alt Hacker NewsUS Administration announces 34% tariffs on China, 20% on EU
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Are we surprised? If anyone watched the presidential debates VP Kamala Harris told us about this.
From September 2024:
"What Goldman Sachs has said is that Donald Trump's plan would make the economy worse. Mine would strengthen the economy. What the Wharton School has said is Donald Trump's plan would actually explode the deficit. Sixteen Nobel laureates have described his economic plan as something that would increase inflation and by the middle of next year would invite a recession."
Emphasis on that last line:
would increase inflation and by the middle of next year would invite a recession.
Here we go.
My dumb ass invested money in usa stocks when trump got elected because trump is pro business, right ? Should have invested in Asia, today china is the usa from 40 year ago.
Inheriting a strong economy beating all expectations that was just about to end its fight with inflation and burning it all away in a pump and dump crypto scheme fashion, while doing nothing (or even working to expand) unprecedented wealth inequality. Good luck, going to need it. The world reserve currency status is faltering, and so will the benefits it allowed US economy.
Notably none of Russia, Belorussia or North Korea.
Really starting to look like the US senior leadership is compromised
Time for the EU to float the idea of the PetroEuro.
Side concern: how impactful must the tarrifs be to make a noticable dent in global trend, and a noticable dent on climate change ?
(I mean, it would not be noticed by the USA anymore, since they're not into that whole "science" stuff, but I heard that Europeans have learned how to make a couple satellites on the side.)
Damn it was hard looking at my portfolio today... I hope thing's change in the long run though
The way I see it, it is more like a very-high initial negotiation position. From here on, each country will be dealt with individually. You accept our terms and get 5% discount on tariff ! Every country has a set of red lines. Fewer the red lines better they will be placed in one-to-one "trade agreements".
EDIT: Someone from white-house explicitly declined tariff to be a negotiation. Next few days will be interesting.
Maybe if the US would clean up their production to what people actually want to buy it would help.
EU does not just randomly target US products. No EU company would be allowed to sell food with the same processes (GMO, prohibited additives, medication traces, ...)
The US is just running into these restrictions more than others because of their (lack of) health and safety standards being at odds with other markets.
So, if the tarrifs lead to the world actually being able to buy something produced in the US with the dollars they were forced to accept, something real besides war equipment and (stale) IP bits, the problem would sort itself.
At least the EU has discovered 'sovereignty', after ignoring it to the hilt for the last 55 years. Ringing up the concept even a year ago was at best met with a shrug and more often with a 'conspiracy theory' label. Sadly I don't even think they mean it, but I would be pleasantly surprised.
Am I wrong to intuit that tariffs against everyone is less bad than tariffs against a few, because now the rest of the world has even more potentially willing replacement trade partners?
By chance could it be that US is still angry at those British tea tariffs?
Trump really thinks America is in the 1950's. He thinks people want to work at factories doing manual labor. He doesn't understand that we DON'T want to work at factories. Americans like our plush corporate office jobs building intellectual property. We aren't oxen doing physical labor.
And we designed it that way. We pay thousands of dollars to each citizen in our public schools to teach them calculus, literature, world history, and science, so that they DON'T work at factories doing manual labor like we were oxen. We're supposed to be doing more valuable jobs in intellectual property and services.
It's going to be hard lesson to be learned by Trump and his working class supporters when the inflation hits them because our economy doesn't have any workers that want to work at factories, but it'll have to be a lesson they learn the hard way.
The correct economy is to let people do labor they're best at. If a foreigner can make a shirt cheaper than an American can, LET THEM. Our economy is already taken by the people that design the shirts.
Looking forward to the retaliatory tariffs, which seems to be only language this administration understands.
I guess it will eventually be the year of FOSS software, I am only waiting for the administration going back to export restrictions in software as well.
I guess we Europeans have to get our stuff from elsewhere than a nation hostile to the world with an insane unpredictable leader. China may also be authoritarian, but at least they are stable.
The coolest thing to read are american takes that are like "hey this might be benefiting us for that obscure reason", totally ignoring the fact that you betrayed your allies. Land of fhe free my ass. The only ideology the US has is nihilistic greed paired with hyperindividualsm and transactionalism to the point where Americans think if someone else is getting a thing you are hurting.
If the US was a kid it wouldn't invite others over because it wants to eat the birthday cake alone. And then it shits on all the cakes at the bakery because it wants to be the only kid eating cakes. If that is the American idea of how to lead a great life the rest of the world is better of without it.
The admin's think is that any negative trade balance is 'exploiting' the US. Logically, the opposite would mean US is exploiting others. So the only 'proper' balance is zero, which requires managed trade. An obvious impossibility in this age. There are ways to rebalance, they require time and patience and thought (the latter seems most lacking).
US says there was an imbalance in trade, and that is true only if we look at goods. If we look at services, I think the picture changes.
What if the EU and rest of the world starts adding taxes to financial and IT services provided by the US? What if Amazon cloud and Netflix start costing 20% more?
And let's not forget US is printing dollars which are being used for worldwide trade and the rest of the world subsidies their inflation and their economy through that.
Let's not forget US exported the 2008 crysis and most of the world payed for that.
I don't think US will like if the rest of the world stops using US dollars, stops using US financial services and stops investing in US economy by buying shares, bonds, securities.
Trump is going for a 1-2 punch. First tariffs and then tax cuts to soften the blow of price increases. It also puts republicans in a choke hold to force the tax cut legislation through, because the fallout of tariffs with no tax cuts would be a death knell for the party.
Maybe in a sim city game this would balance out, but it's a tall order for a real world scenario. Prepare for a bumpy road ahead.
I wonder how long it takes until this trade war moves to the digital stage. It wouldn't be surprising to see that software license fees start increasing if this tit-for-tat continues for much longer
Did the "de minimus" exemption on small packages from China go away, and are all those now going to have to go through customs clearance?
I'm European. While it's pretty childish to paint the US and the EU as two human being with a "relationship" it's of course pretty jarring to see a country that has for my entire life been the undisputed cultural hegemony simply check out of the world stage and suddenly treat everyone on "their" side (culturally, politically and economically) like an enemy, or at the very least an abuser.
I'm not an economist, but I don't think you have to be one to realize that kicking the entire global economy right between the legs will lead to a recession -- just look at the supply chain issues that echoed for years after Covid, and the massive "quantitative easing" that had to be done to avoid a recession.
The abandonment of trade partnerships I could live with, I'll make it through a recession and every country is free to elect their own politicians and make their own fiscal policies, dumb as they may be; I don't get my "feelings hurt" by Americans wanting to bring back manufacturing jobs -- although I have issues understanding the reasoning.
What worries, and actually saddens me, is the complete doing away with of values, that I do think have existed in the past. The US has never been a beacon of exemplary behavior, and I understand that "nations have no friends, only interests" -- one needs to look no further than the US treatment of the Kurds for an example of this -- but it's unbelievable to me how so many Americans can not see the American self-interest in making Russia pay for what they've done in Ukraine.
Russia has been the main antagonist of the US for the entire post-ww2 era. It's a totalitarian state and an obvious enemy to the US. Invading Ukraine was a massive mistake, and all the richest country in the world had to do to basically risk-free damage their biggest antagonist, was to keep pressing a dollar-button together with the EU. No boots on the ground, no Iraq- or Afghanistan scale disaster, just military and economic support for a country that could end up being an extremely close ally. There is literally zero chance Russia could win a war of attrition with this dynamic. Instead, it's like the Soviet union in the 70s would have given away Cuba for free and instead threatened to invade North Korea.
In the end, I think what makes me uncomfortable is that I truly do not understand what it is that the average American (or voter) wants, because the actions of the US on the international stage makes no sense to me, yet so many Americans seem to cheer it on.
and it’s all thanks to a16z and co
Is there going to be a hearing into the stock transactions of any the cabinet related to this news? Seems to me like some people could make some significant money on information like this.
How can companies, importers and ports even implement these tariffs so quickly?
Do these tariffs go into effect immediately?
Trump must be a Russian asset. There can be no other explanation. To weaken NATO, remove U.S. dominance by withdrawing forces from bases worldwide, abandon maritime security, weaken the dollar, and implement hostile economic policies that maintain the dollar as the world’s currency, it seems that the final step of “America First” is to make the dollar the sole currency used only in the United States.
So now that the impacted countries will respond with tariffs, are there any chance they might include tariffs on digital services like AWS and Azure, or will they only target physical goods that cross the border?
I don't know how these things usually work in the best cases, and it seems like we're living in exceptionally stupid ones right now.
I don't know how I feel about this overall. But I do want to recount something from my childhood.
I'm American. I grew up in the rural Midwest. The truth is that much of this country is a depressing shell of its former self. The town I grew up in is all but dead -- about 12,000 people still live there, though. The nearest big city, previously a hub of manufacturing innovation, has been on a steady decline for decades. Since the 70s, more and more powerful drugs have been flooding into the broad geographic region, decimating entire communities and creating generational cycles of poverty and addiction. It's an absolutely brutal combination that has totally killed almost all innovation and output in huge swathes of this country. Candidly, even if you brought back manufacturing to the area, the local population is so dependent on drugs that you'd struggle to even find workers today.
Today's drugs are so powerful that addicts would rather live in total poverty with drugs daily than have a high-paying job without drugs. Every small business owner in these regions knows this, but the true scope and severity of the problem can otherwise be hard to fully notice and appreciate. It's not possible to operate a small business in these regions without encountering the drug problem on a regular basis.
Do I think tariffs are going to fix this? Honestly, probably not, for the simple reason that Trump is old and won't be here much longer even if he tries to install himself as a dictator. The winning strategy for much of the world is to likely wait this out to some degree -- best case scenario for others is that this will just get reversed or significantly mitigated in 3.5 years, which is the blink of an eye on global timescales.
Nonetheless, my heart goes out to the incredible loss this country has experienced over the last few decades. It's truly heartbreaking and devastating that we've sold out so much of the country for short-term profits to such a degree that we can probably never break out of the cycle without severe pain and sacrifice.
One thing we know for sure Trump will never back down or admit he’s wrong. So how to invest in this 4 year regime to survive or even thrive?
So many people around the world have been hurt by the terrorist US government. This lessening legitimacy will hopefully provide them some sort of justice.
Real problem is budget deficit not trade deficit. Trade deficit matters to countries who can't control the supply of dollar.
The country that prints dollars doesn't have this to worry about.
Main problem is budget deficit and the huge pile of debt.
And as tech guys we always wonder if the world is a better place with AI Agents taking over. My guess is that even gpt-3 would have come up with a better solution than this.
Here's the brilliant formula they used to determine those tariffs by the way:
https://xcancel.com/orthonormalist/status/190754526581875103...
https://xcancel.com/corsaren/status/1907554824180105343
It's trade deficit divided by total exports divided by 2
I'm wondering how this protectionist trend will impact overseas hires. Will US companies continue to hire talent remotely outside of their borders? Will they be incentivized to only hire in the US?
This article has more information, such as
> The 10% rate would be collected starting Saturday and the higher rates would be collected beginning April 9.
https://apnews.com/article/trump-tariffs-liberation-day-2a03...
what is stopping everybody from exporting to the one guy that knuckles under completely and circumvent the circus?
The US Administration is dead. America is occupied by creatures that simply want to destroy the current world order, sow chaos, and profit from that by means of power and utter hate and disrespect for ordinary people, who live from paycheck to paycheck. Keep advancing AI, so they wouldn't need to employ humans to kill other humans.
White collar jobs will be destroyed by AI/AGI. But the US workforce consists of a large portion of white collar workers.
To replace the coming destruction of white collar jobs, manufacturing and industry jobs must be brought back, along with new resource collection initiatives (e.g. mining). They will be needed anyhow to build robots, drones, and other machines to compete with China and India, technologically and militarily.
Globalization will be effectively dead, remaining trust in the petrodollar will be destroyed, therefore so will Pax Americana. Expect more wars.
I like to ask, "What would a Russian agent do to try to dethrone the USA as a global power?"
* remove support from historic trading partners
* break up NATO and similar military alliances
* convince the world to distrust USD as default reserve currency
* specifically make it harder to trade with China who makes a lot of our junk
* remove a lot of the federal government workforce from their positions
* convince those involved in Ukraine to back out so that the mineral-rich regions in the east can be appropriated
* destroy the image of "democracy" and "free speech" by flaunting legal processes and crushing dissent
I could list and think of more, but these are most illustrative IMO.
Man the stock market today was a slaughter house.
Unfortunately in America they choose a dictator for 4 years with a parlement made up of puppets so it is what it is.
Would be good to know -
Who are the people coming up with these specific rates?
How are they modeling this system?
what would happen to US??? I mean you cant ignore US market right now
so is this enough that factory gonna comeback on US soil??
I encourage everyone to contact their reps and demand a bill be advanced to return tariff authority to the Congress.
There are enough GOP reps opposed to tariffs to get a discharge petition.
I would bet that most of these tarrifs won't exist in <6 months. This reeks negotiation tactics from Trump.
He's been playing this game for 2 months now with Canada and Mexico, and so far he's loosing. US & business are loosing even more.
Keeping this kind of tarrifs, would be absolutely moronic even by Trump standards. That would be economic and financial suicide for the US.
The Hawk-Dove game is a wise framework to consider. When both are Hawks, both get harmed. When one is a Hawk and the other a Dove, the Dove gets hurt, and the Hawk laughs. I hope both can be Doves, bringing tariffs to zero and making all great again.
for starters, countries will sell to the UK , which will resell to the US at the lowest tarriff rate. Great for the UK, but stupid.
I try to sympathize with trump's deglobalization agenda but it is probably exactly what it seems to be : a colossal stupidity.
As someone interested in "curious discussion", what are some of the positives we can take away from this? Is this a new standard for economic policy?
we've spent the last 50 years basing our currency in foreign manufacturing, seems like a good way to tank the dollar to me
These guys are untrustworthy liars. I assume there are thousands, possibly tens of thousands of carve outs for the tariffs, based on bribing the POTUS or approved affiliates.
What most people don’t see is that we are basically under “shadow austerity” to correct for the not so hyperinflation we saw post COVID.
It is a combination of post WW2 Britain (China is the US in that analogy) - this helps to explain the Canada and Greenland issue; and Volcker era stagflation economics. It will not get any better in the short term, but there is likely to be substantial growth in the long term as a result.
What that means is the fed likely won’t reduce rates, and it may reduce its rate decrease to 1 this year, if even that. It is entirely possible the rate doesn’t come down at all.
Expect Layoffs to come, as the fed doesn’t seem to care about unemployment as its target is on inflation. Many zirp era businesses and funds will fail. Less cereal and eggs for the same dollar.
I am really hoping we don’t start to de-anchor from 2% inflation as a result of all this. I wonder how various US infrastructure projects can and will be financed. Reduction in entitlements. Possibly some type of mandate to hold treasuries.