Trump administration announces tariffs that may make plenty of tech more expensive from August 1 The Trump administration on Monday announced the tariff rates it will impose on fourteen nations starting on August 1st, and several big technology-producing nations made the list. A White House fact sheet delivered news that the administration plans 25 percent tariffs on goods from Japan, Malaysia, and South Korea, and a 36 …
It's about time the rest of us cut out the greedy shits that run the US, until the US voters come to their senses. As for their military, they never join in till they see who is winning, and then never finish the job. It all ends in failure (Vietnam/Korea/Afghanistan/Iraq etc etc). I'm sure the rest of us can do without the 250 year old child that keeps throwing tantrums 'cos they don't get their way. Who the fuck do they think they are anyway?
I'm sure I'm showing my ignorance here, but what does the United States export?
I count beef, chicken, corn -- of which much of the world doesn't want the chemical-laced product. Then I see expensive cars (Ford, three times the cost of similar vehicles in showrooms in South America), "Cloud Services" (does this not make up the bulk of the "trade" difference?), fossil fuels (exports and imports?), and software.
The United States doesn't manufacture any more, so what does it export? How are other countries supposed to ink a trade deal?
Things manufactured in the US:
* Shitty gas guzzling cars that nobody outside of North America wants.
* Aircraft with a "dive yourself into the ground" mode.
* Weapons, but the US has shown itself to be such an unreliable partner, countries that used to buy from the US are turning to arms manufacturers in Europe & South Korea.
To answer your first question, the US makes some of pretty much everything, but the stuff it is most likely to export are either primary (lots of agricultural products, petroleum, minerals), related to those (processed chemicals, foods, some types of electronic components), or services. But most sectors have at least some manufacturers doing some work in the US. For example, whatever your opinion of US-based automotive companies, a lot of non-US car manufacturers have large plants in the US anyway, and not just to sell to that market, so you may end up driving a car from a European or Asian brand that has a lot of North American parts in it.
And to answer your second question, it's really hard to make a trade deal. In a normal world, you could theoretically get a trade war like this for some countries. Some countries had particularly high tariffs while the US had low tariffs on almost everybody. Whether that's a problem depends on your personal philosophy, but it wouldn't be that abnormal for the US to increase tariffs on them with the goal of having a trade deal where both come down. In the same way, other things like protection of IP across countries or trying to stop things like the Chinese mandatory joint ventures thing could drive a trade war. That's not what's happening, as demonstrated by the many tariffs being placed on countries that did none of that stuff. The people starting these are not concerned about other countries' tariffs or trade practices as such, but instead they think that any country that exports more than it imports is somehow cheating, which is not how that works. With the original system, it wouldn't be hard to list actions the other country could take in order to satisfy the complaint, and the only question would be whether enough pressure could be imposed to make them do that. In this system, there is clearly nothing that can be done, and countries are trying a bunch of random stuff in the hope that one of those things will make their situation better, but since the original tariffs were instated for dubious reasons, those deals are likely to be exceedingly fragile.
Some countries had particularly high tariffs
Actually, tariffs have been coming down for decades and with specific exceptions, usually around concerns about dumping or protecting particular local markets, have been negligible for the most part. The biggest problem has always been non-tariff barriers (such as differing standards for food quality). The World Trade Organisation had been generally quite effective (as international bodies go) in resolving trading disputes and creating a stable mechanism for the management of tariffs. Unfortunately, it made some rulings against the US and has been progressively undermined by the US subsequently under a succession of administrations.
The US seems to be under the false impression that the size of its market gives it leverage to tilt the rules in its favour. It did get away with this for decades, with the dollar being the default contract currency for international trade, giving the US the currency stability that has defied its ballooning debt. Unfortunately, the US is now heavily dependent on imports, the debt is growing ever faster and there are moves to use - or even create - other reserve currencies for use in trade (this latter being the reason for the extra beating for the BRICS countries).
Whatever the short term outcome, this is going to end very badly for the US. It needs imports more than other markets need its exports and it's either going to have to eat its own tariffs or do without. The result of the world is rearranging its trade to deprioritise the US and discussions are ongoing about at WTO replacement that excludes the US. If other countries start pricing their goods and services in Euros or BRICS dollars or Yuan, US bond rates will start to creep up to levels that better reflect the real risk. The only weapon the US has left is, well, weapons and it looks like it isn't going to use those to reinforce its present allies and trading partners. That leaves worryingly few options for a president who appears to be impatient where speed of progress is least important and indecisive where urgency is indicated.
Which the Big Bad Ugly Bill of Worms (BBUBoW) that Herr Drumpf just signed into law will the debt grow to silly levels yet the MAGA numbskulls in DC are still parroting the line that the debt won't grow under the BBUBoW.
Nothing like leading the lemmings off the cliff.
All it needs now is for one or two US debt bond holders to sell off (Hey Canada and China are you listening) and the US Economy will implode. Yes, it will take a lot of other countries down with it including the UK but having a repeat of the 1930's in the US is IMHO, the only way to get what Trump is doing through to the MAGA faithful. A few million homes being repo'd will make MAGA sit up an take notice for about 5 seconds. A few million on the streets or living in their cars will make more of an impact.
>A few million homes being repo'd will make MAGA sit up an take notice for about 5 seconds. A few million on the streets or living in their cars will make more of an impact.
There's no real winning I'm afraid.
The response to their prophet betraying them like this isn't going to be "oh shit we were wrong" but more "Smite the heretics! He did not fail, we failed Him for suffering them!"
Think Rwanda or Tulsa 1921 style pogroms with government backing or at least complicity by local law enforcement (99% maga by volume).
'bout the cars, I think one of the European presidents or prime ministers remarked half a year ago, that basically their Mercedes (or whatever) was a vehicle manufactured (I think assembled even) in the US - so yes, Europe does import US cars, they are just, well, European brands, which Florida Man doesn't like.
I just hope that hardware will be cheaper for the rest of us now, since the market here will be flooded by stuff that's no longer economically viable to export to the US :)
"I just hope that hardware will be cheaper for the rest of us now, since the market here will be flooded by stuff that's no longer economically viable to export to the US :)"
Both Sony (PS5) and MS (XBox) have recently shown they will increase prices worldwide so that can "eat" the US tariffs on sales into the US. Loosing such a big market is not something they want, but can't avoid, and they "need" to retain their overall margins because "share price" or something. I expect prices to rise world-wide rather than see over-production being "dumped" at low cost onto the rest of us.
Quite true. I was simply listing things that could cause a normal tariff war. In fact, smart countries would have a reason to start a tariff war with the united States because of their recent legal decisions legitimizing unrestricted access to IP by LLM companies. Unfortunately, the EU appears to be following that lead, with Ireland officially permitting AI training on user content, and many countries, especially including the UK, mulling special legislation to protect, I.E. empower, AI companies because they're now on board with the hype.
Countries with high tariffs? Which ones?
The average tariff rate for almost all countries is very low, typically 2-3%, with tariffs applied selectively on some industries to protect them.
The example trump likes to give is tariffs on US cars. True, the EU levies a 10% tariff on US cars. But the US has levied a 25% tariff on light trucks (the cars people in the US want to buy) on ALL countries since the 1960s. Do a search on 'Chicken Tax'.
The US has had 100% tariffs on Chinese EVs for the last few years, so you simply don't see them sold in the US. This protects Tesla, but has the side effect of letting Tesla charge more in the US than elsewhere. Example, a Tesla 3 in the US starts at $44130, which is about AUD 68K at current exchange rates. You need to add taxes, dealer fees and other costs on top of this.
Australia has no tariffs on imported cars. The drive away price for a Tesla 3 in Queensland is AUD 58696. This includes all dealer fees, state stamp duty, GST, registration and 12 months compulsory 3rd party insurance. Chinese EVs start at about AUD 30k.
This is the effect of almost all tariffs. Imports become more expensive, so the protected domestic industries just charge more. What is to stop them when competition is being priced out?
Ah, but would you want to buy a Tesla?
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No, not when there are plenty of much cheaper Chinese EVs on the market for about AUD 30k. BYD, GWM & MG are making serious inroads here and Tesla sales are tanking.
My next car will likely be an EV. While we have a proper diesel car for going off road, towing or long distance drives we also have a Kia Picanto as a runabout my wife uses for getting to work. This has done almost 200,000 kms and is due to be replaced. I am waiting to see what happens when the the GAC Aion UT launches in Australia, which is due sometime this year. It is expected to sell for well below 30k, so could kick off a price war.
Interesting times.
Please note that I was listing possible reasons why you could have a legitimate trade war, not saying that this one was legitimate, and I specifically noted that it wasn't because, as I said, they are imposing "tariffs being placed on countries that did none of that stuff". There are some countries, mostly in south Asia and Africa, that have high tariffs on some sectors. The US could have decided some of those were unfair and done something about it. Ideally, they would have gone to the WTO first and waited for a judgement there, although as you correctly say, the US has been weakening the WTO for some time, but they wouldn't be the first if they decided to act unilaterally about something like that.
That doesn't apply to Australia, which doesn't even follow what passes for logic in their current plan. The public statements from the US trade people is that this is about trade deficits, which makes no sense already, but they're not even following that rule since the US has a trade surplus with Australia and is getting tariffs anyway. We have left any normal cause for a trade war long ago. Some countries do still have higher tariffs though.
The "logic" applied to Australia shows just how bonkers the whole thing is. Australia has had an FTA with the US for years, so US imports are tariff free. Despite this MOST of Australia was landed with a 10% 'reciprocal tariff', because that is the baseline.
However, the 'tariff' calculations were based on US trade deficits, not tariffs and on internet TLDs, not countries. So Australian territories like the uninhabited Heard & McDonald islands that have their own TLDs all get their own rate. Most are the same as the rest of Australia at 10%, but Norfolk Island copped 29%. This seemed crazy, so I did some digging. There was zero trade between the US & Norfolk Island this year and almost none last year. However, in 2023 Norfolk Island sold a 'massive' $655k worth of stuff to the US. Mostly leather shoes & seeds. However, the people who live there (about 2100 of them) only bought $116k of stuff from the US. So there was a US trade deficit of $539k with Norfolk Island. Because of this absolutely minuscule deficit, the spreadsheet of doom landed them with a 29% tariff rate.
Yes, it is THAT stupid.
Trump has TACOed on the whole idea of trade agreements. As is always the case with him, his 80 IQ smooth brain thinks everything is "simple", but when he's confronted with the fact it isn't (see health care - Trump 02/27/2017: "Who knew health care could be so complicated?") or his claims he'd stop the Russia/Ukraine and Israel/Palestine wars "on day one or even before" now he's found out trade deals are really tough. This isn't play acting like USMCA was - where they basically took the text of NAFTA, made a couple changes, and gave it a different name.
Since trade negotations are tough he's TACOed on the idea of doing them since "90 deals in 90 days" was never going to happen - so far he has frameworks of only two deals, which will take months to turn into actual deals. So he's just sending out letters telling countries what their rates are going to be, thinking their leaders will panic and beg Trump for mercy. But they saw what Xi did - he simply matched Trump's tariffs and Trump TACOed. I expect South Korea, Japan and most of the other countries to do the same.
All he's going to end up doing is increase trade between China and the rest of the world, and Europe and the rest of world, and China and Europe, as everyone decides that the US is not a reliable trade partner or a trustworthy negotiator given how he went back on the USMCA he himself ratified in his first term.
So, you avoid the tariff by announcing a better reciprocal tariff?
So, the countries in question could legitimately just decide that no Tariff need be collected on any US made Hard Drive, Memory module, CPU or GPU…which would have zero revenue implications since those things don’t exist. And…even if someone pulled the trigger right now for a new fab on US soil, the first production product would not even roll off the line until Frumpf’s term is long over.
Why bother? Is this supposed to be about job creation? I am sure Americans are just itching for the chance to work on an assembly line for the equivalent of two cups of rice/day…better make sure those fabs land in Deep South Right-to-Work shitholes! That, I am sure, will make merica grate agin!
I believe this is much more about stock market manipulation than anything. Announce tariff, market depresses…BUY! In a couple weeks…announce a delay/reprieve/….market bounces back….SELL!
Rinse. Repeat.
Probably not. There are likely to be a few zones of this:
Short-term: You get what you're looking for. Manufacturers have too much stuff, can't sell it in the US, so they sell it cheaper elsewhere. This only lasts until their stock has decreased, so maybe a few weeks at most.
Medium-term: Companies try to do something to bring back that market, whether that's looking at manufacturing in the US or setting up more complex arrangements to be able to label things with different source countries. That costs money, and only so much can be added only in the US, so it eventually starts raising prices for everybody.
Long-term: Those companies who don't sell to the US now just make less stuff, meaning prices are the same or worse than they were before. Those who sell to the US have higher costs, so prices are the same or worse than they were before.
AFAIK, Canon has already announced large price increases for a lot of its gear. Don't know about the others, but if one did, I guess they think the other will do too.
Trump & C. may believe the importer would pay the tariffs to sustain the idiotic tax cuts of its "bbb", but many USains may find they are going to pay the tax cut for the rich...
"the extraordinary Economy of the United States, the Number One Market in the World"
Extraordinary certainly. I'm reminded of Bernard explaining the meaning of "egregious" to Hacker: "outstanding in, erm, one way or another". But the Rest Of the World is a bigger market than the US. The inevitable result of the US cutting itself off from ROW, which Trump seems to be setting out to do* just means the rest of us can trade amongst ourselves and the US can make do with the crumbs.
* He thinks he's an emperor commanding his domains to bring him tribute. I don't think that's what he's achieving, largely because it's his own serfs citizens who are actually paying the tribute.
"The letters and fact sheet state that countries can avoid the new tariffs in two ways. One is moving operations to the USA, a decision the administration promises to expedite with swift approval of new manufacturing facilities on American soil."
Countries don't manufacture stuff, companies do. So its up to individual companies to decide if they should invest in US manufacturing not the governments of the country they reside in. Of course anyone with half a brain cell knows that, so that excludes Trump.
And if more companies decide to move their operations to the US, that is less tax revenue for the countries they used to manufacture in if they downsize their operation in their home territory. So I don't see how its ever going to be a win for countries to cave in to the orangutan tariffs. Just ride it out for a few more months til TACO after the markets panic again.
Generally, when two or more countries make a "deal", it takes months if not years of negotiations so that everyone can go home with a "win" under their belt. Making a deal with Trump means everyone except him MUST lose or it's not a proper "win" for him.
Of course, with the former, everyone are still friends, or at least civil to each other, meaning everyone grows and the doors are open to further "deals down the line. With the latter, it's clear that the "losers" are not happy, will look for better deals elsewhere and never trust the USA again after they've seen that even the deals he does make, he changes or goes back on at the drop of a hat.
He's a meme and a half alright - or rather would be had he not entered a position of considerable power given the Supreme Court is uh, a can of shit and rot and has been for a good while. Picking an ex-hool for a president just to spite anyone who's remotely not racist/sexist/phobic etc, 5D chess Poland-style.
Obviously selling the shortcomings of our local libcons quite heavily here, it's not just us that have failed, again, to do anything vaguely progressive because of 'woke' agenda scaring the people, socioeconomic factors overall have been fucked everywhere and it's just that now chickens have come home to roost. Entirety of Europe's been turning far right for better part of this century, but whenever we (people who give a toss about others not being abused) tried to argue it's gonna be more of fashy 20's rather than swinging ones, obviously majority thought we should just STFU and not spoil the fun.
What's the most troubling part is that with the current sea of decentralized disinformation (as opposed to good old state propaganda - at least easier to combat), media and scientific literacy have not risen up to an extent that would allow layfolk to call bull on the most obvious things. Add to it economic pressure leading to people not having enough time to consume other media than what is readily available, just being overworked and afraid for the future and presto, a timebomb with civil rights. I assume this will, unfortunately, only get worse, as the more radical shits have been given the platform again and again despite their horrendous actions (not even beliefs). Antagonist-supported politicians is one thing - major issue is how the rot makes normal people get more vile and how it snowballs.
And with no real answer apart from grassroots movements acting in good faith it's gonna be hard to genuinely, not just nominally change the tides. Creating something is always harder than breaking it. And an enemy, even if imagined, will always get people to act far easier than need to improve, organize or just give a crap about someone else - especially if the else is not a member of the in-group. Hence why most grassroots orgs are way smaller than corpo-like parties and destructive movements. More effort, lesser chances of success, higher chances of burnout and no immediate reward as opposed to dopamine rush when yelling slurs at people just minding their own business or patting yourself on the back for agreeing with preferred political candidate.
I really hope Europe manages to navigate all this well, but with the sodding AI on top of it everywhere the vibes are fucked and a half. Education and organizing are hard as is, in the current climate I won't say impossible to implement, but quite a tall ask.
There's another way. Tell Trump to fuck off, reduce reliance on American goods, and cultivate other trading partners.
Trump has recently said that any country that retaliates will simply get tariffs on their goods increased to that amount. So in typical bully fashion, the U.S. can do everything to you but if you fight back, they'll destroy you.
Would you tolerate such an ultimatum? I would throat punch somebody who spoke to me that way, before their lips stop moving.
