Tariffs on Chips

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Expand view Topic review: Tariffs on Chips

Re: Tariffs on Chips

by Jamiet99uk » Wed Apr 09, 2025 11:13 pm

Esquire Bertissimmo wrote: ↑
Wed Apr 09, 2025 9:47 pm
 I'm ranting now but what a fucking grift. The President of the US just did a reverse pump-and-dump on the entirety of US equities. How many times can he do that before the US becomes un-investible? Turkey under Erdogan is becoming a very appropriate comparison.
I have said this already but HE SHOULD BE IN JAIL and America isn't a democracy.

Re: Tariffs on Chips

by Esquire Bertissimmo » Wed Apr 09, 2025 9:47 pm

I'm ranting now but what a fucking grift. The President of the US just did a reverse pump-and-dump on the entirety of US equities. How many times can he do that before the US becomes un-investible? Turkey under Erdogan is becoming a very appropriate comparison.

Re: Tariffs on Chips

by Esquire Bertissimmo » Wed Apr 09, 2025 8:47 pm

Jesus, Trump told all his Truth Social supporters this morning "THIS IS A GREAT TIME TO BUY!!! DJT".

Now he's openly manipulating the market to enrich his most diehard fans in order to defray the political consequences of *his* policies which tanked the market in the first place.

Absolute piece of shit.

Re: Tariffs on Chips

by Esquire Bertissimmo » Wed Apr 09, 2025 7:47 pm

I imagine the big bump in Treasury yields this morning was the straw that broke the camel's back. China proved it can totally fuck the US government by dumping treasuries if the US is also alienating anyone else who might consider buying them (they certainly seem like a much riskier asset today than they did mere weeks ago).

Trump and company can weather equity market fluctuations - most Americans don't have savings and administration insiders stood to make money from the volatility over the medium- to long-run. But rising bond yields, simultaneous to rising recession risk, is a flashing red light for a very deep and hard-to-abate downturn, not to mention the impacts on the debt and deficit.

Re: Tariffs on Chips

by Esquire Bertissimmo » Wed Apr 09, 2025 7:39 pm

Oct will surely disagree with this, but I think even that imputes more strategic thinking than what has been on display in the past few weeks on the trade file. There were simpler and less damaging ways to fool the ignorant about trade policy if that were the goal lol. I strongly suspect they thought China would roll over, in which case they would have continued on with the previous "reciprocal" tariff approach on everyone else.

Re: Tariffs on Chips

by Jamiet99uk » Wed Apr 09, 2025 7:32 pm

Esquire Bertissimmo wrote: ↑
Wed Apr 09, 2025 7:25 pm
 Lol now the "reciprocal" tariffs have been paused for 90 days...kind of. Most countries are still getting at least a 10% tariff imposed on them. China will still face the 100%+ rate.

So did China just save the global economy? By calling Trump's bluff they made the US back off from the insane and unsustainable position of tariffing everyone all at once, while apparently expecting no blowback whatsoever.

This uncertainty is *killing* investment everywhere, but especially in the States. Meanwhile, whatever leverage the US hoped to gain with the tariffs, if that was even the point, is diminishing. And the pause does nothing to restore confidence in the US as a trade and investment partner - it will suffer nearly all of the reputational damage that would have occurred if they had just stayed the course.

This is simply *not* strategic. There is no conceivable way this advances even Trump's own agenda.
Unless, and this is kind of what Oct has been saying, his "agenda" is just to be seen to be doing something different and challenging the status quo, for the benefit of a poorly informed audience who will praise him for that alone even if it harms their country.....

Re: Tariffs on Chips

by Esquire Bertissimmo » Wed Apr 09, 2025 7:25 pm

Lol now the "reciprocal" tariffs have been paused for 90 days...kind of. Most countries are still getting at least a 10% tariff imposed on them. China will still face the 100%+ rate.

So did China just save the global economy? By calling Trump's bluff they made the US back off from the insane and unsustainable position of tariffing everyone all at once, while apparently expecting no blowback whatsoever.

This uncertainty is *killing* investment everywhere, but especially in the States. Meanwhile, whatever leverage the US hoped to gain with the tariffs, if that was even the point, is diminishing. And the pause does nothing to restore confidence in the US as a trade and investment partner - it will suffer nearly all of the reputational damage that would have occurred if they had just stayed the course.

This is simply *not* strategic. There is no conceivable way this advances even Trump's own agenda.

Re: Tariffs on Chips

by Esquire Bertissimmo » Wed Apr 09, 2025 3:26 pm

Octavious wrote: ↑
Wed Apr 09, 2025 3:47 am
 It might work, again depending somewhat on how you define work. And yes, all the definitions are a bit fluffy but that's economics and politics for you.
I'm curious how you define "work" in this context.

For the reasons I've outlined in this thread the tariff war won't "work", since it will impoverish Americans without actually addressing the current account imbalances that cause US trade deficits.

What is the silver lining here? What concessions could America conceivably get that would be worth the self-harm they've already suffered (let alone what's likely to happen in the coming months)?

Re: Tariffs on Chips

by Esquire Bertissimmo » Wed Apr 09, 2025 12:49 pm

Octavious wrote: ↑
Wed Apr 09, 2025 3:47 am
 It might work, again depending somewhat on how you define work. And yes, all the definitions are a bit fluffy but that's economics and politics for you.

What is largely absent from your analysis is an acknowledgement that the status quo wasn't working either. And not just from a dying rust belt perspective, but from the point of view that a massive trade deficit backed up by massive borrowing is not sustainable. A substantial change was inevitable in the near future regardless of who was in charge, and the standard model is a rather airy fairy idea of doing the same thing better and hoping it's enough. And in fairness historically it has been enough, but the fundamental problems remain and seem to grow.

But instead we have this. I don't think this is good, but that is tempered somewhat in my mind by not thinking what was there before was good. It is entirely possible that there are no good solutions or ways forward.

In short I've been expecting the shit to hit the fan for some time, and what we have from Trump is different shit and a different fan. It's likely going to get messy, but I don't know nearly enough to predict how bad it will be and whether it will be significantly worse than the alternative. I don't think anyone does.
This is mostly right, but it still matters to me that Trump's recent moves have nothing to do with this.

The US has a trade deficit because it borrows more than it saves. That's a fundamental law of economics, literally like gravity, that no one in the Trump admin seems to understand. It's a literal accounting identity that has to be true. The only way the tariffs "fix" this underlying problem is if they decimate the US consumers' buying power so much that people actually save, and if they legitimately cut the federal deficit (which they won't, because DOGE won't touch 80% of spending on entitlements).

The reckoning here could have been good policy. Trump blew up the WTO in his first term by disengaging and failing to appoint appellants — he could have reformed it instead, with the support of basically every other country on earth since basically everyone wanted new rules to restrain China. His admin could actually be doing something about the federal budget — the deficit-financed tax cuts from his first term were a monumental step in the opposite direction. America could help every rust belter directly by actually redistributing the gains from trade with a social safety net like all its allies have, and that would actually work while this trade war won't.

Trump is too often given a pass for "at least he's doing something" in response to huge, real issues. But very often the things he's doing are making that issue worse lol, this trade war is a prime example. He should be castigated for making it worse, not praised for trying something asinine that will foreseeably worsen the problem.

Re: Tariffs on Chips

by learnedSloth » Wed Apr 09, 2025 11:32 am

Esquire Bertissimmo wrote: ↑
Tue Apr 08, 2025 9:29 pm
 I do hold the US voter in contempt. If they were shareholders, they would have picked a CEO who caused the company to fail. But the US is too big to fail, so instead the rest of us have to deal with the consequences.
40 years ago Soviet Union was thought to be too big to fail...

Re: Tariffs on Chips

by Octavious » Wed Apr 09, 2025 3:47 am

It might work, again depending somewhat on how you define work. And yes, all the definitions are a bit fluffy but that's economics and politics for you.

What is largely absent from your analysis is an acknowledgement that the status quo wasn't working either. And not just from a dying rust belt perspective, but from the point of view that a massive trade deficit backed up by massive borrowing is not sustainable. A substantial change was inevitable in the near future regardless of who was in charge, and the standard model is a rather airy fairy idea of doing the same thing better and hoping it's enough. And in fairness historically it has been enough, but the fundamental problems remain and seem to grow.

But instead we have this. I don't think this is good, but that is tempered somewhat in my mind by not thinking what was there before was good. It is entirely possible that there are no good solutions or ways forward.

In short I've been expecting the shit to hit the fan for some time, and what we have from Trump is different shit and a different fan. It's likely going to get messy, but I don't know nearly enough to predict how bad it will be and whether it will be significantly worse than the alternative. I don't think anyone does.

Re: Tariffs on Chips

by Esquire Bertissimmo » Wed Apr 09, 2025 12:17 am

Maybe it is worth addressing why I keep supposedly misunderstanding your points vis-a-vis Trump Oct.

I'm confused because you say the policy is likely a mistake, yet you keep retreating to “who knows, maybe it’ll work.” That kind of hedging blurs the line between acknowledging harm and excusing it. If we agree it’s bad policy, why the insistence on treating the outcome like a coin toss? That’s what I mean by “fastidiously agnostic”—you’re both-sidesing something where the downside is clear and the supposed upside is extraordinarily speculative (and not even well defined by you).

Re: Tariffs on Chips

by Esquire Bertissimmo » Tue Apr 08, 2025 11:36 pm

Octavious wrote: ↑
Tue Apr 08, 2025 10:54 pm
 Fastidiously agnostic? As I've said, I think the likelihood is that the overall impact will be negative. But I can't be certain about that, and in terms of who wins and who loses (for there are always winners and losers) it is far harder to map out with any great confidence. I do not believe that this is an unreasonable stance to take and I'm unsure why it's confusing.
We agree the net effect will be negative so I suppose the rest is semantics. I don't think the negative net impact of Trump's approach to trade is especially uncertain—but questions like "how bad will it get?", "what silver linings might there be?", and "who stands to benefit?" are indeed interesting.

Re: Tariffs on Chips

by Jamiet99uk » Tue Apr 08, 2025 11:15 pm

Octavious wrote: ↑
Tue Apr 08, 2025 9:25 pm
 It doesn't matter. The status quo doesn't work. Trump is changing the status quo. If there's pain along the way they will forgive him. Even if it doesn't end up helping them at all a lot of them will still forgive him, because at least he tried something.
"I will shit myself on live television! Then I will roll around in my own feces while Elon Musk cuts the head off a transgender person! Live! No President before has ever done that!"

"Wow, Donald Trump is really shaking things up. What a guy!"

Re: Tariffs on Chips

by Jamiet99uk » Tue Apr 08, 2025 11:05 pm

Esquire Bertissimmo wrote: ↑
Tue Apr 08, 2025 9:07 pm
 The idea that major economic policy decisions should be made by the President alone, without building some consensus in Congress, and that this is sustainable or desirable, is delusional.
Why does America even have Congress if the President can just rule by issuing thousands of Executive Orders?

Seems a pretty broken political system over there.

Re: Tariffs on Chips

by Octavious » Tue Apr 08, 2025 10:54 pm

Fastidiously agnostic? As I've said, I think the likelihood is that the overall impact will be negative. But I can't be certain about that, and in terms of who wins and who loses (for there are always winners and losers) it is far harder to map out with any great confidence. I do not believe that this is an unreasonable stance to take and I'm unsure why it's confusing.

Re: Tariffs on Chips

by Esquire Bertissimmo » Tue Apr 08, 2025 10:26 pm

Let’s define “good” the way Trump does.

Will worldwide tariffs increase U.S. employment or industrial capacity? Every serious commentator expects a net decline. This isn’t some untested theory—trade happens when it's mutually beneficial, and tariffs are a tax on that benefit. They destroy wealth.

Will tariffs raise federal revenue? Yes—but only to the extent production isn’t re-shored. That revenue is mostly paid by U.S. consumers, with outsized costs to the poorest. And it comes at the cost of lost revenue from capital gains and corporate profits damaged by the same policy.

Tariffs indeed create leverage. But for what? Navarro says tariffs themselves are the goal, and Trump seems to agree. That could certainly be a negotiating tactic—but again, to what end? They’ve tariffed countries that already had zero tariffs on U.S. goods. They’ve taxed products the U.S. doesn’t—and can’t—make. They’ve hit allies and adversaries alike, ignoring supposed "dumping". They bullied Canada into higher NATO spending—but in a way that undercuts U.S. power projection. And they picked a trade war with China while starting one with every ally—crippling their own staying power in their most important trade battle.

I'm confused, if you think this policy is a mistake, why you are so fastidiously agnostic about what the outcome will be. It's a mistake because it is likely to produce bad outcomes, even as defined by Trump and his supporters.

Re: Tariffs on Chips

by Octavious » Tue Apr 08, 2025 10:05 pm

Esquire Bertissimmo wrote: ↑
Tue Apr 08, 2025 9:49 pm
 It's a crazy strategy Oct. No one serious thinks that setting tariffs on every partner at once is a good way to gain leverage. No one thinks that indiscriminate tariffs, even on countries that produce goods the US literally cannot, make any sense. You are so open minded on this particular topic that your brains are liable to fall out.
Define good. It's certainly been an effective way of getting leverage, at least in the short term. It's been remarkable how few world leaders have openly said anything anti-Trump, preferring instead the somewhat ridiculous balancing act of trying to sound respectful despite the fact that what Trump is doing is contrary to everything they have claimed to support before.

As for open minded, I have been quite clear that I think the policy is a mistake, but if you think that means I should pretend to know what the final outcome will be then you will be disappointed. I don't. It's possible that it even works the way Trump intends it to work. The US and the world in general is suffering somewhat from over capacity and I suspect that there is more opportunity for American industry to increase production without having to build any new factories than many give credit for.

Re: Tariffs on Chips

by Esquire Bertissimmo » Tue Apr 08, 2025 10:01 pm

Trump has certainly broken the illusion of US beneficence and stability, though the warning signs were plain enough (a slightly longer historical frame makes the 2008 crisis and the Iraq war now seems like the beginning of the end, rather than mere policy mistakes—of course, anyone whose felt the pointy end of US imperialism never laboured under such delusions in the first place).

It makes me sad because the US has is synonymous with the West. Its decline is the decline of liberal values writ large. US isolationism will make the world poorer and less free—and more Iranian, Chinese, and Russian.

None of this strikes me as having been inevitable, though. An awful lot seems contingent on Trump in particular—who benefitted greatly from Democrat incompetence last cycle.

Re: Tariffs on Chips

by Octavious » Tue Apr 08, 2025 9:52 pm

Esquire Bertissimmo wrote: ↑
Tue Apr 08, 2025 9:41 pm
 You're saying outcomes be damned, sometimes democracy is about blowing off steam. That's certainly right—but it's a fundamental weakness of our system. This particular steam blowing exercise strikes me as a bridge too far, because it will hurt any conceivable concept of US strength (prosperity, foreign policy influence, industrial capacity, etc.), potentially for years or decades to come.
Possibly so. Of course what is undeniably true is that this kind of action has always been a possibility under the American system and just needed various stars to align for it to happen. In which case you can argue that the real delusion was the belief in American stability and its dedication to established global institutions and ways of doing things. A delusion that until recently was shared by a great many people including myself.

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