Trump cards – the ups and downs of the stock market and the response from the rest of the world to “reciprocal tariffs”
The stock market has regained some poise in the last day or so. It would be a brave person to predict that it will only ever go up or down.
In a past life, there was something called “rotation” amongst stocks and prices where a trend was first established by the dozen or so most liquid stocks, and, once this price action was 9more or less0 complete, other stocks would be transacted in the same way – locking in the trend.
It is a little early to say that a downward price trend has been established.
Here is a chart of the S&P500 over the last five years.
And here is a chart of Federal Reserve Bank intervention by the Fed over the long term from here:
Balance Sheets - Yardeni Research
Draw your own conclusions!
In my view, the US economy has been artificially inflated by profligate Biden spending that has caused inflation and has resulted in a fake level of activity. Th stock market and bond yields reflect this to same extent. US economic activity is 10-15% higher than it ought to be and has been “inflated” in price and activity terms by Biden Administration policies – hurting the US consumer.
The “real” economy of tangible gods and services has not suffered the same distortions as those caused by Biden and his motley crew – nonetheless it exists using supply chains that are truly global.
The EU (Union of European Socialist Republics – UESR) and communist China are upset with being served the same dish they have been serving the US for decades – eve imposing HALF the rate of tariffs as they impose on the US drives them apoplectic and sends them into a foot-stomping tirade.
The EU started a trade war by imposing regulations on all those trading with it here:
(100) EU rewrites every trade deal it has with the entire world via its new compliance directive
Thar was last year. The Trump Administration has imposed reciprocal tariffs in a mov that put the spotlight on global supply chains and the EU/China trade practices and many other countries.
The EU thinks it can regulate compliance and economic growth – Trump thinks he can deregulate and foster economic growth.
Countries around he world are looking to abandon tariffs and join with the US in free trade and an even playing field. Here’s an example of the reporting of recent developments:
Vietnam, Taiwan Capitulate: Offer To Remove All US Tariffs, Boost Investment | ZeroHedge
The reactor globally to Trump’s tariffs is not the catastrophe portrayed in the MSM – who seem to want to continue to lie, cheat and steal informed opinion and facts!
It is lazy reporting by the MSM – instead it should be pointing out a few of the other problems of laziness and sloth inflicted in the US over decades of “socialist wokery”.
The main problem is that. Not only have (investment managers like BlackRock) exported US jobs to cheap labour countries, but there is a vacuum where workers have been disenfranchised and no longer possess the skills to make the COMPONENTS of th supply chains. They have “woke” DEI/CRT skills that produce nothing, ever!
40 per cent of the COMPPNNTS for a Ford F-150 might be sourced from 20 countries and assembled in the US – Trump wants these components MADE in the US! Does the US workforce have the scale and expertise to do this?
Or, in the world of Democrats – even the willingness?
It will take years to re-acquire the skills needed to make these COMPONENTS of the supply chains. There is little skill required to assemble the bits from completely knocked down kits – imported from dozens of countries – the skill comes in making the COMPONENTS.
It would be good to see where these companies announcing trillion-dollar investment plans intend to get their labour force from in the US.
The other feature of the impact of the Trump tariffs and the successful removal of tariffs and soft barrier to trade for countries like Viet Nam and Israel.
China has made a ton of investments in Viet Nam – how is the Trump Administration going to ensure compliance of China when it exports to the US via Viet Nam?
It is hardly surprising that Israel agrees to zero tariff barriers when the US provides billions of dollars’ worth of free weapons!
I wonder how the tariffs will be collected. At ports of entry with CBP standing ready with a clipboard of countries and tariff rates? Probably not – US companies will do the tariff collection with their own clipboards and an honesty box!
Tariff wars can easily lead to trade wars and then to hot wars – maybe not these days, but it’s all about a country’s resources.
It should be noted that no-one in the US needs to “suffer” from the price impacts of tariffs.
Tariffs are NOT a tax – they are a choice for price for foreign goods and services, over and above that charged for US goods and services,
How much will be raised from import tariffs?
Frm Brave AI:
“In 2024, the United States reported $3.19 trillion in exports and $4.11 trillion in imports.”
A minimum tariff of 10 per cent implies around $400 billion. That is not what will be collected, of course, as volumes will almost certainly reduce. Still, it is an indication of a starting point.
How much will exports be affected? Who knows! If the US re-skills to manufacture all those components. In a few years time, the US may dominate the supply of global components for autos and other key products like fridges and washing machines etc!
The key question remains - has socialism polluted the labour force to such a degree that there are insufficient numbers of skilled American workers left to take up the slack – ad how long will it take to change the attitude of American colleges and universities to produce graduates of value!
How loud can America ROAR or is it doomed to collapse under the burden of “woke” socialism.
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Onwards!!!
Thank you for your efforts.