1st Feb 25% tariff on Mexico + Canada, 10% on China

[carmanmemoranda]

Mark Carney (former Bank of England boss, now running to be Canada's PM) was interviewed on tv last night about this. In summary, he said Canada will not be bullied into anything and if Trump thinks otherwise, he's in for a shock.

Will be interesting to see if it's all bluster, or if Canada will back down.

I think Carney might be right.

It looks a lot like trump is making it into USA v rest of world.

I don't see him winning that. Could end up with China in a much much stronger position.

 

[fillyboy]

the largest car exporter in America is BMW

Yes I know, it's good for America, creating Jobs, it's good for Germany because it's opened up a huge market, tariff free and cars exported from US to Europe are usually tariff free because of the number of European components.

 

[fillyboy]

And, for arguments sake, let's assume China set up shop in America to avoid tariffs.

Traditionally, the Chinese have set up manufacturing in Mexico for that exact purpose, to sell tariff free in the US.

 

[diy_fun_uk]

And, for arguments sake, let's assume China set up shop in America to avoid tariffs. Costs will be higher as they cannot possibly make low cost items as they do now. You may think that's a good thing but it will only mean costs rising sharply in the States, while Trump has promised to lower them.

This ties in to the wider question about what do we, as citizens and consumers, actually want? I'm referring to goods/services, their availability to us and cost.

Imagine if Starmer was adamant that providers of certain goods/services consumed by the UK were located in the UK, like they were in the good old days. Let's further imagine he had a degree of success achieving this. Would we, the UK consumer, be happy to have these goods/services located back in the UK if it meant an increase in prices, perhaps considerably so?

Not being flippant, however when you watch Dragon's Den, the pitcher will be asked 'and how much do they cost you to make?' The pitcher will reply '£25 each, they're made here in the UK.' Often the Dragon will say 'oh dear, expensive, we can get that cost down by outsourcing production, are you ok with that?' And invariably the pitcher usually (although not always) says yes.

We are hooked on cheap oversees labour that help suppliers sell their goods/services at low, sometimes very low, prices to increase profit.

 

[carmanmemoranda]

Traditionally, the Chinese have set up manufacturing in Mexico for that exact purpose, to sell tariff free in the US.

Similar to why many companies invested in UK whilst we were in the EU.

Not so easy to attract now.

Make it harder to sell in USA and it will affect price and availability for the very people he is promising lower prices

 

[diy_fun_uk]

I think Carney might be right.

It looks a lot like trump is making it into USA v rest of world.

I don't see him winning that. Could end up with China in a much much stronger position.

Isolationism.

 

[carmanmemoranda]

This ties in to the wider question about what do we, as citizens and consumers, actually want? I'm referring to goods/services, their availability to us and cost.

Imagine if Starmer was adamant that providers of certain goods/services consumed by the UK were located in the UK, like they were in the good old days. Let's further imagine he had a degree of success achieving this. Would we, the UK consumer, be happy to have these goods/services located back in the UK if it meant an increase in prices, perhaps considerably so?

Not being flippant, however when you watch Dragon's Den, the pitcher will be asked 'and how much do they cost you to make?' The pitcher will reply '£25 each, they're made here in the UK.' Often the Dragon will say 'oh dear, expensive, we can get that cost down by outsourcing production, are you ok with that?' And invariably the pitcher usually (although not always) says yes.

We are hooked on cheap oversees labour that help suppliers sell their goods/services at low, sometimes very low, prices to increase profit.

We've been forced into downward price spirals.

And the less we earn the less we can afford and on it goes.

Personally I would often pay a bit more for Uk or even EU made products, but don't get that choice.

 

[denso13]

Traditionally, the Chinese have set up manufacturing in Mexico for that exact purpose, to sell tariff free in the US.

Mexico is cheaper than the USA as far as manufacturing costs go.

If he had said that he'd bring back manufacturing to the States but they will have to pay more for the privilege, then the voters might have said ok.

Imposing tariffs and promising lower costs means he hasn't a clue what he is talking about. It's headline making, nothing more.

 

[carmanmemoranda]

Mexico is cheaper than the USA as far as manufacturing costs go.

If he had said that he'd bring back manufacturing to the States but they will have to pay more for the privilege, then the voters might have said ok.

Imposing tariffs and promising lower costs means he hasn't a clue what he is talking about. It's headline making, nothing more.

And lots fall for it, including on here

 

[MNW67]

Reading this article on Sky News has made me think that Trump might not actually be after anything other than the obvious. Apparently, he just hates trade deficits. It is quite sweet really, because it is how I used to think about economics when I was a child. Last time as President, he put tariffs on China which reduced the trade deficit with China. But I hadn't realised that this simply meant that the trade deficit with Mexico ballooned to compensate. A bit like whack-a-mole. Somebody famous said something about repeating the same mistake and expecting different results.

Trump's changed tack to focus tariffs on Mexico and Canada - why?

Placing blocks on Chinese trade had been Donald Trump's main trade focus in his first presidential term - but there's been a change in his approach.

news.sky.com

Seven Years Of Trump-Biden Tariffs On China. Deficit Still $1 Trillion

One of the reasons former President Donald Trump started a trade war with China was to reduce the U.S. trade deficit with the world.

www.forbes.com

 

[Vinty]

Wasn't it Henry Kissinger who said, that the only thing more dangerous than being America's enemy was being America's ally.
75% of Canadian exports go to America compared to 17% of American exports to Canada.

 

[Vinty]

Time for the world to reassess it relationship with America.
Vast majority of the world's population isn't American, maybe business should look elsewhere to do business.

 

[fillyboy]

Time for the world to reassess it relationship with America.
Vast majority of the world's population isn't American, maybe business should look elsewhere to do business.

Crack on lad, stop the export of hurling bats, you'll cripple America in no time.

 

[carmanmemoranda]

Time for the world to reassess it relationship with America.
Vast majority of the world's population isn't American, maybe business should look elsewhere to do business.

Playing straight into chinas hands whilst pretending he is doing the opposite

 

[Vinty]

stop the export of hurling bats

They are all made in China these days.