Yeah, the steel tariff is targeting NAFTA, not China. Media was running the wrong story.
I guess Canada has more iron in the ground than China.
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Only loser firms like GM that manufacture in the US need to worry about tariffs. Smart companies like Apple that does all its manufacturing overseas are alright. No harm for them.
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The US fires the first shots in a tiff over tariffs. Is a trade war looming on the horizon, and will it make America great again?
Is there a hidden agenda? Surely he is aware that the last trade war causes the Great Depression. Now that the world is so interconnected and interdependent, we will see a global Great Depression if a trade war occurs. His often cited reason for doing that is USA, the only superpower, is unfairly treated by its trade partners, is that a joke? Trade deficit means USA, a consumer economy, is paying for goods with an depreciating dollar, what not to like? He wants a trade surplus? Instead of the world sweating for US consumers for a depreciating dollar, he wants US to pay back by working for the world?
What does he really want?
Trade deficit is one of the most misunderstood issues. Just because of the world âdeficitâ most think itâs inherently bad. That includes 99% of the voters. Very few understand by current accounts a deficit just means foreigners are investing in USA more.
Trump is dumb. His voters are dumb. He just want praises and votes.
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The service based economy is a mirage based on increasing debt to achieve growth. Just look at the first graph of household debt as a percent of GDP. Thatâs not sustainable.
The US trade deficit means we are going further into debt to buy goods that rapidly depreciate.
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Jobs.
Which one is cause and which one is effect? Are you blaming China for charging too little for its products? If we close the border tomorrow and say no to every import, will Americans stop buying âgoods that depreciate rapidlyâ and save that in savings account instead?
If every American cut spending 10% and save that in banks what do you think it will do to the economy?
Thatâs just contradictory to what Marcus wrote.
So which is it?
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We used to save 10% and the economy was still growing. If we went from current savings rate to 10% tomorrow, then itâd create about a 5% drop in GDP. Itâd be more practical to gradually increase it over time. Itâs not healthy for households or the economy when over 50% have less than $1,000 in savings. Itâs not good that most people over 50 have under $50,000 in retirement savings. Savings creates future income which increases purchasing power in the future.
The trade exaggerates the impact, since the money for goods leaves the US. We give China $100 for something thatâs worth much less as soon as we open the packaging. Thatâs a recipe for financial disaster. Itâd be like spending more money on cars than a home. At least when those items were made in the US, the $100 paid for them would be spent in the US. We compound that by using debt to finance buying rapidly depreciating items.
Consumer spending is over 70% of US GDP. A 10% contraction will give you a 7% drop right off the bet. Then you add on the decrease in investment appetite the drop will be more than 10%.
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We print $100 and gave that to China. In return China gave us goods. What does China do with that $100? It buys Treasury which lowers our borrowing rate.
The best way to increase American saving rate is to drastically increase interests rate. If credit card charges 50% interests I donât think many people will carry credit card debt.
Weâre at 3.2% savings rate now, so itâd be 70% of the 6.8% increase needed to reach 10%.
Do you not see how futile the cycle of borrowing is? Weâre paying them interest, so over time they accumulate more wealth. Over time a higher and higher percent of US income will go to pay interest on prior purchases which are depreciating. Youâd never manage your personal finances this way, so Iâm not sure why you think itâs fine for the country to do it. Do you not think itâs damaging or do you think itâs damage will be far enough in the future it wonât impact you?
Americans are saving too little. I agree. But a trade war will not fix that. Symptom vs root cause.
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Do you prefer to blame others or yourselves for your bad habits?
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Best way to increase savings is to reduce borrowing. Thatâs tautological, I know. And whatâs the best way to reduce borrowing? Increase interests rate.
Tell Powell to hike rate to 10% and I guarantee you savings rate will shoot up like a rocket.
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The dummies supporting this mumbling jumbling to keep his base fired up president just donât get it. They support not only a 3 time wife cheater, which I think they also do since they are happy with that fact, but are lowering the bar for future generations of candidates, to the point a vulgar, a sexual predator like himself are going to be the norm.
Putin and China and the EU couldnât have hoped for a better president for their ambitions.
Meanwhile, the U.S. could wreck its standing.
That President Trumpovich makes America look a bit less politically stable sort of goes without saying at this point. But the precariousness of the U.S. position is more specific than the presidentâs tweets. Eichengreen and his co-authors looked through the historical data and found that geopolitical relationships â particularly military alliances â influence who uses what reserve currency. Itâs not just an economic calculation, but also a way of strengthening an alliance. âWe find that military alliances boost the share of a currency in the partnerâs foreign exchange reserve portfolio by close to 30 percentage points,â they concluded.
This brings us back to Trumpâs tariffs. Itâs unlikely that increased duties on steel and aluminum could set off a tit-for-tat trade war that eventually encompasses a whole range of trade goods and services. But if they did, that would make the U.S. dollar look less attractive as well.
If any of these conflagrations do happen, Eichengreen and his co-authors think changing technology could be an accelerant. Itâs traditionally assumed that reserve currencies function similar to monopolies: Things like convenience and network effects push everyone to rely on one dominant currency. But with modern technology, massive reserve holdings can be instantaneously transferred between assets and between currencies. Digital technology allows everyone to comparison shop between different assets and currencies at the click of the button.
https://www.msn.com/en-us/money/savingandinvesting/the-dethroning-of-the-dollar/ar-BBK2SYt?ocid=spartanntp
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Stock tanking after hour.
Sound like Trump admin views China as a challenger to USâs technology superiority.
At this rate, global great depression is around the corner, sell stocks buy RE because stock prices drop faster than RE. During dotcom bust, some stocks fell over 90% whereas RE prices in fortress fell only 10-20%.
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You are talking like @BAGB.
Hopefully trump will get impeached by the Dems after midterm. Heâs just bad news.
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âTrump may impose tariffs on $60 billion of Chinese goodsâ
Thatâs 0.3% of our economy. Itâs a big headline without much substance. I find sensational headlines where people have done zero math hilarious. They do seem to create good dips to buy.
People must get exhausted reacting so emotionally to every headline.
https://www.census.gov/foreign-trade/balance/c5700.html
US import from China was 505B in 2017. 60B is 12% of imports. Thatâs not small.