Economy Trump's April 2nd Tariffs

[KaNesDeath]

Can place a numerical value on what Trump has cost me this year so far with this stupidity. Two single day events that wouldve netted me at least $1,000 canceled.........

 

[Islam Imamate]

What’s bad faith about my post? Not a person was talking about consumer confidence. It was all 401k posts and Wall Street.

I think it's bad faith to dismiss the criticism of Trump’s trade policy by minimizing the market turmoil represented by the 2% drop. I cited consumer confidence because along with the dip in the stock market it suggests economic pessimism on the part of the wider economy.

 

[Rob Battisti]

I think it's bad faith to dismiss the criticism of Trump’s trade policy by minimizing the market turmoil represented by the 2% drop. I cited consumer confidence because along with the dip in the stock market it suggests economic pessimism on the part of the wider economy.

I never dismissed criticism of his trade policy. I am critical of his policy.

I am dismissing people saying the world is ending.

 

[lowlife]

"art of the deal" is what I'm going to start using when shit goes hilariously wrong.

 

[Beechwood]

I enjoyed this article - and am believing similar that the stock market will rebound soon enough.

Navarro In Over His Head, Dems Aren't Much Better

Time to End Tariff Alarmism

Contrary to the headlines, it is time to move on from tariffs. Yes, the April 2 Liberation Day announcement was poorly handled. Yes, there is an unfitting dishonesty in painting trade deficits as an economic problem. Hopefully,...

www.americanthinker.com

Contrary to the headlines, it is time to move on from tariffs.



Yes, the April 2 Liberation Day announcement was poorly handled. Yes, there is an unfitting dishonesty in painting trade deficits as an economic problem.

Hopefully, important lessons were learned here, most especially that taxing trade deficits is not the correct instrument to grow reciprocal trade. In addition, President Trump’s emergency power to set tariffs reaches only so far. For stable, long-term commitments, the optimal tariff regime is a job committed by the Constitution to Congress. No reason to swap first principles for expediency.



Now for the good news.

For those who like inside baseball, Peter Navarro is in way over his head. He wrongly favors permanent tariffs. In an unforgivable error, the April 2 tariffs were overstated by a factor of four due to misapplication of the underlying economic formula. He will be sidelined in favor of much sounder advisers, especially Treasury secretary Bessent, who has emerged as the best trade adviser.



For the rest of us, the key news is that economic growth may slow, but not nearly as much as initially feared. Not only are alarmists likely to be proven wrong about a 2025 recession, but look for overall U.S. GDP to hit 1.5–2.0% in 2025 and rise thereafter.

Relatedly, the Democrats’ wish for a market meltdown will not be realized. At its maximum, on the April 2 schedule, the tariffs approximated a $10-trillion after-tax perpetuity cost to the U.S. At the newly paused rates, tariffs are roughly two thirds lower than initially announced, or 10% versus an estimated 30% average tariff rate on April 2. That brings the expected cost down to $3 trillion.






But even that estimate is too high. Many if not most countries will make material concessions in exchange for no tariffs. How ironic if President Trump does more for free trade than achieved by any free-trader in U.S. history.

In any event, the tariff regime negotiated under President Trump’s emergency powers will ultimately be superseded, or codified, by Congress and hence will not last in perpetuity as a cost. Tariff costs will be offset over time by increased U.S. investment and expanded exports. And from a stock market perspective, the tax will be shared between importers and consumers, further limiting its impact on equities.



In all, the tariffs regime will likely have a present value cost of less than $1 trillion. That compares to the market value of all U.S. equities at the beginning of 2025 approximating $62 trillion.

Geopolitically, in place of a global trade war, President Trump has refocused exactly where we need to be: a cold war with China. Trump has majority support from all Americans to take on China. It unites Trump voters and expands the Republican base materially going forward.






Notwithstanding congressional power over imports and exports, the president has unique responsibility for foreign affairs and the defense of the United States. That applies most directly to China. The extraordinary tariffs imposed on China are constitutionally justified as the proper exercise of presidential powers.

Individual companies that rely on China for parts and supplies that cannot be sourced elsewhere will be harmed. Consumers may not see items they have come to expect. In the past two years, Dollar General’s stock has declined from $220 to $88. And critical shortages could occur tied to rare earth metals, pharmaceuticals, health care, and key technology markets. So yes, it will be challenging. It will produce shock headlines. But over time, both countries will adapt.

In 2000, China exported $100 billion of goods to the U.S., growing to a peak of $539 billion in 2018 and falling to $439 billion in 2024. As companies accelerate their exit from China, imports to the U.S. will drop significantly over the next several years, perhaps to the $200 billion range. China can manage, as the U.S. currently represents only 15% of exports. The U.S. can manage, as Chinese imports, while significant, are immaterial to a $30-trillion economy and too small to be a systematic inflation risk, notwithstanding widespread hand-wringing to the contrary.

The 90-day pause will work out great. This is best understood by examining a specific country, Vietnam, and a specific good, footwear.

The U.S. consumes approximately 2 billion pair of shoes annually, or approximately 6 pairs of shoes per capita, of which some 1.8 billion pairs are made overseas ($21 billion in revenue) and 0.2 billion pairs ($2 billion in revenue) domestically. Some 90% of overseas production comes from 4 countries: China (1.1B pairs), Vietnam (357M), Indonesia (112M), and Cambodia (60M).

Vietnam has been hit unexpectedly hard by the tariffs, at 46%. For perspective, Vietnam GDP approximates $500 billion, of which it exports $137 billion to the U.S., especially communications equipment and footwear. Vietnam cannot afford such a monstrous hit to its export-dependent economy. Nor is Vietnam taking advantage of the United States. To the contrary, it has built the complex infrastructure, labor, and capital to produce top-quality footwear, at the demanding performance standards, cost, and health and welfare demanded by the likes of Nike and Adidas.

In anticipation, Vietnam has been in steady communication with the Trump administration, proactively promising to drop all tariffs while encouraging more U.S. purchases. It will also need to end Chinese transshipments. On April 4, Trump posted on Truth Social that he held a “very productive call” with head of state, To Lam, and was looking forward to another meeting “in the near future.”

So what will happen in footwear? Over time, production will and should move from China. Vietnam will be the major beneficiary, along with its Southeast Asian neighbors. If Nike and other importers are wise, they will announce new U.S. plants. Vietnam will eliminate all tariffs on U.S. goods and increase its auto and equipment purchases from the U.S. In exchange, Trump will sharply lower tariffs on Vietnam, hopefully to zero. Separately, U.S. shoe production will rise, and Nike will do just fine. Look for similar results across most of the 70 countries now in direct negotiations.

Finally, perhaps the best news is the return of focus to all that President Trump is accomplishing: a profoundly sane energy policy, sealing the border, re-establishing control over the administrative state, systematically identifying fraud and abuse and corruption, promoting safe elections, returning education to state and local government, eliminating DIE, abolishing USAID, withholding funds from universities. The list goes on — or, as justly said, promises made, promises kept.

There is, however, one problem that is not going away: out-of-control spending and the spiraling U.S debt. Legal challenges are thwarting every advance. It will take the Supreme Court years to sort out the ability of the president to reshape spending. In the end, Congress is the only party that can cut spending permanently to save this country. Democrats refuse to allow even the most sensible savings, and, sad to say, the current Republican Senate barely seems up to the task. Ultimately, this country needs a filibuster-proof majority to eliminate $2 trillion in annual spending and solve the entitlement crisis.

There will be dislocations due to the President Trump’s stand against China. But the reset is long overdue, vital to U.S. national security interests, and well worth the cost of a restructured relationship. Iran must give up its nuclear arsenal, by agreement or force. Taiwan remains a concern. And inevitably there will be some turbulence in the economy.

But tariffs are not an issue. Ignore the legacy media. Ignore the Democrats. Let the stock market gyrate. It will head upward over time.

 

[Islam Imamate]

I never dismissed criticism of his trade policy. I am critical of his policy.

I am dismissing people saying the world is ending.

Trump's misguided trade war and military threats are reordering global economic and diplomatic relations in a way that could very well bring an end to the American led liberal order so in a sense we are seeing the world as we knew it since WWII or at least since the fall of the USSR ending in a way that doesn't look good for the US.

Bad faith minimizations like yours that the stock market "only" dipped 2% obfuscate that reality.

 

[AWilder]

Trump's misguided trade war and military threats are reordering global economic and diplomatic relations in a way that could very well bring an end to the American led liberal order so in a sense we are seeing the world as we knew it since WWII or at least since the fall of the USSR ending in a way that doesn't look good for the US.

Bad faith minimizations like yours that the stock market "only" dipped 2% obfuscate that reality.

"i don't like trump but will do everything in my power to minimize his disasters and support his actions" - "independents"

 

[Islam Imamate]

"i don't like trump but will do everything in my power to minimize his disasters and support his actions" - "independents"

To be fair most independents in the US do lean right IIRC so in that sense Rob is somewhat representative. Maybe not so much when it comes to the crypto and MMT stuff though.

 

[Rod1]

I enjoyed this article - and am believing similar that the stock market will rebound soon enough.

Navarro In Over His Head, Dems Aren't Much Better

Time to End Tariff Alarmism

Contrary to the headlines, it is time to move on from tariffs. Yes, the April 2 Liberation Day announcement was poorly handled. Yes, there is an unfitting dishonesty in painting trade deficits as an economic problem. Hopefully,...

www.americanthinker.com

Contrary to the headlines, it is time to move on from tariffs.



Yes, the April 2 Liberation Day announcement was poorly handled. Yes, there is an unfitting dishonesty in painting trade deficits as an economic problem.

Hopefully, important lessons were learned here, most especially that taxing trade deficits is not the correct instrument to grow reciprocal trade. In addition, President Trump’s emergency power to set tariffs reaches only so far. For stable, long-term commitments, the optimal tariff regime is a job committed by the Constitution to Congress. No reason to swap first principles for expediency.



Now for the good news.

For those who like inside baseball, Peter Navarro is in way over his head. He wrongly favors permanent tariffs. In an unforgivable error, the April 2 tariffs were overstated by a factor of four due to misapplication of the underlying economic formula. He will be sidelined in favor of much sounder advisers, especially Treasury secretary Bessent, who has emerged as the best trade adviser.



For the rest of us, the key news is that economic growth may slow, but not nearly as much as initially feared. Not only are alarmists likely to be proven wrong about a 2025 recession, but look for overall U.S. GDP to hit 1.5–2.0% in 2025 and rise thereafter.

Relatedly, the Democrats’ wish for a market meltdown will not be realized. At its maximum, on the April 2 schedule, the tariffs approximated a $10-trillion after-tax perpetuity cost to the U.S. At the newly paused rates, tariffs are roughly two thirds lower than initially announced, or 10% versus an estimated 30% average tariff rate on April 2. That brings the expected cost down to $3 trillion.






But even that estimate is too high. Many if not most countries will make material concessions in exchange for no tariffs. How ironic if President Trump does more for free trade than achieved by any free-trader in U.S. history.

In any event, the tariff regime negotiated under President Trump’s emergency powers will ultimately be superseded, or codified, by Congress and hence will not last in perpetuity as a cost. Tariff costs will be offset over time by increased U.S. investment and expanded exports. And from a stock market perspective, the tax will be shared between importers and consumers, further limiting its impact on equities.



In all, the tariffs regime will likely have a present value cost of less than $1 trillion. That compares to the market value of all U.S. equities at the beginning of 2025 approximating $62 trillion.

Geopolitically, in place of a global trade war, President Trump has refocused exactly where we need to be: a cold war with China. Trump has majority support from all Americans to take on China. It unites Trump voters and expands the Republican base materially going forward.






Notwithstanding congressional power over imports and exports, the president has unique responsibility for foreign affairs and the defense of the United States. That applies most directly to China. The extraordinary tariffs imposed on China are constitutionally justified as the proper exercise of presidential powers.

Individual companies that rely on China for parts and supplies that cannot be sourced elsewhere will be harmed. Consumers may not see items they have come to expect. In the past two years, Dollar General’s stock has declined from $220 to $88. And critical shortages could occur tied to rare earth metals, pharmaceuticals, health care, and key technology markets. So yes, it will be challenging. It will produce shock headlines. But over time, both countries will adapt.

In 2000, China exported $100 billion of goods to the U.S., growing to a peak of $539 billion in 2018 and falling to $439 billion in 2024. As companies accelerate their exit from China, imports to the U.S. will drop significantly over the next several years, perhaps to the $200 billion range. China can manage, as the U.S. currently represents only 15% of exports. The U.S. can manage, as Chinese imports, while significant, are immaterial to a $30-trillion economy and too small to be a systematic inflation risk, notwithstanding widespread hand-wringing to the contrary.

The 90-day pause will work out great. This is best understood by examining a specific country, Vietnam, and a specific good, footwear.

The U.S. consumes approximately 2 billion pair of shoes annually, or approximately 6 pairs of shoes per capita, of which some 1.8 billion pairs are made overseas ($21 billion in revenue) and 0.2 billion pairs ($2 billion in revenue) domestically. Some 90% of overseas production comes from 4 countries: China (1.1B pairs), Vietnam (357M), Indonesia (112M), and Cambodia (60M).

Vietnam has been hit unexpectedly hard by the tariffs, at 46%. For perspective, Vietnam GDP approximates $500 billion, of which it exports $137 billion to the U.S., especially communications equipment and footwear. Vietnam cannot afford such a monstrous hit to its export-dependent economy. Nor is Vietnam taking advantage of the United States. To the contrary, it has built the complex infrastructure, labor, and capital to produce top-quality footwear, at the demanding performance standards, cost, and health and welfare demanded by the likes of Nike and Adidas.

In anticipation, Vietnam has been in steady communication with the Trump administration, proactively promising to drop all tariffs while encouraging more U.S. purchases. It will also need to end Chinese transshipments. On April 4, Trump posted on Truth Social that he held a “very productive call” with head of state, To Lam, and was looking forward to another meeting “in the near future.”

So what will happen in footwear? Over time, production will and should move from China. Vietnam will be the major beneficiary, along with its Southeast Asian neighbors. If Nike and other importers are wise, they will announce new U.S. plants. Vietnam will eliminate all tariffs on U.S. goods and increase its auto and equipment purchases from the U.S. In exchange, Trump will sharply lower tariffs on Vietnam, hopefully to zero. Separately, U.S. shoe production will rise, and Nike will do just fine. Look for similar results across most of the 70 countries now in direct negotiations.

Finally, perhaps the best news is the return of focus to all that President Trump is accomplishing: a profoundly sane energy policy, sealing the border, re-establishing control over the administrative state, systematically identifying fraud and abuse and corruption, promoting safe elections, returning education to state and local government, eliminating DIE, abolishing USAID, withholding funds from universities. The list goes on — or, as justly said, promises made, promises kept.

There is, however, one problem that is not going away: out-of-control spending and the spiraling U.S debt. Legal challenges are thwarting every advance. It will take the Supreme Court years to sort out the ability of the president to reshape spending. In the end, Congress is the only party that can cut spending permanently to save this country. Democrats refuse to allow even the most sensible savings, and, sad to say, the current Republican Senate barely seems up to the task. Ultimately, this country needs a filibuster-proof majority to eliminate $2 trillion in annual spending and solve the entitlement crisis.

There will be dislocations due to the President Trump’s stand against China. But the reset is long overdue, vital to U.S. national security interests, and well worth the cost of a restructured relationship. Iran must give up its nuclear arsenal, by agreement or force. Taiwan remains a concern. And inevitably there will be some turbulence in the economy.

But tariffs are not an issue. Ignore the legacy media. Ignore the Democrats. Let the stock market gyrate. It will head upward over time.

I stopped reading after the fifth "IF"

Lots of wishful thinking on Trump doing the right thing.

 

[BlankaPresident]

I stopped reading after the fifth "IF"

Lots of wishful thinking on Trump doing the right thing.

TLDR: Everything done so far was shit but if we pray and wish hard enough things will be alright.

 

[Rod1]

TLDR: Everything done so far was shit but if we pray and wish hard enough things will be alright.

TLDR Trump and Congress do a shitload of stuff to reverse their decisions, maybe they will be able to salvage something and leave this self-inflicted wound in a better place than before but still worse than if Trump had decided to do nothing.

 

[Rob Battisti]

Trump's misguided trade war and military threats are reordering global economic and diplomatic relations in a way that could very well bring an end to the American led liberal order so in a sense we are seeing the world as we knew it since WWII or at least since the fall of the USSR ending in a way that doesn't look good for the US.

Bad faith minimizations like yours that the stock market "only" dipped 2% obfuscate that reality.

When people are freaking out over the stock market, I’m going to call them out when they are being overly dramatic.

 

[Islam Imamate]

When people are freaking out over the stock market, I’m going to call them out when they are being overly dramatic.

The thread is about the tariffs generally. The impact on the stock market is one obvious indicator of how misguided these policies are but even with the 90 day pause I think significant damage has been done as evidenced by deteriorating diplomatic ties with our allies and a sharp downward trend in consumer confidence in addition to the dip in the stock market that you tried to downplay.

 

[Rob Battisti]

The thread is about the tariffs generally. The impact on the stock market is one obvious indicator of how misguided these policies are but even with the 90 day pause I think significant damage has been done as evidenced by deteriorating diplomatic ties with our allies and a sharp downward trend in consumer confidence in addition to the dip in the stock market that you tried to downplay.

As I’ve said, repeatedly, my comment was clearly directed toward those who gave freaked out, sky is falling, overblown reactions.

The tariffs are misguided, dangerous, detrimental to America, short sighted, irresponsible, reprehensible and downright stupid.

They will likely lead to incredibly negative consequences to the United States and will likely empower our greatest adversary in China.

I denounce them and I denounce Trump.

A 2% dip in the stock market =/= end times.

 

[Deorum]

As I’ve said, repeatedly, my comment was clearly directed toward those who gave freaked out, sky is falling, overblown reactions.

The tariffs are misguided, dangerous, detrimental to America, short sighted, irresponsible, reprehensible and downright stupid.

They will likely lead to incredibly negative consequences to the United States and will likely empower our greatest adversary in China.

I denounce them and I denounce Trump.

A 2% dip in the stock market =/= end times.

I get what you're saying, and some of the reactions were hysterical. The more bitter aspect of all this is however, is that there is clearly no strategy or end game. It's just own goals, and when the majority of all the shit going on has to be rationalized with "it's not that bad" cope left and right, then you're in the midst of one of the worst presidential terms of all-time. It's way too much drama for little to no apparent reason.

 

[Siver!]

I get what you're saying, and some of the reactions were hysterical. The more bitter aspect of all this is however, is that there is clearly no strategy or end game. It's just own goals, and when the majority of all the shit going on has to be rationalized with "it's not that bad" cope left and right, then you're in the midst of one of the worst presidential terms of all-time. It's way too much drama for little to no apparent reason.

Well said.

It's also kinda hard to lean too far into the "it's not that bad" narrative when the alarm bells that have been ringing don't just concern the immediate future/present, but the mid-to-long term prospects too.

It's perfectly possible that come next year's World Cup, the markets will be on the up again and US tourism will be booming - but it's also very possible that it might not, at which point you have to seriously question what good is Trump doing right now?

What good is Trump bringing to the table while everyone - from Trump himself to his harshest critic - is limited to saying "wait and see".

 

[Rod1]

As I’ve said, repeatedly, my comment was clearly directed toward those who gave freaked out, sky is falling, overblown reactions.

The tariffs are misguided, dangerous, detrimental to America, short sighted, irresponsible, reprehensible and downright stupid.

They will likely lead to incredibly negative consequences to the United States and will likely empower our greatest adversary in China.

I denounce them and I denounce Trump.

A 2% dip in the stock market =/= end times.

Am i missing something? S&P 500 is down 10% and could go lower depending on how far Trump will take the trade war.

 

[nixkid]

MAGAs watching the world burn after they started the fire and not realizing they're house is going to burn down too.

 

[Rob Battisti]

Am i missing something? S&P 500 is down 10% and could go lower depending on how far Trump will take the trade war.

S&P 500 is down 6.95% from April 2nd at the time of my post, it was well than from April 2nd. Dow is the same.

Irrespective of that, the point is, people were calling it the worst collapse in history. It wasn’t. It isn’t.

It’s certainly bad. Putting it into perspective.

 

[Rob Battisti]

I get what you're saying, and some of the reactions were hysterical. The more bitter aspect of all this is however, is that there is clearly no strategy or end game. It's just own goals, and when the majority of all the shit going on has to be rationalized with "it's not that bad" cope left and right, then you're in the midst of one of the worst presidential terms of all-time. It's way too much drama for little to no apparent reason.

I agree. I was less pointing out that his actions were not that bad and more pointing out that the “dip” wasn’t tremendous.

Trump certainly is idiotic in this case. Literally shooting himself in the foot for no reason.