Comment by ggm
8 days ago
So my pessimism they can't "heal" this in time is the weak bit, if there are multiple levers they can tweak leading into the midterms to say "it's morning in america"
I say pessimism but in case it's not clear I'd prefer a democrat victory, both in the immediate past and in the coming midterms.
The reason for my "optimism" is that it's just as easy for him to undo this as doing it in the first place. If he keeps them in place as constructed for more than say, 3 months, without shooting them through with loopholes, then he might have a real unfixable problem on his hands, as businesses start to seriously reorient themselves. However, if over the next 3 months or so, he starts tactically peeling them back or being very "generous" with exemptions, the net economic impact could be relatively small, and maybe even moderately positive (depending on the details).
Fwiw I'd prefer the republicans win again, so my optimism is actual (not that I don't have substantial criticisms of the current admin's policies). However, it is refreshing to have a content-focused exchange on the internet about politics, so h/t to you :)
What I don't understand with your argument is, how do you account for the loss of trust of your trading partners? Even if the WH responds and tweaks the tariffs there is no hiding the fact that they have damaged trust in the US as a trading partner. I mean just look at what is happening in most western countries already, there a serious reorienting away from partnership with the US. Also consider that the US is primarily a service export economy and that it's generally much easier to divest from services than manufactured goods, I suspect the moves will have caused serious and long lasting damage to US companies.
The loss of trust issue is the one I worry about most. However, it's also true that the key players who we've implemented tariffs against have had them against us for years, and we've simply absorbed that.
I don't like the mechanism he chose to implement them, or the sharpness with which they were imposed, but I do think implementing actual proper reciprocal tariffs phased in over a reasonable period of time was a good idea. And I agree with you re: the service/goods issue. Them excluding services in their trade deficit calculation is by far the dumbest part of this plan.
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Eh, this worries me less. I mean ideally yes trade signatures have value but we all know the reality here is that strong nations don't feel bound by international law.
I don't think "reputational harm" exists in international relations. I do think the terms of future bilateral negotiations may be less favourable to the US for a while but if they are too iniquitous they won't get ratified in Congress.
Maybe some significant 20+ year investment choices redirect. Some future 56th president will complain 47 laid the seed of this disadvantage. In every other respect after the noisy bit is over people do what they do.