Trump 2.0

[basilio]

 

[basilio]

probably should put this in the economic Trump thread.
The biggest surprise is Taiwan. 32%!!! That will hurt US consumers.

Won't impress Taiwan either. If one was trying to push Taiwan into Chinas' arms this is a decent shove.

 

[Knobby22]

Won't impress Taiwan either. If one was trying to push Taiwan into Chinas' arms this is a decent shove.

I think he will do a deal to hand over Taiwan....but not yet.
I am thinking the tariffs are to move more of the semiconductor factories into USA more quickly.

 

[moXJO]

I think the shake-up is good in the sense that our dopey politicians should be looking to fill some gaps and take a serious look at if the US will actually support us.
Our goods are still cheap with our dollar so low though.

 

[JohnDe]

Tariffs, are they good or bad? Ask 12 people to explain their reasoning and 12 different answers will come back.

Removing tariffs has improved our economy, we can now buy just about anything at extremely cheap prices compared to the 1960's, 70's and 80's. But at what cost?

We lost our manufacturing industry.

We have become a wasteful world, where everything is a throw away item; cars, fridges, washing machines, microwaves, and so on.

We have become a confused nation. We have people screaming about the environmental damage and our wasteful ways, yet they also scream about increased tariffs. Wiser people look at the whole book, not just the cover.

Is Trump's tariffs bad for us and the world? Again, a question that has multiple answers. The only way we will find out is with time, because there are many variables; will it force industries to be more productive, will it force governments to be leaner and reduce taxation costs, will countries like China be forced to operate within the rules that nations like ours must?

This may be the catalyst to force us all to work within our means, to reduce debt, to stop wasteful spending, to start producing, to work together again.

I'm an optimist and willing to wait and see. However, regardless of the outcome, history has shown us that we always come out of tough times better.

 

[basilio]

An historical perspective on Trumps grand new tariffs.

Reciprocal tarrifs could raise average US duty to 25%​

The “reciprocal tariffs” Donald Trump announced today could raise the average US tariff rate to 25% from a current rate of about 3%, according to Omair Sharif, an economist and founder of Inflation Insights.

Sharif added that the duties would top the 20% rate imposed by the Smoot-Hawley tariffs levied in 1933, which were widely blamed for worsening the Great Depression.

 

[Bellcose]

I am thinking the tariffs are to move more of the semiconductor factories into USA more quickly.

Not semiconductor's as such but interesting nevertheless

Trump’s Aggression Sours Europe on US Cloud Giants

Companies in the EU are starting to look for ways to ditch Amazon, Google, and Microsoft cloud services amid fears of rising security risks from the US. But cutting ties won’t be easy.

www.wired.com

 

[basilio]

Trump has killed Temu and other small scale imports of Chines products.
He has closed the "de minimis" regulation which allowed small scale importation of products without additional duty.

All gone.

But then cheap products are not part of the American Dream are they ? That should go down well with people on low wages and multiple jobs to stay afloat.

‘Cheap goods’ aren’t part of the American Dream, Trump’s treasury secretary says​

“Access to cheap goods is not the essence of the American Dream,” Bessent said at a recent meeting of the Economic Club of New York.

Instead of said “stuff,” Bessent says the dream is focused on mobility and self-actualization. “The American Dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, and economic security,” he said, adding, “for too long, the designers of multilateral trade deals have lost sight of this.”

‘Cheap goods’ aren’t part of the American Dream, Trump’s treasury secretary says

In a recent speech, Scott Bessent threw more cold water on a Trump campaign promise to lower the cost of living.

www.yahoo.com

https://www.axios.com/2025/04/02/trump-temu-shein-de-minimis-tariffs-pdd

 

[basilio]

In point of fact the economic impact on US consumers of the abolition of the "de minimis" regulations will be far larger than currently understood.

Given that the biggest users of these companies will be those on average to minimum wage the impact will immediate and expensive.

It is going to kill Chinese industry as well.

New tariffs hit, but there's a $100 billion hole in the data (all from China)​

https://www.axios.com/2025/03/04/trump-tariffs-china-100-billion

 

[sptrawler]

Trump’s Aggression Sours Europe on US Cloud Giants

Companies in the EU are starting to look for ways to ditch Amazon, Google, and Microsoft cloud services amid fears of rising security risks from the US. But cutting ties won’t be easy.

www.wired.com

Thats got to be good for competition and building other countries resilience, the EU, UK and the West in general, have had a lazy approach to developing their own internet platforms.

As with most issues the West have tended to just buy off the shelf packages, from U.S based providers, then wonder why they have a 'brain and skills drain' as their high performing individuals move overseas to chase advancement.

The majority of the Western countries, including Australia have become lazy, led by the politicians IMO.

Most things these days are outsourced, including thinking, how many issues are addressed these days by, "it isn't my department, it is lack of funding, it is due to things outside of my control, we need more money as the contractors are falling behind, i will have to contact the provider support" etc.

How many things that were a one of payment, have now become subscription model and people can't move off the platform because there isn't an alternative or to change is too difficult, all generally brought about by outsourcing everything including thinking and development and now being exposed. Most large companies in Australia, would have outsourced their IT sections by now, I guess.

What's laughable, is the loonies think the move toward making our country less reliant, is a bad thing. They want to wallow in the constant decline in standards and outcomes, while worshipping the dig and ship mentality, which they obviously aspire, to maybe they are closet Tonka truck driver wanabees.

From your post @Bellcose :

The moves may already be underway. On March 18, politicians in the Netherlands House of Representatives passed eight motions asking the government to reduce reliance on US tech companies and move to European alternatives. Days before, more than 100 organizations signed an open letter to European officials calling for the continent to become “more technologically independent” and saying the status quo creates “security and reliability risks.”

Two European-based cloud service companies, Exoscale and Elastx, tell WIRED they have seen an uptick in potential customers looking to abandon US cloud providers over the last two weeks—with some already starting to make the jump. Multiple technology advisers say they are having widespread discussions about what it would take to uproot services, data, and systems.

 

[basilio]

Thats got to be good for competition and building other countries resilience, the EU, UK and the West in general, have had a lazy approach to developing their own internet platforms.

As with most issues the West have tended to just buy off the shelf packages, from U.S based providers, then wonder why they have a 'brain and skills drain' as their high performing individuals move overseas to chase advancement.

The majority of the Western countries, including Australia have become lazy, led by the politicians IMO.

Most things these days are outsourced, including thinking, how many issues are addressed these days by, "it isn't my department, it is lack of funding, it is due to things outside of my control, we need more money as the contractors are falling behind, i will have to contact the provider support" etc.

How many things that were a one of payment, have now become subscription model and people can't move off the platform because there isn't an alternative or to change is too difficult, all generally brought about by outsourcing everything including thinking and development and now being exposed. Most large companies in Australia, would have outsourced their IT sections by now, I guess.

What's laughable, is the loonies think the move toward making our country less reliant, is a bad thing. They want to wallow in the constant decline in standards and outcomes, while worshipping the dig and ship mentality, which they obviously aspire, to maybe they are closet Tonka truck driver wanabees.

From your post @Bellcose :

The moves may already be underway. On March 18, politicians in the Netherlands House of Representatives passed eight motions asking the government to reduce reliance on US tech companies and move to European alternatives. Days before, more than 100 organizations signed an open letter to European officials calling for the continent to become “more technologically independent” and saying the status quo creates “security and reliability risks.”

Two European-based cloud service companies, Exoscale and Elastx, tell WIRED they have seen an uptick in potential customers looking to abandon US cloud providers over the last two weeks—with some already starting to make the jump. Multiple technology advisers say they are having widespread discussions about what it would take to uproot services, data, and systems.

Yeah. I can see your points SP.

The US has a stranglehold on Finance and IT and International trade.
It uses the SWIFT system of international payments to create a worldwide reliance on the US Dollar.The US dollar is the benchmark of international trade. Microsoft amongst others has a dominant position in IT software. Facebook, X , Instagram dominate social media

All these and more are used to prop up US economic and political interests. Any attempts to create viable alternatives are viewed as attacks on the US Government amount to serious National Security status. From the US perspective those attempts need to be crushed and proponents dealt with.

SP do you have any thoughts on how the rest of the world can deal with that reality ?

SWIFT, the U.S. Dollar, and the Global Political Economy of Trade | Dollars & Sense

 

[sptrawler]

Yeah. I can see your points SP.

The US has a stranglehold on Finance and IT and International trade.
It uses the SWIFT system of international payments to create a worldwide reliance on the US Dollar.The US dollar is the benchmark of international trade. Microsoft amongst others has a dominant position in IT software. Facebook, X , Instagram dominate social media

All these and more are used to prop up US economic and political interests. Any attempts to create viable alternatives are viewed as attacks on the US Government amount to serious National Security status. From the US perspective those attempts need to be crushed and proponents dealt with.

SP do you have any thoughts on how the rest of the world can deal with that reality ?

SWIFT, the U.S. Dollar, and the Global Political Economy of Trade | Dollars & Sense

The fact is China and to a lesser degree Russia are trying to undermine the U.S fiscally through Brics and the Belt and Road initiative and militarily by building up their inventory of equipment and technology.

The U.S, well Trump in particular can see that unless the West gets off their butts, it is only a matter of time before the World order flips, China is investing a hell of a lot into developing countries like Indonesia, Malaysia, Thailand etc so those countries will be more receptive to ditching the U.S dollar as reserve currency.

Unless the West stops the slide into third world style economies, it is only a matter of time before it actually happens, just ask yourself "if we didn't have the iron ore, coal and minor minerals, what would keep our dollar at its current level"?

So even the EU has a collapsing economic model, they have expensive energy and can only sell their product, on historical respect for quality.
As China's manufacturing standards improve, the perceived difference between the Chinese and European product will narrow, but the cost difference will increase, China's will get cheaper due mainly to volume, cheap energy and cheaper labour costs.

It is only a matter of time before the Chinese product is comparable with the European or American product, much the same as happened with Japanese products, they went from Jap crap to best in class.

No doubt what Trump is doing is going to hurt financially, but my guess is unless the West changes, they will hurt a lot more in the long run.

Do I think Trump is a unattractive person and personality? Absolutely.

Do I think he is right in what he is doing? Most of it yes, because the ingrained operandi modus in the West entrenched.
There is a huge amount of money being made by smoke and mirrors and money printing.

IMO at the moment the only way the West can stop the slide is by tariffs, this negates the advantage that China has and slows their sales.
That should in turn mean that China will have to increase their prices at home, to compensate for loss of sales to the major U.S market, that in itself would become inflationary for china and their wages will have to climb.

It wont stop the rise of the second world countries, but it should slow the rise, hopefully it ends up with the countries on a level playing field, without tariffs in the future sometime and most countries with similar living standards.

This whole process was put in place in the 1970's, with the Lima Agreement, it was meant to raise third world countries out of poverty and it has worked to a degree.

But it was never intended, to send first world countries into poverty, from my recollection.

Europe needed to get its house in order, way too much bludging, pizzing in each others pockets and group hugs, while the house burns down.

IMO Trump has stoked up the wrath of the multinationals, all their inventory that they source from China, is going to hit their bottom line and CEO's pay packets.
Just my thoughts, but it sure is interesting times.

 

[sptrawler]

Europe gets creative amid Trump demands to end ‘freeloading’ on defence

Faced with the US president’s push to more than double the alliance’s spending targets, European diplomats are exploring a new method to count military investment.

www.theage.com.au

 

[Smurf1976]

But then cheap products are not part of the American Dream are they ? That should go down well with people on low wages and multiple jobs to stay afloat.

Cause and effect.

Find me 100 people who are working multiple low wage jobs in modern society and you'll have found me at least 99 people who've been thrown under the bus by globalisation.

Those same people would be far, far better off if their working life was a modern version of this:



Yes people, contrary to what seems to have become popular belief a substantial portion of our past industrial and manufacturing workforce were indeed women. A point I suspect few young people realise was the case.

Now technology changes, there'd be fewer jobs in such a place today due to automation and obviously the product has greatly changed but still, the basic point stands. It's a far better opportunity for many than low value service work. At least it's a steady income and pays a set wage.

Ever wondered why we're so short on trades these days? Easily explained by asking any older tradie where they did their apprenticeship - practically the whole lot will say it was with a big company that manufactured something or it was with supporting infrastructure eg utilities, railways, etc for whom the factories were the largest user of the service and thus its reason for being.

Plenty of engineers put through a degree under much the same circumstances too. Started out on the tools, demonstrated ability, the company paid the cost of their further education.

Then there's all the other people involved. Everyone from stores and logistics to accounting to human resources to management. It takes a lot more to make things yourself than to just import them, it creates a wide range of opportunities.

Get rid of the cheap imports and yes that hurts poor people. On the other hand, local production largely gets rid of genuinely poor people, it gives them an opportunity they otherwise don't have. Once someone's no longer poor, the lack of cheap goods isn't a problem.

 

[IFocus]

The USD is the world reserve currency because it advantages the US.

So that means the US will always run trade deficits.

So what is the point of tariffs given that much of the manufacturing targeted requires cheap labor?

The Cult cheering even louder

 

[IFocus]

“In October 1959, a Yale professor sat in front of Congress' Joint Economic Committee and calmly announced that the Bretton Woods system was doomed. The dollar could not survive as the world's reserve currency without requiring the United States to run ever-growing deficits. This dismal scientist was Belgium-born Robert Triffin, and he was right. The Bretton Woods system collapsed in 1971, and today the dollar's role as the reserve currency has the United States running the largest current account deficit in the world

 

[sptrawler]

The U.S federal government most recently had a budget surplus in FY 2001. "The federal deficit more than tripled from $983.6 billion in FY 2019 to $3.1 trillion in FY 2020.
Apparently the U.S had budget surpluses in 1998_ 2001.

 

[Knobby22]

. "The federal deficit more than tripled from $983.6 billion in FY 2019 to $3.1 trillion in FY 2020.

Under Trump.

 

[Smurf1976]

The USD is the world reserve currency because it advantages the US.

So that means the US will always run trade deficits.

So what is the point of tariffs given that much of the manufacturing targeted requires cheap labor?

That it's coming to an end.

As the US slowly but surely becomes weaker, and other countries stronger, a point inevitably comes where others question why, exactly, they're holding USD as the reserve currency?

For other countries, holding USD makes perfectly good sense when you're importing manufactured goods from the US and you need USD to purchase commodities traded in USD. That's entirely rational.

But if the manufactured goods need to be purchased in CNY, and the commodities are also traded in CNY, then why on earth would you hold USD? Why would you not hold CNY instead?

Now throw in if China is your military protector as well. In that case you'd hold CNY for sure.

That said, it's not really tariffs that are bringing manufacturing back to the USA, a point easily demonstrated by noting it's been underway for some years now. What's actually doing it is cheap energy. Australia take note.....

That Australia now imports house bricks isn't because we don't have any clay. It's because it's just becoming too expensive to fire a kiln here. Just one of countless examples.

 

[sptrawler]

Under Trump.

Maybe he is trying to fix it? Lol