Trade wars

[harley]

If that's truly your biggest concern, you needn't worry. The price increases on those products are unlikely to matter a whole lot.

My biggest worries are the stock market and jobs. I can afford to pay a little more for my soda and beer.

Yeah, that was pretty thoughtless on my part. Sorry. I hate to see people suffer, especially for political gamesmanship. The stock market is a different issue, since I think it's overly exuberant and could use a little shake up.

But seriously, last year this time I could get a 12 pack of diet Pepsi for $2.50 on sale. This year, $3.33 is the best I've found. And that's before the tariff announcement. Between inflation and tariffs I guess I'll have to break out my SodaStream again.

 

[Meadbh]

The economics of a trade war are one thing. The loss of goodwill may have longstanding adverse effects.

 

[marko]

Maybe it's a phase I'm going through, maybe I'm getting old, maybe I've just seen it all before...but this stuff doesn't seem to bother me anymore.

If I have to pay a few bucks more for A, B or C, I just don't care all that much.

Like digging bomb shelters in the 60's, acid rain, the energy crunch of the '70s, global cooling, which became global warming, the Great Recession; it all seems to eventually work itself out. It just seems that things folks worry about most never materialize.

As for this topic, my guess is that this is a negotiating ploy.

 

[joeea]

The stock market is a different issue, since I think it's overly exuberant and could use a little shake up.

That's kinda thoughtless too, don't you think?
Some retired folks (and those who hope to retire some day) sort of depend on their portfolio.

 

[harley]

That's kinda thoughtless too, don't you think?
Some retired folks (and those who hope to retire some day) sort of depend on their portfolio.

Nope, the stock market is a choice, and it goes up and down for good reason and for no reason. Depending on it always going up is a foolish choice. I'd never retire if I needed the market to stay at a certain level all the time. I personally think a price drop now and again is healthy, and can be an opportunity for those still accumulating or those retirees like myself that still have cash available.

 

[Texas Proud]

My biggest concern is the price increase in soda, which I drink a lot of (diet, so don't give me a hard time). I drink beer out of bottles, but I'm sure when they have to raise the price of cans, they'll spread it to the bottled beer too smooth the increase.

I know one of the main reasons given for the tariffs is a national security issue, that we need to be producing the materials for our weapons instead of importing it from potential enemies, but the major trading partner for aluminum is Canada. As someone else said, if it gets to the point where they are an enemy, we've got bigger problems than aluminum imports. I hope this doesn't go through. Nobody wins a trade war.

According to some talking head the increase in cost is .6 cents.... not something that will be passed along IMO...

 

[marko]

Nope, the stock market is a choice, and it goes up and down for good reason and for no reason. Depending on it always going up is a foolish choice. I'd never retire if I needed the market to stay at a certain level all the time. I personally think a price drop now and again is healthy, and can be an opportunity for those still accumulating or those retirees like myself that still have cash available.

+1 Everything you said.

 

[samclem]

Tightly-focused tariffs are okay if they are designed to address an underlying structural disadvantage that has been identified, enunciated, and no solution has been possible through normal trade negotiations (bilateral or multilateral). Punitive, hasty, and poorly-thought-through tariffs just based on bottom-line trade balances are not good for either side.

I hope what we are seeing is just an opening position for negotiations.

Just a thought: If a person has a set of negotiating strategies/tricks/bluffs etc and a negotiating "M.O.", they will probably be more successful long-term if there's a nearly unlimited pool of folks to play on the other side (like in a private business setting) and if the negotiations are fairly confidential (so not everybody can see the tactics play out in each case). This would allow a person to keep using the techniques for a long time, since there would be a constant supply of new [-]adversaries[/-] negotiating partners to whom they would be novel.
But if the negotiations are public, if your organization leaks like a sieve, and if the universe of[-] adversaries[/-] negotiating partners is limited (and they talk to each other all the time), you should expect that your negotiating tactics will lose a lot of power quickly.

 

[copyright1997reloaded]

[Disclaimer: I am a free trader, and don't like tariffs. However, that doesn't mean I can't discuss the other side of the issue.]

This is being made out to be a big deal (as it seems that everything is a big deal these days), but a little history perspective might help. In March of 2002, President Bush imposed a steel tariff of 8-30%. These were later lifted earlier than expected in December 2003, likely because the EU won a dispute on the matter in the WTO.

 

[joeea]

Nope, the stock market is a choice, and it goes up and down for good reason and for no reason. Depending on it always going up is a foolish choice. I'd never retire if I needed the market to stay at a certain level all the time. I personally think a price drop now and again is healthy, and can be an opportunity for those still accumulating or those retirees like myself that still have cash available.

Got it.

So "Sorry. I hate to see people suffer, especially for political gamesmanship." really means "I hate to see people suffer, especially for political gamesmanship, unless they are stupid enough to be invested in the stock market in which case they get what's coming to them as a result of a trade war due to political gamesmanship."

Okay.

 

[copyright1997reloaded]

Got it.



So "Sorry. I hate to see people suffer, especially for political gamesmanship." really means "I hate to see people suffer, especially for political gamesmanship, unless they are stupid enough to be invested in the stock market in which case they get what's coming to them as a result of a trade war due to political gamesmanship."



Okay.

There are TONS of posts here on this site from people who are looking for stock prices to go down from fearful people selling so that they can pick up shares on the cheap. That is the nature of a market, buyers and sellers. In each transaction, someone must be wrong. Even if you buy with the intention of holding a long time are doing so with the hope that someone else buys it from you and pays more.

 

[joeea]

There are TONS of posts here on this site from people who are looking for stock prices to go down from fearful people selling so that they can pick up shares on the cheap. That is the nature of a market, buyers and sellers. In each transaction, someone must be wrong. Even if you buy with the intention of holding a long time are doing so with the hope that someone else buys it from you and pays more.

I understand.

It's the "due to political gamesmanship" (your words) part I find troubling.

To each, his own.

 

[alaska55]

Tariff

Can any one guess what the tariffs are on imported cars into EU from US compared to cars into US from the the EU.

 

[flintnational]

Can any one guess what the tariffs are on imported cars into EU from US compared to cars into US from the the EU.

The EU has significantly higher tariffs (AKA taxes on consumers). But, this poses a significant cost on EU consumers. They suffer from higher prices or less selection (fewer imports) or both. I don't think it makes any sense to retaliate against the EU by imposing higher costs and less selection on the US consumer through tariffs.

And while adjustments in theory might make sense, my experience is governments rarely act correctly. They dole out favors to politically powerful groups and distort markets. Their aim is rarely to restore economic equilibrium.

 

[foxfirev5]

Smoot Hawley.

 

[exnavynuke]

Wars, of any kind, have no winner. Only those who didn't lose as much. Trade wars tend to have more "innocent victims" than other types of wars though.

The problem with writing a book about your strategy is that everyone knows you're either following that strategy (and ignore it) or don't believe you're bluffing like normal. The markets seem to be responding closer to the former position than the latter imo, as I'd expect a sharper drop if the markets thought wide-scale trade wars were actually impending.

 

[mpeirce]

Smoot Hawley.

Is that really adding to the conversation?

Smoot Hawley was a broad protectionist bill and doesn't really compare to the current proposals targeted at steel and aluminum.

Free trade is generally a large net positive in the world, but that doesn't mean it's desirable in every case. The theory of competitive advantage (the foundation of free trade policy) doesn't apply when you are trading with an adversary, especially one (China) that has a "socialist market economy" - i.e. far from a "free market".

The French didn't buy steel from the Germans in the 30's. We didn't buy steel from the Soviets in the 60's. We should assure that the US has viable steel, aluminum, and other (semiconductor is another example) manufacturing capabilities.

 

[dtbach]

It's reassuring to know that at least trade wars are easy to win.

 

[flintnational]

Trade deficits are killing us !

I just checked. My DW is running a huge trade deficit with Amazon and Costco. Clearly they are competing unfairly with their low prices and their refusal to buy from me.

Fortunately I have found the solution. I am going to impose a 25% tariff on everything the DW purchases at Amazon and Costco. Think of all the benefits to the flintnational household.

Hey, I am all for helping displaced workers. But, that means we should actually help displaced workers; job retraining, tax incentives to bring in new industries, etc.

 

[redduck]

Smoot Hawley.

Smoot Hawley was a broad protectionist bill and doesn't really compare to the current proposals targeted at steel and aluminum.

If I recall correctly, Smoot Hawley was a back-up catcher for the Cleveland Indians in the '40's. Great arm, no hit. Seems odd that he was named after a protectionist bill. (Or, maybe it was just a coincidence).

 

[copyright1997reloaded]

I understand.

It's the "due to political gamesmanship" (your words) part I find troubling.

To each, his own.

They weren't my words.

 

[growing_older]

There's at least a small cynical, skeptical suspicion that this is market manipulation writ large. We already know there was dumping of stocks before the tariff idea was floated. Some big buys just before the idea is abandoned would profit handsomely. Chaos politics seems unpredictable but maybe not to insiders. Conspiracy theorists should be having a field day.

As a practical investor, I'm simply staying the course and doing nothing. I already adjusted (slightly) my asset allocation to account for being close to retirement and personal risk tolerance in a frothy market. Nothing else to do but wait and watch the show. Markets inevitably fluctuate.

 

[Meadbh]

I am asking the mods to please close this thread now before I say something I regret.

 

[dtbach]

I am asking the mods to please close this thread now before I say something I regret.

Shouldn't they close it on actual content rather than on nonposted thoughts?

 

[joeea]

They weren't my words.

Sorry. You are correct. The words came from someone else.