Trump Tariffs

Dumb as they come.....so he fits right in!

The unemployment rate since  end-Covid looks fairly muted if we pull the lens back and look at a 10 year chart.. and the weekly jobless claims data isn't showing any signs of weakness to this point ;

https://tradingeconomics.com/united-states/jobless-claims

But Let's see what happens this Thursday and Friday when we get new data points for both.  Trump is really throwing a wrench into the economy,  and company CEOs aren't going to invest when they don't have confidence what Trump will do next....  "uncertainty" is the enemy of growth... That is the problem we will have to contend with for the foreseeable future....

Yes, I'm aware of the high debt that consumers hold.. they haven't had much reason to change their behavior when they are confident with their job is my assessment.  But that's out the window now w all the uncertainty in the economy.  That is just an added layer of concern  for Consumers and our Economy ... and consumers make up 70% of the economy

I wrote earlier in another thread about the government layoffs.. what makes Trumps timing so bad on this is that he ( ideally) would want a strong private economy to absorb those layoffs.   But his Tariffs Adventure throws a wrench into CEO planning.... and his timing couldn't be any worse. 

[Quote: Originally Posted by wallstreetcappers]@Rush51  

This would mean a loss of BILLIONS in foreign investment in PPE, how long will it take for the fake tariffs to equal or be greater than the loss on those investments AND the increase in labor costs in the US, AND (a big and here) the cost to build/rebuild manufacturing in the US? How long even if they decided tomorrow to come back to the good ole USA would it take for those imaginary manufacturing plants to be in use and functioning? I have not seen reference from any of your side about the nuances and loopholes of these fake tariffs because the headlines you here in the media are NOT what the truth is about how these will work and how you get around them. Then toss in the cost to the consumer on the tariffs to our goods and products, these tariffs are such a scam waste of time they are useless noise which will go nowhere.[/Quote]

No, which is why I used the word " trying " more than once ... it is Trump's "  goal"  to bring back these auto jobs to the U.S., but the "reality"  will be much different IMO,   or very few auto jobs coming back.

You already made reference to this important point.  It is very expensive and would take years to build these auto plants.   The pain point  would have to be really high before an auto CEO would commit to such a thing, I would think... 

@ WSC ; your previous statement 

"So do you think these corps that ditched the US will just return because of tariffs ? "

My reply above is in reference to this. 

@Rush51

This is from the same guy I was referring to saying that the numbers that have been revised down may indicate the USA has already been in a recession:

While service spending has remained relatively strong, this too is beginning to falter as Americans pull back on discretionary expenditures. Notably, consumer behavior is shifting, with less spending on dining out, vacations, and other non-essential goods. Even industries traditionally seen as more resilient, such as value orientated retail, are feeling the pressure. The CEO of Dollar Tree has reported that even basic consumer staples are seeing reduced demand, signaling that financial strain is reaching across all income brackets.

You also see the issues with the real estate markets right now.  Both the residential and the commercials sectors are starting to show signs of worry.

As far as the unemployment rate chart.  I would treat it like a stock chart — zoom in and zoom back out.  Yes, it may seem fine on a 10 year.  But on a shorter timeframe some of the ups and downs show up.

But with the Sahm Rule back in late summer and the crossover of the 3 year moving average on the unemployment chart it would indicate a recession.

The crossover, for example, has preceded every recession for the past 75 years or so.

However, it is a fickle thing to know what lies ahead and hard to tell at times if we had been in a recession, of sorts, already.  So, sure the charts may have corrected a bit and maybe a recession, or at least a worse one has been staved off.

Like I always say economists and meteorologists are the only two occupations where they can be right only half the time and still keep a job.  They can be wrong night after night and still have an audience the next night anxious to hear what they have to say.

I will say this, some things have changed a bit.  For example, added manufacturing jobs ticked up for the first time in about 6 months.

Whether this is the start of some of the tariff stuff taking effect or not is hard to say at this point.  Some of this may even be some anticipatory jobs staying in the USA or coming back because of companies knowing what Trump had campaigned on, so knew what was coming.

I do not think any one of the concerns is worrisome.  I just think when you look at all of them together it could be a problem.  

On liberation day, Trump announces the largest tax increase on Americans since the 1940s.  Absurd that average family could be paying thousands of dollars more annually to provide tax cuts for billionaires.  Meanwhile stock futures plunge on fears tariffs will spark trade war against 185 countries.

Last night from Wisconsin's elections show sign of cracking from two months of Trump and Musk. It seems like it will crack even further.

@Raiders22

 The classical definition of a recession is not left to feelings,  but to 2 consecutive quarters of contraction .  And We haven't even had 1.  

But I do realize some economists like to insert their own feelings into what a recession really is.... and you correctly point out that the great majority of them should not be trusted and are wrong ( add stock analysts to that group). 

@Europa

 Highly probable.  If there was such a bet available I would bet heavily on it.

Noted earlier a statement from a guest analyst on CNN was she said "there has been 18 "special elections" in the US in trump's 2nd regime, and the Democrats have won 17 of them"

I caught only a bit of Trump’s ranting but didn’t he say that he raised /collected hundreds of billions of dollars as a result of tariffs on Chinese goods? Where do these numbers come from?……..I’ll tell you where! …They come from a particular part his anatomy !

American enterprise institute doubts Trump tariffs can revive US manufacturing.  Unlikely a significant number of factories move to US because of high costs and uncertainty.  Those that move face shortage of skilled workers.  Even if some move, the number of jobs created would be small and outnumbered by those wiped out in recession. in first term, trump tariffs lead to job losses in industries forced to pay higher costs exceeding job gains in those protected by tariffs.  Trump is undermining international trade which has historically been beneficial for the US.  Americans are better off with cheap imports, more jobs and economic growth.

@thirdperson

 doubts, could, possibly, may, if, might all words that usually start off your first sentence. It's ALL speculation after that. More propaganda from the left leaning bot. Pretty easy to go back and read all your posts to see a common theme. This is true (democratic) journalism right here folks. 

@thirdperson

 As I watch the markets contract and nations around the world plan retaliatory action I realize that there aren’t any adults in the room here. There are not competent people behind the scenes running things here. Just incompetent fascist sycophants who’s only qualification is owing everything to Trump…Worse yet 49 % put there chips behind this foolish loser! Midterms will hopefully stall this wrong turn till we can have a qualified leader with understanding of how the world turns!……..And then Trump can pay his over due debt and justice be carried out! 

Are the walls cracking ? https://www.foxnews.com/politics/senate-approves-resolution-against-trumps-canada-tariffs-hours-after-liberation-day-event

"liberation day" is now followed by "liquidation day"  

@thirdperson

Sound points, as usual.    Furthermore, I think you mentioned this before as well, but at any point, the "flip-flopper-King" may do just that, pulling the rug out from any overseas company which tries to avoid tariffs by moving to the US.

We have to understand that the prime benefit of being overseas in the first place is CHEAP LABOR!   No company will get that here!  Meaning costs WILL RISE on the items they produce!

All of the major news sites have the markets plunging as their main story. Out of curiosity, I went to Fox BS network and the main story was about how all countries were caving to Trumps bold move.……

@kcblitzkrieg

 I can only assume in liquidation you mean investors dollars! Just wait till they hit the supermarkets!….Is this part of the voters MANDATE….? Trust in President Trump ……

When Trump was elected I yanked out about 80% of my risk assets from long term retirement accounts, today I put about 20% back into risk mutual funds.

@Rush51

Yessir. That is partly true.

But there are several other factors that lead up to that negative GDP that would propose that we are already in a recession.

A lot of times recessions will be more clearly seen in hindsight or well into the midst of it.

For example, retail sales falling off, unemployment rising, income contracting, or a drop in manufacturing.  These can be some of the leading indicators.

Then those numbers would catch up and be reflected in the GDP growth numbers.

Of course, all economists and financial folks (like investors) will not agree on when it started, ended, or what its worst point was.  This is especially true for the average citizen.  Because different things affect different folks at different times and to a different degree.

That is the most popular definition.  But I would not call it the ‘classical one’.  For example, The NBER is the one that sets the ‘official’ entry and exit dates for them.  Their definition is a bit more nuanced.  They simply say it a a period over a few months where there is a significant decline in economic activity.  But they couch it by saying it is normally visible in real GDP, real income, employment, industrial production and sales.   

That is why I say at this time it is difficult to say for sure because of the various factors. But it would not be surprising to see that we are in one or about to be in one.