More random thoughts
Wall Street, not congress, seems to have been the checks and balances for Donald Trump.
He still has support with the MAGA crowd but for how long?
Kamala Harris is exploring the possibility of “establishing an institute for policy and ideas” as a fund raising vehicle to finance her political future which makes sense given her deep knowledge of the issues and her ability to articulate complex thoughts.
Merchants are now putting a “Trump Liberation Tariff” on their bills. Much like some put a credit card usage fee on sales slips.
Trump says any pain in the U.S. from tariffs will be offset by long-term gains in jobs and investment. Does he really think the American public after a 24% rise in prices under Biden will stand for a similar or greater rise under Trump?
Trump says that manufacturing will miraculously reappear because of tariffs. But factories are not built in a day, companies say that even if they did they couldn’t find the workers.
It doesn’t make sense for companies to rush to make big investments because of Trump’s tariffs because he is erratic and is a short timer. Case in point, he just exempted cell phones, computers, hard drives, memory chips, flat panel television screens and semiconductors from his “reciprocal” tariffs on China. So why should Apple, Samsung and the rest spend billions to move production and disrupt their supply chains? This time Trump really blinked. What’s next?
Southeast Asian economies are built on exporting goods – mainly to the US. Economists call this comparative advantage. Twenty million jobs in Chinese factories and the Vietnamese economy are geared towards making stuff for the US market: apparel, homeware, toys, the electronic and other consumer products.
China runs an almost $1 trillon goods surplus to the world. Given Trump’s logic this should mean that China’s economy should be humming along, vibrant, the biggest in the world and rapidly growing – none of which is true. Et tu Donald?
Howard Lutnick says that Trump’s tariffs will eliminate China’s “army of millions and millions of human beings screwing in little, little screws to make iphones” so they can be built in America by robots. Is this a racist comment? Regardless, Lutnick either knows better or is a fool. I guess the robots will be imported from China.
China is a bad actor. It has admitted that Beijing was behind a widespread series of alarming cyberattacks on U.S. infrastructure. I would have hit them – and only them – with tariffs until they stop their sword rattling, stealing of intellectual property and cyberattacks.
Repeal the so-called Inflation Reduction Act. All it did was to hand out billions to the green industrial complex. The typically low original cost of $400 billion is now over $1 trillion. But of course some republicans want to keep those parts that give pork to their districts.
Didn’t Trump say he believes in fair trade? But to him, “fair” means a trade surplus with tariffs, not merely as a means to an end, but as an end in themselves. Again, Trump see China.
China has put its minerals on a watch list to limit their sale to the US. China makes 80 percent of EV batteries. If China stops exporting rare earths, what would be the impact on the US? China dominates 90% of the global rare earths markets which are essential to the defense, energy and electronics industries. Trump might say “mine, baby mine.” But It takes an average of 29 years to go from mineral discovery to production in the U.S while in China, with few environmental regulations and state subsidies it can take months rather than years to bring a factory on line.
Trump is now bragging that we are now raking in the money from tariffs. He is ignoring the firms that are laying off workers, firms that are delaying production and firms that are going out of business. He is also ignoring that the net impact of the first Trump deficits in his first term was negative. This time it will be worse unless of course he continues to blink.
haroldblackphd.com 