It is a lie to claim that the United States now has a tariff or an industrial policy. It just has a chaos monkey making chaos, and a bunch of grifters trying to cover up and rationalize that...
Trump's negotiating style, if it can be called that, is bullying. Its purpose is extortion, not a mutually beneficial outcome. Essentially, he sees a trade surplus as a shiny, golden trophy - one he must have, with each and every country, every trading partner. That makes no sense at all in economics or international trade. But to get what he wants, he will strike the first blow. The tactic is then to grab whatever the frightened or desperate victim is able to offer. That's the way a gangster operates.
What Trump doesn't understand at all is that the US needs aluminum from Canada and car parts made in Mexico. By putting tariffs on them, he makes Americans pay more for what they will buy and use or buy and use less. In either case, he lowers the economic well-being of Americans. The list of products which America can't and won't make as well as China is enormous - because these are two countries at different stages of development. America is heavily invested in services, China in manufacturing.
Trump is the worst disaster to have happened to America in a long time. By the time his presidency is over, they will have suffered much more than in many of the more famous events which attracted news headlines at the time as disasters in previous years. Economic decline and sudden breaks cause serious social tensions and conflicts. America has its worst enemy as president - what a terrible fate.
There’s a non-trivial probability that the courts will rule that Trump has exceeded his delegated powers under the International Economic Emergency Powers Act (IEEPA) and that his tariffs are thus illegal. Perhaps that’s the best we can hope for.
Do you think that Trump maneuvered China into making the arguments much stronger? I mentioned the other day that one should listen to anyone discussing the §232 tariff legal issue, so I hold you in high esteem based on your statement.
I believe the Trump administration has handled a difficult situation effectively. It may result in a disaster, but that is a risk one takes when changing things.
Thanks for the undeserved praise. Unfortunately, I’m definitely not an IEEPA expert, but I’m inclined to doubt that Trump is thinking strategically about that or anything else. Perhaps Brad will do a podcast with a real expert from Berkeley’s law school?
It may very well be an important issue before everything is finished.
FWIW I'm not an expert either, but I did see former Congressman Gallagher mention it and express concern over the issue. Litehauzer mentioned in his book that, at times during the first Trump administration, specific actions were taken due to legal constraints. While I don't remember, or care, if my recollection that it was a §232 issue is correct, I understood why they took the action that I thought was crazy at the time.
If a single person is thinking strategically, it is Bessent or someone he works with who is not in the public domain. Trump doesn't have to understand it, but he is responsible for it. He has navigated situations that I thought were impossible before, so I have some hope things will eventually turn out o.k. (or descend into war) at some point in time.
Trump removes all the oxygen from a room with his bluster and convinces people trade deals are the same thing as deciding how much money per hole one is betting in a round of Golf (at which Trump cheats, btw).
But China isn't playing.
Not sure how much longer markets can avoid pricing in what is coming, or not coming, meaning many goods from China.
Perhaps I am a grifter, but I will say two things:
1) When you know the facts are not good for you, a well-known strategy is to "confuse them." I've never actually done it, but I was told it was a good strategy.
2) It is chaos. When the US went off the gold standard, it was chaos, too. Administration is adjusting as things go along so will we have several years or many years of sub-optimal growth? I have no idea but as long as it hurts China more than US (and any allies who remain), I will consider it a success. I suppose the ultimate goal is to persuade China to reform its systems and behavior; a reasonable strategy is to harm them, even if it harms the US and its allies.
After all, the sanctions against Russia have the same effect, but no one complained about that.
Trump's negotiating style, if it can be called that, is bullying. Its purpose is extortion, not a mutually beneficial outcome. Essentially, he sees a trade surplus as a shiny, golden trophy - one he must have, with each and every country, every trading partner. That makes no sense at all in economics or international trade. But to get what he wants, he will strike the first blow. The tactic is then to grab whatever the frightened or desperate victim is able to offer. That's the way a gangster operates.
What Trump doesn't understand at all is that the US needs aluminum from Canada and car parts made in Mexico. By putting tariffs on them, he makes Americans pay more for what they will buy and use or buy and use less. In either case, he lowers the economic well-being of Americans. The list of products which America can't and won't make as well as China is enormous - because these are two countries at different stages of development. America is heavily invested in services, China in manufacturing.
Trump is the worst disaster to have happened to America in a long time. By the time his presidency is over, they will have suffered much more than in many of the more famous events which attracted news headlines at the time as disasters in previous years. Economic decline and sudden breaks cause serious social tensions and conflicts. America has its worst enemy as president - what a terrible fate.
There’s a non-trivial probability that the courts will rule that Trump has exceeded his delegated powers under the International Economic Emergency Powers Act (IEEPA) and that his tariffs are thus illegal. Perhaps that’s the best we can hope for.
Do you think that Trump maneuvered China into making the arguments much stronger? I mentioned the other day that one should listen to anyone discussing the §232 tariff legal issue, so I hold you in high esteem based on your statement.
I believe the Trump administration has handled a difficult situation effectively. It may result in a disaster, but that is a risk one takes when changing things.
Thanks for the undeserved praise. Unfortunately, I’m definitely not an IEEPA expert, but I’m inclined to doubt that Trump is thinking strategically about that or anything else. Perhaps Brad will do a podcast with a real expert from Berkeley’s law school?
It may very well be an important issue before everything is finished.
FWIW I'm not an expert either, but I did see former Congressman Gallagher mention it and express concern over the issue. Litehauzer mentioned in his book that, at times during the first Trump administration, specific actions were taken due to legal constraints. While I don't remember, or care, if my recollection that it was a §232 issue is correct, I understood why they took the action that I thought was crazy at the time.
If a single person is thinking strategically, it is Bessent or someone he works with who is not in the public domain. Trump doesn't have to understand it, but he is responsible for it. He has navigated situations that I thought were impossible before, so I have some hope things will eventually turn out o.k. (or descend into war) at some point in time.
God help me. I love the turmoil.
Trump removes all the oxygen from a room with his bluster and convinces people trade deals are the same thing as deciding how much money per hole one is betting in a round of Golf (at which Trump cheats, btw).
But China isn't playing.
Not sure how much longer markets can avoid pricing in what is coming, or not coming, meaning many goods from China.
https://strategicmetalsinvest.com/current-strategic-metals-prices/
Perhaps I am a grifter, but I will say two things:
1) When you know the facts are not good for you, a well-known strategy is to "confuse them." I've never actually done it, but I was told it was a good strategy.
2) It is chaos. When the US went off the gold standard, it was chaos, too. Administration is adjusting as things go along so will we have several years or many years of sub-optimal growth? I have no idea but as long as it hurts China more than US (and any allies who remain), I will consider it a success. I suppose the ultimate goal is to persuade China to reform its systems and behavior; a reasonable strategy is to harm them, even if it harms the US and its allies.
After all, the sanctions against Russia have the same effect, but no one complained about that.