It will almost certainly contract more significantly into the second quarter as well. Many businesses remain reliant upon goods from China and are taken a massive financial hit on purchases now, but they are also waiting for the trade war to cool off before making future purchases. That will create a demand rush once the tariffs cool down and if they don't cool down these businesses will continue to have the same financial troubles but will also have inventory problems too.
In short, it must get worse before it can get better irrespective of what happens next or when.
The problem is that factories take years to build, many forms of agriculture take years to yield results too.
So when the tariffs can change every day and you don't know if they'll be around in 5 years, do you commit millions to building something that doesn't pay off until 5 years from now?
> The problem is that factories take years to build
Nobody's even building them right now. CAPEX and industrial investment have declined in recent months. (!!) They may even drop further. So it seems that if the aim is to revitalize America's industrial base, the present strategy isn't working, but is having an opposite effect.
Which is funny because US industrial investment was on a tear pre-tariff as companies near/on-shored at historic rates. Not only were tariff's not needed, they've effectively shut down their intended goal.
This chart is a pretty astounding look at how successful Bidenomics was at achieving this and how catastrophic Trumponomics is already turning out to be:
Credit to prior on-shoring should go to Covid 19 and the Chinese government's heavy handed response to it, not any US policy or administration.
Talk to anyone in industry and they'll say "we on/near shored because Covid supply chain problems taught us a lesson" or something along those lines. Those investments were just starting to bear fruit in the past few years.
Edit: And before anyone tries to put words in my mouth, this is neither an endorsement of "Trumpenomics" nor a dispute of the prior commenter's statement about them.
The difference between on- and near-shoring is pretty important, and I'm going to bet the trillion dollars in incentives played a far, far bigger role than the delta in people's resilience estimations between putting a factory in Mexico vs the United States.
Credit should go to all factors, but sorry it's foolish to think orchestration of a trillion dollars into exactly these sectors wouldn't play a huge role.
>The difference between on- and near-shoring is pretty important,
Of course. I don't think many saw coming that we wouldn't be on friendly trade terms with Mexico and Canada.
> and I'm going to bet the trillion dollars in incentives played a far, far bigger role than the delta in people's resilience estimations
Which have you seen companies respond more swiftly to, opportunities to make money, or disruptions in their existing ways of making money? Which gets the CEO on the phone faster, a potential business deal or a prod outage?
Just about everyone experienced the latter during Covid. "Yeah we'd love to do all the electrical for your covid construction boom fueled McMansion development but switchgear is back ordered 18mo, sorry", and so on and so on across many industries. And they're all real salty about it.
I'm sure the incentives added fuel to the fire, but the way the Chinese economy stayed disrupted for longer really pained a lot of people in the US who depend on stuff from there to make money here.
Depends on if the outage impacts the entire industry/sector or just his company. If the former, it's relatively fine because stock performance is going to be similar to competitors and investors won't be asking too many questions. Might be some wailing and gnashing of teeth but not too much action in the form of spending money on the problem.
I don't think many companies in my estimation took too many lessons from the COVID supply chain crises. If they did, the lesson was to simply outwait things. Everyone was having similar problems and you didn't be the single one of your sector to have re-shored production at triple the expense while your competitors simply spun back up once the Chinese factories got back on-line.
If it was such a compelling thing that was already happening we'd be seeing a lot more 'low value base component' manufacturing coming back, such as electronic components like resistors. So far from my basic understanding of the subject it's all the stuff quite high up the value chain instead. At best some things got near-sourced or moved around, with the raw inputs seemingly still coming from China in the end either way.
It would certainly be interesting to find some actual data here though.
The IRA added huge incentives towards factory construction in certain areas. Biden also maintained strategic tariffs on certain industries (as opposed to the blanket tariffs Trump is using.) I understand that people with specific political preferences would like to believe these incentives didn’t work, but there’s every reason to believe the simpler explanation: incentives like this do work. We should be learning from these results instead of denying them.
Companies started shifting plans as soon as the election result was decided in November. Many started stockpiling Chinese imports then. Additionally many have paused Capex due to the economic uncertainty:
The tariffs were not a surprise after the election. The President said he was going to enact crushing tariffs, so this was effectively predictable since early November.
> if the aim is to revitalize America's industrial base, the present strategy isn't working
The issue is that the aim clearly isn’t to revitalize the industrial base. If it were, then the tariffs wouldn’t be removed after negotiating with other countries. Since other countries can make deals to reduce the tariffs on their products, then it’s clear that the aim isn’t to get Americans to build things at home. The tariffs are clearly some kind of brinkmanship game to pressure other countries into making concessions.
> 10% for everyone tariffs were not paused, nor can they be negotiated away
But "everyone" doesn't mean everyone because everything on this list is exempt from the global 10% tariff and recriprocal tariffs (https://www.whitehouse.gov/wp-content/uploads/2025/04/Annex-...). Categories have been added to the list after influential people called the President. So even the 10% for "everyone" tariff can be negotiated away if you give the President something he values.
Which suggests it isn't just a way to get foreign countries to negotiate, but also a way to get domestic companies to negotiate with him, possibly in a way to increase his personal power.
There is no "aim". The tariffs are something Trump has been "wanting to do" for decades, and now that he has almost absolute power and is surrounded by sycophants, he gets to do whatever he wants. This is a flex. A way for him to "play hardball" with the rest of the world but without any clear notion of what the next step us. He's said that other countries will have to "pay a lot". What does it even mean? There is no plan. There is no ask. There is no endgame. His cronies are too afraid of him to tell him that this is a terrible idea, and now that he owns it, he'll sooner go down with the ship than admit he was wrong.
I think the aim of the tariffs changes depending on President Trump’s mood, what the market is doing, what the press is saying, and who he spoke to last.
If you believe certain business cycle theories, the way an economic downturn starts is when businesses no longer see the need for additional new capacity. So there's declining CAPEX. Then the 40% of the economy that is CAPEX-related takes a downturn. Even though the 60% that is consumer goods is still for the moment going at full capacity, the CAPEX-related part suffers layoffs. That in turn affects the consumer spending part of the economy.
So if CAPEX is declining, the downturn has already started. (I mean, I guess the article's headline already told us that...)
The strategy of the US has been Hegemony. Friendly foreign partners were intended to take over industries we did not want in our own backyards for political, diplomatic, economic, or environmental reasons. For a stint in college I was an International Relations major and this was 100 series education. At a basic level this is discussed as the “Pollution Haven Hypothesis.”
A political/diplomatic example is rebuilding the Japanese Steel industry after WWII so they could regain self sufficiency. Until we decide to shoot ourselves in the foot hard enough we’ve had a consistent trading partner in high quality steel ever since.
The current “strategy” is painful because it has the weight of the past 60-70 years working against it.
I dunno. This reads to me like an attempt to retroactively justify the effects of US policies that were aimed at a different purpose. I don't think I've ever seen an American politician say that they'd prefer for industry X or Y to be located in a different country.
I don't think either of these policies intended or caused other countries to "take over industries we did not want in our own backyards". In the 50s and 60s the US still ran consistent trade surpluses.
A lot of businesses now have to face that to survive, they need to increase their market share or profit margin by double-digit percentages when they probably don't have double-digit numbers there to begin with :\
And double-digit increases are what they have been working toward the whole time, they know how to do it, that's how they have managed to get by, even though they know it will takes years. These are great business operators, they know they'll make it if they persevere, they just don't know how many years.
And these were the businesses that were shrewdly operating successfully in the USA in difficult markets with slim margins, even if they were leaning to any extent on cheap foreign materials, labor, or even weighted more toward robust domestic commerce in general.
Prevailing in situations that "average" businessmen aren't quite up to.
How do you think the less-skilled operators are going to feel? They know who they are. Lots of times their businesses are totally dependent on the majority of Americans overall being "richer" than most. And in less than 100 days really, that's been brought into question more times than in any other previous decade. With things like over-taxing and currency exchange taking their toll at the same time commerce itself as a source of prosperity is receding, this is going to make them some of them the most nervous of all.
Trump has always been foolish with money, after his first term the US can no longer afford lots of things that were affordable under all previous presidents, you can't make this up.
When a recognized business-bozo-in-chief can remotely do more percentage damage in one day than a business owner can make up for in one year, might as well give up now, or at least take a sabbatical. Trump can't last forever, and anybody who replaces him may not be any wiser or less misguided, but at least would be more stable & trustworthy.
However, doing something like declaring election fraud, having Vance not certify the vote, and then in chaos, remaining in power, its totally doable, granted he has legal immunity.
The things is, they are doing so much illegal shit that they know if Dems get in power, people will go to prison. So everyone around him has as large incentive to go along.
We are both suppressing international trade of consumer goods and making it harder and more expensive to build out the infrastructure to build consumer goods in the US.
There's a chance the tariffs will be rejected by the Supreme Court within a year, a chance something political happens within the next two years (senators and representatives will turn on Trump as soon as he becomes a liability in the next election), and new management will be here in four years.
Too much is in flux to make an expensive decision that won't see value for years. There'd need to be grants to jump start construction.
That might be a good time for him to move to whatever his Reichstag fire will be and make sure he stays on. The argument could be that this sort of long term development requires a firm and constant leadership for a long time.
Part of Trump's genius tarriff plan was closing trade deficits.
Except trade deficit is just mostly a measure of how much countries choose to park the returns on their goods/services in your own country as investment in capex, domestic investments, etc. It is the foreigner choosing not to take the dollar or exchanged goods back to their own country, but to invest it in your own country.
You literally kill capex by killing the trade deficit.
Kinda, but domestic capex is overwhelmingly more important than foreign investment in almost every country, and the US is absolutely included on that set.
So, on practice, you won't find a correlation here.
Fun fact: The GDR (East Germany) had a massive coffee problem because of dollars (scarce). So they heavily invested in Vietnam for coffee production. It took 10 years for the coffee to be produced, and the GDR collapsed before. After German reunification Vietnam became one of the biggest coffee producers.
Yes. And even if we could wave a magical wand and materialize a whole new city (or region) with thousands of new factories and also a workforce complete with training, and housing for them, and new universities to continue the training for them and their children, and new power plants to supply the power and water needs of this new region as well as a transportation infrastructure to support all this new economic activity. New airports, new rail networks, and new shipping ports. Even if all that could happen instantaneously, the result of all these new Made-in-USA goods would still be astronomically higher prices for all Americans. The US is one of the most expensive places to live in the world, and all these factories have to pay those high prices both for their construction and for their ongoing operations. (I'm assuming here the magical wand only speeds time. It doesn't produce investment capital out of thin air.) So protective tariffs would need to continue on indefinitely so all these people could keep their very expensive jobs and all Americans would be paying the bill for it, forever.
I saw a study years ago that compared US made vs foreign made products and found that most imports had US made alternatives that were not substantially more expensive. Walmart made a big push to increase their percentage of US sourced products a few years ago. With the increase in automation, the labor costs aren't as much of a differentiator.
I'm not sure this small price difference will continue since I assume a reduction in imports might result in greater demand domestically and those factories might not be able to easily scale to absorb the shift.
Survivorship bias. The only US made goods left are those that can compete with foreign production. You cannot use those remaining as evidence that all goods could be US made without significant price increases.
>With the increase in automation, the labor costs aren't as much of a differentiator
and unsurprisingly, the imported goods are the goods that are still heavily reliant on labor cost.
If automation was possible, it would be the preference of any business to use that over human labor, simply for the consistency of output and ability to control cost factors. I do believe this to be the case in most instances.
Thats why car companies have long advocated for tariffs on imported vehicles (and is one tariff we have consistently held for a long time).
Yep! Though I guess that weirdly does get us back to some version of the 1960s/70s America these tariffs are supposed to revive: Where things were expensive (relative to buying power) but you bought them forever and might even know the people who made them.
If people will be happy to buy locally-made furniture for triple the price and having it last longer is a different question.
Nobody is going to invest in a factory that's only profitable under this tariff regime because it's all based on Trump, who notoriously changes his mind or may die or get overridden after the midterms. What if Trump wakes up tomorrow and says "you know what? I had a man to man with Xi Xinpeng and now the trade war is off!"
I am not against repatriating manufacturing, but it's something that needs to be done with thought and strategy. This trade war is worse than Biden's Afghanistan withdrawal.
> This trade war is worse than Biden's Afghanistan withdrawal.
"Biden's"? That's comparing an 100%-Trump fiasco with an 80%-Trump fiasco.
If we're gonna blame Biden for not breaking the US/Taliban ceasefire agreement and drawing things out... Then we need to talk about how it was Trump who made the agreement abandoning the Afghan government, Trump who negotiated that aggressive May 2021 deadline to land at the beginning of the next term [0], and Trump who had to be stopped by his staff from triggering a far-worse instant "fuck y'all, we bail" just days after he lost the election in Nov 2020. [1]
This isn't going to go away with a new administration. Global trust in the US is broken. Even this idea that things will swing wildly back when an administration changes is part of the problem. There's no going back from this, the US has permanently lost its position in the global order. Even our allies are looking elsewhere now.
I agree, which is good, because the US cannot be trusted to vote for adults (based on observations and the evidence). But punitive tariffs can go away under different governance, so some relief, but to your point, we're not going back to how things were because of the self inflicted trade harm.
If people are unhappy with the outcome of harmful, irrational policy, they should feel empowered to riot. The government and representation is supposed to work for the people, after all. Accountability is important in governing systems.
If it's only inconveniences like $65 coffee that sets touchy people off enough to storm the Capitol or something, that's definitely not a riot. It's been fully proven by the party in power to be a legitimate demontstration of opinion.
Empathy. If well-off people were to fully understand the situation the rest of us find ourselves in, and the increasing likelihood that it will eventually become a problem for them, too, they'd put all of their HOA-busybody/PTA-pearl-clutcher/campaign donor might behind solving the issue. They are currently in "ignore it, it doesn't effect me, it's not my problem" mode, heavy.
The factories would be more expensive because the materials and machines are also affected by tariffs. And you obviously can't rely on the tariffs to remain that way, Trump is far too flaky, hopefully not in power forever and the tariffs are just too damn stupid to remain. The harm they cause will be quite obvious soon.
What is the best case scenario here? Even if the tariff war ends next month, wouldn't production/shipping etc take weeks/months to recover? How are small businesses with limited cash flow expected to survive in the interim?
The most scary thing are medicines, medical equipment etc. Healthcare is going to become even more expensive, no?
Above everything else, why would other countries/allies/trading-partners trust the U.S govt again? I just can't comprehend how this is good for anyone, other than those with spare cash to buy up distressed assets
The best case scenario is that governments make agreements to accept more US exports, the trade war ends, and in a couple years conventional wisdom remembers this entire episode as a cautionary tale about crazy policies countries sometimes pursue when their trade balance gets too out of whack.
Is that the most likely resolution? No, I don’t think so, I’m still holding most of my money out of the stock market. But doing lots of business with countries whose current government isn’t trustworthy isn’t an unheard of scenario.
Even if they did get built they only make economic sense if there's still the tariffs or something drastically changes the cost formula (eg: automation that's simultaneously very adaptable to new products like a hoard of people) but more realistically the tariffs have to remain in place forever to keep the factories.
Welcome to Argentina, a country where we live on a roller coaster of shifting policies, economic turmoil, and ongoing corruption. While it's clear that not all countries are alike, it's interesting to observe what emerges from this kind of system.
Argentina's people seem to have dealt with this through mass tax fraud, hiding money in crypto/cash/real assets, insubordination to law, and electing a self proclaimed anarcho-capitalist. Somehow they've managed to thrive in a lot of ways, and not only that they can deal with an arbitrarily incompetent government through self-resilience.
> Argentina's people seem to have dealt with this through mass tax fraud, hiding money in crypto/cash/real assets, insubordination to law, and electing a self proclaimed anarcho-capitalist.
It is not black or white when there is not real [power of] law enforcement.
Precisely. Seems fairly likely the tariffs will be gone 5 years from now one way or another. Who in their right mind would build a business based on those tariffs still existing into the future.
factories also require relative stability to justify the upfront investment. If a person is so inclined, they would be raising money today to build a US factory that may open after Trump is out of office.
Personally I'd want one hell of an insurance policy to cover the risk of all that money being wasted when I finally open my doors and have to compete with overseas manufacturing that may no longer be burdened by these tariffs.
> do you commit millions to building something that doesn't pay off until 5 years from now?
This is exactly the kind of short-termism that got us to where we are now. Why is it so hard to think on a 5-10 year timeline? This is country-level ADHD. Anything worth building requires long term investments. People in the past used to spend their life building cathedrals that they knew would never be finished in their lifetime, and now you're questioning whether it's worth investing in something that has an expected ROI in 5 years!
But what if 2 years in all the tariffs are cancelled and you go bankrupt?
if you want people to think long term you need long term stable policies that won't change the next time someone else sits in the oval office or Congress changes hands. you need to commit to a strategy.
I think this may be missing the difference in differential risk.
If I live in a place with constant uncertainty, taking one uncertain bet over another makes little difference.
If I instead live in a place of relative historic stability with (real or perceived) short-term uncertainty, it makes a lot of sense to wait until the relative stability has returned.
Entrepreneurs in Ukraine have other options. Instead of building a restaurant or factory they could sit on their money for a few years until the war ends.
And do you think that is an equal differential in risk compared to someone in the US doing the same? I can think of at least a handful of reasons why that may not be the case.
>> Not willing to take risks to build something great.
8 of the top 10 companies in the world we're started in America in the last fifty years. If you were try to guess where the next world beating companies are going to come from I am sure some will come from China, Europe, South America, but still most from the US. The US still puts the world to shame in putting capital at risk on new ideas.
The ROI isn't 5 years, it's more that it won't generate any returns for 5 years and those returns might not pan out depending on policy change. If you build an American factory and right as it's getting up and running, the next administration rolls back all tariffs, you're left with massive debt and everyone undercutting your prices.
Risk. It's called "doing business". Anyone who has built anything great took risks because they had a vision and believed in it. They weren't "rent seeking" and looking for guaranteed returns.
What bank is going to finance a loan for a new factory whose profitability is predicated on this trade policy remaining stable for the next decade? Even if you as a business owner have appetite for this risk, the bank won't.
Even if all those factories were built instantaneously, it still results in made-in-usa prices for all Americans for everything coming out of those factories, along with protective tariffs forever. A factory can't be constructed or operate going forward in the US for the same price as in China. The moment any president drops tariffs, all those factories will shut down immediately.
I work for a major tier-1 supplier for the trucking industry, and the outlook is not good. This year was supposed to be a good year as customers pre-buy to avoid upcoming changes in emission regulations, but the drop in trade with China means that goods aren't coming into the ports, so trucks aren't needed. OEMs are dropping their forecasts and pushing out new development, which means our projects are getting cancelled. A couple months ago we were talking about how we're going to hit our variable compensation profitability plans; but just yesterday we were told that we're going to have to take a mandatory 2 weeks of unpaid leave this year. The damage has already been done, and the next couple years don't look promising.
Tourist travel to the US has contracted, for instance. US service exports are suddenly extremely suspect and a lot of countries are finding alternatives. US goods exports are facing massive headwinds, and counter-tariffs in some other countries (China, where imports from the US have basically stopped, and Canada where $400B+ of US goods were sold last year, many of which now see a counter-tariff and boycotts/replacement).
The situation is going to get much, much worse, and there is a serious sense of denial among both the market and many participants who seem to think Trump can retreat from his economic folly and everything will be good again. It won't. There is a massive structural shift that is going to linger for decades.
To steelman it, the US has a far lower dependence on trade as a percentage of GDP than just about any other country, so if any country will be likely to (raw-economic-numbers) survive a shock like this, it's the US. Of course this is a generalization, there could be critical single/multi item goods that make this not a thing (note: it's not lithium or "the rare earth"). It's worth asking and doing a deeper analysis on the question: Are the goods not being traded to the US "things that Americans can do without"? I think for a large portion of that, the answer is "yes". No, you do not need dropshipped junk or an electronic device with a 50% chance of working from amazon. Even for bulk conumer goods american alternatives are not substantially more expensive. I was shopping for cookie cutters recently and a US cookie cutter is $2 more than the chinese cookie cutter. Without even amortizing over the number of uses I'll get out of this, the marginal increase in cost is ~0, but I am certain that the way that online retailers sort sales by price, the number of buyers of the american good is way lower.
I think more likely problems are small electronic PCBs used for semi-bespoke controls in whatever manufacturing that actually {happens in/moves to} the us, hvac controls etc.
> To steelman it, the US has a far lower dependence on trade as a percentage of GDP than just about any other country, so if any country will be likely to (raw-economic-numbers) survive a shock like this, it's the US.
The reason this line of thinking doesn't work is that these measures affect all the trade that the US does with anyone, but for any other country they affect only the trade with the US. The US relative dependence on the entire world is larger than any individual country's relative dependency on just the US.
To illustrate:
US imports seem to typically be about 15% of the US GDP. EU exports to the US are only 3% of the EU GDP. So we'd kind of expect the shock to the US to be 5x larger than the shock to the EU.
Surviving is hardly a desirable outcome. Surviving is akin to a Pyrrhic victory (which is net negative). The loss that follows is greater than the profit from the win even after the most desirable of outcomes.
In the case of the US the result is isolation. That means loss of economic strength as well as loss of political influence. Those are more expensive than they sound because the second and third order consequences are security concerns and more powerful coalitions in opposition.
> [isolation] means loss of economic strength as well as loss of political influence.
Could be. In the long term, the world needs to reckon with the fact that our implementation economic systems (capitalist, socialist, fascist) depend on population growth, and isolation could also mean removal from the chaos that ensues when the existing political systems can't cope. Assuming the US improves its situation, which believe it or not is oh so slightly better as a result of what's going on now.
We're making nobody want to immigrate to the US. We're also not at all addressing the reason people aren't having kids anymore and taking rights away from women that's further scaring them away from it. We're not reforming to a post-scarcity, low replenishment economy here.
How does losing a compensatory supply of labor across both low and high skill markets, cutting off ourselves from backup, discouraging fertility rates, and kneecapping any incentive to invest in manufacturing domestically AT ALL help the situation?
> We're also not at all addressing the reason people aren't having kids anymore and taking rights away from women that's further scaring them away from it
I'm on your side on the political issue, but the data do not agree with you: The states with the most restrictive reproductive laws have higher fertility rates. I'm not claiming there is a correlation -- but rather fertility is not at all governed by reproductive laws (or even motherhood support, because those states also have shit motherhood support systems).
To answer your question: Surviving into an non-population-driven-growth regime requires primarily two factors:
- reducing reliance on financialization
- reducing reliance on pure consumption
I'm not saying the US is good at either of those two (it's not) but it's better than it was, say, in 2019. I would even look at your retort -- it used the word invest. That suggests a heavily financialization-dependent mindset. If you are looking through those lenses, it is difficult to imagine what the future needs to look like.
We're not moving away from that. We're just making the capitalism more crony. I understand you're trying to steelman, but the argument fundamentally does not make sense.
Trump's economic and immigration and foreign labor policies do not encourage anything that mitigates the disaster of demographic collapse. We're making ourselves even more sensitive by taking away all the safety nets our economy could fall back on.
you misunderstand: i am implying trump is increasing cronyism but stumbling into "correct" policies along the way as an accidental side effect of his dumb shit.
Trade is bi-lateral. The UK’s trading partners were also harmed by their decision to leave. Short term, it’s just simply a net negative for everybody. Long term (decades), the UK will have a long run growth rate lower than the rest of the EU. Granted, our lack of a crystal ball means that we can just debate outcomes ad nauseum.
If I recall correctly, the UK changed the way in which they compute the government contribution to GDP (going from G being just cost to some estimate of the output). This caused both the COVID drop and recovery to look steeper.
Agreed, this is the most likely outcome in the short term.
In the long term there are going to be unexpeted knock-on effects. Even a modest definancialization of the American economy makes it more robust to demographic changes and the end of the population-driven growth era. Lowered imports from abroad (especially china) and decreased consumption writ large means lower carbon footprint. Maintenance of airplanes getting more expensive means people fly less (already happening), again, lower carbon footprint.
Heard an interesting analysis by a Bloomberg Radio guest, running down the advantages/disadvantages between US and China. They came out mostly balanced, but the big imbalance is the population. The US population is a LOT less tolerant of disruption, and the Chinese population is more tolerant, and less informed, e.g., no one there even knows the rates are ~145%.
I'm inclined to agree. I see the US population as fully and multi-generationally accustomed to the luxury of comfortable living with a decent safety net. When things start to get really hard, the US population will get rapidly un-governable, while the Chinese will be both more ignorant, more controlled, and more willing to take some suffering for the country's good, while the US has been all about "ME" for quite a while.
Nah, the US has gone through plenty of crazy social shifts without totally collapsing. Since the civil war, historically, difficulty tends to galvanize the US public (for better or worse). You'll have to do a better job explaining why this time is different, that isn't just "vibes". American culture is full of inherent contradictions in individual/social balance. The biggest one recently is identity politics, and the swing to and from this movement is indicative of how malleable the US relationship with individualism is.
What’s different is the US is wayyyyy richer and more comfortable than any time previously in history, or at least was until recently (in terms of PPP of the avg person). When you grow up in those conditions, it’s like you’re the kid of a rich person who made all the money, and you now feel entitled to it without any of the work it took to get here, and without experiencing the pain without it or the lessons learned along the way. Instead you start to complain that you can’t do XYZ (buy a home, have a family, pay for healthcare), but because you didn’t create these conditions or experience life before, you just blame others without any of the tools to correct it for yourself.
>>When you grow up in those conditions, it’s like you’re the kid of a rich person who made all the money, and you now feel entitled to it without any of the work it took to get here, and without experiencing the pain without it or the lessons learned along the way. Instead you start to complain that you can’t do XYZ (buy a home, have a family, pay for healthcare), but because you didn’t create these conditions or experience life before, you just blame others without any of the tools to correct it for yourself.
THIS!
A nation of (predominantly) spoiled brats is not Sparta.
On average? Maybe not. But that is not the point; it's the massive info imbalance between US vs China population
I would bet, of the US 48% who read above a 6th-grade level, at least 2/3 of them know the rate is well over 100%.
The analyst's point is that even the literate in China do NOT know the rates because they have been systematically suppressed by the govt., so the info is simply not available (except to those few who have a reliable hole in the Great Firewall), so the Chinese population is already more controlled.
>I see the US population as fully and multi-generationally accustomed to the luxury of comfortable living with a decent safety net.
What gives you this idea, at all?
Our safety net is non existent in this country. The fact is most people in the US feel squeezed, thats why Trump was able to win with his America First attitude to begin with.
Sure, maybe she's wrong and the US population is actually hardened, tough, and patriotic enough to get over their divisions and unite to support tariffs.
I'm looking at it from a general historic perspective. Just look back 100 years.
Of course the safety net could be a lot better and the GINI coefficient is awful, but there still has never been more wealth floating about the general population. When the people complaining loudest about their situation are having boat parades, driving $75K pickup trucks with aftermarket mods, and getting their news on 75" TVs, and their biggest complaint driving their vote is the price of eggs due to an avian flu pandemic, they are definitely comfortable.
When that changes in a matter of weeks, we'll see what happens.
I just found the analyst's observations valuable and worth sharing.
>Of course the safety net could be a lot better and the GINI coefficient is awful, but there still has never been more wealth floating about the general population. When the people complaining loudest about their situation are having boat parades, driving $75K pickup trucks with aftermarket mods, and getting their news on 75" TVs, and their biggest complaint driving their vote is the price of eggs due to an avian flu pandemic, they are definitely comfortable.
This isn't reflective of the median reality for most people. Simply put, the strata divide is growing even though there is a lot of wealth in US society, it is spread incredibly unevenly.
The US isn't well prepared to handle a trade war, never mind that this trade war is really cover for a class war because big businesses felt labor made too many gains from late 2020 through early 2023
Agree the US is ill-prepared (and less-prepared vs Chins) for any kind of war, trade or otherwise, which was the point of the analyst I cited.
I won't dispute that the median reality for most people is far less than ideal. Yet from a historical perspective the overall life in the US is of historically unparalleled safety with overall peace and low crime rates, health with more ppl covered by insurance (but yes, less than 32 other developed nations, but higher top-quality care), and plenty of historically cheap goods imported from low-wage nations.
Yes, it can all be far better, the top 0.001% are stealing vast wealth that could literally transform lives, and there is a homeless problem from inadequate psych care. But we do not have massive poverty, unemployment is at record lows for decades, and so forth.
It appears we are about to find out what it is like to see breadlines and brutality.
And yes, I 100% agree the "trade war" is about cementing more gains for the top class because labor had it too good. They can only see a business model where they prosper only if everyone else suffers. They don't see the greater prosperity possible if everyone participates in building the prosperity.
>Yet from a historical perspective the overall life in the US is of historically unparalleled safety with overall peace and low crime rates, health with more ppl covered by insurance (but yes, less than 32 other developed nations, but higher top-quality care), and plenty of historically cheap goods imported from low-wage nations.
Which in context of the conversation, means nothing. I'm not disputing the fact that relative to historical circumstances, entire swaths of the world have it better than ever, but that doesn't end poverty or meaningfully increase stability under the current regime, and whatever comes of this - and its not going to be good - will last far longer than the regime is likely to be in power[0]. Addressing current and future concerns is what counts here, regardless of how good anyone has it.
[0]: I hope the US can maintain free and fair elections. Remains to be seen if this administration, its cronies, and its followers running congress and SCOTUS won't dismantle elections
>>Which in context of the conversation, means nothing.
Umm, it's the central point —» Which population is more prepared and willing to endure deprivation to win a trade war? Those multi-generational experience of safety, stability, and MTV prosperity mean everything in terms of being unprepared to endure deprivation for a greater good. A nation of spoiled brats is not Sparta.
We certainly agree the outcome of this is inevitably bad, is already decades-long in terms of trust broken across the globe, and the regime is definitely trying to kill free&fair elections to remain in power.
>To steelman it, the US has a far lower dependence on trade as a percentage of GDP
The US being the centre of trade is basically the entire foundation of its GDP. It is the reason the US $ is the global reserve. It is the reason the world holds t-bills. It's the reason silicon valley is in San Francisco and the centre of the music and movie industry is in LA. It's the reason the financial capital of the world is in NY. It's why science revolves...revolved...around the US.
If you're living in the richest large country in the world, it's worth contemplating why that is. Is it US exceptionalism? No, it's that the US came out relative untouched from two world wars that seriously harmed most of the world, so it become basically the central hub. The geographically-safe, still wealthy friendly power.
That is all dissolving at an astonishing pace, and the reality will be a harsh one. Like the other post said, the US isn't going to suddenly be poor, but instead it's just going to be an endless drain as the world reorients.
And I mean you can say "oh well we'll do without!", and...okay? I guess it's just the new minimalist world!
As to the "the US will be harmed less than others", while I actually believe the US will be one of the hardest hit countries of all, because most of the US economy relies upon an illusion, it's a silly self-comfort anyways because the US is the cause of all of this. It's like salting the land and then gloating because your crops weren't grow well anyways.
That may have been the design case, but the reason it is now is just TINA. No other currency can absorb the volumes necessary. Let's go over the alternatives:
- Euro - has less than half the volume of the US. A possible contender, but remember each member state does get to dictate its own printing rules, so the
- Yen - one tenth the reserve volume, but pegged to a country that has been in several "lost" decades.
- Yuan - country has massive capital controls and you could get completely fucked if the government fears revolt and lets people move their money out of china. And yet, international reserves are LESS than the CAD.
> it's worth contemplating why that is. Is it US exceptionalism? No, it's that the US came out relative untouched from two world wars that seriously harmed most of the world, so it become basically the central hub.
I think you've got the causal arrow wrong on this. The US is geographically well situated. It touches both oceans, and has a huge gap between it and most of the rest of the world. It's ~energy independent, and has robust agricultural center. That's why it was untouched from both world wars and that's why it became the central hub of commerce in the postwar era. The US can afford to fuck up a lot of domestic and international policy and still generally speaking not worry about existential threats.
>I think you've got the causal arrow wrong on this.
My point was precisely that the US benefitted by geographical happenstance. Not sure how I got this wrong.
Regarding existential threats, nuclear proliferation is going to go through its worst period in human history. We are going to end this decade with a number of new nuclear bomb participants, and it's a profoundly obvious, inevitable outcome of the current US administration's myopic policies. And with that the probability that some American cities become glassed keeps spiralling ever upwards.
Not really. At least in terms of oil, the majority of what’s extracted cannot be refined in the US because all of the refineries were built for non-shale oil. Basically all of the oil gets sent abroad to be refined and then sent back.
Why this isn’t talked about more, especially under the context of “drill baby drill”, I don’t understand. If anything the slogan should be “refine, baby, refine”
yep thats why i put "~". youre absolutely correct but also in a pinch the us could fast track getting dirty athabasca sands oil in and mixing it with shale to get something more ingestable by our plant.
i would not be surprised if being ready for such a scenario + knowlege of shale reserve limitations is why those plants aren't kicked over so long as the trannsshipment for refining doesnt remain cost prohibitive.
>Are the goods not being traded to the US "things that Americans can do without"? I think for a large portion of that, the answer is "yes".
How does one reconcile this with the fact that 2/3rds of the US economy is based on consumer goods? I agree with the general premise that we probably don’t need so much frivolous junk, but like it or lump it, that’s what our economy has been based on for decades. It would potentially take just as long to remake the economy into something else.
Yes, everyone is whistling past the graveyard about this.
You will see panic in two weeks. I was talking to two truck drivers here in Lincoln, Nebraska I met at a Flying J. They are already talking about layoffs and job insecurity and they are wondering why no one cares. One of them asked where his bail out was.
The market, I think, is driven by AI and will be reactive, not predictive. All you need to do is be the quickest person out. All the under millionaire suckers will be wondering what happened to their 401k's.
I’m in that 12% (fortunately). But I’m far from the 0.5%. The 0.5% have complex diversified assets. “Normal” millionaires like me are mostly real estate and market. We are vulnerable both to market losses and, if the economy crashes, much lower property values.
Plus the defense industry of course. You could drop the tariffs overnight but much of the world which trusted America for their defence needs no longer do.
In short, it must get worse before it can get better irrespective of what happens next or when.