> Indeed. That's especially true on the NATO side. This is a historical event on the scale of the breakup of the USSR.
Exaggeration isn't helpful. Whatever "this" is, you can't possibly make an assessment of that kind until years after the fact.
In March 2020, people were convincing themselves that the global economy was flying straight into the ground, but people who didn't lose their minds made a lot of money, quickly.
IMO, there was a better case for that panic, given the context (they were partly right! the lockdown stuff was incredibly costly!), than there is that this particular spasm is meaningful. Only time will tell.
> Exaggeration isn't helpful. Whatever "this" is, you can't possibly make an assessment of that kind until years after the fact.
I don't think you fully grasp the gravity of Trump's actions.
For the first time in its history, NATO is excluding the US from arms purchase programs. This takes place at a time where the EU is scrambling to prepare for a war with Russia, which is also caused by Trump's action of abandoning it's allies,
The Trump administration is also heavily invested in annexation rhetoric targeting multiple NATO members.
Then there's the whole tarrif absurdity.
These sequence of moronic steps individually represent world-changing events. They all took place in a couple of months into the Trump administration's takeover.
This goes well beyond the suspicion that Trump is a Russian stooge. This changes the way the world was structured after WW2. The fall of the soviet union might even have a smaller impact in world history.
> I don't think you fully grasp the gravity of Trump's actions.
I "grasp the gravity", to the extent that anyone is actually able to do so at this time. I am unwilling to engage in hyperbole in order to create the illusion of a nearby black hole.
This is a non-partisan reaction. I am opposed to tariffs; I am also opposed to panic and exaggeration.
> This goes well beyond the suspicion that Trump is a Russian stooge.
Your choice of neutral, unbiased language is compelling.
The first man on the moon, the breakup of the Soviet Union, September 11 - these were all things that people predicted would be monumental world-changing events at that point in history, and also proved to be after the fact. Maybe history will prove us wrong, but this feels like one of those moments to me.
I mean we correctly estimated that the breakup of the USSR was a big deal without hindsight.
People who didn't panic during the covid crash made money not because they understood the situation but rather because the money supply went into the stratosphere.
The closest modern analogy might be Liz Truss’ short tenure in the U.K. Her actions paled in comparison to this absurd tariff situation but the only way to resolve it and restore confidence was for her to resign.
The problem in the US is that the tariff situations is bonkers insane, was clearly not thought out at all, and the person controlling the strings is talking about ways to run for a 3rd term instead of considering resignation.
This is a political crisis. The best we can hope for is that the Senate pushes forward with attempts to reign in the president’s tariff powers and the House actually goes along, which is unlikely right now.
I think we’re going to start seeing Republicans test the waters with breaking rank with Trump soon though.
Yeah really, Truss really is the most salient yardstick, with the complication that any analogous action in the mechanisms of american politics feels slightly unfathomable. And I was shocked enough at Truss' ouster.
It's all so divisive, but it frustrates me to no end that likely the biggest end that people trying to defend this, without any admission this is a crisis of confidence waiting to happen if it's not already there.
The amount of political capital immolated for the sake of this course of action is flatly embarrassing.
It doesn't really matter what they want or how long they think it's going to take to get it, the damage is already done.
> I think we’re going to start seeing Republicans test the waters with breaking rank with Trump soon though.
This is already happening. The snag is, until the break adds up to a 2/3 majority in both House and Senate, a presidential veto of a bill reversing the tariffs cannot be overridden. And to get to 2/3, a lot more pain is going to have to be felt in Trumpland.
If people start turning against Trump, Congress will follow. Look what happened after the 2022 terms. Dems over performed and everyone immediately tried to make Ron Desantis a thing.
Sharks will always be in the water around Trump waiting for him to slip. The question is, will Independents(maybe even some of the base) shift hard away when they start feeling the pain of the tariffs.
Loss of trust and finding other sources for the things they used to buy from the US, perhaps even producing those things themselves and becoming a new competitor the US didn't have before.
If it's reversed faster than alternatives are in place, then it won't matter too much if the trust is there because what alternative is there? The logistics and stuff take time to change. If it persists long enough, then the trust piece will be more of a factor.
Mone of that really has to do with the tariffs. Consumers will continue to buy what they can afford. This won't reduce that much, probably by about 5% is my guess based on multiple factors. Most healthy companies will continue to operate just fine. Market confidence is down, but it's been fragile due to it's overvalued state for a while. Aside from tariffs, policy outlook is very business friendly.
This mostly a market overreaction or correction from being overvalued if we look at the past. This Chinese trade war has been going on since Trumps first term (at least). The rates on the top import/exports have been around or over 25% for a while. It's also interesting how much China is hurting itself with pork. The Chinese own Smithfield and are a huge importer of pork from the US, yet they slapped an 80% tarriff on it?
It will affect if people buy a Honda they don't 100% need right now, or keep emergency money in case things go worse. Which on larger scale will still affect prices of everything.
Every time this happens people say it’s different. See: COVID pandemic. And we know the V shaped recovery that came after that. Of course that shouldn’t be interpreted as a predictor of what’s to come next (because it’s not), my only point is to say that the same rhetoric pops up frequently during downtowns since forever.
This is different. It was entirely avoidable. Entirely predictable. Entirely preventable.
Hell, it’s mostly reversible if the administration would own their mistake. But they won’t.
That’s the problem: This is not a natural disaster or even a reaction to a market-created crash. It was orchestrated by the people who were supposed to be doing the opposite.
I don’t believe claims that the United States is doomed or other hyperbole. I do believe that this is firmly different than anything we’ve seen in our lifetimes though.
After the initial COVID phases nothing major really changed long term as far as the world balance goes though. Everyone got affected, everyone started recovering. Things may have been uneven, but not like now, right?
Up until WWII happened I doubt many people would have believed that sort of death and destruction was right around the corner. They'd just had WWI and weren't expecting that settling the unsettled business from that would be around 3x worse, break the European colonialists and ... I don't know how wiped out Jews in Europe were, but it was a painful experience although I assume some survived. The property damage was also extensive.
High tariffs isn't going to be the end of the world & this particular stage of crisis doesn't look very important. But the overall geopolitical crisis we're in as everyone realigns certainly could end the world as we know it. Both in the literal and worst case senses. Few went in to WWII chuckling and saying that they were going to break their own power permanently, but that is what a lot of participants ended up doing.
Just a comment, every catastrophe has victims, survivors, and lasting consequences. I didn't mean to trivialize that in my response. Regardless, life goes on.
In the sense that members of the human race will survive, sure. That Woodward book out recently was suggesting a double-digit chance for a nuke to get used in Ukraine. Hopefully he is prone to making things up - seems possible that life would not have been going on in at least some regions.
I simultaneously take comfort from the fact that no-one else seems as worried as me and dread from the fact that it'd be the 3rd world war that people just walked into because they weren't taking the threat seriously enough. We appear to have been watching insane policy come out of the US diplomatic establishment for a good decade now. And the crisis is still escalating.
A disease did that. Nobody knew the details, there was fear it wouldn't stop. The markets groaned and creaked under the weight of the fear and uncertainty. But with the vaccine and the reduced lethality of new strains, a disease becomes a nothing. Recovery began because nothing was in the way, the bad thing was gone.
The people in charge of the government did this. The people who will still be in charge of the government. The bad thing is not gone. The bad thing has no end in sight. And the bad thing is doubling down.
The bad thing is saying it’s no problem to stick around for a third term and beyond, and that it wants to go to war to annex territories from the closest trading partners who might be able to mitigate the impact of the trade war.
The cause really was not the disease and even loss of life from it. It was actual real world disruptions shutting down normal operations. Lockdowns, quarantines and so on. Goods stopped moving. So it is obvious that trade would slow down and thus profits would be hit, directly leading to stock prices correcting.
At the time, there was trust that the government wanted to assist the recovery. They have lost the benefit of the doubt. This actually feels malicious.
With Covid, recovery came as Covid was removed. With Trump, recovery can come with…
Did anybody actually “trust” other countries to start with? I’m reminded of the cynical yet accurate quote that nations don’t have friends, they have interests. I expect the American feds to pursue the best interests of Americans (though these policies aren’t in those best interests, it seems admin doesn’t know?) and foreign nations to do the same.
This point is especially hollow because it is true that many countries have maintained asymmetric tariffs on us. Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them. I’d take their cries of “lost trust” more seriously if they hadn’t shown with their actions they will pursue their own advantage too.
US has been very successfully exporting its debt (quite literally, almost no other country can run such high deficits for so long) and services.
What do you think happens with all that money if Americans can’t buy those cheap imported goods anymore?
Also other countries like China or Japan won’t be able to continue buying US bonds. Basically Americans are getting free stuff funded by debt they are never going to pay back and still you have people whinning…
> larger %
US decided to charge e.g. 15 times higher tariffs on the EU than the EU does. You believe that’s even remotely reasonable?
Or do you actually trust Donald’s table that they made to confuse clueless idiots?
Successfully? We blew 3.1% of our GDP on debt service alone in 2024. This is insane, irresponsible, and unnecessary. We are mortgaging our children and grandchildren’s futures. Just like young folks like me correctly complain that old people are leeches sucking America dry - social security, medicare, housing price subsidies, decade after decade, despite a what, $1.7mm average net worth - my generation shows no signs of doing anything differently. “Screw them kids. Boomers got theirs, I’ll get mine.” If our interest burden keeps growing from 20% of federal revenues we could end up spiraling into more and more debt. Or worse we could get to a place where the fed can’t feasibly raise rates to level out the economy and moderate inflation because that would balloon interest payments to a ridiculous degree.
Where Trump is fundamentally correct is that a trade imbalance means selling pieces of your country off to compensate. Equities, bonds, land. All a claim against future money that sucks those returns out to go to foreigners. America has been lucky in the past, in that the huge market for dollars helped us avoid some of this, but that’s not a limitless solution.
Obviously the answer is not that we must make Nikes here. It’s also not that we must have zero trade deficit with any single nation. But we probably should focus on exporting more advanced goods and more services to bring our overall trade deficit down, focusing on a net zero or overall trade surplus outcome.
> We blew 3.1% of our GDP on debt service alone in 2024
As long as GDP growth outpaces (or is even) the increase in debt it’s not a big issue. Some spending cuts and mild tax increases (maybe not so mild for the higher brackets) would solve that.
> focusing on a net zero or overall trade surplus outcome.
If you looked at the countries pursuing such policies like Germany or Japan they haven’t been doing that well at all over the past 20 years. Basically no real growth and they are permanently stuck in the early 2000s. US on the other hand has been doing extremely well (lack of redistribution is another issue).
Debt growth is massively outpacing growth in GDP. You're right that it's less of an issue if we grow quickly and effectively keep leverage the same but that's not what's happening.
Germany and Japan haven't focused super heavily on achieving a trade deficit. As you said, Germany has huge problems with her welfare state and Japan has huge demographic issues. I'm not saying we should achieve a trade balance by tariffing everything to death; I am saying we should focus on faster growth to get there and reduce our insane level of consumerism. I don't have an issue with a temporary trade deficit for growth-oriented reasons, but I have little save contempt for people ordering packages of chinesium temu crap.
> Germany and Japan haven't focused super heavily on achieving a trade deficit
They have. For Germany maximizing their trade surplus was one of their primary goals for many decades. Amongst other things that’s why they accepted the Euro (easier than devaluing DM).
> As you said, Germany has huge problems with her welfare state
I never said that.
And Germany specifically has quite low government debt and a very high trade surplus. Yet.. it’s not doing better economically than the US. Welfare hardly has much to do with that.. e.g. US government excluding all private spending spends about the same as Germany as % of GDP on healthcare. Total social spending is not that massively higher either (~23% vs ~28%).
> ordering packages of chinesium temu crap
Sure, but that’s by and large insignificant. If we look up US imports by category consumer goods don’t really make up that much.
Also, I don’t really see how can tariffs do much besides lowering productivity and increasing prices.
Like that complete nutjob Lutnick said they want “millions and millions of people in America screwing in little screws to make iPhones”. That just makes no sense, you want to minimize the amount of easily outsourcable low productivity jobs in your country.
The “reciprocal” tariffs are nothing close to reciprocal. I hope you know by now that the numbers Trump presented were not actual tariff numbers that other countries put on us.
The trust issue is domestic, too. Businesses just got slapped with the largest tax increase in history at home. Pointing fingers at other countries is a distraction. It’s ridiculous to think that this will encourage companies to start building factories here when even the raw materials are now heavily taxed on their way in to the country. Any sane company is going to pause US factory investment until there is some clarity and predictability.
I think I miscommunicated my support for some trade policy change as support for Trump’s “liberation day” tariffs. Here are things I think we should fix:
- America and Hypotheticalstan each export $1T to each other with a bunch of tariffs on various things. America raises $50B in tariff revenue on Hypotheticalstan’s imports while Hypotheticalstan raises $100B on American imports.
- America doesn’t make enough defense-critical stuff: steel, solar panels, chips, aluminum, rare earths, etc.
- America has a ~$918B trade deficit.
Things I do not care about:
- Vietnam makes our Nikes.
- We have a trade deficit with specifically Vietnam.
> Why should you care how much another country charges its residents to import stuff from the US?
Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.
Or they could go, everything's gotten so expensive these days, I'll buy wine less often altogether.
> Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.
Sometimes it's hard to tell if the US public is even aware of this. I mean, what is the point of tarrifs other than raising the prices in the domestic market of imported goods and services? That's all they do.
The rationale from the perspective of the central government is that this will finally make foreign goods and services uncompetitive with regards to domestic alternatives, and thus will finally render them viable. But that childish assumption is based on so many absurd notions that are plainly unrealistic. The only thing that's real is the direct impact of tarrifs: increase the price of goods and services in the domestic market.
I think the problem is that because of the huge disparity between the cost of imported and domestic goods which has developed over decades, the choice that people face is not 'oh, now imported goods are a little more expensive, I will instead buy American', it's 'now I can't afford to buy anything at all.'
You have to get more money into the hands of the consumers in order to be able to implement something like this.
Wine is a good example because it’s not fungible: one bottle of red wine is not like any others. If you have a domestic wine industry, it likely can’t compete on quality with French wine.
So if France can export wine at a price that’s reasonable enough, your domestic wine industry will fail, undercut completely by cheap French imports.
Tariffs in and of themselves are not all dreadful. They help level the playing field and support domestic industry.
But you can’t go from decades of offshoring manufacturing to suddenly charging punitive tariffs without making imported goods (which were the only ones your citizens could afford) much more expensive, and therefore, yes, folks might buy wine less often altogether.
IMHO it’s pretty fungible at least outside the high-end stuff. Most people would hardly notice where the wine comes from (aside from specific types of grapes and such)
I'm surprised to hear that. In my experience, most people tend towards the other end (believing themselves to be connoisseurs, etc.) rather than 'just give me the house red'.
Because tariffs aren’t actually a good thing. If you hurt my producers by $1, I should hurt yours by $1 to maintain some level of credibility in our repeated game. If I don’t punish foreigners for tariffing my guys they have no incentive to reduce or remove those tariffs.
I don’t actually care about t-shirts being made in china. That’s not an industry that matters at all. I do care about china closing her entire market to American tech, for instance.
If you start looking for justice in the world economy, you've already lost the game. The only thing that matters is money. You can stick tariffs on left, right and centre, and all you'll end up doing is pushing goods out of the hands of your consumers.
You can try to 'hurt' another country's producers, but they're likely to just go and find another market for their goods.
I'm not really looking for "justice", I'm looking to uphold our interests. I don't particularly care if we raise more revenue than some other country does from our imports. I don't think tariffs are the best or only weapon to fix our problems. I do think they have a place, that selling off more and more of our country via trade deficit is unsustainable, and that our priorities as a nation are beyond screwed up.
> I expect the American feds to pursue the best interests of Americans (though these policies aren’t in those best interests
I think that's the thing — you plan in business for people to operate in _their own_ best interests. If people stop doing that & their behaviour is volatile, then you're going to put your own mid-term plans on pause until you know what's what.
> Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them.
Is that happening, trade deficit aside, & when you factor in services as well as goods?
You could start making stuff we're willing to buy. I'll give you a qick rundown of what Europeans might want:
* no junk food, no weird GMO garbage.
* road-legal automobiles, no EPA-workaround trucks with shoulder-high hoods.
* advanced tech hardware gadgets.
* entertainment
* no, we're not particularly interested in guns.
Tell me what exactly what aren't we already buying from the US, when it's competitive: quality food we have our own, sorry; cars, well you've gone down a crazy path since I can remember; hardware, well we do, except you chose to offshore manufacturing; entertainment, we do... a lot; guns, be honest, you know you have a problem, not us.
To be fair, the US exports a lot of services to the EU. For some reason these weren't included in the calculations shrug. As an aside, it's hilarious to see loads of Europeans saying that they never use any US products on a bunch of US owned products.
Also, last weekend my son had some weird intestinal flu we couldn’t figure out and ended up visiting the weekend GP. You think we had to pay anything (besides the slippery-slope-ish, pice-controlled, Dutch health insurance system)?
So yeah, I might earn 1/3 an SF developer, and yeah — the startup scene can be frustratingly sterile — but I can afford to not need a Tesla Juniper, though I really love it when I lease it for travel.
And yes, we do do innovative and cool stuff, we just don’t exit with billions.
cali is the butt of half the jokes in America for a reason. i'm glad you like your view though. i'm glad you like your government insurance but my private health insurance is also very good and i don't have to pay much (if anything) for things like that. i'm also alive today thanks to good private insurance and the level of care it afforded, the range of specialists i could see, which most government-run systems would not have covered.
if y'all are content, fine i guess. but it is true that the current european model is sustainable. the FT ran a good piece recently discussing how America reducing or ending the indirect european defense subsidy, combined with slowing growth and an ageing population, means that model must come to an end. i don't begrudge you the years you enjoyed it but certainly not for me.
you were saying you think no GMOs, smaller vehicles, banned guns, and less money are worth this. i think that's a terrible way to live and would hate doing so. my objection was precisely to you applying your lens and values to America, American values, and our way of life.
