Excellent Richard as usual. While there is certainly justification for trying to fix the trade and fiscal imbalances, I guess what´s happened boils down to time horizons and the "sophisticated" strategy the mastermind laid out in the book Think Big and Kick ass in business and life.
Acting quickly so the Establishment doesn't have time to fight back vs. The risk of making a lot of mistakes along the way. Seems they do not worry about the risk side of the ledger
Another great read, thanks. I'm inclined to agree that the tariffs effort is mostly a negotiation strategy to extract other things from the countries around the world. Whatever revenues are gained by the government from tariffs is basically a consumption tax in the USA, as Stan Druckenmiller recently said. Doubtful tariffs will bring a lot of revenue over the long term, for a number of reasons.
Defence spending is ~3% of GDP. Difficult to shrink this number, especially with the rise of China and its military capabilities Meanwhile, the USA provides insurance to most of the free world, in the form of military protection. I'm guessing the trade negotiations will compel countries to increase their defense spending to at least 3% of their GDP, with the requirement to purchase American military products. Compliance will gain tariff concessions. Or fend for themselves & continue to pay tariffs. Military products is an area where America has good products and a competive advantage. Suggesting that tarrifs will result in the manufacture "Nike shoes" in the USA, or other low tech products has zero chance of success.
Agree with you. Once we get one deal done so there is precedent and more clarity on what it takes, trading partners and investors will feel more comfortable. Which country will be first?
These were my thoughts on the past week on Sunday morning: https://kingcambo812.substack.com/p/fear-and-loathing-in-trader-hell-1c7
Excellent Richard as usual. While there is certainly justification for trying to fix the trade and fiscal imbalances, I guess what´s happened boils down to time horizons and the "sophisticated" strategy the mastermind laid out in the book Think Big and Kick ass in business and life.
Acting quickly so the Establishment doesn't have time to fight back vs. The risk of making a lot of mistakes along the way. Seems they do not worry about the risk side of the ledger
Another great read, thanks. I'm inclined to agree that the tariffs effort is mostly a negotiation strategy to extract other things from the countries around the world. Whatever revenues are gained by the government from tariffs is basically a consumption tax in the USA, as Stan Druckenmiller recently said. Doubtful tariffs will bring a lot of revenue over the long term, for a number of reasons.
Defence spending is ~3% of GDP. Difficult to shrink this number, especially with the rise of China and its military capabilities Meanwhile, the USA provides insurance to most of the free world, in the form of military protection. I'm guessing the trade negotiations will compel countries to increase their defense spending to at least 3% of their GDP, with the requirement to purchase American military products. Compliance will gain tariff concessions. Or fend for themselves & continue to pay tariffs. Military products is an area where America has good products and a competive advantage. Suggesting that tarrifs will result in the manufacture "Nike shoes" in the USA, or other low tech products has zero chance of success.
Agree with you. Once we get one deal done so there is precedent and more clarity on what it takes, trading partners and investors will feel more comfortable. Which country will be first?