The administration has signaled that they expect to negotiate acceptable balance-of-trade deals with the US's Asian allies over the next few weeks. If that happens, I can see businesses being certain enough to make investments. Until then I'm bracing for a recession too.
The EU is very slooow to act. It might happen during the next administration but only if each 27 of them are convinced it's a good idea. Like the 2% fot NATO which now is insufficient. How about 5%, since Russia is prepared for war and we have China to worry about.
I feel like you're arguing against something I didn't say. I agree there's a good chance the president will make up new tariffs or fail to negotiate some of the current ones. If that happens then trade deals with Asian allies won't reassure anyone. That's why I'm still preparing for a recession.
I don’t get this take. We already negotiated trade agreements. That’s what got ripped up with all this tariff nonsense. Why would anyone expect the US to respect the next negotiation? The damage here was reputational. That can only be repaired with time. It can’t be negotiated.
It's easy for us on the Internet to talk about how untrustworthy the US is and how little a negotiation means. It's a lot harder for trade authorities in a country to tell all their US exporters "hey, the Americans are being obnoxious, so your business is probably going to fail and we're not gonna do much about it". If you asked me to negotiate with the US in this situation, I absolutely would refuse, but that doesn't seem to be what's happening in practice.
You'll definitely be hit one way or another. The question is whether businesses can predict what their tariff hit will look like next year and plan around it, or can't and need to hold onto their cash until they know which investments are or aren't worth it.
The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs. Money collected on tariffs would be redistributed in the form of tax cuts.
The end goal would be 0% corporate and income taxes, funded with high tariffs. Over time the US re-industrializes.
> The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs.
Building a factory is a 3-5 year task, with a decade-long payback time. And at any point, tariffs can be removed, making all that investment futile.
And even then, there's no guarantee that the factory is going to help people. If it's a lights-out facility staffed with robots, then it'll just be producing more expensive goods, with all the profits staying in its owners' pockets.
Who would trust the US after this? Why would a company build a factory in a lawless state run by a moron like this who thinks blanket tariffs work and could replace taxes?
> The idea would be that different parts of the supply chain would build factories in the US to avoid tariffs.
Right, because the US doesn't have diamonds, vanilla, coffee beans or the many other things it needs? How do you avoid tariffs like this?
The US still needs fish from the penguins. What's the plan? To tell penguins to stop fishing and come to the US and work in factories?
> The end goal would be 0% corporate and income taxes, funded with high tariffs.
Well you have that right. When there's 0% of the people working no 1 will be paying corporate and income tax. It'll just crash.
> Over time the US re-industrializes.
Like it's gone? You do know the US is the 2nd largest global manufacturer right? That is even today. So do we need to blow that up 1st in order to re-industrialize?
