Trade Wars

[Dude#1279435]

Yeah, the white house posted the formula for the "reciprocal" tariffs.

View attachment 73085

>>>To conceptualize reciprocal tariffs, the tariff rates that would drive bilateral trade deficits to zero were computed.<<<

Reciprocal Tariff Calculations

Executive Summary Reciprocal tariffs are calculated as the tariff rate necessary to balance bilateral trade deficits between the U.S. and each of our trading partners. This calculation assumes that persistent trade deficits are due to a combination of tariff and non-tariff factors that prevent...

ustr.gov

>>>. . . there are actually two parameters: φ and ε, representing the pass-through of tariffs to domestic prices and the elasticity of demand for imports, respectively, but with values of ¼ and 4, respectively, these parameters happen to cancel out perfectly. . . . More importantly, this is an equivocation: the foreign “tariff rates” are invented numbers derived from no explicit policies, based on the dubious theoretical assumption that unspecified but retaliation-worthy factors conspired to “prevent trade from balancing.” The US responses are actual tariffs. <<<

Trump’s Reciprocal Tariff Calculations Are Nonsense, Will Punish Mutually Beneficial Trade

If you tax trade, you get less of it—both imports and exports alike. Even a less-flawed version of Trump’s tariff plan would be unlikely to achieve its goals.

taxfoundation.org

As far as I can tell, for purposes of "reciprocal" tariffs the administration assumes a zero trade deficit is optimal.

In contrast, the 10% universal tariff apparently assumes that all tariffs are always a good thing, regardless of whether or not the U.S. has a trade deficit with any given country.

>>>For example the US does not currently run goods trade deficit with the UK. Yet the UK has been hit with a 10% tariff.<<<

https://www.bbc.com/news/articles/c93gq72n7y1o

The tariff formula includes trade deficits for goods, but not services. This is an antiquated view that assumes there is something magic about goods.

Afraid it's not in my pay range LOL. This guy says I dunno seems like a bunch of mathematical BS.

 

[Dude#1279435]

[shakes head]

I dunno guess it gets back to for me reports in Trump's first term where he might not do morning meetings or read the PDB's. He's watching Fox cause he's more concerned about his image and what they're saying about him. Is playing golf a lot, and begs the question the degree of lazy involved in some of his decision making. Tariffs, well he likes em so here I'm gonna slap em on countries without looking into it a bit. Penguins on an island say thanks for the tariffs. What's a tariff??? I'm busy feeding my kid. It's rather comical.

 

[Trell]

I don't know how many times I have been told that nothing is lost unless someone sells, aside from value for whatever period lasts until the price returns.

Unless you get a margin call. That aside, many are selling because they are drawing down their retirement account. Or various other reasons.

If someone makes 20% in a year but the value drops by 10% at the end of that year, they still make 10%.

True, but they don't know if it will fall more than 10%.

Also, most retirement funds aren't tied to the market on a 1:1 ratio because they're diversified.

If you mean the stock market, yes, but there is also the bond market that is part of retirement funds.

 

[Trell]

 

[Trell]

 

[Mr._Clark]

I don't know how many times I have been told that nothing is lost unless someone sells, aside from value for whatever period lasts until the price returns. If someone makes 20% in a year but the value drops by 10% at the end of that year, they still make 10%. Also, most retirement funds aren't tied to the market on a 1:1 ratio because they're diversified.

If a person retired in the mid 60s when the S&P 500 was around 1,000 they would have taken a loss unless they waited almost 30 years to sell:

S&P 500 Index - 90 Year Historical Chart

Interactive chart of the S&P 500 stock market index since 1927. Historical data is inflation-adjusted using the headline CPI and each data point represents the month-end closing value. The current month is updated on an hourly basis with today's latest value.

www.macrotrends.net

In theory any given investor might be able to beat the S&P 500, but very few actively managed funds have done so.

Diversification might help smooth out the highs and lows, but diversified portfolios rarely (if ever) outperform the S&P 500. Also, diversified portfolios still have significant investments in stocks (to my mind a portfolio with no stocks is not diversified in any normal sense of the word)

If the market is flat for the next 20-30 years it will be very difficult for individuals who are retired or close to retirement to avoid taking at least some losses on the stocks in their retirement portfolios.

If the market bounces back shortly it's not ,much of an issue, provided one doesn't sell low and lock in the losses.

 

[Trell]

If a person retired in the mid 60s when the S&P 500 was around 1,000 they would have taken a loss unless they waited almost 30 years to sell:

View attachment 73090

S&P 500 Index - 90 Year Historical Chart

Interactive chart of the S&P 500 stock market index since 1927. Historical data is inflation-adjusted using the headline CPI and each data point represents the month-end closing value. The current month is updated on an hourly basis with today's latest value.

www.macrotrends.net

In theory any given investor might be able to beat the S&P 500, but very few actively managed funds have done so.

Diversification might help smooth out the highs and lows, but diversified portfolios rarely (if ever) outperform the S&P 500. Also, diversified portfolios still have significant investments in stocks (to my mind a portfolio with no stocks is not diversified in any normal sense of the word)

If the market is flat for the next 20-30 years it will be very difficult for individuals who are retired or close to retirement to avoid taking at least some losses on the stocks in their retirement portfolios.

If the market bounces back shortly it's not ,much of an issue, provided one doesn't sell low and lock in the losses.

A nitbit: That index does not, as far as I can see, include dividends which historically are a major part of the total stock returns.

Then there is the quote attributed to the late John Bogle, founder of Vanguard: Performance comes and goes but expenses are forever.

Bogle has for many years had a following and, of course, a forum along with articles and interviews over the years. When he created the first retail index fund decades ago he was labelled "un-American".

Bogleheads® investment philosophy - Bogleheads

 

[TLS Guy]

Jaguar Land Rover have got smart. Trying a trade war with tariffs is a dead end and all loose. So Jaguar Land Rover say they will stop exports to the US immediately and that includes parts. So if you are a wealthy Trumper with an out of commission Range Rover, it will sit until Trump comes to his senses. More likely Trump and Republicans will sink like a rock in the polls, and they will decide it is time to impeach him.

Isolating the US from International trade will be much quicker and surer than tariffs. This will be especially true if people start getting hungry. History tells is that!

 

[Trell]

Jaguar Land Rover have got smart. Trying a trade war with tariffs is a dead end and all loose. So Jaguar Land Rover say they will stop exports to the US immediately and that includes parts. So if you are a wealthy Trumper with an out of commission Range Rover, it will sit until Trump comes to his senses. More likely Trump and Republicans will sink like a rock in the polls, and they will decide it is time to impeach him.

It's a nice statement, and I really appreciate it, but it won't be that effective as they have the resources to acquire it anyway.

Isolating the US from International trade will be much quicker and surer than tariffs. This will be especially true if people start getting hungry. History tells is that!

The Trump US is isolating themselves all on their own and we'll all be worse of for it.

 

[mtrycrafts]

Guy claims to have figured out what formula they used to calculate the tariff rates. Funny thing is if the guy's right than it looks pretty gal darn lazy. The way I understand it they should be strategic tariffs, but instead it looks like blanket tariffs. Some countries have a trade deficit with us so who knows what Trump is thinking.

Did an LLM help write Trump’s trade plan?

Probably yes

garymarcus.substack.com

View attachment 73076

Trum and his people are too stupid to come up with a special formula.

 

[mtrycrafts]

...

>>>Most Americans' retirement savings, including 401(K)s, are tied to stock market performance. They are invested in shares and funds that track the major indices.

...

And if they want to privatize Social Security, will it be invested in the market?

 

[Trell]

Trum and his people are too stupid to come up with a special formula.

Krugman calls it "malignant stupidity" in a post he wrote a couple of days ago:

Will Malignant Stupidity Kill the World Economy?

Trump’s tariffs are a disaster. His policy process is worse.

paulkrugman.substack.com

 

[Trell]

And if they want to privatize Social Security, will it be invested in the market?

That's what they've said in the past, as I recall. But Social Security is really a pay-as-you scheme depending on taxation.

You might find the following primer about Social Security informative:

The Clean Little Secret of Social Security

It’s a pretty good program, and we can afford it

paulkrugman.substack.com

 

[mtrycrafts]

...

If the market is flat for the next 20-30 years it will be very difficult for individuals who are retired or close to retirement to avoid taking at least some losses on the stocks in their retirement portfolios.

If the market bounces back shortly it's not ,much of an issue, provided one doesn't sell low and lock in the losses.

Yep, inflation is not flat for 20-30 years.

 

[Trell]

Yep, inflation is not flat for 20-30 years.

It could also be deflation or many years of very low inflation that brings on their own set of problems.

 

[mtrycrafts]

That's what they've said in the past, as I recall. But Social Security is really a pay-as-you scheme depending on taxation.

You might find the following primer about Social Security informative:

The Clean Little Secret of Social Security

It’s a pretty good program, and we can afford it

paulkrugman.substack.com

Yes, pay-as-you because they placed funds collected in general funds as best as I remember, not in a special bucket like government treasury notes collecting interest, compounding. So, there is an IOU that comes from general funds. But could be wrong, number 1 for today.

 

[Trell]

Yes, pay-as-you because they placed funds collected in general funds as best as I remember, not in a special bucket like government treasury notes collecting interest, compounding. So, there is an IOU that comes from general funds. But could be wrong, number 1 for today.

There is a fund that the Republicans long have wanted to put their hands on but in the end it's about taxation, thus the "pay-as-you-go". This is similar to other develop countries pension schemes.

In this an ageing population is not healthy for your SS benefits nor for (any) stock market total returns. Japan is an example but you're young enough to recall when Japan was destined to take over the world.

 

[Mr._Clark]

Afraid it's not in my pay range LOL. This guy says I dunno seems like a bunch of mathematical BS.


View attachment 73086

I believe Duke is correct. He's saying the exact same thing the Tax Policy Institute said in the snip I posted.

 

[Mr._Clark]

Republicans in congress are starting to see the writing on the wall.

>>>Ted Cruz warns of midterm ‘bloodbath’ if Trump tariffs cause a recession . . .

Ted Cruz, the US senator from Texas, has warned that his fellow Republicans risk a “bloodbath” in the 2026 midterm elections if Donald Trump’s “liberation day” tariffs cause a recession.

Cruz also warned that the president’s tariffs, if they stay in place for long and are met by global retaliation on American goods, could trigger a full-blown trade war that “would destroy jobs here at home, and do real damage to the US economy”.<<<

Ted Cruz warns of midterm ‘bloodbath’ if Trump tariffs cause a recession

Texas senator’s comments another sign of Republican unease over ‘reciprocal tariffs’ and stock market plunge

www.theguardian.com

 

[Trell]

Republicans in congress are starting to see the writing on the wall.

>>>Ted Cruz warns of midterm ‘bloodbath’ if Trump tariffs cause a recession . . .

Ted Cruz, the US senator from Texas, has warned that his fellow Republicans risk a “bloodbath” in the 2026 midterm elections if Donald Trump’s “liberation day” tariffs cause a recession.

Cruz also warned that the president’s tariffs, if they stay in place for long and are met by global retaliation on American goods, could trigger a full-blown trade war that “would destroy jobs here at home, and do real damage to the US economy”.<<<

Ted Cruz warns of midterm ‘bloodbath’ if Trump tariffs cause a recession

Texas senator’s comments another sign of Republican unease over ‘reciprocal tariffs’ and stock market plunge

www.theguardian.com

Yeah, they're seeing that they could be voted out of office.

A day ago the US Senate passed a resolution to block tariffs on Canada with four Republican votes, Ted Cruz was not one of them.

Republicans join Democrats in Senate vote to rescind Trump Canada tariffs

Resolution that would block tariffs passes 51-48 in Senate, in vote that shows Republican unease over president’s plans

www.theguardian.com