2024 US Election: Page 53 - The Arsenal discussion forum and community: One More in the Tolly

2024 US Election

JazzG

These things can backfire, Chip sanctions on China for example haven't worked. They've managed to source them through Singapore and things like Deepseek have blown a hole in the American tech sector in recent weeks. Clever Countries find a way, they will also start diversifying their supply chains and unlikely alliances get formed.

I can kind of rationalise why he wants to go after Mexico, a lot of drugs and trafficking happens through into the US from there so maybe to get them more serious about that. The Canada one I need to read into, I'm not too familiar what the reasons are there.

I don't think he'll follow this through all the way, it will be short term a deal will be done and then move on.

Mirth

JazzG the whole premise is based on an assumption that trade deficits are bad. An entry level economic course would tell you that isn’t necessarily the case - certainly not when you’re the United States.

Claudius

Mirth exactly. the man said “America First”. We need to believe him when he spouts nonsense.

Kel Varnsen

Mirth

Large trade deficits are in some ways bad for the us. Two main reasons are home manufacturing and increasing us debt.

Burnwinter

Gazza M Unpredictable and untrustable behaviour along with brinkmanship will do huge damage to all international relationships to which the United States isn't entirely indispensable.

People aren't gonna look at Trump ordering the US out of the WHO and think "Oh wow, there's a great country that we definitely want to structure our multilateral diplomacy around". In short, this kinda nonsense seems guaranteed to hasten the rise of a multipolar world in which China-centric arrangements are frequently preferable to US-centric ones.

I'd be surprised if there weren't a few more serious candidates for de-dollarisation before 2028.

awooga83

Burnwinter yep he's not some genius he applies these ridiculous strategies because he's used to doing it in business but in a geopolitical world they are much more risky. The AI sector as it is has far too much hype and froth but that's been the nature of US over the last 10 years. Lots of "this is the future" and emotive reactions. Put a variable like trump in and there will be more volatility.

Gazza M

Trudeau and sheinbaum are launching joint effort in retaliatory tariffs, much of which is targeting red states specifically. it's about time people called this buffoons bluffs. the senators and representatives of those red states will be bricking it at how rapidly this situation is deteriorating. making his red state base turn on him is a good chess move from Canada and Mexico.

old mates response btw:

Claudius

I wonder how he plans to pin the inflation that emanates from this trade war on niggers, I mean DEI.

Kel Varnsen

Tariffs are more complicated than that. Trump tariffs in 2018 were for example not inflationary. Importers absorbed almost all of the costs. These are larger tariffs, but their effects on prices for consumers are unpredictable.

However, reduced profits for importers should lead to lower growth in wages for many sectors.

Some tariffs are probably smart, but they need to be targeted. These blanket tariffs, even on products the us don' t make, seem idiotic.

Claudius

Kel Varnsen that's my sense as well Kel. If you want to target growth in industry X, you can use tariffs as a part of a recipe for growing that industry domestically. and you keep the rest of the economy running as it was.
what concerns me about this approach is that you can't simultaneously expect all industries to drive import substitution. so there are some industries where due to supply chain, capital or other constraints, it will be impossible to pivot, and that cost will eventually go to consumers. and for a lot of fast-moving goods, a portion of this tariff should already be passed onto consumers within weeks

Mirth

Kel Varnsen I agree, although I would say that the impact of tariffs aren't economics pseudo science. The impact is very real and well documented for centuries all the way from the times of Imperial Preference and beyond.

There's no reality in which this creates any net winners. You're right that occasionally tariffs can be used to protect, say, a nascent industry for longer term benefits or a voting bloc but the cost is still borne by others in the economy in return.

And imposing blanket tariffs while also using it to threatening allies (that supply your food and energy needs) into giving up their sovereignty is open hostility.

Ultimately this isn't about good economic policy so there's no point about trying to find it. It's about power and control and the belief that the United States can bleed longer than just about any other country on earth. Trump's (probably correctly) surmised that most of his Western partners and their populations are uncomfortable with making difficult decisions or facing hardship and will drive them to the negotiating table.

Coming soon to Europe.

Kel Varnsen

At the same time, the US economy has some long term problems. Its recent "massive growth" compared with the eu, for example, seems to be entirely funded by increasing debt - to a large extent possible through trade deficits and the role of the dollar. However, this creates incentives for a growing debt, which will become very problematic at some point.

https://www.imf.org/external/datamapper/GG_DEBT_GDP@GDD/FRA/DEU/GBR/USA/AUS/NLD/NOR/SWE/CHE

https://www.imf.org/external/datamapper/NGDPDPC@WEO/USA/GBR/EU

Burnwinter

Listened to the "Ones and Tooze" episode on "Trump's first week" today while doing a massive amount of gardening (we left our place in Darwin mostly empty during wet season, and stuff grows damn fast here ...).

Tooze and his mate are certainly convinced these tariff wars along with the global uncertainty they create will push the dollar up, and thereby increase the cost of exported US goods, leaving aside any domestic inflationary effects (or otherwise).

Gazza M

and apparently musky de boer has infiltrated and taken control of payment systems at the treasury. I think the US is now officially out of checks and balances

Claudius

Gazza M insane how democrats have allowed this guy to move. This is one of the most closely guarded platforms, with restricted access. Just give it to musk.

Musk also called Boeing in to explain costs on their government contracts. This a guy who runs a competitor. Folks calling PGMOL corrupt need only look here for proper corruption. In broad daylight too.

Burnwinter

Gazza M and apparently musky de boer has infiltrated and taken control of payment systems at the treasury.

Is this being reported in a real media outlet? I've seen a couple of very dodgy write-ups flying round on social media.

Gazza M

Claudius you don't get it bro. it's all out in the open now bro. it all used to happen behind closed doors bro. they're real people that go on podcasts and shoot the shit for 2 hours bro.

Gazza M

NYT and AP both reporting the same story citing separate anon sources

https://www.nytimes.com/2025/02/01/us/politics/elon-musk-doge-federal-payments-system.html

Burnwinter

Gazza M Thanks for this.

De-paywalled version of the NYT article about Musk and DOGE getting into the Treasury IT setup here:

https://archive.md/rW4yX

Have to say given how the tech sphere lobbies the US federal administration, and given how uninhibited Musk is about bullying regulators, I'd be a bit concerned about this if I were running Alphabet or Meta.

That said, I also wouldn't be surprised if Musk were able to score a massive PR win by swiftly locating $500bn or so in Treasury funds that actually are being shamelessly wasted on rent-seeking embedded corporate partners, because the Pentagon is justly famous for doing exactly that.

Gazza M

seems like an accelerationist attempt at winding back all post-WW2 American hegemony and historic relationships, with trump and co as the arbiters and auctioneers. friends becoming enemies, enemies becoming friends etc. alot of bystanders are going to get wrecked in the process

Burnwinter

Gazza M seems like an accelerationist attempt at winding back all post-WW2 American hegemony and historic relationships, with trump and co as the arbiters and auctioneers.

Not really, because the United States certainly isn't doing this from the position of being the unquestioned centre of world economic and military power. Any allies it dispenses with it can't guarantee will be automatically replaced.

It does however look like the current administration aspires to convert Canada and Mexico into a post-USSR style "sphere of influence" as opposed to diplomatic and economic partners—and possibly the post-Brexit UK with them.

Mirth

Burnwinter It does however look like the current administration aspires to convert Canada and Mexico into a post-USSR style "sphere of influence" as opposed to diplomatic and economic partners—and possibly the post-Brexit UK with them.

And of course, the chaos of the post Soviet state made some people very, very rich.

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