer, that's not very smart
Third parties can answer.
If the country gets rich from tariffs why stop them?
Because it's not the country getting rich - it's the government getting rich from its citizens. It's another form of taxation, but one with no plan and crazy fluctuations day to day that affect first and foremost businesses, who will put off investments are start layoffs in order to make themselves more resilient to the chaos, which affects the whole economy. And this long term downturn in the economy doesn't make the country rich, but rather poor.
If what Trump was saying about making the country rich were true, then sure, why would people complain? But it's not true; just a lie told to placate his followers. It's another version of "diamond hands" or "ride the dip" that you hear from people pumping and dumping crypto stocks.
This is where I don't follow Trump's logic. Trump and Musk were claiming that the US will push super high tariffs, that it will make the US rich, and hinting that it will maybe even be possible to suppress the income tax.
Musk to his credit is pretty anti-tariff, and has touted a 0% tariff environment with Europe. It's Navarro and Lutnick that are the devil's whispering into his ear on this policy.
Art of the deal. 10% seems "reasonable" to everyone now. That was not the case a week ago. Meanwhile a bunch of overleveraged stock market buffoons were taken to the cleaners.
10% doesn't seem reasonable to anyone. Note that markets are still drastically down.