“I hope that the United States and Europe can establish a very close partnership,” said [Elon Musk], “effectively creating a free-trade zone between Europe and North America.”
That had nearly become a reality during President Barack Obama’s second term but talks broke down after the environmental activist group Greenpeace leaked information, leading to a backlash....
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143 comments:
Any word about VAT and the other taxes?
Seems like weak tea for anything other than similar limited rollbacks
Democrats will torpedo this somehow, just like last time. Thanks Green"peace"
I am hoping that the "reality" this time around is much more friendly to the US, and doesn't include a whole slew of "environmental" regulations. I am also thinking that "Greenpeace" won't be invited to the table.
EU Trade Commissioner Maroš Šefčovič, of Slovakia, said the zero-for-zero arrangement would be applied to chemicals, pharmaceuticals, rubber, plastic machinery and cars.
So it's window dressing rather than structural reform.
Any word about VAT and the other taxes?
VAT is usually a tax on domestic consumption. You can even get VAT back on goods bought in Europe and taken back to the US if not used. So I don't think VAT applies to exports. Nor sure about Sales Tax in the US for exported goods. But these details can be ironed out.
Trump should agree to reciprocal tariffs. If the EU levies a tariff on ANY US product, that is the reciprocal tariff on all EU products. The highest tariff being the EU's tariff price in the US for all of its goods.
We shouldn't let these cheese-eating surrender monkeys push us around.
The ass-maddery this caused on Reddit over the weekend was epic. It was glorious to hear them cry in unison, "NO...not the heckin' market! WON'T SOMEONE THINK OF THE HECKIN STOCKBROKERINOS!"
Grok: The European Union (EU) does charge both Value Added Tax (VAT) and tariffs on goods imported from the United States, depending on the type of goods and the specific circumstances.
Trump should, of course, announce a new VAT on all European goods imported into the United States.
And watch the Democrats heads explode.
Remember when Democrats demanded that the rich pay their fair share? Well this is it. It's finally happening and they're all complaining about their stock slush funds.
Trump, 78, has also slapped all foreign-made cars coming into the US with 25% tariffs.
Odd for the Post to shoehorn his age in there.
Isn't Trump's goal to 1) bring in trillions in Tariff revenue, and 2) strengthen the domestic industrial base. How does this and similar deals do that?
@jim5301, I think the message is quite clear, either global companies start planning now for an increased US domestic footprint or they're going to regret losing market sharein the biggest consumer market on planet Earth. I'm not even in international FDI attraction and it comes across loud as a bullhorn to me...the era of lax reciprocation towards protectionist economies is over.
I am also thinking that "Greenpeace" won't be invited to the table.
@Boatbuilder, hopefully Greenpeace (has there been anything peaceable about them for decades now?) is busy raising money to pay that $660 million judgement against them in North Dakota. It turns out that organized violence and incitement to violence is not covered under the rubric of free speech. At least not in North Dakota.
"That had nearly become a reality during President Barack Obama’s second term but talks broke down after the environmental activist group Greenpeace leaked information, leading to a backlash."
Backlash is such a popular word.
Greenpeace? You mean the organization that is now bankrupt thanks to a North Dakota jury verdict?
"Backlash?" I thought you wrote "backsplash." you mean this isn't the interior design thread?
Grok: The European Union (EU) does charge both Value Added Tax (VAT) and tariffs on goods imported from the United States, depending on the type of goods and the specific circumstances.
Yes, but the VAT is not discriminatory, it's on all goods both those made in the US and the EU, just like the US Sales Tax in varuous States. The important thing is to have level playing field. I don't see how VAT changes that.
CJinPA said...
“Trump, 78, has also slapped all foreign-made cars coming into the US with 25% tariffs.
Odd for the Post to shoehorn his age in there.”
Before the election and after Biden withdrew, simpletons on the Left tried to claim that Trump’s age meant he was just as cognitively impaired as Biden (when they finally accepted just how bad Biden’s condition was). Age alone isn’t the factor. I’ve known people nearly 100 years old who were still mentally sharp, while there are also sad cases of early onset dementia affecting people in their 50s and 60s.
There is no way that Trump will accept this. He doesn’t want free trade on equal terms. Zero tariffs will result in continued large trade imbalances, with the US importing more than we’re exporting. Trump wants balanced trade, managed trade, not free trade. Autarky, American Juche, that’s the ticket, not yucky, icky trade.
If Trump forces the EU not to charge a VAT on US-manufactured cars, can you imagine how many US car manufacturing jobs will be created? Between that tax break and energy cost advantage, every Mercedes, VW, BMW and Audi sold in the Euro-zone will be "Made In the USA".
The United States ALREADY has a free trade zone with Canada and Mexico. That did not stop Trump from blowing it up with rants that the poor little U.S. was being taken advantage of.
And then there is Trump saying yesterday that Europe needs to pay reparations to the U.S. before he will agree to talk.
It’s going to happen again, isn’t it? Trump has once again proposed something outrageous, driving the world’s leadership class into a swoon, and then purple-faced outrage. Then a week is wasted, with the experts announcing adamantly that the proposal is the most ill-informed, worst-case-possible, most disastrous thing they can imagine, certain to topple the world economy and devastate the under-classes.
And here we are, approaching the third phase: When it becomes apparent that Trump, once again, has said something that turns out to be not only accurate, but astute - just not in the way all the world’s leaders and experts had imagined, when they badly misinterpreted, once again, what Trump said in the first place.
Give it a few more days, and they’ll all be standing there with their mouths hanging open, sputtering on about how Trump ‘shouldn’t be allowed to get away with it’. Then the Progressive Democrat class will set about trying to sabotage any success as it develops, and thwart any forward progress on the ‘thing’ they were so sure would never work - after it has become obvious to everybody that, Yep, it was a good idea.
…kinda sorta on a few things is not the deal Trump’s looking for…
@robother, not to mention the EU automakers - especially Germany's - are withering on the vine because their bureaucratic overlords feel chest-thumping with Russia over Ukraine is more important than reduced energy cost, and they're now buying LNG from us @ 3x the cost.
Let that sink in. Bunch o' megaminds across the pond I tells ya.
…and it just highlights how uncompetetive the EU in manufacturing that they need all the economic protections and subsidies…
Volvos BMWs Mercs and soon VWs are all manufactured within a couple hours of my house. We watch them get loadsd on boats. Seems like we’re in a good position…
This would be an easy short-term win, if they are looking to calm the economy. But it raises the big unanswered question: Does Trump see tariffs as a tool to get to tariff-free reciprocity, or does he want permanent tariffs for policy reasons?
when they aren't buying discounted Russian oil through india,
The ass-maddery this caused on Reddit over the weekend was epic. It was glorious to hear them cry in unison, "NO...not the heckin' market! WON'T SOMEONE THINK OF THE HECKIN STOCKBROKERINOS!"
The usual situationalist/instrumentalist left-wing douchebaggery. No permanent principles, only permanent enemies, to be attacked with whatever weapon presents itself to be picked up and used.
"Free trade" deals always come with strings attached. But if it is truly free, Trump will go for it.
It's a little early to be making nice with Fascist Germany.
Does Trump see tariffs as a tool to get to tariff-free reciprocity, or does he want permanent tariffs for policy reasons?
I think he's answered it on many occasions. All he wants is a fair playing field, and if other countries go to low or no tariffs, he will too. His trade policies are those of Dick Gephardt 30 years ago.
Trump Threatens to Slap an Additional 50% Tariff on China ~ WSJ
Trump should sign an executive order banning china from retaliating. Its the only way
It is still run by a pro-rape government.
…and it just highlights how uncompetetive the EU in manufacturing that they need all the economic protections and subsidies…
It would appear that depending on economic protections and subsidies is easier than making your business more competitive.
I’ve known people nearly 100 years old who were still mentally sharp, while there are also sad cases of early onset dementia affecting people in their 50s and 60s.
My old granddad made it to 98 with all his wits, and he had plenty of them at baseline. An Ivy League grad with double majors in history and economics. He would always quiz me on the latest political and economic news when I visited, and in his late 90's he was sharper than Joe Biden was on the day he graduated law school.
"The United States ALREADY has a free trade zone with Canada and Mexico."
Sort of. Regarding Canada, there are quota limits on some products and when they're exceeded, tariffs are applied. Those tariffs are up to 298.5% for certain dairy products like butter. Not exactly "free trade" if you're limited in how much you can trade.
It's day three.
EU exports more industrial stuff than it imports, so zero zero benefits EU over USA.
Too many things do the same thing as tariffs to sort it out. Currency exchange rates, for one; subsidies to your own industries so that they can sell cheaper; environmental laxity imposed on your own industries; low wage rates favoring your own industries.
A lot of these are perfectly good economic policies, indeed covered in the ancient theory of comparative (not competitive) advantage, where it makes sense for one country to do one kind of thing and import other needs bought with proceeds from sales abroad. Tariffs are just substitutes or countermoves from all of these.
One of the dastardly things countries can do is export unemployment. You go idle while we work.
Another thing countries can do is print their own currency and buy dollars with it. I think that settles out as a trade advantage.
VAT is brought up as a trade tool but it's not. It's a local substitute for an income tax, which the US counters with an actual income tax. The foreign nation does not charge VAT on exports, which makes them cheaper than at home. But the US buyer pays the same tax as an income tax.
The Obama proposal, TTIP, was never close to a final agreement and the Greenpeace leaks only played a small part in their failure.
Is the sky still falling, libtards?
Is anyone concerned that Trump just made up numbers for his chart.
Consider Vietnam - trade deficit - 123 billion. Sales to US - 120 billion. According to Chat - average tariff - 9.4%
But using Trumpamatics - their tariff is 118/125 = 94%
Can someone defend this?
One issue is regulatory barriers. Don't know about what the EU might have but examples are England does not permit (restricts?) the import of cars with the steering wheel in the left. Lee Iacocca used to complain about this with Japan. He could not sell cars there because Chrysler did not make a right hand drive.
Motorola could not sell cell phones in Japan because Japan had decided on a technology, widely used in the US, that was incompatible with Motorola's. Also widely used in the US. Japan wanted a single national standard.
Australia prohibits (restricts? Taxes?) the import of US beef because much of it contains hormones which are illegal in Oz.
Are these kinds of restrictions reasonable? Definitely in the case of cars, perhaps in the case of Motorola and probably not in the case of Beef (Oz could allow only hormone free beef in)
The point is that there is much more than simple tariffs involved.
John Henry
The United States ALREADY has a free trade zone with Canada and Mexico. That did not stop Trump from blowing it up with rants that the poor little U.S. was being taken advantage of.
Ha ha. NAFTA did not produce free trade, just the illusion of free trade. I've spent 40 years both importing and exporting to/from Mexico and Canada. Show up at customs with a $1000 Les Paul guitar and see how free trade is.
Also, there are protectionist acts that have nothing to due with tariffs. Try exporting to Japan. It's almost impossible due to their rules on ingredient labeling of consumer goods. EU is difficult, but not impossible, but costly, something small businesses can't do, but they have their own rules that protect domestic producers. China changed to a system that required a submission of your exact proprietary formulas. We walked away.
So tariffs are not the only piece of the negotiation process.
I predict that by this coming Friday tariffs will no longer be an issue for Party members to scream about because the world will yield to the USA, the stock market will be flying upwards, and come Friday afternoon, Democrat Party libtards will have a brand new Trump "scandal" to carry into the weekend.
The EU - one of the 3 largest economic trading entities in the world - just offered to meaningfully reduce costs to American products and increase our trading competitiveness. In a single weekend.
On top of vietnam and others.
That would seem to be successful to me.
A lot is made about how we have lost manufacturing in the US and how we need to get it back. Usually, it is conflated with manufacturing jobs as if it were 1:1. Bringing back manufacturing will not bring back all the manufacturing jobs lost in the past 50 years. A large portion of them were not lost to cheap foreign labor but to automation. If the manufacturing does come back, even if done manually offshore, it will be automated here. Nobody can afford workers costing $30-40m/yr doing work a $25m robot can do.
I had cause to look up US manufacturing output the other day. Grok found me the data at the St Louis Federal Reserve Bank. I got the whole series 1950-2025 but am showing it in 5 yr blocks for simplicity. It is constant 2017 dollars so inflation is not a factor. I've calculated it per capita total pop so population is not a factor.
Not too shabby:
Year Total Per Capita
1950 $151,325,798 $1,986
1970 $203,211,926 $2,659
1990 $248,709,873 $3,258
2010 $308,745,538 $3,515
2024 $341,814,420 $4,024
In Constant 2017 dollars
Source: Federal Reserve Bank of St Louis
John Henry
Good news for the country is bad news for democrats and their cultists.
Mark - is that how you loyal democratics are going to play this?
LOL - such frauds.
Warren Buffet is 95 years old. His sidekick Charlie Munger was 99 when he passed in 2023. Both working every day running Berkshire Hathaway.
Funny how we never hear their ages mentioned as an impediment.
Current B-H price per share $742,540. Down from last week but just about where it was 30 days ago $742,901.
John Henry
Here is a good run-down of the lies and desperate psychosis gripping the corrupt democrat media.
How about, find out the hard way of what happens when you demonstrate to your commercial partners you're an unreliable, unpredictable buyer and supplier
In fact, one look at the markets will already show you.
I HATE! HATE! HATE! myself every time I look at B-H stock price. In 1978 I learned about Buffett and B-H and was impressed. I was going to buy some shares but was talked out of it because they were "too expensive" at $360 IIRC.
If I had bought just 10 shares...
John Henry
Or... and hear me out on this one... or, you could find out the hard way what it's like when you continue spendthrift policies to the tune of trillions and your credit card runs out because you have been also using your credit line to antagonize your largest lenders through "sanctions," which are the same thing as tariffs, BTW, and the free money comes to a hard stop.
So when the repo man comes for your Ferrari, do you explain to him that you borrowed the money to buy it to maintain "stability" in your lifestyle? Or a better analogy for the way the Biden Administration squandered trillions would be when Gino and Luigi show as you are walking to your car after work to collect on the huge losing bets you had been making playing the ponies.
"China changed to a system that required a submission of your exact proprietary formulas. We walked away."
China has had a 99% decline in foreign direct investment.
Kaki makes some great points, but they should also apply to China. We let them get away with far too much crap.
Can you "free trade" with a country that takes your best product lines, gives money to companies to tool up to copy them? Great prices. But you lost an entire product line.
China just finished doing this to MRI machines.
"The United States ALREADY has a free trade zone with Canada and Mexico."
Mostly in fentanyl and little girls.
@rabel: Your assertion that T-TIP was "never close to a final agreement" is technically correct in the sense that negotiations were in progress and no definitive text had been agreed upon before talks stalled. But the phrase "never close to a final agreement" is vague. Many complex trade deals remain "not close to ... final" for years but gain momentum toward completion. Dismissing T-TIP on this basis alone overlooks the context of the negotiations.
As for the impact of Greenpeace Netherlands, you can argue that the leak played a "small role," but that judgment depends on how you define "small." The document leak heightened public skepticism and added fuel to existing criticisms of the deal, particularly regarding regulatory alignment and corporate influence. The leak wasn't the only reason T-TIP failed, but it contributed to an environment in which political will for the agreement waned. Other factors--widespread protests, opposition from EU member states, concerns about investor-state dispute settlement (ISDS), and shifting US trade priorities after 2016--also played a part.
You have oversimplified a nuanced situation. The actions of Greenpeace Netherlands were one of several significant factors, not just a minor footnote.
"Is anyone concerned that Trump just made up numbers for his chart."
Nope.
1) I doubt Trump made the chart himself.
2) Whoever did can likely argue it's validity at least as well as someone else's view of it's misdirection.
3) It makes no difference in the game afoot.
Not a peep out of the environmentalists in support of Trump’s tariffs. That’s because they know it’s just a negotiation tactic which if successful would unleash even more ‘environmental catastrophe’. Everybody knows Trump is negotiating, except the panic sellers.
VAT is completely beside the point. It is charged on all goods sold wherever they originate. Where the hell does this notion come from?
Trump knows exactly what hat he is doing. Folks screaming that it’s coming too fast, but that is the only way to get it done. Presidents have been talking about it and talking about it for decades. Talking about bringing jobs back to the middle class. But only one person has the guts and the fearlessness to actually do something about it. Everyone else has been too timid, to worried about politics. Trump is fearless. The Republican Party are also showing themselves to be pretty fearless as well. This is a big deal, doge is a big deal, actually tackling the deficit in a meaningful way is a big deal. And all we get from the other half of the country is exactly what we always get, partisan politics with little semblance of reality. With their media propagandists, this is why we have 36Trillion in debt and no idea where the money goes. I’m pretty proud of the Republican Party right now. But President Donald J Trump is a giant.
@Dude1394. There is no relationship between the balance of trade and government budget deficits. Budget deficits are caused by the government spending more than it is raising in taxes. Whether the US imports more than it exports has no impact on how much money the government spends or raises through taxes. Perhaps your point is that the tariffs are good because they are the biggest tax increase in the history of the United States and that will reduce the budget deficit? If that’s your point, that’s true to the extent the tariffs succeed in raising lots of revenue for the government.
Peter Navarro just published a piece saying that everything is going to plan and this is necessary. His arguments look dubious and he ommits services for reasons only he will know, but this is the stuff we have to live with now.
No point in Ken Langone, Stanley Druckenmiller, Larry Fink, Bill Ackman and that bunch crying about it now. The time to speak out loudly was in 2024.
Only Buffett, Rheinmetall, and a few resilient firms are showing any real grip. Interesting times - watching how the bottom is still far, and yet, hopefully, possible. In the US, only Warren is offering a clear, conservative picture: high liquidity and quiet growth.
That alone tells you Buffett’s bet is “wait and see.” Trump is losing his nerve, sensing that Buffett is actually positioned independently from the chaos. He’s the only one in a shaping stance, while others are frozen or falling off.
I figure I'm going to wait for 90 days before setting my hair on fire over the announcement of tariffs. Some deals are going to get made. Deals will be offered by a bunch of countries--some will be accepted, some not. The EU offers zero-zero tariffs on "industrial goods". Well what about agricultural products? And so on. Much of the screaming about these tariffs has been done by newly self appointed experts who couldn't balance their own checkbook.
As I say, I'll wait and take another look 90 days down the road. Trump has achieved some things that "couldn't be done" i.e. closing the border without waiting for "comprehensive immigration reform". He's also stepped on his own toes on some other issues.
Malaise, scroll through the Wikipedia article on TTIP or use another source and I think you will find that I was correct.
Years of negotiations that were going nowhere and an environmental movement already mobilized against the TTIP well before the Greenpeace leaks.
Trump wants more than zero-for-zero from the EU. He wants reparations for decades of abuse which Europe has dished on the US.
I am sure Trump will 'think' about it... but no doubt he will have a counter offer.... that is part of the 'art of the deal'.
John Henry, there are many, many jobs in a heavily automated factory.
A GM assembly plant employs around 4,000 and a Tesla Gigafactory (what could possibly be more automated) employs 10,000 to 20,000.
"Trump, 78, has also slapped all foreign-made cars coming into the US with 25% tariffs."
Odd for the Post to shoehorn his age in there.
They probably have marching orders to include it at least once in every story.
As stocks continued to massively tumble, and 401(k)s nosedived, Trump stated that his global tariffs are a “beautiful thing to behold” while he was spending days on his million dollar golf course.
Trump is losing his nerve, sensing that Buffett is actually positioned independently from the chaos.
Source: Your ass.
"I’m old enough to remember that in 2022 the Nasdaq dropped 30% and the S&P 500 was down 20% and the media spent the year telling us that we weren’t in a recession and in fact the definition of a recession we had always used wasn’t actually correct."--Dan O'Donnell on X
It wasnt just the media lying thru their teeth about the 2022 downturn/market drop. Our very own LLR-democratical Rich was right there in the middle of Liar-Central as well.
As he always is...and always will be.
@amexpat who wrote "The important thing is to have level playing field. I don't see how VAT changes that."
To have a level playing field, then the United States should charge a 20% VAT on all European products sold in the United States, in addition to the proposed tariff. As is done to US goods in Europe. That has not even been proposed by Trump and stands as a way to make the playing field completely level.
Hassayamper (to LLR-democratical Rich): "Source: Your ass."
Its often difficult to get a glimpse of LLR-democratical Rich's arse given his permanent condition of having LLR-democratical lonejustice's lips being there.
The S&P 500 was down 0.23% today.
"Much of the screaming about these tariffs has been done by newly self appointed experts who couldn't balance their own checkbook."
There it is in a nutshell. And it's on display here at Althouse comment section on a daily basis.
pacwest: "There it is in a nutshell. And it's on display here at Althouse comment section on a daily basis."
lonejustice, Abacus Boy Rich! That's your cue!
I see the goalposts are already being moved by the usual suspects.
The world is going to end!!!! Trump's trade war!!! Stock market crashing! Screeeee!
Some movement comes about.
Well, this isn't much. It's not enough. It's not exactly what Trump wants.
Some more movement.
Well, it's still not enough. But what about x, y and z? Why hasn't his fixed that yet?
Some more movement, and things end up being pretty much as Trump anticipated.
It was going to happen anyway. Trump had nothing to do with it!!!
Just watch.
The panic selling helps actually. It incentivizes self preservation. Self preservation incentivizes negotiation.
As stocks continued to massively tumble, and 401(k)s nosedived, Trump stated that his global tariffs are a “beautiful thing to behold” while he was spending days on his million dollar golf course.
Every single one of my leftist acquaintances was spewing this exact, same bullshit for the last 24 hours. And we're supposed to believe your some sort of conservative who voted for Trump three times?
With 'allies' like you, who needs enemies?
Almost every Trump supporter I know said they were going to massively invest in stocks today because Trump was going to turn the stock market around with his tariffs, and today was the golden day to invest. I guess they didn't believe their own rhetoric.
Off topic at hand: Chief Roberts just blocked a lower court ruling compelling Trump to bring back a dearly deported.
Tired of winning yet?
There are ways to compel Trump to do things, just not by judicial fiat. Roberts likes things done by the book.
The same people who can''t define a woman are suddenly econ experts.
Oh, and I thought today was the day everything was supposed to fall apart, and we all jump off a bridge or something.
Market down a bit when I looked, also up a bit too. Wasn't it 2022 when it was down 20% and the same leftists on this blog didn't say a fucking thing??
the leftists on this blog should take note of past videos with your god Biden, pelosi , schumer obama saying we need tariffs. they didn't really mean it, but to leftists saying something counts, LOL.
It is early days yet. and so far, 70 countries have said they would like to negotiate with America. Isn't that the point?
Kak: "In fact, one look at the markets will already show you."
Thanks for reminding me, Kak. And I want to sincerely thank you and all the doofusses like you who drove those stock prices down, because I just loaded up on some ridiculously good bargains. In a few weeks when the market comes roaring back, I think I'll cash in and buy something nice with the Trump Tariff Gambit Free Money you bozos made for me.
Meanwhile, you should start putting together some new bitching topics to whine about when this one's no longer viable for you.
"Almost every Trump supporter I know said they were going to massively invest in stocks today ...".
Makes sense. Lonejustice knows a bunch of Trump supporters, almost all of whom have been keeping large amounts of cash in their checking accounts.
And then there's the UK. I'd hate to see anything happen to their government.
And let's not forget Macron's kangaroo court convicting Marine Le Pen of aggravated jay-walking. Wouldn't want to see the French economy going down in flames or anything.
I am sorry that I didn't vote for Trump twice. There, I said it.
Rabel, You are right, there will be jobs that come with the reshored factories. My point was that they will not be 1:1 with the jobs originally lost.
The GM assembly plant that employs 4,000 today might have employed 12,000 25 years ago for the same output. A lot of those jobs were unskilled. Defined roughly as being able to walk in off the street with no special skills and be 80% functional in a week or 2 with OJT.
Now the 4,000 left will have a much higher proportion of skilled workers. CNC operators and programmers, robotics programmers, mechanics, electricians electronic techs and others. Good, well paid jobs. But jobs that require specialized training for anywhere from 3 months to a couple years then experience on top of that.
The 20 people that rivet the 150 pieces of the Ford Chassis will not be the same 10 (or 5?) people who injection mold the Tesla Chassis in 3 pieces on a Gigapress.
There will be manufacturing jobs and they will be much better than many of the current manufacturing jobs. But there won't be anywhere near as many.
John Henry
Trump Team Mulls Exporter Tax Credit as Tariff Counterweight ~ Bloomberg Business News
I thought Trump’s tariffs were intended to generate revenue to offset the tax cut—or even replace the income tax entirely, if you take Trump at his word (which you probably shouldn’t). But now, it seems the plan is to use that revenue to subsidize exporters instead. It feels like they’re just improvising as they go.
During Trump 1.0 — a significant portion of the tariff revenue collected was redirected to U.S. farmers, particularly through bailout programs, to offset losses from retaliatory tariffs imposed by other countries, especially China.
lonejustice said...
"Almost every Trump supporter I know said they were going to massively invest in stocks today"
This comment does not seem plausible to me. Though it does appear that many people were buying today. Not me. I'm waiting for bigger drops. I made 1.58% today though.
This may be a bit of hoptedoodle.
Fort Payne Alabama by the 1990s manufactured about 10% of all the socks made in the world. About 8,000 people were employed in a dozen or so factories.
Sock making is highly automated with high speed rotary looms weaving the tubular body of each sock. But they can't weave the end of the toe. For that, many, many employees sat at sewing machines sewing them closed by hand. Sounds like a fun way to spend 80,000 hours of your life, right? No matter how well paid.
In the early 2000s the entire industry upped sticks to Central America. It cost slightly more to weave the sock body there. But it cost significantly less to have operators sewing the toes.
Sock manufacturing is returning to Fort Payne, though perhaps not at 90s volume. One of the reasons is that toe sewing can now be automated.
If sock making comes back in similar volumes as before, those 8,000 toe sewers aren't comeing back. The plants will have knitting mechanics, technicians and toe sewing machine specialists. Much more interesting, much better and much better paying jobs. But nowhere near as many.
I am not arguing that sock making should not return to Fort Payne, though there may be other, better, US locations for it. I am in favor of any manufacturing in the US.
I am just pointing out that there will be far fewer jobs than before. That is probably a good thing. a lot of these unskilled manufacturing jobs are pretty shitty. We can do better for our people.
John Henry
@Skeptical Voter: Much of the screaming about these tariffs has been done by newly self appointed experts who couldn't balance their own checkbook.
I've seen these people before. The same smug purple-haired baristas and communist bicycle mechanics and 24 year old marketing majors working for Facebook. This is on brand for them. They were self-appointed experts on epidemiology during Covid, despite being unable to explain the difference between viruses and bacteria. And for years now they've also been self-appointed experts on atmospheric physics, although not one of them can differentiate a second-degree polynomial.
"It is early days yet. and so far, 70 countries have said they would like to negotiate with America."
Yeah, but... (see: Jim @ 4:35 above).
John Henry I would mostly agree with you except for the 25 year figure.
I was there and we had already squeezed out all the labor that could be squeezed with automated, if not robotic, processes or by moving the most labor intensive jobs to Mexico and then China.
Eventually we moved it all.
Very much like DEI, outsourcing overseas simply became the "thing" to do for large American manufacturing companies.
It didn't always make sense from many perspectives, including financial ones.
Butting in on John Henry and Rabel's conversation:
It seems to me there is going to be a large displacement of the workforce due to GNR similar if not greater than the 1800's agriculture revolution whe farm labor went from 49% of the workforce to 3%. Not sure how we are going to manage it, but I think there will be a lot of social upheaval.
I'm being a bit of a Luddite here?
LLR-democraticl lonejustice: "Almost every Trump supporter I know....."
LOL!
Wink wink....
After reading Drago's comment with his ExTwitter link -- I surfed through ExTwitter and being under its influence I can clearly see that all the financial publications are shamelessly leftist propaganda production which is blind to all the miracles that Trump performs day and night. I also learned -- 'It's not the real economy. It's only stocks, bonds, the dollar, corporate earnings, unemployment, inflation, trade...' 🤡
MAGA and satire are officially indistinguishable. 🤣
lonejustice said...
Almost every Trump supporter I know ...
Both of them.
Lem Vibe Banditory: "Off topic at hand: Chief Roberts just blocked a lower court ruling compelling Trump to bring back a dearly deported.
Tired of winning yet?"
I am happy to take this rather massive win, but the signals coming out of the clearly weak Amy Coney Barrett and JRoberts are extraordinarily disturbing for the long term.
It appears the lefty/media public pressure on her is working and she is doing the classic "growth in office" which means leftward march. We will be lucky if she isnt already almost to Kagan status.
JH's comments led me to look into whether anyone had finally figured out how to automate building automotive wiring harnesses.
Nope. Still build on assembly lines by manual labor. Tesla is trying but not there yet. They outsource their harnesses.
There's a mile or two of wiring in a vehicle in the form of individual harnesses and the build process is not automation friendly, beyond Henry Ford's assembly lines.
That was labor intensive work that it made sense to outsource.
I'm pretty sure installation is also still mostly manual.
Abacus Boy, LLR-democratical Rich really does believe every financial publication isnt as rabidly left as the non-financial publications!
Li'l Richie, the Harry Sisson of Althouse blog, probably believes the "science" mags aren't compromised and "the Science Guy" is a real scientist!
LOL
What's next Rich? Do you STILL believe Stolen Valor / Blue Falcon Tim Walz is a true-blue rootin-tootin war hero AND that kamala is actually brilliant?
Go ahead...you can tell us....
I've commented some time ago about the volatility in the stock market. I read a comment by a senior player on Wall Street who attributed the inclination toward panic sell offs in the market to the increasing number of people on meds/drugs. Consider the list below.
https://www.cchrint.org/psychiatric-drugs/people-taking-psychiatric-drugs/
"Mason G said...
"The United States ALREADY has a free trade zone with Canada and Mexico."
Sort of. Regarding Canada, there are quota limits on some products and when they're exceeded, tariffs are applied. Those tariffs are up to 298.5% for certain dairy products like butter. Not exactly "free trade" if you're limited in how much you can trade."
That's exactly how sugar cane imports into the USA work. Why our soda is made with high fructose corn syrup instead of sucrose. On the world market- cane sugar is much cheaper. Brazil is the largest producer- and a large part of their crop, like a large part of our corn crop, is used to produce fuel ethanol.
rhhardin said...
...
VAT is brought up as a trade tool but it's not. It's a local substitute for an income tax, which the US counters with an actual income tax. The foreign nation does not charge VAT on exports, which makes them cheaper than at home.
Almost, but not quite, completely wrong. This is a list of income tax free countries:
https://www.globalcitizensolutions.com/countries-with-no-income-tax/
Only one of them in Europe- Monaco. And they don't produce a whole of manufactured items... VAY is in addition to income tax. I'd be fine with VAT in the USA- if income tax was abolished. Politicians are addicted to more spending. They'd never give up on a source of revenue. Sort of like sales tax and income tax in some states. Where one was added with a promise to get rid of the other- which never happened.
And if there were a $25,000 robot that could do what a human does standing on that assembly line he would already be working.
The business case is clear but the technology is not. Yet.
Also... You don't take a loss if you don't sell.
The robot butler we saw is supposedly state of the art. Yet he/she's nowhere near matching human performance in many simple tasks.
Development will accelerate if they get further along with the sexbots. Products are thus far unsatisfactory unless one has a particular robot fetish.
Hurry up guys.
"High fructose corn syrup is most stable in suspension", a food process scientist told me.
From X:
🇺🇸 S&P 500 +0.7%
🇯🇵 Nikkei -7.8%
🇭🇰 HS -13.2%
🇨🇳 SSE -7.3%
🇹🇼 TSE -9.7%
🇪🇺 EU50 -4.7%
🇬🇧 FTSE100 -4.4%
🇨🇦TSX60 -1.2%
🇲🇽 BMV -1.3%
🇩🇪 DAX -4.1%
🇮🇹 MIB -5.1%
🇫🇷 CAC40 -4.8%
🇮🇳 Sensex -3.1%
🇰🇷 KOSPI -5.6%
🇦🇺 ASX200 -4.2%
Once again, as always, without exception, LLR-democratical Rich told us this result was literally impossible for today.
Can you imagine how angry Rich is right now? At least as angry as he was when the astronauts rescued by SpaceX did not burn up in the atmosphere.
3 biggest crashes and what your return would be today if you didn't sell, but bought or held:
1929 Crash: ~89% decline, ~104,171% increase
2000 Dot-Com Crash: ~49% decline (S&P 500), ~634% increase.
2008 Financial Crisis: ~57% decline, ~742% increase.
Every correction in history has been a buying opportunity, and the bigger the drop the bigger the opportunity. Only way to lose is to panic, or pick a single bad stock, but investing in diverse market funds is guaranteed by history.
Trump Tariffs took us down <10%
If you jumped in for the crash of 2008 with $100K, today you would have $842,000 after this week's correction.
"Almost every Trump supporter I know said they were going to massively invest in stocks today because Trump was going to turn the stock market around with his tariffs,"
I doubt people said that. It's not the reason, but yes, I did just that. Put all my cash in. I won't know how I did for years, because I rarely sell. It will probably go to some charity in my will, like The Fund For Aging Cheer Leaders
I see a pattern there, bags. The bigger the drops, the higher the recoveries. Mind you, those recoveries didn't include the restructuring Trump has embarked upon. Bottom line is "free trade" was not real "free trade", it was more like subsidized trade.
^^ Missing the 10 best days can cut your total return by half or more compared to staying fully invested. The catch is that these "best days" often occur close to the worst days, like during recoveries after sharp declines. Timing the market to avoid the bad days risks missing the good ones too.
If it's correct that Trump et al want a 15-20% market correction to drive down the interest rates on all those 10-year Treasury bonds that need to be refinanced (money pulled out of equities flows into bonds, driving down the "price," which is the interest rate), there will be plenty of other solid buying opportunities.
The Biden administration created a gigantic financial mess that is exceedingly difficult to clean up. We've had >25% real inflation over the past 4 years (Yes, that's not the official figure, but it's a lowball of the actual rate) and run up a massive debt. But the 10-year T-bills that need to be refinanced now were bought in 2015, when the never-ending "quantitative easing" and the 7 years of a soft economy had led to very low interest rates. Refinancing at a high interest would result in a huge hit to the budget. The Trump people are going to do everything in their power to push money into the bond market, and driving down the very overvalued stock market is the safest way to do this (certainly less risky than trying to squeeze money out of the equally overvalued Real Estate sector) since almost 100% of the money in the stock market held by middle class people is in 401k accounts that most people just set up and ignore. In a best case scenario middle class families take only a temporary on-paper hit.
The bad days are the best days.
Human nature is funny. Can you think of anything else where people say, I know it's on sale right now, but I'm going to wait till the price goes up to buy it.
The Supreme Court has a woman problem, whatever that is.
Gospace @ 6:55pm,
Yes to replacing income tax with a consumption tax; no, no, a thousand times NOOOOOO to a VAT! One of the best features of a sales tax is its visibility.
The American Brexit. Bessent needs lower long end yields to refinance the 30% of all Treasury bonds set to mature this year. His problem that wasn't in these clowns calculus, is foreign investors won't buy the given low yields, high inflation, and now huge currency volatility as USD reserve status is unwinding.
Rabel,
I had a couple of clients in PR back in the 90s that made wiring harnesses among other things. A few weeks back I was in an aircraft plant, small prop business planes, and we walked through an area where they were making up some huge and super complex looking harnesses.
I agree that it would be very difficult to automate.
John Henry
Re the 25 years ago, that was a number I pulled out of the air. I still think of the 80s as being 25 years ago. Not 40.
bagoh20 said...
The bad days are the best days.
Quoting Lenin now, Bagoh?
he phrased it "Worse is better" though in another context.
John Henry
@bags: I like your reasoning at 8:55; I just wish that George Soros* wasn’t so invested in shorting stocks.
_____________________
*The last living actual Nazi who betrayed people his own people to gas chambers.
A 5% one day stock market "crash" doesn't even make the top 17 since 1896.
According to Wikipedia https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average
"Kirk Parker said...
Gospace @ 6:55pm,
Yes to replacing income tax with a consumption tax; no, no, a thousand times NOOOOOO to a VAT! One of the best features of a sales tax is its visibility."
That also works for me. One tax. And one tax only. Whatever it is. But a tax that discourages you from working harder to make more money is just wrong. Which is what a "progressive" income tax is. That needs to be loaded with exemptions.
"In a best case scenario middle class families take only a temporary on-paper hit."
I love how we only discuss the best case
Prof. Drout, My personal experience over the last ten months of 2024 was the worst retail-level price inflation I've seen in five decades.
John Henry,
Some years ago my brother-in-law helped Boeing develop an automated wiring-harness table. Instead of hand-building the r routes on a wooden table, you could enter a bunch of parameters (or maybe import from CAD) and it would pop up a bunch of fingers forming the chutes for the harness.
No automation of the actual pulling of the wires, though.
Much less attaching the connectors!
"I love how we only discuss the best case"
We've got you to cover the apocalyptic case.
"Prof. Drout, My personal experience over the last ten months of 2024 was the worst retail-level price inflation I've seen in five decades."
I was at the mini-mart last week and thought I'd grab a bag of chips. You know- the single-serving 69 cent bags. Except they're not 69 cents anymore- the price on the shelf was $2.79. I looked around to see if maybe the higher price was for a bigger bag of chips, but no- that was the price.
I skipped the chips.
Someone hinted the tax bill will zero out capital gains tax--presumably, long term only. My Wachovia stock fell to about a fifth in 2008, and it hasn't risen much since as Wells Fargo. The tax discouraged me from rebalancing my portfolio earlier, which it badly needed. It needs it again, as the CSX stock my step-grandmother bought in 1965 has done very well.
"lonejustice said...
As stocks continued to massively tumble, and 401(k)s nosedived, Trump stated that his global tariffs are a “beautiful thing to behold” while he was spending days on his million dollar golf course."
Love seeing financial news from a guy who thinks Trump's golf course is a "Million dollar golf course."
Nice headline "...zero for zero...". But what does this mean? For example, VAT taxes are substantial in Europe - does this headline include those taxes. If President Trump sticks to his guns and not caves to all of the special interests, this over the next year will be a boon for 'deficit reduction'. The USA cannot continue doing business like the past. The Dollar has been diluted, so our spending power is down substantially due to Deficits. Yet not one politician screams about the lack of spending power for US consumers. Look, these Tariff negotiations are great. BTW, for the bloggers hear responding to his article, remember our exports for 2023 equal to only 11% of our GDP. While imports equal to approximately 16% of GDP. The USA is substantially self-sufficient and it may hurt in the short term, a little bit, but by next year, it will look good. I've not been a Trump fan, but I got to give him credit for tackling the 'Deficit' problem which both Republicans and Democrats have ignored in the past. Both parties, historically, have not taken action on 'Trade Imbalances' and only given political 'lip-service'.
Well, John. We seem to have survived the loss of 1000s of black smiths so I think we'll survive this as well.
When things are in flux opportunities abound.
EU leaders think they can trick Trump with some beads and blankets.
The EU leaders are throwing political opponents in jail.
I fully expect Trump to put the screws to macron and the other fascists in Germany and France and the UK.
If you're getting your business news from the New York Post, you really don't know anything about business or finance. (Which would be true for most law professors.)
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