Updates on tariffs for everybody in a couple of weeks (gift link):
https://www.wsj.com/politics/policy/trump-team-explored-simplified-plan-for-reciprocal-tariffs-06d1a9fa?st=ty99uy&reflink=desktopwebshare_permalink
My advice to anybody that is invested in US stocks…
Run!!
That crack team of people making highly complex tariff decisions on the fly should worry you, because its pretty clear at this point that they don’t have any kind of realistic long-term plan.
Meh, all this is priced in now. Might be time to buy
By definition, these type of tariffs (off/on and all over the place) cannot be priced in (as you really have no idea what Trump will do next)
Its the uncertainty of this that is deadly to the US and its markets.
You are seeing this now…
What if all share prices dropped 90%, would we say it’s still not priced in simply because it’s uncertain?
Per efficient markets the uncertainty is well priced in at this stage. Whether that turns out on the good or bad side is roughly random, but I don’t think there’s free money to be had by selling, especially once everyone is convinced the market is going to go down, sounds like the right time to buy.
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Um, tRump was not president then.
Apologies, the quote is from the FT. I have just run out of free gift links.
Here is article link:
It is a typo. The date should be Feb 2025, when Trump was President.
Feb. 4, 2025
New 10% tariffs on all Chinese imports to the U.S. come into effect. China retaliates the same day by announcing a flurry of countermeasures, including the duties on American coal, liquefied natural gas and agricultural machinery.
Source: A timeline of US-China tit-for-tat tariffs since Trump's first term
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Whaaat"?? An extremely expensive online ezine publishes with typo’s?
THAT is the point I’m trying to make.
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Just on the backend of this one.
Here is the analysis of the current Trump plan by Miran.
Putting your trust in Trump is comedy of the highest order because it will be him that you ultimately have to deal with, and as you can see manufacturing % has been dropping for developed countries.
Reposted from previously in this thread:
FT Analysis
Table of manufacturing 2005 vs 2023
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I tried reading this paper, but I gave up. In one page, he talks about the 2018-2019 China tariffs not having a material effect even with the appreciating US dollar, but then he relies on the USD depreciating to offset the effect of tariffs. Isn’t it the US importer (and ultimately the US consumer) who pays the tariffs, or am I missing something here? 
They are counting on domestic producers being able to produce widgets cheaper vs those widgets with tariffs attached that were being imported from abroad.
Worth noting that while that is in progress the price level in the US will get higher. In all probability, it will stay permanently higher for years.
The part that is bonkers is that they assume that the USD will depreciate relative to other currencies as more widgets are produced domestically, and because they will also be able to force countries who hold standard US debt to trade it in for a 100+ year US bond (basically a perpetual bond).
There is effectively zero evidence any of this has a chance of working.
So it’s just “beggar thy neighbour” in the final analysis. Thanks for clarifying that!!
Obligatory “Macroeconomics is for suckers.” quote.
All kinds of human biases at play, the market has priced something in, but may very well have underestimated unknown volatility…
Someone help me out here. Are the tariffs going in April 2 going to impact Japan or any countries in Europe yet? Can’t keep track of all the pronouncements from the Oval Office.
Nobody really knows exactly as they have written this very broadly.
They will likely hit the EU, China, Canada, Mexico. Japan, South Korea and Taiwan are still question marks as they are negotiating.
- Reciprocal Tariffs: President Trump signed a presidential memorandum on February 13, 2025, to develop a plan for increasing US tariffs in response to other countries’ tariffs, tax policies, and any other policies including exchange rates and unfair practices. The recommendations are due April 1, 2025 and the president has indicated they will begin taking effect on April 2.
Presidential Memorandum Link
https://www.federalregister.gov/documents/2025/02/19/2025-02872/reciprocal-trade-and-tariffs
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One dumb thing (of many) about the April tariffs is what is taken into account in setting their level. Counter to Trump’s talk about Canada’s high tariffs, the overall rate of tariffs on goods entering Canada is actually less than on imports to the US. However Trump is going to take into account VATs as well as tariffs despite the fact they apply equally to imported and domestically-produced goods.
Excerpt from Globe article on tariff levels:
**Trevor Tombe, an economics professor at the University of Calgary, said via e-mail that the “overwhelming majority of U.S. exports to Canada enter tariff free.” Looking at World Bank data, he calculated that the average effective tariff on all imports from the U.S. in 2023 was 2.07 per cent, while the average effective tariff on Canadian goods entering the U.S. was 2.4 per cent.
Claire Fan, a senior economist at Royal Bank of Canada, noted that customs duties collected as a percentage of goods imports was only about 1.3 per cent in December, 2024.**
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