Subject: Re: Berkshire and Tariffs
Ray, how do you see the tariff “war” playing out? What is the endgame here?

For as long as I remember, ever since at least 50 years, US sugar prices have been hovering at around twice the level of world prices. (That's why so many products have the abominable HFCS instead of real sugar.) Somehow nobody seems to care about that. What is going on here is the abrupt change. Change upsets the balance that everybody is accustomed to.

Quite quickly things will settle down, now that the US has the attention of the rest of the world. It's the story about how you get the attention of a mule. If the tariffs announced this morning stay as published, in a few weeks or a couple of months everybody will have adjusted and accommodated to them. Things will shake up then settle down.
My best guess is that we will settle down with have lower tariffs in most cases.


IMHO the endgame is just what has been stated: stopping the asymmetric tariffs where other countries put a grossly high tariffs on US goods but the US has a low or no tariff on goods from them.

The insane circumstance where we import damn near everything from China. They are an adversary; why in the world are we dependent on them for products and necessary raw materials?
Britain learned in WW2 what happens when you are dependent on critical goods from another country across the ocean.


I read a couple of articles early this morning before I headed to the store, let's see if I can find them a few hours later.

Here's a sampling:

1) Look at the table*. Every single country that got hit with "reciprocal" tariffs still taxes us as much or more than we tax them, sometimes a lot more. The new tariffs will make our products more competitive at home and thereby increase domestic production while lowering the balance of payments deficit. Manufacturing (ie, jobs) outsourced overseas will return to the homeland.

* The offcial gov't site must be getting hammered, it won't load. Here is a news link, scroll down to the table. https://www.newsweek.com/trump...
edit: maybe this: https://voxday.net/wp-content/...

Seeing as the US tariff is just HALF of what a country places on us, I don't see why people are going nuts.


2) The response from the EU is exactly what we would expect to see from the end of the 80-year-old Marshal Plan.
EU Commission President Ursula von der Leyden has three big concerns with the new trade/tariff reset.
•The EU will not be able to compete for U.S. market share with 20% general tariffs and 25% auto tariffs.
•The EU must deploy countermeasures against the risk of losing industrial capacity and manufacturing to the United States.
•The EU must defend itself against China dumping cheap products into the EU now rejected by the USA.

Von der Leyen is concerned mostly about the extremely valuable U.S. consumer being leveraged by President Trump, essentially blocking exploitation from EU and Asia. The EU will not tolerate losing access to the most valuable customers in the world, Americans.

3) US is the largest international market. If the rest of the world wants to sell to this major market (they do!) they will do whatever they need to. The US is the elephant in the room, everybody else has to work around that fact. After all, there is no reason that other countries MUST sell to the US. They can always decline to export goods the the USA.