Post New

Apple, NVDA, QQQ should bounce at the Monday open.

"Electronics imported to the United States will be exempt from President Donald Trump’s reciprocal tariffs, according to a US Customs and Border Protection notice posted late Friday."

https://content.govdelivery.com/bulletins/gd/USDHS...

CSMS # 64724565 - UPDATED GUIDANCE – Reciprocal Tariff Exclusion for Specified Products; April 5, 2025 Effective Date

https://content.govdelivery.com/bulletins/gd/USDHS...

Chapter 3: "The Art of the Deal" - Donald J. Trump

Think Big: Aim high to achieve big results.

Maximize Options: Keep flexibility in negotiations.

Protect the Downside: Always have a plan to limit risks.

"Smartphones, laptop computers, memory chips and other electronics will be exempt from President Trump’s sweeping tariffs on China, according to new guidance from the administration, in another step back that could ease some consumer concerns about an immediate spike in costs for electronic products.

The guidance, published Friday night by the U.S. Customs and Border Protection, also exempts machines used to create semiconductors, flat screen TVs, tablets and desktop computers from Trump’s 125% China tariff and his 10% baseline tariff on countries around the world."

https://www.wsj.com/tech/trump-exempts-smartphones...

Trump to China: "OK, I've compromised. Now it's your turn."

Will it work? We'll see.

It's interesting that the guidance exempts machines used to create these electronics. I've been saying for a while that even the factories that make the machines we would need to in an iPhone factory come from China. Putting a tariff on that industrial equipment at the same time claiming we can make all these things domestically was never believable. Experts say a made in US iphone would cost 2x-3x what it does now. I can still see an argument for a small strategic iPhone factory in the US selling iPhones directly to the government that could also fill a technology gap should we ever go to war with China.

But I'm quite sure I would not call this a compromise, more than I'd take it as confirmation of what everyone has been saying all along. That China can stand way more tariff pain than the US is willing to inflict on its population.

That China can stand way more tariff pain than the US is willing to inflict on its population.

Though probably true, let's hope it doesn't get tested.

The US is definitely a manufacturing powerhouse, second biggest in the world. (though just so efficient that it's accomplished with only 8% of the workforce). Germany, Japan, and South Korea are all famously huge too. But China's manufacturing output is more than the sum of those four combined.

Pressuring other countries is not good form, but if you really wanted to do it, tariffs are not the way. That's better accomplished with export restrictions. I suspect that China could shut the US economy down by banning the export of only (say) 20 products, and I think it wouldn't even violate WTO rules. The CCP wouldn't really care much about the impact on the local manufacturing companies. It would certainly make enemies, of course, so (again) I hope this sort of thing is never tested.

Jim

The "Art of the Deal"/"The Art of War"

“He who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain” - Sun Tzu

Trump is a big fan of Sun Tzu (has quoted him often in his books and social media). I asked Grok(Elon's X AI)about the influence Sun Tzu has had on Donald J. Trump.

How could Trump's recent implementation of tariffs be related to the use of Sun Tzu "The Art of War" principles?

Below is how Grok responded:

"Donald J. Trump’s recent implementation of tariffs, particularly in early 2025, can be analyzed through the lens of Sun Tzu’s The Art of War principles, as his approach to trade policy often mirrors the strategic deception, adaptability, and psychological leverage emphasized in the text.

Below, I explore how Trump’s tariff strategy aligns with specific Sun Tzu principles, drawing on his documented references to the book (e.g., X posts from 2012–2014, Trump 101, and Think Like a Champion) and recent tariff actions, while critically assessing the depth of this connection. I’ll focus on tariffs announced in April 2025, including the 10% universal tariff (paused for 90 days except for China at 145%), as well as steel, aluminum, and auto tariffs, and avoid speculative claims.

1. Deception and Unpredictability
Sun Tzu Principle: “All warfare is based on deception. Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive” (Chapter 1). Trump quoted a related idea in 2012: “The supreme art of war is to subdue the enemy without fighting.”

Tariff Application: Trump’s tariff announcements and reversals create confusion and keep trading partners off-balance. On April 2, 2025, he declared a 10% tariff on all countries, escalating to higher rates for some, only to pause most tariffs (except China’s) for 90 days by April 9 after market volatility. This rapid shift mirrors Sun Tzu’s tactic of appearing aggressive then retreating to sow uncertainty. Posts on X suggest Trump uses tariffs as a “classic Art of the Deal strategy” to gain leverage by projecting strength, then negotiating from an unpredictable position. For example, announcing high tariffs (e.g., 145% on China) signals resolve, but the pause invites negotiations, making opponents unsure of his next move.

Analysis: This aligns with Sun Tzu’s emphasis on psychological disruption. By oscillating between threats and concessions, Trump forces countries like Canada, Mexico, and the EU to reassess strategies, potentially weakening their resolve. However, the market turmoil (e.g., stock plunges reported on April 4) suggests a risk Sun Tzu warns against: overextending resources or losing control of the narrative.

2. Winning Without Fighting
Sun Tzu Principle: “The supreme art of war is to subdue the enemy without fighting” (Chapter 3), a quote Trump shared on X in July 2012. Success lies in achieving goals through intimidation or diplomacy rather than prolonged conflict.

Tariff Application: Trump’s tariffs appear designed to pressure trading partners into concessions without a full-scale trade war. The April 9 pause on reciprocal tariffs (except for China) was framed as a negotiation window, with advisors like Scott Bessent noting Trump’s desire for “bespoke” deals. This echoes Trump’s 2012–2014 X posts praising Sun Tzu’s avoidance of prolonged warfare, as seen in his comment: “There is no instance of a nation benefitting from prolonged warfare.” By threatening high tariffs (e.g., 25% on autos, 145% on China), Trump aims to extract trade agreements or market access (e.g., his demand for the EU to buy $350 billion in U.S. energy) without sustained economic damage.

Analysis: This strategy partially reflects Sun Tzu’s ideal of victory through coercion. The pause suggests Trump recognizes the cost of prolonged trade conflict, aligning with Sun Tzu’s resource conservation. However, China’s retaliation (e.g., higher tariffs on U.S. exports) and the EU’s 25% counter-tariffs indicate limits to this approach, as opponents may not yield as Sun Tzu’s weaker foes might. Trump’s focus on China, isolating it while easing pressure on allies, shows selective targeting akin to Sun Tzu’s advice to divide enemies.

3. Exploiting Weaknesses
Sun Tzu Principle: “Attack where they are unprepared, go where they do not expect” (Chapter 6). Trump’s 2012–2014 X posts, like “Invincibility lies in the defence; the possibility of victory in the attack,” suggest balancing strength with opportunistic strikes.

Tariff Application: Trump’s tariffs target perceived vulnerabilities, such as China’s reliance on U.S. markets and allies’ dependence on trade stability. The 145% tariff on China exploits its economic slowdown and export-driven model, aiming to force concessions on issues like intellectual property or fentanyl. Meanwhile, tariffs on steel, aluminum (expanded February 2025), and autos (25% from April 3) hit industries where countries like Japan and Germany have exposure, pressuring them to negotiate. X posts from April 2025 (e.g., @Garcia1968Crown
) claim Trump uses Sun Tzu to counter China’s currency manipulation, suggesting tariffs as a precise strike at economic leverage points.

Analysis: This aligns with Sun Tzu’s focus on exploiting gaps. Trump’s selective exemptions (e.g., USMCA goods at 0% for Canada and Mexico) show calculated targeting to avoid alienating key allies unnecessarily, reflecting Sun Tzu’s advice to preserve alliances. However, global retaliation (e.g., Japan’s “national crisis” response) suggests Trump may misjudge opponents’ resilience, risking Sun Tzu’s warning against underestimating enemies.

4. Psychological Warfare
Sun Tzu Principle: “The leader is the arbiter of the people’s fate, the man on whom it depends whether the nation shall be in peace or in peril” (Chapter 1). Sun Tzu stresses morale and perception, intimidating opponents to sap their will.

Tariff Application: Trump’s public rhetoric amplifies tariff threats to project dominance. On April 8, 2025, he insisted tariffs were “medicine” for the economy, and his ALL-CAPS X posts (“THIS IS A GREAT TIME TO BUY”) aimed to calm markets while maintaining an aggressive stance. This mirrors his 2010 Think Like a Champion praise for Sun Tzu’s strategic clarity over Machiavelli’s power obsession, suggesting he values psychological control. The White House’s April 10 statement, “Do not retaliate and you will be rewarded,” directly pressures allies to comply, aiming to demoralize resistance.

Analysis: Trump’s bombast reflects Sun Tzu’s psychological tactics, using fear of economic pain to coerce compliance. His reversals (e.g., pausing tariffs after market “yippiness”) show adaptability, as Sun Tzu advises adjusting to shifting conditions. Yet, Sun Tzu cautions against alienating allies, and Trump’s broad initial tariffs (hitting Poland, Japan, etc.) risked unifying opposition, partially corrected by the pause.

5. Adaptability and Strategic Positioning
Sun Tzu Principle: “He who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain” (Chapter 6). Flexibility is key to maintaining advantage.

Tariff Application: Trump’s tariff rollout shows tactical shifts based on feedback. After markets crashed (April 4–9, 2025), he lowered duties to 10% for 90 days (except China), responding to economic signals while keeping pressure on Beijing. His February 2025 steel and aluminum tariff expansions and April auto tariffs show staged escalation, positioning the U.S. as a dominant negotiator. In Trump 101, he recommended The Art of War for managerial adaptability, and his 2025 actions suggest he adjusts to avoid overcommitment, as seen in exemptions for semiconductors and pharmaceuticals to protect U.S. supply chains.

Analysis: This reflects Sun Tzu’s call for fluid strategy. Trump’s pause aligns with “retreating to advance later,” preserving leverage for talks. However, Sun Tzu emphasizes knowing the terrain, and Trump’s initial miscalculation of market sensitivity (e.g., $800 billion import drop projected) suggests incomplete preparation, risking Sun Tzu’s warning of losses from hasty moves.

Critical Assessment
Depth of Influence: Trump’s tariff strategy loosely mirrors Sun Tzu’s principles, particularly deception, coercion, and adaptability, as seen in his quoted maxims and books. His unpredictable tariff reversals and targeted pressure on China echo Sun Tzu’s tactical flexibility and focus on weak points. However, the influence may be more stylistic than doctrinal. The Art of War was a trendy business text in the 1980s–2000s, and Trump’s references (mostly famous quotes) suggest he draws on its reputation to frame his “Art of the Deal” instincts rather than a deep study. His chaotic execution (e.g., market volatility) sometimes deviates from Sun Tzu’s disciplined planning.

Risks and Divergences: Sun Tzu warns against prolonged conflict and alienating allies, yet Trump’s tariffs sparked global retaliation (China, EU, Japan) and economic fears (e.g., JPMorgan’s 60% recession odds). His broad initial tariffs ignored Sun Tzu’s precision, though the pause corrected this somewhat. Unlike Sun Tzu’s emphasis on spies and intelligence, Trump’s team (e.g., Navarro, Lutnick) lacks the robust analysis China employs, as noted in 2018 critiques.

Alternative Influences: Trump’s tariffs also reflect domestic political goals (e.g., boosting manufacturing) and his dealmaking ethos, not just Sun Tzu. Advisors like Peter Navarro and his own Art of the Deal focus on bold leverage, which overlaps with but isn’t exclusive to Sun Tzu. X posts comparing “Art of War vs. Art of the Deal” (@princeofnew
, April 2025) highlight this blend of quiet strategy and loud transaction.

Recent Context and Sources

Trump’s 2025 tariffs, per reports (e.g., Reuters, April 9; Tax Foundation, April 11), aim to reduce trade deficits and protect U.S. industries, raising $1.2 trillion over a decade but costing households $1,300 annually. The pause on April 9, after China’s counter-tariffs and market drops, suggests responsiveness to Sun Tzu’s adaptability but also a reactive stance, unlike Sun Tzu’s proactive foresight. X sentiment (e.g., @WiseEyedEagle, April 2025) views tariffs as isolating China per Sun Tzu’s “break alliances,” though global unity against the U.S. (e.g., EU’s response) complicates this.
Conclusion

Trump’s tariffs reflect Sun Tzu’s The Art of War in their use of deception (unpredictable announcements), psychological pressure (threats to coerce deals), and adaptability (pausing tariffs). His prior references to Sun Tzu frame these as deliberate, but the influence is likely intuitive, filtered through his dealmaking lens. Missteps, like market chaos and global pushback, deviate from Sun Tzu’s precision and restraint, suggesting a partial application. For deeper insight, I could analyze a specific tariff (e.g., China’s 145%) or compare with his 2018 trade war. What angle interests you most?"


Perhaps there is a method to Trump's madness, or this artificial stupidity?

Trump to China: "OK, I've compromised. Now it's your turn."

Will it work? We'll see.

It might work. But this type of negotiation tactic is generally ineffective and often backfires. Trump has made several bold opening moves, but then quickly backed down--at least partially--without gaining any concessions in return. Sending unclear signals is a poor negotiating tactic. It also isn't clear what China (or any countries') concessions need to be. For example, tariffs on Canada are linked to fentanyl smuggling. So what specifically does Canada need to do in regards to fentanyl to get the tariffs lifted? It isn't clear, we haven't heard. And since other countries not linked to fentanyl also got hit with tariffs, a reasonable person would conclude tariffs don't have anything to do with fentanyl. The rates and exemptions seem to be changing weekly. Different administration officials are taking different negotiating positions. If we don't send clear signals what our position is, the other parties can't counter.

Another similar bad negotiating form is breaking trust. Once you break trust you can never really get it back. Saying untrue things like "the EU was designed to screw the US" will not improve Trump's position.

Professional negotiators seldom if ever start off with a big opener. It is called anchoring, and it makes it hard to move off of that position without losing face. Along those lines, a big opener can be seen as a threat or bullying. People don't like to be bullied and that often ends negotiations. In fact, China already said they won't be bullied, so it is unlikely we'll see anything fruitful in that regard for a while.

Another key to successful negotiations is keeping your emotions out of it. Trump said his recent tariff hikes on China were because he felt disrespected. That means he's being controlled by his emotions and not focused on getting to the outcome.

A great movie depicting high level negotiations is "Bridge of Spies" starring Tom Hanks. It is a true story. Hanks plays James Donovan, an American trying to negotiate the return of pilot Gary Powers from the Russians and a innocent American student swept up by the East Germans in exchange for a Russia spy. The Russians and East Germans don't want to work with each other, and definitely don't like Americans, and they make things exceptionally difficult for Donovan. But throughout he stays on message "your one guy for our two guys" and patiently keeps emphasizing that it is in all sides best interests to come to an agreement. Eventually, everyone agrees.

...."the art of the deal. He is the worst negotiator. China never bought anything. They took him the cleaner. North Korea never agreed to anything. He negotiated a trade deal with Canada, Mexico, and then he just blew blew it up.

He is not a good negotiator. When you claim, you're a good negotiator, it's to cover up the fact that you're a horrible negotiator. ...He's going to say ... I got this deal, and then he's going to try to calm the markets down. But the fact is the damage to America. Nobody will ever trust us. In eight weeks, he's destroyed eighty years of reputation that America built, all of us collectively, all through all the battles, he has destroyed in the end"

---Rahm Emmanuel, former White House chief of staff, diplomat and mayor.

Given that this is the BRK board, who would you rather have as a "businessman U.S. president", Donald Trump or Warren Buffett at age 78 (Trump's age)?

If not WB, I would prefer Mike Bloomberg, but c'est la vie.

I wonder what the results would be if Xi, rather than saying the drop in tariffs on electronics was a step in the right direction, applied an "export tax" in the amount of the targeted reduced tariffs of the same percentage, maintaining the post-tariff pain to the consumer. (If nothing else, it would point out that tariff taxews aree not collected by the manufacturing country). If, in fact, the tariffs are designed finance the continuation of the income tax reductions, one wonders what percentage of the pile is reduced by the removal of the tariff revenue of these reletively expensive items.

Jeff

Howard Lutnick, U.S. Secretary of Commerce, has effectively responded to the OP's speculation about what will happen at Monday's open:

https://www.ft.com/content/9038804f-cf69-4193-9332...
"... speaking on ABC’s This Week on Sunday, Lutnick said products such as smartphones, laptops and wireless earphones that were offered a reprieve on Friday would be re-examined as part of a government probe into semiconductors, that could result in tariffs. 
“What he’s doing is he’s saying they’re exempt from the reciprocal tariffs,” Lutnick said, referring to President Donald Trump. “But they’re included in the semiconductor tariffs, which are coming in probably a month or two.” “Correct. That’s right . . . We need our medicines and we need semiconductors and our electronics to be built in America.”

Maybe Tim Apple needs to chat with Lutnick about Apple's planned $500billion investment in the U.S. over the next four years
https://www.apple.com/newsroom/2025/02/apple-will-...
Presumably plans are just that, i.e. something that can change when the situation changes.

On "Face the Nation" this morning, it was stated (right or wrong) that the electronics exempted from the tariffs constituted about a third of our trade deficit.

Jeff

I suspect that China could shut the US economy down by banning the export of only (say) 20 products,

Yes. Yes! YES!!! That's why the US needs to wean itself from such a large dependence on China. These was a recent news article that said some of the crucial materials for the latest US fighter jets come from China.

https://bulgarianmilitary.com/2025/04/11/us-scramb... and https://www.rand.org/pubs/articles/2023/the-time-t...
"All of which makes China's near-total domination of the rare earth market a matter of economic and national security concern."

How insane is it for a country to intensely depend on an adversary(ish) country for some necessary good? If you recall, Germany laughed at Trump 45 when he said they should not depend on Russia for natural gas. Look what happened.

How could Trump's recent implementation of tariffs be related to the use of Sun Tzu "The Art of War" principles?

Below is how Grok responded:...

From another site, Grok was posed a related question:
To Grok:
Please briefly explain the art of the deal for [people] who still don't understand how Trump operates even after decades of him using the same strategy for everything. Be concise.

Output:
"The Art of the Deal" is Donald Trump's negotiating strategy that he has used consistently for decades. Here are the key elements:
1. Start with an extreme position to create room for compromise.
2. Use attention-grabbing statements to control the narrative and put the other side on the defensive.
3. Create a sense of urgency to pressure the other side into making concessions.
4. Keep the other side guessing about your true intentions and bottom line.
5. Be willing to walk away if the deal doesn't meet your standards.

How insane is it for a country to intensely depend on an adversary(ish) country for some necessary good?

Yes, well most of the world is catching on to this vis a vis the USA.

IP

"I suspect that China could shut the US economy down by banning the export of only (say) 20 products" - Mungofitch

"Yes. Yes! YES!!! That's why the US needs to wean itself from such a large dependence on China. These was a recent news article that said some of the crucial materials for the latest US fighter jets come from China.

https://bulgarianmilitary.com/2025/04/11/us-scramb... and https://www.rand.org/pubs/articles/2023/the-time-t...
"All of which makes China's near-total domination of the rare earth market a matter of economic and national security concern."

How insane is it for a country to intensely depend on an adversary(ish) country for some necessary good?" - rayvt

Your making your opponent's point. That is why it is so insane to start a trade war with a country the U.S. is so dependent upon. How are tariffs going to help correct the fact that the U.S. is dependent upon China for some important products?

Everyone knows that the U.S. is dependent upon China for these important goods. Prior, more sane administrations, were trying to wean America off of the China dependency by developing alternative sources. So they were subsidizing chip manufacturing in America. They were subsidizing rare earth element mining in America. They were looking to Australia for rare metals. All of those steps were designed to wean the U.S. off of China, yet those things take time.

Trump jumped the gun and started a war that the U.S. isn't yet ready to fight leaving it at the mercy of an adversary. All because he doesn't understand what trade account balances indicate. Dumb.

well, better get those highly skilled redstate workers cranking out their craft semiconducters and biologics.
we will need it until we have american jobs for american robots, surely by the midterms.

oh yeah, add the military supply chain also :
https://substackcdn.com/image/fetch/f_auto,q_auto:...

(unless of course someone imagines trump may reverse his position...daily)

"All of which makes China's near-total domination of the rare earth market a matter of economic and national security concern."

Here I go again. The US gave Mountain Pass, CA money to develop their rare earth mine and refinery. There really weren't enough of the varied rare earths to really help, the refining tech was questionable, and ultimately didn't work, so they ship to China for refining. Great independence. The US got took by a con, but everyone involved liked it.

Lynas couldn't get set up completely in Australia because all of the refinery builders had contracts occupying them. So they set up in Malaysia - big mistake - Malaysia's greens ignored the advancements and ran an anti thorium radiation campaign of mutated animals and babies. The concentrated ore was shipped to Malaysia and for a year was operated by an incompetent French CEO. He was fired, Amanda Lacaz took over, smoothed out operations and got the process down pat. When China lowered RE prices to bankrupt outside of China refineries, Lynas remained profitable. lYNAS survived the price downward manipulation. Now Lynas is poised to start separating heavy rare earths in June, and will be the first to do so. Lynas built another plant in Calgary ( haven't followed this one) and is part owner of another processing plant in Texas ( haven't followed this one either).

Lynas has the tech know how and IP on processing. They've lived it, survived political storms, Chinese price manipulation, and are now expanding operations. Australia is a friendly if T doesn't go complete asshat on them. MAGA - get T off of our allies backs. We need our allies - give T a wake up call. No one minded NATO getting a kick but turn around and work with them now - it's the smartest thing to do. Putin is no help, we know you like persecuting gays, etc., but it ain't helping. That is all.

here's a big redstate problem... they dont have a surplus of highly skilled workers....there is no historically embedded industry in many of them... viz look at TSM's issue in AZ, many companies in TX , and numbers being brought in from outside, eg California..

reminds me of fab setups in europe, we had to create lower level jobs in ireland, as we had already sucked out almost every engineer from their universities , and retrain anyone who had some kind of background eg car repair work , . in israel, we had to ship in and rotate scottish engineers hired on graduation, in CA even we looked at Brazil and school of mines in zambia as engineering resource.....if it dont exist it takes time to create the necessary labor force (we didnt in the end)

in chem eng in holland , the top 3 companies hired ALL the engineers on graduation, the rest were left fighting to find labor.

The US gave Mountain Pass, CA money to develop their rare earth mine and refinery.

There was a certain amount of shorthand in Lapsody's post that needs to be expanded upon. The issue with most rare earth mining and refining operations is that these (really not that rare) elements tend to co-locate with radioactive elements. Separating the useful elements from the radioactive dross in a way that keeps the mining and refinery workers safe and the downstream inhabitants un-irradiated is expensive. The Chinese operations tend to take a more casual attitude towards those concerns. It sounds like some of these concerns were also expressed by the Malaysian greens. It is straight-forward to mitigate the risks but to do so at a cheaper price than what the Chinese are offering is a challenge. So the US choice is to subsidize a more environmentally (and worker) friendly operation or to buy from the lowest bidder, which currently seems to be the Chinese.

During the cold war the US irradiated large numbers of miners and their families digging uranium ore in Southern Utah near Moab. There is a large site just north of Moab where the processing facility was built and the Department of Energy has spent decades cleaning up the results of that "damn the torpedoes" effort. The US has to decide what price to pay for on-shoring mining and manufacturing. It is considerably cheaper to let other people deal with the environmental consequences of these operations.

Rgds,
HH/Sean

Please briefly explain the art of the deal for [people] who still don't understand how Trump operates even after decades of him using the same strategy for everything. Be concise.

That was the wrong question to ask. And you don't need AI to answer it. Trump has already been president. Everyone with the slightest interest already knows how he operates. The real question "Do Trump's tactics work? Are they effective?"

This is topical because stock and bond markets are roiling, automakers have announced layoffs, construction projects are being canceled across the country, demand for export shipping containers is plummeting, GDPNow is pointing towards recession, consumer confidence is the lowest in decades, and so on. The economy was strong back in January. It isn't now.

We already went through Trump Tariffs 1.0. The CBO estimates it cost the US about 0.5% of GDP and led to a real reduction in US household income.¹ And for that high cost, we got very little to show for it. Any concessions were basically just window dressing. The trade deficit continued to go up. This is not like buying a car where you can walk away if negotiations go south. The stakes are high. There is real money at stake, some of it ours.

We can also examine the results of every other major thing that Trump negotiated or promised to negotiate during his term. He promised to replace the ACA with something better, build a border wall and have Mexico pay, and advance an infrastructure bill. None of that happened. He promised to replace the Iran nuclear deal with something better. He also promised a North Korea nuclear deal. He failed negotiate either of those. He recently promised to end the Ukraine war on day 1, and just this weekend Rubio said they probably can't negotiate it. In fact, I don't recall a single piece of signature legislation that was passed on his watch.²

After four years of seeing Trump repeatedly failing to negotiate anything of any substance, it is safe to say he's not good at negotiating. My confidence that a guy who has a poor track record of success who continues to use the same objectively bad tactics will succeed this time is very low.


¹ https://www.cbo.gov/publication/56073
²The Tax Cuts and Jobs Act was Paul Ryan's baby.

"Please briefly explain the art of the deal for [people] who still don't understand how Trump operates even after decades of him using the same strategy for everything. Be concise."

He gets results:

Trump Administration Announces Trade Deal With Britain

https://www.nytimes.com/2025/05/07/business/econom...


U.S. and China agree to slash reciprocal tariffs in major step toward easing trade war

https://www.nbcnews.com/world/asia/tariffs-china-t...

He gets results:

Depends on your frame of reference.

Your next door neighbour sets fire to your house, and his house, and says that if you lend him your lawnmower he won't block some of the fire trucks. He doesn't guarantee how many, but says it will be some. Is it a big win for him if you then lend him your lawnmower? He did, admittedly, get results.

On the exotic subject of Berkshire, has anybody noticed that it's one of only a hand full of S&P 500 companies to be lower in price in the last month? The rally relative-to-market started Feb 21 and ended around the first week of April. The advantage (representing all of the relative-to-market advantage in the last three years) has now half unwound.

Jim

More results:

Our previous Dementia Patient in Chief claims US Border will not be secure until Congress Critters passes a flawed pork filled bill:

https://www.youtube.com/watch?v=_Fj5W7P61pk

Once elected, Trump closes the once open border in a matter of DAYS:

https://www.dhs.gov/news/2025/04/28/100-days-most-...

We didn't need a new bill. We needed a new president.

Promises made. Promises kept.

Results.

More results...(I know, I know, most on this board do not agree with eliminating massive governmental waste, fraud and corruption:

The Department of Government Efficiency (DOGE), initiated by the second Trump administration, has targeted various programs and contracts deemed wasteful, fraudulent, or corrupt. Below is a list of programs, NGOs, and contracts reportedly terminated by DOGE, along with their associated dollar amounts, based on available information from web sources and posts on X. Note that some claims lack detailed verification, and savings figures may be inflated or disputed, as highlighted by critics. I’ve included only those with specific dollar amounts and program details, ensuring clarity and accuracy where possible. All amounts are in USD.
Terminated Programs and Contracts:

Risk Management Agency (RMA) Lease in Topeka, Kansas
Description: A lease for a USDA branch office that was reportedly unoccupied since the pandemic, cited as an example of government waste.

Dollar Amount: $964,396 saved by terminating the lease (annual cost was $121,818).

Magnetic Tape Replacement with Digital Backups
Description: DOGE replaced magnetic tapes with digital backups, claiming savings. Experts questioned the savings due to a lack of cost-benefit analysis and noted potential archival and security risks.

Dollar Amount: ~$1,000,000 saved.

Department of Education Comprehensive Centers Grants
Description: 18 grants for consulting services with a focus on Diversity, Equity, and Inclusion (DEI) were terminated.

Dollar Amount: $226,000,000 saved.

Department of Education DEI Training Grants
Description: 70 grants for DEI training programs were canceled in a 48-hour period.

Dollar Amount: $373,000,000 saved.

Department of Education Equity Assistance Centers Grants
Description: Grants to four Equity Assistance Centers, focused on equity initiatives, were terminated.

Dollar Amount: $33,000,000 saved.

HUD Misplaced Funds Recovery
Description: Funds earmarked for financial services administration, deemed no longer needed, were recovered due to a broken process during the Biden administration.

Dollar Amount: $1,900,000,000 recovered.

USDA Grant for Queer, Trans, and BIPOC Urban Farmers
Description: A grant to educate queer, trans, and BIPOC urban farmers and consumers about food justice in the San Francisco Bay area was canceled.

Dollar Amount: $397,000 saved.

HHS Equity Assessments Contract
Description: A contract for equity assessments of existing program policies was among 167 canceled contracts.

Dollar Amount: $2,230,000 saved (part of ~$115,000,000 total savings from 167 contracts).

IRS Planned Contract Rescission
Description: A previously planned contract was rescinded, with the IRS committing to more intentional use of taxpayer dollars.

Dollar Amount: $1,900,000,000 saved.

Department of Defense Wasteful Programs
Description: Initial findings identified programs not supporting DOD’s core mission, including a human resources program, a grant to decarbonize Navy ship emissions, and a grant for equitable machine learning models.

Dollar Amount: $580,000,000 saved.

Eurasia Foundation Digital Transformation Activity
Description: Funding for digital transformation activities in Europe was terminated.

Dollar Amount: $69,000,000 saved.

Internews Media Programs
Description: Programs including “media enabling democracy, inclusion, and accountability in Moldova” were canceled.

Dollar Amount: $32,000,000 saved.

USAID Meals to Al Qaeda-Linked Group
Description: Alleged funding for meals to a terrorist group linked to Al Qaeda was terminated. (Note: This claim is unverified and lacks supporting evidence from primary sources.)

Dollar Amount: $10,000,000 saved.

USAID NGO Funding for Bat Virus Research in Wuhan
Description: Alleged funding to an NGO supporting bat virus research at the Wuhan Institute of Virology was canceled. (Note: This claim is unverified and lacks corroboration.)

Dollar Amount: $5,000,000 saved.

HHS Free Housing and Cars for Illegal Aliens
Description: Alleged funding for housing and cars for undocumented immigrants was terminated. (Note: This claim is unverified and lacks detailed evidence.)

Dollar Amount: $22,000,000,000 saved.

DEI Scholarships in Burma
Description: Funding for DEI scholarships in Burma was canceled.

Dollar Amount: $45,000,000 saved.

Social and Economic Inclusion Program
Description: A program to improve social and economic inclusion (unspecified location) was terminated.

Dollar Amount: $40,000,000 saved.

Sex Changes in Guatemala
Description: Alleged funding for sex change procedures in Guatemala was canceled. (Note: This claim is unverified.)

Dollar Amount: $2,000,000 saved.

Sesame Street in Iraq
Description: Funding for a Sesame Street program in Iraq was terminated.

Dollar Amount: $20,000,000 saved.

DEI Contracts at the Department of Education
Description: 29 contracts related to DEI initiatives were canceled.

Dollar Amount: $101,000,000 saved.

ESG Consultant in Africa
Description: A consultancy contract for Environmental, Social, and Governance (ESG) initiatives in Africa was terminated.

Dollar Amount: $520,000,000 saved.

Promotion Program (Unspecified)
Description: A program for promotion (details unclear) was canceled.

Dollar Amount: $25,000,000 saved.

Johns Hopkins Social and Behavior Change in Uganda
Description: Funding for a program to drive social and behavior change in Uganda was terminated.

Dollar Amount: $42,000,000 saved.

Fiscal Federalism in Nepal
Description: A program supporting fiscal federalism in Nepal was canceled.

Dollar Amount: $20,000,000 saved.

Biodiversity Program (Unspecified)
Description: A biodiversity-focused program (details unclear) was terminated.

Dollar Amount: $19,000,000 saved.

EPA Wasteful Spending
Description: Funds identified as wasted by the Biden administration, including discretionary distributions to entities like the Climate United Fund.

Dollar Amount: $20,000,000,000 saved.

Institute of Education Sciences (IES) Contracts
Description: 89 contracts for educational research, including evaluations of programs like the 21st Century Community Learning Centers, were terminated. DOGE claimed $881,000,000 in savings, but analysis suggests actual savings may be ~$278,000,000 due to funds already spent.

Dollar Amount: $278,000,000 saved (adjusted estimate).

Mathematica Teacher Residency Evaluation Contract
Description: A contract to evaluate teacher residency programs was canceled. DOGE claimed $19,000,000 in savings, but the contract was valued at ~$8,000,000.

Dollar Amount: $8,000,000 saved (adjusted estimate).

Small Business Administration Fraudulent Loans
Description: Loans made to applicants over 115 or under 11 years old in 2020-2021 were identified as fraudulent and canceled.

Dollar Amount: $630,000,000 saved.

Labor Department Fraudulent Unemployment Payments
Description: Fraudulent unemployment payments made since 2020 were terminated.

Dollar Amount: $382,000,000 saved.


EPA Leasing Costs
Description: Savings from moving staff out of a Washington building, reducing leasing costs.

Dollar Amount: $18,000,000 saved.

Office Leases (Unspecified)
Description: Nearly two dozen office leases were terminated, with no specific details on locations.

Dollar Amount: $44,600,000 saved.

Elon, once a hero of the left and progressives, for supposedly helping to save us from the climate change fraud, has now become Enemy #1.. to the point where vandalism and violence is justified

More results...

Wrong board.

Jim

He gets results:
Trump Administration Announces Trade Deal With Britain

I'd genuinely like to know how this is a good result.

In 2023, the avg UK tariff rate on US imports was 3.8%. In contrast, the avg US tariff rate on UK imports was 3.3% - slightly less, but quite close.

With this deal, the avg UK tariff rate on US imports per White House will be 1.8%. In contrast, the avg US tariff rate on UK imports remains at the recently elevated 10%.

That means we consumers in the US will pay up to 6.2% more on average for imported UK goods than we did before, while consumers in the UK will pay up to 2% less for imported US goods.

One could argue it's a very slight win for very specific US companies selling goods into the UK, except if they buy the inputs for their goods from.. pretty much anywhere but the US, since tariffs have now raised prices on goods imported from every country in the world.

One could also argue it's a benefit to the US government in terms of additional tariff (tax) revenue, but in that case, let's call this a tax instead of pretending it's something else.

But what about all the consumers in the US who would buy goods from the UK? Now we're simply faced with paying more for what we used to get for less.

Considering these net effects as a whole, this still seems like a significantly more negative result than pre-tariff, with very little if anyything to celebrate about.

Depends on your frame of reference.

Your next door neighbour sets fire to your house, and his house, and says that if you lend him your lawnmower he won't block some of the fire trucks. He doesn't guarantee how many, but says it will be some. Is it a big win for him if you then lend him your lawnmower? He did, admittedly, get results.


One of my best friends is a Kiwi with an amazingly successful business history (he started as a teenager with a hot dog stand in Wellington, later the first one who imported used car parts from Japan (a business often copied, but never with his success), now in his "retirement" (Ha!!!) a mentor for many inventors and creative people without business skills) and racedriver history (NZ land speed record for Diesel engines, Porsche cup champion, around 70 24h races worldwide).

He once told me this about results and the means to get them:

"In business you can only get so far while staying a decent, honest person with integrity. There is a threshold you can't transcend without throwing scrupels over board. I am not willing to do that."

Keir Starmer: (During the announcement call with Trump (speaking via speakerphone from a Jaguar Land Rover factory in the West Midlands)

“This is a really fantastic, historic day.”

“It was about this time of day 80 years ago that Winston Churchill announced victory in Europe… To be able to announce this great deal on the same day 80 years forward, almost at the same hour and as we were 80 years ago with the U.K. and the U.S. standing side by side, I think is incredibly important.”

“This [deal] is going to boost trade between and across our countries. It’s going to not only protect jobs, but create jobs, opening market access.”

“The timing couldn’t be more apt, because not only was it 80 years ago today, victory came for Europe after and at the end of the Second World War but of course, on that day, the UK and the US stood together as the closest of allies.”

https://www.newsweek.com/donald-trump-administrati...

Winning!

For decades politicians have talked about lowering drug prices and the huge discrepancy between prices paid in the US vs. identical drugs in other countries. Trump finally trying to do some about it:

Trump seeks to lower drug prices in U.S. by pressing other countries to pay more

https://www.cbsnews.com/news/lower-medications-cos...

Sorry to all the international posters on this board. But wait, your government pays for it anyway./sarc

This process will take time, but is a step in the right direction.

More winning from our deal making president.

Didn't we just leave this phase of the board behind us?

Do we have to get dragged back into it?

Didn't we just leave this phase of the board behind us?

Do we have to get dragged back into it?


We don't have to. You know what to do.

dtb

Didn't we just leave this phase of the board behind us?

Do we have to get dragged back into it?

Just use the "ignore" button. My list has grown by one. It makes life more pleasant - particularly if people don't copy what was said and repost it.

I don't do this easily. But I do have a "three strikes and out" attitude. Given the number of good posters Manlobbi has attracted, there's actually very few of them.

Who Knew?:

Since taking office in January 2025, President Trump has focused on several key areas:

Border Security: Illegal border crossings have dropped significantly, with reports of up to 94% reduction compared to last year. He resumed construction of the U.S.-Mexico border wall and signed the Laken Riley Act, which requires detention of certain undocumented immigrants involved in crimes.

Economic Policies: Trump signed the One Big Beautiful Bill Act, a major tax and spending package that extended 2017 tax cuts, increased military and border control funding, and reduced some welfare benefits. The economy added 671,000 jobs, and tariffs brought in $90 billion, with a record $27.2 billion surplus in June 2025. Egg prices dropped 53%, and gas prices hit a 20-year low (inflation-adjusted).

Deregulation: His administration rolled back regulations, saving Americans an estimated $180 billion, including relief from costly Biden-era appliance efficiency rules.

Energy and Trade: Trump boosted oil and gas drilling permits by 44% compared to the Biden administration and secured trade deals with the UK, China, and Indonesia. He also protected U.S. steel and aluminum industries with 25% tariffs.

Military and Foreign Policy: Military recruitment hit 15-year highs, and Trump signed deals to provide military equipment to Ukraine (funded by NATO) and designated several Latin American cartels as terrorist groups.

Executive Actions: He issued over 170 executive orders, addressing issues like ending federal DEI programs, protecting women’s sports, and stopping funding to certain UN agencies.

These actions reflect Trump’s focus on immigration, economic growth, deregulation, and America-first policies, though some, like tariffs, have sparked debate due to market reactions.

Since January 2025, President Trump has signed the following trade deals:U.S.-UK Trade Agreement: A deal to boost economic ties and reduce trade barriers between the United States and the United Kingdom.

U.S.-China Trade Agreement: A new agreement focusing on reducing trade imbalances, increasing U.S. exports, and addressing intellectual property concerns.

U.S.-Indonesia Trade Agreement: A deal to enhance trade in goods and services, promoting market access and investment opportunities.

U.S.-Japan Trade Agreement: Signed on July 22, 2025, this deal is described as one of the largest trade agreements in history. Japan agreed to invest $550 billion in the U.S., with 90% of the profits directed to American industries like energy, semiconductors, critical minerals, pharmaceuticals, and shipbuilding. The agreement includes a 15% tariff on Japanese exports to the U.S., down from a threatened 25%, with auto tariffs also reduced to 15% from 27.5%. Japan will open its markets to U.S. goods, including cars, trucks, rice, and other agricultural products, and eliminate additional safety tests on U.S. vehicles. Steel and aluminum tariffs remain at 50%. This deal is expected to create hundreds of thousands of U.S. jobs and boost American manufacturing.


And some here were wishing harm and extreme hurt to the people who voted for Trump. Incredible.

Clock is ticking for the EU to finally come to the table and make a trade deal with the U.S..

Terms are getting incrementally tougher for them each and every day.

Tick...Tok...Tick...Tok...

US Trade Deal with Japan

Investment & Profit Sharing
Japan will invest $550 billion into the U.S. economy.
The U.S. will retain 90% of the profits from that investment.
Funds will target strategic sectors like semiconductors, energy infrastructure, shipbuilding, and pharmaceuticals.

Tariffs & Market Access
15% tariff will be applied to all Japanese imports, including autos and industrial
goods-down from the previously threatened 25%.
Japan will open its markets to U.S. cars, trucks, rice, and other agricultural products.
Longstanding restrictions on U.S. vehicles and safety standards will be lifted.

Agriculture & Energy
Japan will increase U.S. rice imports by 75% and purchase $8 billion in American
agricultural goods.
Expanded energy exports include a potential LNG offtake agreement from Alaska. 3

Aerospace & Defense
Japan committed to buying 100 Boeing aircraft and billions in U.S. defense
equipment.

Who knew? Certainly not the ignoramuses who voted for Trump.

15% tariff will be applied to all Japanese imports, including autos and industrial
goods-down from the previously threatened 25%.

Yes, certainly something I want to celebrate. Last year I was paying 1.6% tax on things made in Japan. Now I will pay 15%. Why not make it 25% and make me really happy!

Aussi

Japan will invest $550 billion into the U.S. economy

So, instead of buying US bonds, Japan will lend money to US businesses. This will help raise long term rates at the margin. Great headline and what could possibly go wrong?

Aussi

Maybe you didn't realize it, but this the Berkshire Hathaway board. Please take your MAGA drivel elsewhere.
Thank You!

So, instead of buying US bonds, Japan will lend money to US businesses. This will help raise long term rates at the margin. Great headline and what could possibly go wrong?

Yes, maybe they will invest in Trump Crypto?

https://gettrumpmemes.com

Maybe you didn't realize it, but this the Berkshire Hathaway board. Please take your MAGA drivel elsewhere.

Please take *ALL* the political stuff elsewhere. Whether pro-Trump or anti-Trump it does not belong here. Stop polluting this board with political crap.

Since taking office in January 2025, President Trump has focused on several key areas:

As you note, the current US administration has indeed been very active, and have accomplished several of the things that they set out to do. They have been quite effective in that sense.

The reasonable objections that one sees aren't that they aren't doing these things, or that they weren't in the election platform, but rather that many of the things that they are doing are spectacularly stupid. As a prime example, bilateral trade balances, which have driven trade policy and are set to impoverish many people around the world including many Americans, are meaningless. They have no more economic meaning that the precise distance from one's arse to one's elbow. Only the aggregate across all trading partners has a meaning, and even then not all THAT much meaning.

Much of that list is mainly a demonstration of the impressive power of an unquestioned leader backing a policy based on pseudoscience, a bit like Lysenkoism, or backing pseudoeconomics, like chairman Mao ordering backyard blast furnaces in little villages which would otherwise have been producing food. Sometimes that's a good thing. Sometimes not.

Economically speaking, I doubt many people making decisions in Washington are even aware that an import tariff is just a sales tax paid by domestic importers, let alone that it is economically the equivalent of a tax on US *exports*. The Lerner Symmetry theorem showed this 89 years ago and it still stands, assuming that the economy still has a meaningful set of companies with competitive pricing.

The thing to note is that the already very large rise in the weighted average US tariff rate will undoubtedly reduce both US imports AND exports, making the US poorer. Many in the administration like Mr Bessent are well educated in basic economics and know this, but they are going along with it anyway. I presume this is because of some mix of (a) they don't care about that particular outcome, and/or (b) it is career suicide to contradict the leader.

As the US economy is likely to be on a weaker trajectory in the next few years than it would otherwise have been, and given Berkshire's near complete link to and correlation with the US economy, I expect the intrinsic value of a share of Berkshire is lower than it would otherwise have been, by a material amount. For US based investors holding it in taxed accounts, this might be partially or even fully offset by the temporarily lower tax rates. (I say "temporarily" in the sense of Ricardian equivalence...debt and deficits can not grow without bound, so lower taxes for a while generally means either higher taxes later, or a financial explosion).

Jim

I enjoy your posts Mungo. Seems they heighten my personal introspection, especially when
I become recklessly bullish. Between your posts, other board postings and rewatching Netflix “Boom, Bust, Boom” I maintain relatively stability - ha.

Admittedly, I wrestle with the notion of Economist’s theorem implications (e.g. Lerner Symmetry) being strongest when policies are stable or even permanent vs. let’s say if, in this case, tariffs are temporary. Could symmetry possibly break down?

Heck, I dunno.

Keep posting Mungo!

Grateful Always,
PaulnKC

If I block all with that frowny face who are not willing to utter their political/ideological world view, either without scrupels directly or embellished as economics, eventually defended with "It has implications for Berkshire too" (What has none?) on the proper boards instead of poisoning this one, then half of the posting "population" here would be gone.

Is there a way to instead block and make invisible threads instead of individuals? It's difficult for me to otherwise avoid those poisoned threads as I simply read a post, then click on "Next", then on "Next" again etc., therefore having to wade chronologically (I hate the threaded view) through all that political/ideological sticky shit to read the few posts worth to be here (for the post and for me).

The Chinese operations tend to take a more casual attitude towards those concerns. It sounds like some of these concerns were also expressed by the Malaysian greens. It is straight-forward to mitigate the risks but to do so at a cheaper price than what the Chinese are offering is a challenge. So the US choice is to subsidize a more environmentally (and worker) friendly operation or to buy from the lowest bidder, which currently seems to be the Chinese.

Just saw this. This needs to be expanded upon. :) Lynas passed all hurdles and could produce rare earths in Malaysia without causing any environmental problems, and they showed this early on. The greens to take advantage of the ignorance of the populace, so the invironmental campaign continued. Malaysia has stricter regulations than the rest of the world. Lynas developed ways of using the remainder which were acceptable by world standards, but not approved by Malaysia. Malaysia has their fair share of Chinese, who used the green movement to inhibit Lynas so they could continue to have a strategic hold on RE. Lynas got past that, but arduously.

Mountain Pass wasn't ever more environmentally friendly than Lynas, but that might have been used by some in the USA. Last I saw, MP was burying residue in the desert and wrapping it in plastic. Go figure. Lynas now claims it can remove the thorium from the ore, but I haven't followed that.

At the "Winning the AI Race" summit hosted by the All-In Podcast and the Hill and Valley Forum on July 23, 2025, in Washington, D.C., Nvidia CEO Jensen Huang praised President Donald Trump, stating, "America’s unique advantage that no other country can possibly have is President Trump."

Huang highlighted Trump's recognition of the need for AI innovation and energy, noting that Trump's AI Action Plan would "accelerate AI innovation in America" and "fundamentally change the United States' position in the years to come." These remarks were made in the context of Trump's speech and signing of executive orders to promote AI development with fewer regulatory constraints.


Winning!

Could symmetry possibly break down?

Certainly. Several papers have been published over the decades which talk about the exceptions. But they are generally just refinements or quibbles aimed at getting a paper in a publication, not contradictions.

For example, monopolists may not be fully affected as expected. The effects of import taxes (tariffs) and export taxes will tend to have different time lags, so the end result on terms of trade might ultimately be the same but might not hit equally quickly. Capital controls would change things, as would price fixing laws, and fixed exchange rates. A big swing in the capital account will change things, not just the symmetry theorem of course.

...Lerner Symmetry being strongest when policies are stable or even permanent vs. let’s say if, in this case, tariffs are temporary....

The theorem holds primarily when the tariffs are permanent, and (perhaps more importantly) seen to be permanent. Nobody is going to build a factory to offset the cost of tariffs if they think the tariffs won't last a really long time.

The general rule has been robust, though. In real world countries, neither export taxes nor import taxes will reduce a country's trade deficit, and they both have the same effect of reducing both the volume of exports and the volume of imports even in the absence of policy changes or "retaliation" by trading partners. Other things being equal (though they never are), both policies will drive up the country's exchange rate and lower the real GDP.

Jim

Could symmetry possibly break down?

More important things just DID break down as I just had to find out after my Internet stopped working (on super slow and unreliable mobile data now, living in an area with nearly zero reception): Starlink outage --- worldwide!

Gives a little taste of the future when all is controlled by a central entity (whoever).

Starlink hacked? By Skynet?

I agree. A tariff is a sales tax or as I would put it a consumption tax. Which is long overdue IMO. Finally a tax the wealthy can't get around.

More consumption more tax.

I'm all in. If this helps reduce the countries debt and helps offset the new tax reductions then it is working from where i sit.

I have looked to move all over the world, and with the exception of a few countries the US has the lowest taxes anywhere on the wealthy and Trump is reducing those, which I disagree with.

But maybe the tariff bill was always part of his plan.

I hope so.

Mungofitch:
the already very large rise in the weighted average US tariff rate will undoubtedly reduce both US imports AND exports, making the US poorer.

Meanwhile elsewhere you have pointed out that a tariff is just a sales tax on imports, or did you say imports and exports? It is obvious it is a sales tax on imports, would be interested in how it is a sales tax on exports if is a claim I remembered correctly.

My question is: if tariffs are a sales tax, are they any worse or better than other sales taxes on other things? That is, if we want to raise $100billion in taxes, do we expect a worse result if we do it with tariffs than if we do it with a more universally applied sales tax?

I ask because we already use (perhaps sub-optimally, but I think not horribly so) sales taxes to raise revenues and we already know we need to raise revenues to stem at least some of the gusher of blood we call a deficit. And we already do at least some fine-tuning of sales taxes to achieve other goals than pure revenue raising, such as luxury taxes (presumably to give a slight redistribution) and high taxes on at least some unhealthy things like alcohol and tobacco.

So if we want to raise $200 billion, and we can either 1) put tariffs on imports that raise $200 billion or 2) put sales taxes broadly that raise $200 billion, is it obvious that in terms of unwanted side effects, one is worse than the other? Both remove $200 billion of buying power to 0th order. Both remove that buying power in larger proportion from people who buy more stuff, so both probably slightly increase savings/investment?

The question seems important because many of us, certainly me, would like to see revenues increased by as much as a Trillion, but not at the expense of DCF future GDP of more than a Trillion, that is, we want to keep the benefit of paying off debt with higher revenue streams. And it is not obvious that tariffs are any worse than any other choice for raising revenues. But if they are worse, I would like to know that.

Yours,
R:)

This news item just came across my computer 30 minutes ago,
from Yahoo:
"President Trump and European Commission President Ursula von der Leyen announced that the US and EU had agreed to the framework of a trade deal after negotiations in Scotland on Sunday.
... von der Leyen said that the EU had agree to 15% tariffs "across the board."

also
"Beijing and Washington are expected to extend their tariff truce by another three months at trade talks in Stockholm beginning on Monday."



I continually shake my head in puzzlement. How is it that so many people *still* don't realize and haven't internalized that Trump is not a typical politician and does not behave like a typical politician?
For better or worse, people keep trying to figure out what's going on while analyzing him as if he's a normal politician.

"Clock is ticking for the EU to finally come to the table and make a trade deal with the U.S..

Terms are getting incrementally tougher for them each and every day.

Tick...Tok...Tick...Tok..."

Trump, the consummate dealmaker. So many here got it so wrong.
https://www.cnbc.com/2025/07/27/trump-european-uni...

TDS overrode their ability to be rational.

I continually shake my head in puzzlement. How is it that so many people *still* don't realize and haven't internalized that Trump is not a typical politician and does not behave like a typical politician?

100% of the population knows that Trump is a not typical politician.

Trump, the consummate dealmaker.

I've seen very little credible evidence to support such a statement.

But come over the US Policy board where there is a lively discussion going on about such things. It seems so many of Trump's 'deals' ain't what he claims them to be.

But come over the US Policy board where there is a lively discussion going on about such things.

If that board is like so many other of the typical internet politics message boards. I would rather clean out my septic tank by hand.

"Lively discussion", huh, code word for a bunch of idiots screaming and throwing poo.
I came to the realization back in the days of Usenet that nothing said or agreed to on these boards have any meaning. All it does is increase your blood pressure. Just words shouted into the void. None of it changes anything.

"Lively discussion", huh, code word for a bunch of idiots screaming and throwing poo.
I came to the realization back in the days of Usenet that nothing said or agreed to on these boards have any meaning. All it does is increase your blood pressure. Just words shouted into the void. None of it changes anything.

You're right, let's scream and throw poo here. My blood pressure could use a lift.

Interesting how easily a board can collapse. And while everyone sees it the ones actively doing it - and the ones letting them be pulled in and replying - don´t stop. Seeing the abyss and continue the walk.

You guys talked about that having happened before. Now I see it live.

"Interesting how easily a board can collapse.You guys talked about that having happened before. Now I see it live."

I saw it "live" with all the ongoing Trump basing over the last year. Even to the point of wishing harm to those that voted for him. (I did and I'm glad I did) There was no opposition to Trump bashing then - only pile on posts about what an idiot he and his voter base were. Many on this board made the bed they now find themselves in. I'm done with political posting.

Mungofitch:
the already very large rise in the weighted average US tariff rate will undoubtedly reduce both US imports AND exports, making the US poorer.
...
Meanwhile elsewhere you have pointed out that a tariff is just a sales tax on imports, or did you say imports and exports? It is obvious it is a sales tax on imports, would be interested in how it is a sales tax on exports if is a claim I remembered correctly.
My question is: if tariffs are a sales tax, are they any worse or better than other sales taxes on other things? That is, if we want to raise $100billion in taxes, do we expect a worse result if we do it with tariffs than if we do it with a more universally applied sales tax?

Sure, a tariff is a sales tax on imports. It's not a tax on exports, but the end result is the same. Though it is not at all obvious, a set of import tariffs is economically exactly the same as a tax on exports in terms of its effect on wealth, trade, resource allocation, prices and so forth. This is a result of the Lerner Symmetry Theorem which was published a very long time ago and has held up well. The theorem does not hold up 100% in an economy that is dominated by tourism or foreign-owned assets or fixed exchange rates, but that doesn't describe the US. Most importantly, import tariffs or export tariffs will each reduce both imports AND exports, and make the country poorer as a result. Trade creates wealth.

Are tariffs (or equivalently, export taxes) better or worse than simple sales taxes? Worse, for a few reasons. First, they reduce trade and wealth, as mentioned above. Everybody (not just the exporter) is better off if each country does relatively more of what it's relatively good at, and trades for the other things, even a country that isn't the very best at anything. It's also a problem because tariffs are usually extra-distorting because they are virtually never the same rate for all goods from all countries, the version that would be most defensible. A follow-on problem from that is that tariffs, because they are so varied, are commonly used for corruption from special interest groups or unscrupulous persons local or remote. The are an gilt-edged invitation to state capture.

The two main goals for any tax raising policy are to get the most tax revenue for the least amount of damage to the economy (the most feathers from the goose with the least hissing), and with the fewest economic distortions. So far, history seems to show that a single-rate tax on ALL goods and services, produced locally or elsewhere, is closest to that. Often accompanied by some sort of offsetting but relatively constant credit for the poorest, as current spending makes up a larger part of whatever income they have.

The best argument for tariffs (or equivalently export taxes) is in a small economy which is overwhelmingly dependent on exports of just one or just a few goods, which leads to concentration risk. The very distortions that make everyone poorer can occasionally be a good thing if they make everyone safer by avoiding crises. It's better to make $98 every single year than to make $100 for many years then $0 for five years. Efficiency is a valid goal most of the time, but in some circumstances it is the enemy of resilience. I think the US has a sufficiently diversified economy that this isn't a concern.

Jim

The two main goals for any tax raising policy are to get the most tax revenue for the least amount of damage to the economy (the most feathers from the goose with the least hissing), and with the fewest economic distortions. So far, history seems to show that a single-rate tax on ALL goods and services, produced locally or elsewhere, is closest to that. Often accompanied by some sort of offsetting but relatively constant credit for the poorest, as current spending makes up a larger part of whatever income they have.

A national sales tax is a political non-starter in the USA.

Would a 15% across the board import tax get us some way to a national sales tax? Seems so, but with, as you point out, serious and undesirable side-effects.

Personally, I think a 15% or so VAT is what we need, but that's not going to happen.

Would a 15% across the board import tax get us some way to a national sales tax? Seems so, but with, as you point out, serious and undesirable side-effects.
Personally, I think a 15% or so VAT is what we need, but that's not going to happen.

That does raise another small problem with taxing imports: there just aren't enough of them.

At a guess, 6% VAT would probably be enough to wipe out the problems of the federal deficit. Maybe even as low as 4%: there is no problem with a deficit over the long run, even with forever rising real debt, as long as the debt doesn't rise faster than real GDP over time. According to figures provided by an LLM (i.e., might be wrong), the US trailing four quarter deficit was about $1.3tn and final sales of goods and services to individuals were about $21 trillion, so about 6%.

But imports are only maybe 10-15% of that, so to raise the same revenue as a 4% across-the-board VAT (which wouldn't wipe out any businesses) would be maybe 25-30% across-the-board tariff (which would break whole swaths of the economy).

My cockamamie solution: National VAT with no exemptions, plus a fixed tax credit per household of maybe $1200 so nobody in the bottom quintile ends up paying more. Then just pass a law that the federal VAT rate is whatever would bring the deficit under (say) 2.5% of GDP, averaged over a few years. Lawmakers that don't like the idea of a national VAT are not thrown overboard: they need only move a little more towards a balanced budget in other ways at any time, and the rate stays at zero!

Jim

Sure, a tariff is a sales tax on imports.

I read a different take that seems to make sense. It went something like this:

A tariff is not a sales tax. Note: Americans know full well what a sales tax is, and how a sales tax works.

1) A tariff is a fee on the supplier, collected by the importing agent.
To the supplier it is just another cost item, along with all their other costs and taxes and fees.

2) The selling price of a product is determined by supply and demand, and has almost nothing to do with what it costs the seller to produce it. The seller's cost just determines if they make a profit, and the amount of their profit.

3) If one of their cost items goes up, they have the choice of raising their asking price. Doing so shifts the supply/demand curve. A rational self-interested seller is already setting his price as high as he can, since the price is actually determined by what buyers are willing to pay. The buyer doesn't care about the seller's costs.

4) The seller basically decides to either take a lower profit or stop making & selling the product[*]. If the seller has been making a handsome profit (remember: the buyer doesn't care about the seller's costs) he is more likely to just take a lower profit.

In ALL cases, it is the BUYER who determines the price of something. If a $100 product suddenly gets hit with a $400 tariff, the price does not go to $500. The price goes to $0 because nobody buys it.

----
Of course, one of the things a seller could do is to mitigate the extra tariff cost. In the current instance, one way to mitigate the tariff is to move production to the United States. Which is explicitly what the US is wanting to accomplish.


There's a lot of moving parts in the tariff situation. And a lot of shrieking on the internet. Things change, the equilibrium shifts, and people who benefitted by the old equilibrium do not like the new one and will complain mightily.

FWIW, since the last few days I have become an instant expert on tariffs, after spending a couple of hours in the Univerity Of Google.


===========================
[*] An example is the US sugar tariff. Which I hate. We pay twice the world price for sugar because of that.

At a guess, 6% VAT would probably be enough to wipe out the problems of the federal deficit.

You can't be that naive. Not if you have spent any time as a US resident or citizen.

Within 2 to 4 years the federal government would increase spending by more than the amount of VAT collected.

We have plenty of historical evidence of what would happen.

Federal income tax was initially 1% with a top rate of 3%.

The Social Security tax was initially 1%.

Several states have raised their income tax this way:
* A temporary surcharge to pay for flood/tornado/fire damage. "This is not a tax increase, because it is only temporary."
* A few years pass.
* The surcharge is folded into the income tax. "This is not a tax increase, because you are already paying it."

1) A tariff is a fee on the supplier, collected by the importing agent.
To the supplier it is just another cost item, along with all their other costs and taxes and fees.


You could look at it that way if you like. It can happen, but it isn't really accurate in most instances.

Imagine a firm that sells widgets for €100 a pop wholesale, globally. Self-sealing stem bolts, say. That's the normal way firms sell stuff.
If there is a 25% tariff on that going into the US, who is paying? Some mix of the importer, the retailer, and the consumer, all of whom are in the US.

Volume discounts are normal and the US is a big importer of a lot of stuff, so the US gets good prices. But there aren't that many companies that sell to the US at a lower price than elsewhere just because the US is, well, so wonderful. That's simply because the vast majority of companies don't have nearly enough margin to sell at the discount that some folks in Washington seem to expect. Blood, stones. As you note, the price is set by supply and demand, but there is zero supply at a price that's a loss to the supplier, so you can rule that out. (if you ever want to empty the shelves, legislate retail prices downwards)

Producers might cut prices to "eat" some of the tariffs, as you would for any big customer, but only modestly long term. Maybe a bit more short term to smooth price changes out over time protecting market share and production/channel capacity, and to implement a wait-and-see approach to see what the actual regulatory environment will settle down to over time. At the moment, the actual early figures are that new tariffs are on average being split 20/40/40 producer, US distribution+retail, and US consumer. So 80% is borne within the US so far. That would likely rise a bit higher if the tariff levels stay/end up at the high end of the range of people's expectations, as the "smooth things out" and "wait and see" strategies get exhausted.

There is one way to get to the old saw "don't tax you, don't tax me, tax that fellow behind the tree": currency movement. If the US dollar rises, that increases the true salary and purchasing power of US consumers. They still buy tariffed imported goods at the same local nominal price, and the producer still sells at his local wholesale price. This happy outcome is unfortunately offset by the expectation that trade and therefore incomes will fall somewhat, the normal expectation when trade intensity falls. It also tends to increase the trade deficit as a rising currency strongly favours imports over exports, probably not the intended effect. If the currency falls more, the reverse is likely to happen: the tariff hit to sticker prices will be a double whammy for locals spiking the cost of living, but imports will fall a lot (the intended outcome).

It's certainly true that things work a certain way on average, but not always in every instance. Too much certainty isn't a good thing.

Personally, I think the highest probability important outcome that isn't widely appreciated is the likely fall in US exports over the next year or two, relative to what would expect at that point in the business cycle. For once there is a pressure in the same direction among classical trade theory (Lerner equivalence outcome of tariffs), the attitudes and actions of trade partners (the Jack Daniel's effect), and global portfolio allocation changes.

Jim

The economics are pretty simple and straightforward.

Just under 48% of all US taxpayers pay a combined 0% Federal income tax and 0% Federal consumption/sales tax. So for half the country their tab for federal government is zippo.

A mandatory $1 annual minimum income OR sales tax would represent a broadly advertised tax hike on nearly half the country.

So what do you do?

European countries embrace the VAT and it's why we roll out tariffs. You can hit everyone with taxes and the best part is the taxes are well disguised.

Additionally, tariffs have a broad populist appeal as companies eat large chunks (GM just ate $1 Billion last quarter) so stockholders will feel pain, too. Did you notice Biden didn't touch Trump's term 1 China tariffs? Tariffs arguably have more support from Union backed Dems than from Republicans. They're here to stay. And half of the country will remain federal income and sales tax free. And we'll get between $400-$500 Billion in fresh new revenues. FWIW June was the first budget surplus month in years.

Yes, we will be poorer. Our trade partners will be poorer. Adjust appropriately.

You can't be that naive. Not if you have spent any time as a US resident or citizen.
Within 2 to 4 years the federal government would increase spending by more than the amount of VAT collected.

I agree that US legislators are not always renowned for their long term prudence, and optimism on that front is not the obvious stance. But to be fair, the same is true of legislators around the world, give or take.

Consider:
Canada was a spendthrift in the 1980s, with venal politicos never looking beyond the next election, causing a debt and deficit trajectory that seemed soon to explode. But a 1991 7% national goods and services tax fixed it all pretty much single handedly (even though the revenue bump was not much at first, as it replaced a very 19th century style manufacturer's tax all of whose tax revenues disappeared at the same time). It is currently down to 5%. Have a look at the rankings of deficit-to-GDP and debt-to-GDP among the G7 these days.

So there is hope!

As for the notion that such a tax might become permanent and be increased, that's actually a good thing. Governments do need revenue: the US has spending that the population doesn't want to go away so, despite the grandstanding, cutting spending is never going to fix the deficit problem. And nobody has found a tax that raises so much revenue with so little distortion and pain to the economy and populace. The revenue from that can allow reduction in the deficit, but also reduction in the amount of taxation in areas that are much more harmful. Payroll taxes, for example, which work to minimize employment levels. Depending on whether you consider Hong Kong to be a country or not, the largest country without a national consumption tax is Qatar, with GDP at 0.7% that of the US.

Jim

tariffs have a broad populist appeal

This is certainly true. On the other hand, it isn't by itself a very good reason for any policy : )

Mercantilism doesn't make sense, but it is certainly popular. The flat-earthers of economics : )
Politicians go that way whether they know better or not. I suspect that it's usually "not".

One traditional cure is to read something by Bastiat. (or better, a summary, since his prose is a bit old fashioned). He makes a great case that if exports are good and imports bad, then the whole world would be much better off if all the cargo ships simply sank. Read up on what he says about candle makers, which is sometimes hilarious.

Jim

Tariffs have a broad populist appeal

Americans think tariffs are a good thing...as long as someone else has to pay them.

I've found it well worth reading Bastiat in the original (his French isn't so very difficult) or in translation -- I've never seen a summary that gets the humor across half so well.

http://bastiat.org/en/petition.html


a snippet from the Petition of the Candlemakers:

We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation.

[...and thus, if Parliament would only pass a law requiring everyone to block up any opening through which light might enter, it would bigly stimulate all branches of French industry. Make France Great Again!]


Nous subissons l’intolérable concurrence d’un rival étranger placé, à ce qu’il paraît, dans des conditions tellement supérieures aux nôtres, pour la production de la lumière, qu’il en inonde notre marché national à un prix fabuleusement réduit ; car, aussitôt qu’il se montre, notre vente cesse, tous les consommateurs s’adressent à lui, et une branche d’industrie française, dont les ramifications sont innombrables, est tout à coup frappée de la stagnation la plus complète...

I disagree a bit.

I come from a different concern. I agree that tariffs influence the natural optimization of labor and economic output. But that may not be the best outcome for a single country. Keep in mind that we are not starting off with a base of no tariffs in the world. So there is already a built in bias. So some of this is correcting back.

My bigger concern is that our current tax system does not produce enough revenue to support our current spending habits. Of course spending less would be nice, but not likely. Some of the shortfall is that many people cheat and underreport income (look at all of the people who require payment in cash). I just did a remodel and many vendors would only work for cash. I tried to at least pay with a check when I could. One of the best ideas Biden had, IMO, was increasing the staff at the IRS. We need more revenue, which is not the same as additional taxes. Just people paying what they should owe may make a big difference. However, we don't seem to be making any real progress on that front. So the next best thing to me, is introduce a consumption tax. Which I believe will increase compliance and may in fact be fairer. You buy a yacht for $200 MM you pay a big fat tax. Current sales taxes are a state and local revenue source. Not the federal government. Tariffs allow the federal government to participate.

A comment w/r/t tariffs from another internet board. Make of it as you will.


"Just delurking to spill some inside tea, as 27 years in the import-export biz does make me something of an expert. Tariffs are my life.

Imports have not only not slowed down, they're increasing. A lot. My company is booming, and hiring, and I have many, many contacts throughout the industry that say the same. We are setting transaction records on a weekly basis at this point. (And on a personal note, collecting a metric shit-ton of OT, now tax-free thanks to Trump.)

All the majors are still importing the same stuff; Kroger, Costco, Wal-Mart, Home Depot, you name it, all the biggies.

Which tells me that their consumers are buying more. Which means consumer confidence is up.

And while imports are up, exports are up even more, which is what we as Americans want, rapidly addressing a trade imbalance that never should have existed in the first place.

I'm seeing nothing but win from Trump's trade policies on my end.
Posted by: Delurker at July 30, 2025 07:41 PM (NhiOW)"

Make of it as you will.

To the supplier it is just another cost item, along with all their other costs and taxes and fees.

True.

The selling price of a product is determined by supply and demand, and has almost nothing to do with what it costs the seller to produce it.

This is also true. However, if the selling price is too low to make a reasonable profit, fewer sellers will be willing to produce it. In the limit, if it the price is too low to make any profit, the business will not exist.

A rational self-interested seller is already setting his price as high as he can

This is also true. But a rational self-interested seller doesn't set their supply as high as high as they can. They only set their supply as high as they can while also selling at a price that produces a reasonable profit.

<i?The seller basically decides to either take a lower profit or stop making & selling the product

Or the seller (or all the sellers collectively for commodity-like items) can choose to make fewer items, and then sell them at a higher price by moving to a different point on the the supply/demand curve. You can see this most clearly with pure commodities. Take oil for example, when oil prices are high (high is defined as "can produce a profit above what investors deem sufficient"), more oil wells come on line, and supply increases. When oil prices are low (low is defined as "can produce a profit below what investors deem sufficient") more oil wells are taken off line to reduce the supply.

And the same applies to non-commodities, though with a somewhat slower process. Look at auto manufacturing for example. When an auto company sees that they make $6000 per truck/SUV and only make $1000 per small sedan, they may choose to slow or stop the production of small sedans because the overall costs of making a sedan are not that much more than making a truck/SUV, and the overall G&A is the same, so it isn't really worth devoting expensive factories to small sedans that only produce a small profit.

And on a personal note, collecting a metric shit-ton of OT, now tax-free thanks to Trump.

Delurker might want to look into that. Overtime is most definitely not "tax-free". Tax-reduced would be closer.

https://www.freep.com/story/money/personal-finance...

The half of time and a half is not subject to federal tax, with an income phase-out.

And while imports are up, exports are up even more
I have to wonder how much of this is due to everyone front-running the yet to be fully implemented tariff program(s)

And while imports are up, exports are up even more
I have to wonder how much of this is due to everyone front-running the yet to be fully implemented tariff program(s)


(From April) Apple chartered cargo flights to ferry 600 tons of iPhones, or as many as 1.5 million, to the United States from India, after it stepped up production there in an effort to beat President Donald Trump's tariffs, sources told Reuters.

https://www.reuters.com/technology/apple-airlifts-...

tecmo
...

But a 1991 7% national goods and services tax fixed it all pretty much single handedly

You're going to have to define what you mean by "fixed it all" here. Because if I'm not mistaken, the Canada debt to GDP (with the 7% "VAT") is very similar to the USA debt to GDP (without a VAT).

But a 1991 7% national goods and services tax fixed it all pretty much single handedly
...
You're going to have to define what you mean by "fixed it all" here. Because if I'm not mistaken, the Canada debt to GDP (with the 7% "VAT") is very similar to the USA debt to GDP (without a VAT).


Not as far as I can tell.

You get different figures using gross and net debt, and also depending on whether you include state/provincial debt, but the usual summaries are fairly compelling:
https://www.icaew.com/insights/viewpoints-on-the-n...

Canada's central government net-debt-to-GDP at around 37%, and its current year deficit as % of GDP, are both the lowest in the G7. I think Germany pulls ahead if you use gross debt to GDP.
And Canada's pension system is forecast to be fully funded till at least 2090, not something every country can claim. There are those that might quibble that bragging about the pension pot and also bragging about net debt is in effect double counting a single advantage, but it's something that most countries couldn't count even once.

It wasn't just the GST, of course. That basically fixed the government deficit trajectory, but the pension pot was built more by seeing the problem coming and hugely increasing payroll contributions starting in the 1980s and especially 1990s.

Jim

I came to the realization back in the days of Usenet that nothing said or agreed to on these boards have any meaning. All it does is increase your blood pressure. Just words shouted into the void. None of it changes anything.

I know! But its worse than that. There's also a lot of people posting about how it doesn't make sense to post because everything is so useless and stupid.

And then of course probably too many meta meta posts.

R:)

Canada's central government net-debt-to-GDP at around 37%, and its current year deficit as % of GDP, are both the lowest in the G7. I think Germany pulls ahead if you use gross debt to GDP.


This makes Canada seem much better than it actually is. Major spending in Canada (healthcare, education, most transportation infrastructure and cultural programs, etc.) is handled by the provinces, in Canada’s federalist system, so most of the indebtedness is at the provincial level, not the federal level. So total debt levels are more like 75% of GDP, not 37%. https://www.fraserinstitute.org/commentary/governm...

This makes Canada seem much better than it actually is. Major spending in Canada (healthcare, education, most transportation infrastructure and cultural programs, etc.) is handled by the provinces, in Canada’s federalist system, so most of the indebtedness is at the provincial level, not the federal level. So total debt levels are more like 75% of GDP, not 37%. https://www.fraserinstitute.org/commentary/governm...

Yes, different measures give different results. If you included the present value of the US deficits in medicare/medicaid in the next 60 years to make it match Canada's lack of that problem, it would look pretty scary. You just have to use whatever you can get that gives something close to apples and apples.

For example, yes, there is a lot of provincial level debt in Canada, as that Fraser Institute article presumably notes. (they're kind of the Mr Potter conservatives of Canadian think tanks and despise the Liberals). It's not generally from health care costs, though, which is substantially funded by the federal government. It's more that they just don't balance their budgets well, generally. Conversely, there isn't material debt at the level of Canadian cities (Calgary issued its first true bond last year), nor the nightmare pension liabilities that (say) Chicago has. Gross debt to GDP from all levels of government are quite a bit higher in the US, even before being netted.

Sticking to the broad strokes, the Canadian debt and deficit situations across all levels of government, counting both assets and liabilities of pension commitments, are far from perfect but night-and-day better than that in the US and modestly better than most other rich countries.

Jim

UK and US agree $42 billion tech pact to mark Trump's visit
https://www.reuters.com/world/uk/uk-us-agree-42-bi...

Winning!

Define winning?

So Nvidia announced that they are betting (buying?) 45B of Intel at like #23 a share (a heck of a bargain) shortly after the US government grabbed 10% of the company.

Today, it's announced that we are sharing our prime position in AI with Britain - so a select group of firms (including both Intel and Nvidia) are involved.

So, I see this as a win for the Brits and for the investors on those companies pitched, but I'm wondering, from a strategic standpoint how it helps the US (or Berkshire Hathaway)?

(I wonder if there have recently been blocks of the companies involved by politicians or their spawn).

Jeff

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