Interrupting "Real Yield" today, Sonali Basak reported from Reuters than tariffs will not begin until March. Everything else I see says the ridiculousness will start on Feb 1st, but that oil/gas will be dogged by a smaller tariff. A report I saw earlier asserted 25% on Canada, 25% on Mexico, 10% on China. Really??? Reward China for being scumbags politically and militarily? ... But of course, the Orange Dolt thinks whatever he wants to think. His cardinal rule is that it must be nonsensical.
Any specific, actual updates? Thank you.
Comments
(report supposedly updated an hour ago)
Reuters has a 26sec video clip of Leavitt making that statement. It's real.
https://www.reuters.com/world/americas/north-america-braces-new-trump-tariffs-saturday-deadline-nears-2025-01-31/
U.S. trade law gives the president huge discretion to impose tariffs, but only for a specific set of reasons: economic injury from import surges (Section 201), national security (Section 232), unfair foreign competition (Section 301), dumping — sales below costs. Drug smuggling, especially imaginary drug smuggling, isn’t on the list.
...
As I wrote the other day, in the three decades since NAFTA went into effect, North American manufacturing has evolved into a highly integrated system whose products — autos in particular, but manufactured goods more broadly — typically contain components from all three members of the pact, which may be shipped across the borders multiple times. Manufacturers developed this system not just because tariffs were low or zero, but because they thought they had a guarantee that tariffs would stay low.
One way of saying this is that until just the other day there was really no such thing as U.S. manufacturing, Canadian manufacturing or Mexican manufacturing, just North American manufacturing — a highly efficient, mutually beneficial system that sprawled across the three nations’ borders.
But now we have a U.S. president saying that a duly negotiated and signed trade pact isn’t worth the paper it was printed on — that he can impose high tariffs on the other signatories whenever he feels like it. And even if the tariffs go away, the private sector will know that they can always come back; the credibility of this trade agreement, or any future trade agreement, will be lost. So North American manufacturing will disintegrate — that is, dis-integrate — reverting to inefficient, fragmented national industries.
Hence my title ....
These 'tariffs' are just the Sundowning Florida Man throwing arbitrary and ill-informed tantrums to show the world that there are somethings that 'I alone' have the ability to do -- I have power, I have to use it. He needs foreign or 'other' bogeymen and perceived 'threats' from the 'other' to justify his flailings, so this is what we get. How long before 'fetanayl' becomes 'foreign DEI' as his existential crisis du jour?
Some of his more rational advisors I'm sure are going nuts over the Canada tariffs though ... especially over oil. Let the middle of the country (and his base) suffer for it. (Look at SOBO's pipeline map). He wants to lower inflation and the price of goods? Sure, tariffs will fix that riiiiiight up for ya, buddy. Wait for it -- and remember whose signature is on the orders that did that. (Hint: it's not Biden or Obama or the Democrats in Congress.)
Yet he said yesterday “Tariffs don’t cause inflation. They cause success....Tariffs are going to make us very rich and very strong.” IDIOT.
WaPo notes that "only 1.5 percent of migrants apprehended by U.S. Customs and Border Protection in the 2024 fiscal year and 0.2 percent of fentanyl seized at U.S. borders came from Canada" and suggests that's just a canard pretense to justify his actions to his cult.
I never believed he would start WW3 with our adversaries. However it is entirely likely he'll do so with our allies. Up is down, down is up, and you did not see that with your own eyes, people.
Elect a clown, and the government becomes a circus. It'd be funny if it wasn't so dangerous.
Oh ... just saw this tidbit:
"The GOP also expects to factor in Trump’s tariffs as revenue that will reduce the[ir spending/tax plan] legislation’s price tag."
So the GQP has swallowed FOTUS' idiocy that tariff money goes straight into the US Treasury. MORE IDIOTS.
If by beneficial you mean "less bad", then others agree. All links are into NYTimes article:
How Could Trump’s Tariffs Affect the U.S., Canada and Mexico?
https://paulkrugman.substack.com/p/why-has-trump-gone-soft-on-china
"Could China have, in effect, bought itself lower tariffs by enriching Trump personally?"
US trade rep / Commerce Dept website probably will have accurate and updated information.
I expect Tariffs on China to be higher if not equal to that on border countries but someone can post the info when available.
Over the past six-seven years a lot of Chinese manufacturers have moved their operations to other Asian countries and continue to be under (direct or indirect) China / CCP control.
It would be good to know how have forum members changed or plan to change their portfolio because of the Tariffs. Your reaction can be very targeted to specific tickers, sectors, or market as a whole. For example, you decreased or plan to decrease your equity allocation because you think Tariffs will dampen (slow down) the economic activity in the US and / or cut into gross margins of US companies.
Increasing allocation to defense, as there is likely to be a major war somewhere , given his craziness.
If the market tanks and the economy seems to be holding up I might increase equity but the real danger here is the market tanks, and destroying free trade, canceling foreign aid, eliminating the rule of law, destroying the CDC, FDIC and SEC etc, cause a major depression, as supply chains are disrupted, epidemics resurface, and corporate lawlessness eliminates any ability to understand future earnings.
Tariffs doesn't bother me - it will be temporary. Most of the countries run trade deficit with US, export economy countries will suffer more (Example-Colombia). Our prices will not increase much - companies will eat some cost (they will get tax benefit to offset the increased cost). We will take control of Panama canal with Panama agreeing willingly or by force - will reduce transportation costs. Deregulation will reduce the operating costs. I consider it as consumption tax (since we don't have VAT, more than 50% population don't pay income taxes). I am looking at tax cuts which will more than offset cost increase due to tariff.
Otherwise not adjusting my portfolio in any way.
Another thought re: tariffs: if imported goods are going to cost more, you can bet domestic vendors are going to raise prices, to a point just under what the imports cost. Amazing and fabulous capitalism. Everyone was maybe hoping that deregulation would help the Markets, but he is sowing nutso chaos. Plain and simple.
(Not related to Tarriffs but because wars was mentioned, I expect overnight tactical military operations but I do not expect any major wars initiated by the US (On Trump’s bucket / wish list is Nobel Peace Prize). Besides, neocons are not in charge.)
I expect a weaker economy if Tariffs go full on but I do not know if and how that might impact equity indices. I am cutting back on individual stocks as long term ideas.
Rick,
Selling pipelines and hanging on to rail roads makes sense. Shipping stocks are iffy.
If social media sentiment translated into market moves we would see a 1987-like crash on Monday
I hope everything is a giant overreaction but I can't wait to see how the markets digest the tariffs
It does feel like an airpocket event is on the table.
https://www.whitehouse.gov/news/
https://www.khon2.com/local-news/hawaii-prices-could-spike-due-to-recent-tariffs/
https://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States
Judging by who the USA has trade deficits with, I would hazard a guess that the EU, ASEAN, individual ASEAN countries like Vietnam, individual EU countries like Ireland and Denmark (because of Greenland) could be the next targets of Trump's tariffs. Panama too.
In addition to the economic troubles (both in the USA and abroad) caused by Trump's tariffs, various security arrangements will be in question as countries respond to Trump's tariffs. Could violence against USA interests abroad and USA citizens abroad be forthcoming if Trump's tariffs are expanded to other countries? At what point is Trump considered to be a national security threat?
Vladimir Putin is smiling ...
I'm waiting for FOTUS to use America's need for Ozempic/Wegovy as a cudgel to threaten Denmark over Greenland. IE, I'm going to tariff these pharmaceuticals 500% until you give us Greenland! Will Denmark care about the wailing of patients in America? *shrug*
I'm sure the thought has crossed his mind.
It has been abundantly clear that Trump is a national security threat
since his inept and criminal mishandling of classified documents.
And yet the Teflon-Don got away scot-free once again!
There ought to be a law against this type of activity...
In my denomination's rule book, it is flatly stated that the rules and structures will not work unless all concerned behave in good faith and a sense of trust with each other. Obviously, that applies to our public institutions and the Constitution, too. We are being sabotaged. Right now.