Writes Ana Swanson, in "Trump Is Winning His Trade War. What Will That Mean for the Economy?/The president’s vision for reshaping global trade is falling into place, but he is embarking on an experiment that economists say could still produce damaging results" (NYT)(free-access link).
They're even submissively adopting his hairstyle:
Once mocked, now emulated.
That's Ursula von der Leyen, the head of the European Commission, enduring the announcement of Trump's victory in the trade war.
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91 comments:
Typical NYT; the exact wrong take. The US will now be able to sell cars and other stuff to Japan and EU. US goods had obscene tariffs in some foreign countries.
As ace stated “The Marshall Plan is finally over”. Such a wonderful reset.
Glancing at the NYT readers’ comments, it is just Trump hate. That’s what the Dems are now: Trump haters. If Trump is for it, they are against it.
This is all so funny. Trump, the big dummy, is an economic genius! DOW close to all time high!
If it is such a bad economic policy, why do other countries have them against us? I’m not saying those economies that do are somehow better, yet I do not see the same criticism directed at them.
Trumpworld is mostly complete
Leland said...
"If it is such a bad economic policy, why do other countries have them against us?"
A question that experts are never able to answer except to say if Trump is for it we are against it.
I've been pondering this. Obviously the strength of our consumer spending was an untapped resource in global trade. Our consumer dollars are so valuable the rest of the world will pay a premium to sell their wares here. The fact is obvious: countries are lining up to do so, and in the case of the EU they got nothing, nothing in exchange for $1.5T investment in our goods and services, no tariff as in 0% in exchange for paying us 15% across the board.
Still to be determined: who plays and who pays.
"If it is such a bad economic policy, why do other countries have them against us?"
Those other countries are poorer than we are. A tariff is just a tax on domestic citizens, with the goal of insulating domestic industries from competition. Hence the 15% tax on foreign cars, but it's not all good news for Ford and GM, because they're hit with a 50% tariff on steel, aluminum, and copper. Is it worth paying extra for cars now and forever so that maybe your kids will be more likely to work in a copper mine?
The "experts" all said that Freedom Day would crash the economy and kill jobs and spike inflation. Four months later all three data points are instead decidedly favorable: more jobs, higher wages, lower interest and six-day streak of record S&P high closings.
They were wrong. On the other hand what data did they cite to support their pessimism? I don't recall any. America only has about 112 years experience without tariffs playing the major role in filling our Treasury. But we had 200+ years before that financing our country almost entirely on tariffs levied on imports and taxes on exports.
No income tax, except for a temporary one that paid off Civil War debts between 1861-1871. Not until the 16 Amendment in 1913 did we have an income tax levied on the people to finance our federal government. Like everything else it was pitched on a "tax on the rich" yet somehow reached down into the pockets of almost every American shortly after.
Prior to Wilson, presidents understood that the World will pay a premium to access our markets. After Progressivism took hold it was clear the tax code could be used to punish enemies and reward friends of Congresscritters. It is only now in era of Trump 2 that we are learning how extensive and pervasive that self-dealing was with the Uniparty and their DNC masters.
Coincidentally. It is the Great Orange Wrecking Ball that is bringing us back to our roots of charging THOSE bastards for doing business in a well-regulated and prosperous market that is also the hugest economy on Earth. Something NOT available anywhere else in the World.
Now the obvious question it raises is, why did no OTHER president think to ever put America first?
That's Ursula von der Leyen, the head of the European Commission, enduring the announcement of Trump's victory in the trade war.
And staring longingly at his crotch...
Neither the EU nor Japan have been formidable economies in quite a while, certainly since COVID and the European embrace of the climate madness.
Still to be determined: who plays and who pays.
I submit what was touted by the Left as the Worst Case Scenario way back when Trump announced huge punitive tariffs as his opening bid: this will kill magat's shopping places especially Walmart!
China vowed "me no pay!" and Walmart said, "Don't think you can pass it onto me, Chen. 'Tain't happening."
Suddenly, one might say unexpectedly, China realized that with oil prices down it saved so much on transportation that, nevermind, "We eat tariffs. Same price. You take now." Why?
The "experts" never considered the dynamics of trade at street level. China was under enormous pressure to clear its docks and invoice product. The worker bees were running out of storage. The middlemen had negotiated the original price with a fat margin. Everybody wanted the shipments to go to prevent riots when workers go unpaid.
This just played out on another scale with the EU. If you ever did business with them you know the individual countries have VAT and the EU has another VAT and none of it despite its name "add value" at all. It's a non-tariff barrier to business. Trump has revealed the nasty little secret to EU finances. We've been paying it.
It was a nice free ride for the rest of the world while our politicians (many of them bought and paid for by foreigners) allowed a trade and tariff imbalance that benefited other countries at America's expense. That free ride is over now.
Neither the EU nor Japan have been formidable economies in quite a while, certainly since COVID and the European embrace of the climate madness.
Yes yes yes. THAT is huge reason they need access to our consumer dollars. Without it their manufacturing collapses. Their exports trend down. Way down.
Trump in effect is using the Chinese model. But China is becoming so less reliable at being that market that they have weakened themselves terribly. But if Joe Euro sets up a plant here he will sell more to us and the world. Even back home to his friends.
Wiser heads in Europe and Japan realize that if the Fed govt continues on its debt spiral, they're going to suffer, too. Now Congress needs to codify some of these tariffs to drive home the need to onshore. I'm not holding my breath.
"Formidable economies?" No. Trading partners, acting like, you know, partners.
not all good news for Ford and GM, because they're hit with a 50% tariff on steel, aluminum, and copper
FIFY: "...a 50% tariff on FOREIGNsteel, aluminum, and copper..."
Nothing stopping us from mining and refining our own now that Trump waived restrictive environmental rules via EO. Plus we won't be wasting precious resources on windmills and solar farms. Now Congress needs to codify those non-tax related parts of the Trump plan.
"...the highest tariffs in modern history..."
Liars.
https://obamawhitehouse.archives.gov/the-press-office/2017/01/12/fact-sheet-obama-administrations-record-trade-enforcement
Scroll down to "Commerce AD/ACV Actions"
Tariffs are not a novel deal. Progressive tariffs are evolutionary, including to compensate for labor and environmental arbitrage, DEIsm, etc.
Little She-Bear is wearing her do a bit longer with much less girl-boss assertiveness.
Economics is not a zero-sum game, though damaging results are likely. Let's ask Chairman Xi.
“ Mike (MJB Wolf) said...
The "experts" all said that Freedom Day would crash the economy and kill jobs and spike inflation. Four months later all three data points are instead decidedly favorable: more jobs, higher wages, lower interest and six-day streak of record S&P high closings.”
It’s enough to raise questions about other things these so-called “experts” have been wrong about. Globalism and out-sourcing do benefit some, but they also harm others. Perhaps it would be easier to list the things these “experts” got right over the past 50 years or so. My guess is that would be a much shorter list than the things they got wrong.
A painful set of lessons. First the outrage as a change in assumptions shocks the system. Then the brutal awakening, as reality asserts itself and the predicted change begins to manifest itself in the results, sparking the second wave of outrage. Not only is he crazy, it turns out he's right !
Yesterday I was listening to European experts tut-tutting their way through the new scheme, labeling it a big nothing-burger, then I heard the Russians and other eastern European leaders, with no stake, saying otherwise. I'm predicting the trajectory will be a clear new baseline.
They need access to America's market. There's no substitute.
Trump is simply negotiating a better deal for the US. The US is paying for the defense all these countries and our economy is helping to keep them wealthy. We need the money. If America tanks, everybody tanks. He's not doing it to be a dick.
If we just WON $700B in energy sales, mostly natural gas I expect, and what rogue nation is LOSING that customer? Trump keeps it simple in making US the winner and THEM the loser and Putin is very visibly the loser in this deal.
Unexpectedly. Of course.
Everyone in America wants to be a billionaire, everyone in Europe wants to be a king.
100% of democrats believe that Trump is a moron who does not know how to read or write.
They're even submissively adopting his hairstyle:
I love this blog.
"FIFY: '...a 50% tariff on FOREIGNsteel, aluminum, and copper...'"
But you understand that any domestic steel and copper that GM buys will be just as expensive as the foreign steel and copper (with tariff), right? That's the whole point of the tariff. American mines and plants currently can't compete, because foreign salaries and safety regulations are far lower, so the tariffs are meant to raise the cost of the metal to a level that domestic producers might be able to match. In other words, it's a subsidy to domestic producers.
Mike (MJB Wolf), you're the first commenter I've seen here (or anywhere else for that matter) who has correctly assessed the motivations, dynamics-in-progress, and outcomes of Trump's tariff strategy. Well done. I'd like to add a few of my thoughts to your summary question: "Now the obvious question it raises is, why did no OTHER president think to ever put America first?"
1) No other President was a billionaire businessman who understood the leverage power of controlling access to the largest consumer purchasing base on Earth.
2) Other Presidents used tariffs on a tactical level, to protect a few specific industries or punish a few specific countries. Trump is addressing this as a global strategy. It's the SCALE that no economist has ever seen, or anyone has ever tried in such a short period of time. He has effectively done a global reset of world trading strategy in less than 6 months...and the time pressure was part of his strategy to make it work, as any good salesperson should understand. And all to America's advantage, as the results continue to show.
3) Yes, as detractors have pointed out, it is in effect a new tax on American consumers who will pay the NET added cost (which in most cases will be less than the tariff %). I'd call it a VVAT, or Variable Value Added Tax. It will vary by country of origin and individual product, but it will indeed have value added in manufacturing jobs coming home or staying home, higher wages, and net trade balance.
It's not just a good deal. It's an epic deal.
Dammit. Why won't the economy crash?
- A whole lot of lefties.
Boatbuilder, that's a great link. And it reinforces my perception of the US previously being weak on trade. Years ago I became aware that Canada, basically prevented sale of milk from the US. (Lots of little variations like % fat, etc.).
The result, just like the Obama response:
Meetings, encouragement, appeals to international organizations, strongly worded letters, forums, coalitions... the usual bureaucratic mumbo-jumbo. Results... money spent... office drones hired...the status quo essentially maintained.
Trump took ACTION.
That's a bright dividing line today:
Left = words
Right (Trump) = accomplishments.
Mike mjb
Re income tax the one in the 1860s was supposed to be permanent but was ruled unconstitutional by the Supremes.
Another attempt was made in the 1890s and struck down.
It took 16A to allow one.
John Henry
Just wondering—do we have a clear understanding of the long-term goal behind the current trade actions? And how much room is there for that goal to evolve over time, especially as other countries respond or adjust? Curious what success might look like 10 or even 20 years down the line.
Suddenly, one might say unexpectedly, China realized that with oil prices down it saved so much on transportation that, nevermind, "We eat tariffs. Same price. You take now." Why?
Regardless of your racist pidgin English, which apparently is how the monkeys flying out of your butt think Chinese people speak, this is not what happened. First of all, oil prices, which are always volatile, are down about 5% since the beginning of the year and certainly within the normal variation of historic prices (and there is a floor, generally around $60 a bbl, where U.S. oil production becomes unprofitable). Secondly, there is zero evidence that prices we pay for goods from China, or any other country, are going down. True, so far consumer prices have not reflected the tariffs. But there is only so long that companies will pay the tariffs (and make no mistake, China does not pay the tariffs, they are paid by the importer) before they start passing on the extra cost to consumers. Inflation is already creeping up.
but it's not all good news for Ford and GM, because they're hit with a 50% tariff on steel, aluminum, and copper.
Good news for miners, and states with mines.
Is it worth paying extra for cars now and forever so that maybe your kids will be more likely to work in a copper mine?
Do you know what those jobs are like nowadays? You sit in the air-conditioned cab of an excavator the size of a ferryboat, or drive a truck bigger than a house. You don't even get dirt under your fingernails. You get gold plated benefits and a salary that tops six figures if you pull some overtime.
We don't have Breaker Boys anymore.
it will indeed have value added in manufacturing jobs coming home or staying home, higher wages, and net trade balance.
It will also support domestic mining and industrial enterprises that we would do well to preserve in the interests of national security.
Planetgeo
Not to take anything away from press trump but Adjusted for inflation Herbert hoover may have been wealthier.
May have had more executive and big project experience. Built a 300 mile railroad in Siberia, spent several years as minister of interior for the Chinese emporer, deveped huge mines around the world.
During Ww1 as a private citizen organized and ran, and funded a food network credited with saving 20mm civilian lives
Later, did similar fo us govt.
Hoover was an amazing and inspiring man.
John Henry
Honda builds 70% of all it cars sold in us in the us. Has a long term program to get to 90 percent
BMW, Mercedes, vw, Toyota and others also make a large part of us sales in us.
John Henry
"Formidable economies like the European Union and Japan have abruptly made peace with higher tariffs on their exports, acquiescing to President Trump’s demands...."
That's because they aren't actually "formidable", they're weak economies that desperately need access to the US economy in order to survive.
"As major economies fall in line to sign agreements that include the highest tariffs in modern history, the president’s vision for global trade is rapidly being realized. That new normal uses America’s economy as leverage, with other countries accepting tariffs of 15 to 20 percent to do business with the United States.... The outcome has seemingly proved Mr. Trump right that his tariff threats are a powerful bargaining tool...."
"Seemingly"? How about "Trump was right, the 'experts' were wrong. Again"?
Keldonric said...
Just wondering—do we have a clear understanding of the long-term goal behind the current trade actions?
More manufacturing the US. More support industries for manufacturing in the US. More jobs for Americans
BMW, Mercedes, vw, Toyota and others also make a large part of us sales in us.
Unfortunately, Trump's crazy tariff rates mean that it may be cheaper to manufacture cars in Europe (where there is no 50% tariff on steel and aluminum and components will not be subject to tariffs if they go back and forth across the border to Canada and Mexico--which is the current way things work), pay the 15% import tariff, and be done with it. Hell, U.S. manufacturers might decide it is cheaper to import from Europe (and of course Chrysler is based in Italy, and both Ford and GM manufacture in Europe) than manufacture here.
"Seemingly"? How about "Trump was right, the 'experts' were wrong. Again"?
Because, we are only seven months into this nonsense. Let's see where we are a year from now.
Tom T. said...
That's the whole point of the tariff. American mines and plants currently can't compete, because foreign salaries and safety regulations are far lower, so the tariffs are meant to raise the cost of the metal to a level that domestic producers might be able to match. In other words, it's a subsidy to domestic producers.
Well, Tom, the point here is that either those safety and environmental regulations are a good idea, in which case Americans should pay more for steel etc. in order to make sure all the steel used in America is made under those regulations, or they're a bad idea, in which case they should be eliminated in the US.
Using them simply to shut down US production, and moving it to foreign countries, not excusable, justifiable, or legitimate.
So, where do you stand? Do you like those regulations? Then you should celebrate that Trump's tariffs will mean that more goods are produced under them, even at a higher cost to Americans
Freder it is only Xi that I imagine in that dialect, although it is not far off from some of the negotiators China sent to sweet talk me and people I represented. Maybe you should get out more. I notice you do not even mention WHAT level tariffs are at nor QUANTIFY what per cent has "trickled down" to be inflicted on the poor consumers you imagine.
I gave real-world examples. I've lived this scenario over and over and seen suppliers from all over Earth try to work over US manufacturing. Walmart's prices are still steady while China pays the freight on those tariffs. I didn't say everyone everywhere.
But please! There is ZERO inflation compared to the hellscape Biden inflicted on America. And oil is WAY down since the pandemic, which was the true cause of almost all enduring logistics problems. Keep doomsaying Fredo. It won't change facts. Y'all were wrong. Trump is right. And by the time the rise in costs "trickles down" the bottom up boom ignited by Trump will absorb it without a hiccup.
Timing son. It's all about the timing.
Tom T. said...
"If it is such a bad economic policy, why do other countries have them against us?"
Those other countries are poorer than we are.
So?
So you agree that tariffs lead to more people being employed in manufacturing. The realty is that those without college degrees in the US (more than 50% of US adults) have been left behind by the "globalized" economy. Trump is making sure that poorer Americans get to have part of America's "richness".
Why do you have a problem with that?
Because, we are only seven months into this nonsense
LOL if it was nonsense you wouldn't be in such a panic over being WRONG about inflation, WRONG about jobs, WRONG about the stock market, WRONG about DOGE, WRONG about Trade Deals, WRONG about Congress passing the OBBB, WRONG about bombing Iran, WRONG about everything.
If you are not WRONG then simply show me the WalMart prices that went up in proportion to tariffs imposed on China.
Very slightly OT: one advantage of tariffs, to the extent that they are actually applied and collected, is that they function as an indirect broad-based consumption tax. So as a fiscal conservative who is in favor of a higher broad-based consumption tax, paid by everyone, to lower the deficit and in fact the actual debt, I think tariffs can help, especially at a time when increasing income taxes on bottom 50% is politically taboo.
And yet, Freder a large maker of high-end $1-2mm medical robots is moving ALL their production from Switzerland to the US. This will be lots of high-end jobs as these are handbuilt by craftspeople.
They have 20 manufacturing cells in the US now. I know because they ordered 20 licenses this week. We also discussed pricing for 10p additional licenses.
Astra zeneca announced $50bn investment to make pharmaceical active ingredients in the us.
A local company last week announced it is closing its Mexican plant and moving production here.
Samsung announced a $16bn plant to make chips i house for Tesla. In texas
Lots of other e x samples in recent weeks.
John Henry
Maybe Fredo had a stroke.
Unfortunately, Trump's crazy tariff rates mean that it may be cheaper to manufacture cars in Europe (where there is no 50% tariff on steel and aluminum and components will not be subject to tariffs if they go back and forth across the border to Canada and Mexico--which is the current way things work), pay the 15% import tariff, and be done with it.
Where to start? it may be cheaper to manufacture cars in Europe. Maybe? With all that domestic steel and energy they (don't) have? Really?
Then, components will not be subject to tariffs if they go back and forth across the border to Canada and Mexico. Back and forth...to Europe? Maybe you should workshop that. Sounds costly. And while you're at it, check and see if those "components" are or are NOT subject to those tariffs and/or the recent deal Trump worked out with Mexico. Canada I believe would rather die than deal.
...pay the 15% import tariff, and be done with it. That sir, though taken out of context by me, is the only sensible thing I could extract from your rant. You're welcome!
It is also EXACTLY what the EU just agreed to.
Ursula von der Leyen managed to maintain polite if not pleasant facial expressions when Trump was speaking. Not so much a year ago when European Parliament Member Ewa Zajączkowska-Hernik ripped her a new one. The EU camera person was charitable towards Ursula and only showed a close-up view of her at the very end.
https://youtu.be/UGVEIA8o_gI?feature=shared
For the economically illiterate let me help you: the main COST of making steel is the huge amounts of energy required to convert the materials into graded steel. Energy. That thing at the heart of MAGA, which will allow all other things to be possible. We were and soon will again be energy independent and a clean reliable source of oil and gas to our trading partners. With more nukes coming we will also have the lowest cost ELECTRICITY in the developed world, which will lure MORE manufacturing and AI and other research here as well.
Energy is the key. When it is abundant the people prosper.
England has zero domestic steel production. Sky high and unstable electricity.
Germany produces less than half the steel than we do NOW. Horribly unreliable and overpriced electricity too. And that's the BEST Europe can do.
France sadly only produces about 10M tons or about 1% of China's annual output. Energy is at a crossroads.
@Greg The Class Traitor:
"More manufacturing in the US. More support industries. More jobs."
Appreciate the response. I’m also curious how this plays out long-term if people in other countries start feeling the impact. That might eventually change how their governments approach things—which could end up affecting how we reach our own goals. If that happens, how do we adjust?
Really enjoying Megyn Kelly's podcast where she's reading all the doom-and-gloomsaying that Kamala and other democrats did on the occasion of Freedom Day. It's LOL worthy. Of course as usual the nevertrumpers were worse in their predictions!
Don, Don, Don of the US
Strong as he can be.
(Ahhhhhhhh)
Lookin’ out for the free!
Don, Don, Don of the US
Never gets down on one knee
(Ahhhhhhhh)
Lookin’ out for you and me!
When he makes his deals,
the Democrats squeal
and the media lies
Don’t bother asking why
Then he'll have some fun
on his Air Force One
While Starmer and Ursula
Wonder what they done… with
Don, Don, Don of the US…
Everyone is saying AI will never work but mining is going big on automated haul and production drilling. The Baghdad copper mine in AZ will be all auto in a few years and labor costs will be pretty irrelevant. Bad for unions, bad for foreign low cost labor nations.
It also is great for low cost because automation over humans saves maintenance and tire and fuel cost. People don’t do the right thing all the time. And great for Catipillar. So 24 hour production with no piss breaks will save a lot. The era of mineral buying from overseas is closing.
"Those other countries are poorer than we are."
"So?"
So I don't want us to make ourselves poorer. That's what can happen to countries that wall themselves off too much.
And yes, tariffs can support manufacturing, by forcing US consumers to subsidize domestic producers who were otherwise too expensive to be competitive. (Tariffs won't help US manufacturers compete overseas, however). Tariffs can also hurt manufacturing, by raising the costs of inputs like steel, aluminum, and copper. Hence my comment that the tariffs we have now are a good thing for producers in certain ways and a bad thing in others.
"The Baghdad copper mine in AZ will be all auto in a few years and labor costs will be pretty irrelevant. Bad for unions, bad for foreign low cost labor nations."
It's the same idea as McDonald's moving more to computer kiosks in response to minimum wage hikes. Tariffs are an attempt to make high-cost American labor competitive in the US, but technology undercuts them.
I love how 8 months ago you all were denigrating the lefties on this site as being completely ignorant of basic economics. Now that Trump has basically decided that Econ 101 is bullshit, you have adopted his economic theory as brilliant.
Continually hoping America fails - because the bad man is working to make it better - isn't a good look, leftists.
But we've grown used to it.
And yet, Freder a large maker of high-end $1-2mm medical robots is moving ALL their production from Switzerland to the US.
This is some classic bullshit. Is this the company you are referring to? They are not moving all their production to the U.S., just opening a new factory in Michigan to serve the U.S., Canada and Mexico, to supplement, not replace, their plants in Shanghai, Sweden, and Switzerland.
The outcome has seemingly proved Mr. Trump right that his tariff threats are a powerful bargaining tool
Full credit to Ann for recognizing this early while there was so much professional and amateur wee weeing….and the agreements are only the early benefit. With the new incentives domestic production may very well improve….
Now that Trump has basically decided that Econ 101 is bullshit…
…says the never took it or slept thru it…
says the never took it or slept thru it…
Good thing I didn't waste my time. Trumpenomics is the new order of the day. I am sure part of the deal with Columbia and Harvard is that their economics courses must laud the wonder of tariffs.
"People don’t do the right thing all the time."
And having worked in world class manufacturing facilities I can guarantee you that neither do machines, however advanced, automated, or robotic.
"If you're puzzled why the EU would accept such a lopsided agreement: It's because the EU lacks any real political clout. It has outsourced its energy security, ignored its military, crippled its industries, stifled innovation with red tape, and utterly failed to establish itself as a vital global force. In essence, the EU depends on the U.S. far more than the other way around. Sadly, being the global leader in preaching morality doesn’t earn you influence, leaving the EU, for all practical purposes, geopolitically sidelined." -- from Lily on Substack
Keldonric said...
I’m also curious how this plays out long-term if people in other countries start feeling the impact. That might eventually change how their governments approach things—which could end up affecting how we reach our own goals. If that happens, how do we adjust?
So long as we remain the largest consumer economy in the world, other countries are constrained by their need to sell to us. The major threat to these fixes is not anything foreign countries do, but some future President decided to screw over American workers by unilaterally dumping the tariffs & deals.
Tom T. said...
Tom: "Those other countries are poorer than we are."
Me: "So?"
So I don't want us to make ourselves poorer
So all those EU, UK, Japan, and China with their tariffs and non-tariffs barriers are just morons making themselves poorer?
Because only Tom is the true genius able to see the right way to do things?
No, Tom, what the situation is is that you are very upset that Americans without college degrees are going to get jobs and raises, and Americans with college degrees are going to take a slight hit to their outgoes in order to pay for it. Because letting all Americans benefit form a growing economy is just anathema to you (go look up a chart of income growth for Americans w/ and w/o college degrees, starting 1970. Those w/ college degrees have been taking all the wealth for ourselves).
Tariffs won't help US manufacturers compete overseas, however
Yes, in fact, they can. because once we get companies here, and making money here, it's much easier for them to grow, and add overseas sales, than it is to start up a company w/o the tariffs.
“I love how 8 months ago you all were denigrating the lefties on this site as being completely ignorant of basic economics.”
All you lefty corksoakers know is “we gotta win to ensure access to the US Treasury and continuation of BIG Grift”.
Looking at this strategically - the US is the prize market for everyone (since the end of WW2). This is because the US consumer has had the greatest disposable income out of all first world countries. If US economic reforms increase US disposable incomes, in spite of higher tariffs, this might be a wash for foreign exporters. Even better if tariffs (relatively) favor Euros or other US friends vs Chinese for instance. Not saying that this is how it will all play out .
“I love how 8 months ago you all were denigrating the lefties on this site as being completely ignorant of basic economics.”
Why go back eight months when it still applies today?
No Freder, Not ABB. ABB is a fine company, makes perhaps tens of thousands of general industrial robots annually. Most in the $25-75,000 price range.
The company I was speaking of doesn't even make "robots" in my opinion. They are more like "waldos". OTOH, they are the client so can call it whatever they like.
They have a robotlike arm and a control station. The surgeon sits in the station and performs surgery by manipulating the controls to move the arm. Normally the doc is in the room with the patient. But recently I read of an operation where the surgeon was somewhere in the US and the patient was in China.
Much more sophisticated than the normal robot. Plus it is a "medical device" which bumps the price up significantly due to regulation. All hand assembled by artisans in manufacturing cells.
Currently have 20 cells in the US. Bringing 100 from Switzerland soon. My impression is this year but I don't have a timeframe yet.
As I say, they are a client and told me about the 100 when we were discussing the order he gave me for 20 software licenses last week.
The client is a division of one of the top 5 or 10 largest pharmaceutical companies in the world.
John Henry
We have a serious national security problem with pharmaceuticals. Most of the active ingredients are manufactured outside US. I wrote about it here
https://www.packagingdigest.com/pharmaceutical-packaging/here-s-how-america-can-bring-back-pharmaceutical-packaging
(Maybe someone listened!)
We've had several companies recently announce major US expansions many specifically for making the API (active pharma ingredient) I had mentioned Astra-Zeneca and their $50bn announced last week.
I asked Grok if they knew any others:
Eli Lilly - $14.3bn (US Company)
Novo-Nordisk $6.8bn
Novartis - $23bn
Sanofi - $20bn
Merck - $12bn
Johnson & Johnson - $55bn (US Company)
Roche - $50bn
Abbvie - $10bn (US Company)
It is not all API and Grok did not have a breakdown. Focus seems to be mainly on increasing US API production.
John Henry
Freder mentioning ABB reminded me of General Electric. It used to be the quintesential US manufacturing and innovation company.
Until Jack Welch decided it should be an unregulated bank and the Hell with manufacturing. Then Jeff Immelt finished the job and in 2016 or so GE ceased to exist. Much of the wreckage was sold off at salvage prices.
ABB wound up with GE's electrical switchgear and related business.
And I think I mentioned previously that "GE" was moving a lot of appliance manufacturing to Kentucky. $20-40bn plant expansion IIRC. That "GE" appliance division is now owned by Haier, a South Korean conglomerate.
A lot of you probably write checks to Synchrony each month for various credit and time payment plans. They handle my Sam's Club Mastercard, for example. Synchrony used to be GE's finance arm.
Thanks, Jack.
John Henry
The appliance manufacturing is moving to Kentucky from China.
John Henry
With events in England in recent years, I think I need to go back and reread Nevil Shute's 1953 novel, "In the Wet"
John Henry
I am sure part of the deal with Columbia and Harvard is that their economics courses must laud the wonder of tariffs.
…you haven’t been paying attention to any of this episode, especially here, to Ann or me or anyone else who recognized immediately Trump is using tariffs- successfully- as leverage in negotiations for better trade deals, payments owed from deadbeat nations, carrots for more investment in us manufacturing. BTW why no wee weed up over other nations that tariff us goods, or restrict us goods outright, or subsidize their own industries to the detriment of US based competition?
I’ve purchased watches from London auctions and have them shipped to the US where I sometimes pay duties what have been in place over a century.. Wasn’t Trump what did it but tariff hate born yesterday…
btw, If I want to sell a watch back to the UK they tell me to sod off- 3x the duties if you get past all the UK rules and restrictions and prohibits…
John henry said...
"Honda builds 70% of all it cars sold in US in the US. Has a long term program to get to 90 percent
BMW, Mercedes, VW, Toyota and others also make a large part of us sales in the US"
Yeah, the cars with the highest domestic content are Japanese nameplates, plus Tesla.
One not well known fact is that a majority of GM vehicles (~55%) are made outside the country. For several decades, car makers have eyed the emerging markets in east Asia, GM especially. It used to be a joke that GM would inevitably move their headquarters to China. Considering some of their strategic decisions before the tariffs, it may not have been a joke.
So worth it to return and find our resident Econ denialist, who still has not recognized the curve, lecturing us on economics. LOL. What curve, you say? Take your pick: Demand, Supply, Laffer, Yield. Pick one or all. The Freder is your man!
Ann Althouse wrote: "That's Ursula von der Leyen, the head of the European Commission, enduring the announcement of Trump's victory in the trade war."
It was fascinating to watch von der Leyden's expressions and body language during the "sit down" part of the meeting.
There were moments when I thought she deserved "Best Actress" for her enthusiasm, but then I also thought I detected a few possible "I can't believe I'm finding this bastard to be charming" moments.
To be fair, it simply may have been a case of relief that her meetings with Trump didn't devolve into full fledged sh*t shows.
“ It used to be a joke that GM would inevitably move their headquarters to China.”
Since Beiden outsourced government policy to China it is only right that he did the same for government motors corp.
ABB Has a plant, formerly GE, in Arecibo PR where they make large case industrial circuit breakers. Just read in today's local news that they are expanding. $30mm is not a big expansion but as my wife says "Something is something" It will also create 90 new jobs.
GE used to have 28 plants in PR, most making residential components and parts thereof. Almost all gone now. Parents in law worked unskilled labor in the Palmer PR plant for 30+ years each. A sweat shop by many definitions. But they made enough to build a concrete house and put 5 children, including my wife, through college. They worked in a sweatshop so their kids would not have to. Grandkids and great grandkids are doing even better.
Thank God for that GE sweatshop.
NOTE: I use "sweatshop" ironically. It was a fairly standard industrial manufacturing plant. Hot, hard work, not particularly interesting. But with only 6-8th grade educations, it was an opportunity.
John Henry
Freder Frederson said...
"I love how 8 months ago you all were denigrating the lefties on this site as being completely ignorant of basic economics. Now that Trump has basically decided that Econ 101 is bullshit, you have adopted his economic theory as brilliant."
Source? No? You never will answer because you can't.
I love haq YOU'RE grasp of basic eonomics is basically nil.
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