In light of the election results (Presidency, Senate, House), it appears likely the incoming administration will be in a favorable position to pursue their desired policies. Among those mentioned has been tariffs "across the board" for all imports to the US, to the tune of 10-20%.

With the recognition that some proposed policies may not come to pass, at least in the full form in which they are mentioned on the campaign trail: How likely do you think it is the new administration enforces 10-20% tariffs on all goods imported from all nations? It is most assuredly a full-on tax on consumers, and I think the notion that simply "buying American" is a suitable alternative to circumvent the additional costs tariffs would create for Americans is naive at best.

The initial sentiment in the stock market would suggest to me that investors are not so concerned about it, though that may not be very telling in itself.

Anyways, I would like to hear folk's thoughts here on where they think this proposed policy will actually go. I'm hoping it is the sort of thing that would be pursued with at least a modest awareness of second order consequences (wishful thinking, perhaps).

hedge said:

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I think it's a bad idea, and will drive up prices for the already struggling middle class. I genuinely hope this does not happen

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I agree, it's a bad idea. I think it would offset whatever Federal tax cuts (if any) are enacted.

Definitely Not A Cop said:

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My thoughts on tarriffs have changed a lot since COVID. I was against any form of tariffs before. Since then I think they are somewhat needed for any critical industry to keep enough necessary infrastructure stateside in case of another black swan event.

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Can you define 'critical industry(ies)'?

Just watched this video on garlic production in Gilroy, CA.

Garlic from China being imported for less than the cost to produce in the US.

US garlic producers drop from 20 to 3 major farms.

Top producer spent money on modern machines and processing but still they were being undercut by the Chinese.

US producers said they would eventually go out of business.

So the owner of the biggest farm goes to Washington and in 2019 Trump signs a tariff on Chinese garlic.

Biden has so far left the Tariff in place.

Almost all the labor being used to harvest and process garlic were Mexicans on temp ag worker visas.

SteveBott said:

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Trump has had a fascination with tariffs for decades. And as POTUS he does not need Congressional approval and can implement them on his own. IMO it's not if he will, but how much.

His 2017 85% of the tax cuts went to the top one percent of income owners and corporations. So those cuts won't help consumers. It's a double whammy on the bottom 60% of wage earners.

Tariffs are inflationary at least in the short term. It's going to be a bumpy ride in the near future.

As a mortgage lender I don't expect to see rates go south of six anytime soon.

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How have the last two years gone with respect to rates? We supposedly "achieved" the feds preferred blah blah 2.5% CPI... have rates gone to inflation + 1%? How are tariffs today?

Honestly you really have no idea, and you certainly wouldn't be able to connect the dots to 2017.

Dreigh said:

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Definitely Not A Cop said:

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My thoughts on tarriffs have changed a lot since COVID. I was against any form of tariffs before. Since then I think they are somewhat needed for any critical industry to keep enough necessary infrastructure stateside in case of another black swan event.

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Can you define 'critical industry(ies)'?

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For critical infrastructure/industries, I would say that it is manufactured goods used in the electric & power production industries, oil & gas, specific healthcare equipment/products, pharmaceuticals, raw material products (steel, etc)…..

SteveBott said:

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Trump has had a fascination with tariffs for decades. And as POTUS he does not need Congressional approval and can implement them on his own. IMO it's not if he will, but how much.

His 2017 85% of the tax cuts went to the top one percent of income owners and corporations. So those cuts won't help consumers. It's a double whammy on the bottom 60% of wage earners.

Tariffs are inflationary at least in the short term. It's going to be a bumpy ride in the near future.

As a mortgage lender I don't expect to see rates go south of six anytime soon.

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Yes, I am aware he does not need Congressional approval. I started this thread to discuss (after some pretty big statements about the use of tariffs on the campaign trail) to what degree he will enforce tariffs and on what countries/products.

Let me be clear: I'm not interested in getting yet another doom thread started about, well...anything (there is another forum for that, and plenty of it). I appreciate the thoughtful responses so far, and I agree with posters who have said they do not believe "across the board" tariffs will actually find their way into policy.

Moy said:

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Dreigh said:

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Definitely Not A Cop said:

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My thoughts on tarriffs have changed a lot since COVID. I was against any form of tariffs before. Since then I think they are somewhat needed for any critical industry to keep enough necessary infrastructure stateside in case of another black swan event.

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Can you define 'critical industry(ies)'?

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For critical infrastructure/industries, I would say that it is manufactured goods used in the electric & power production industries, oil & gas, specific healthcare equipment/products, pharmaceuticals, raw material products (steel, etc)…..

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I agree these are critical industries. Do you think there are longer-term solutions to onshoring these industries beyond tariffs? My concern is that tariffs do not seem like a viable longterm solution to keep in place.

SteveBott said:

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Trump has had a fascination with tariffs for decades. And as POTUS he does not need Congressional approval and can implement them on his own. IMO it's not if he will, but how much.

His 2017 85% of the tax cuts went to the top one percent of income owners and corporations. So those cuts won't help consumers. It's a double whammy on the bottom 60% of wage earners.

Tariffs are inflationary at least in the short term. It's going to be a bumpy ride in the near future.

As a mortgage lender I don't expect to see rates go south of six anytime soon.

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so that is a lie or you are just misinformed:

"Beyond what the Trump tax cuts did for economic growth and federal revenues, it provided major benefits to working families.

The officially reported poverty level fell to its lowest rate in 50 years and unemployment rates for minorities and those without a college degree hit all-time lows.

Real median household income rose by $5,000, and wages went up by nearly 5 percent.

Americans earning under $100,000 saw an average tax cut of 16 percent. And while the tax burden on low-income families went down, the top one percent saw their share of federal taxes go up."

Actual statistics from the 2017 Tax Cuts from CBO

SteveBott said:

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If you believe two partisan republicans who wrote that are factual go ahead.

https://www.cbpp.org/research/federal-tax/the-2017-trump-tax-law-was-skewed-to-the-rich-expensive-and-failed-to-deliver

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So you believe the people who wrote that aren't biased?

I'm not defending Trump's various tax and tariff plans, but c'mon....If you're going to dismiss someone's argument because partisan republicans wrote it you need to rebuttal with something better than that....

IowaAg07 said:

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I feel like this could be an economic discussion or a political discussion, and for some reason F16 is showing up to the B&I forum.

Is anyone arguing that tariffs are NOT an indirect tax on the consumer? I'm also still wondering why we need to balance the trade deficit when we're a consumer economy with a strong currency, which would generally lead to a trade deficit.

For the record, I'm all for putting pressure on China using as many targeted tools as we can (including tariffs, if we're willing to live with consequences). I'm not for general, widespread tariffs at all. I think there are much more effective ways to incentivize on-shoring of critical manufacturing and industries.

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My apologies for posting a topic that, in hindsight, I should've known would be draw political debate...especially this soon after an election. I was interested in starting a discussion regarding the potential effects of sweeping tariffs on business and investing decisions in the near to medium term, and people's thoughts and opinions on how likely such measures might be implemented. Discourse on such matters is typically much more reasoned over here.

Did not really mean to start an argument for or against tariffs.

Edit: typo

That wasn't directed at your topic, I agree this is a good discussion if people can take off their political blinders. I agree with you that normally the B&I board generally gets a more rational response.

I think Trump truly believes tariffs across the board are a great thing and the tax is collected mostly/all from the foreign countries. I am hopeful that he is surrounding himself with a lot of business people that understand foreign trade well and they will convince him to use them in only selected industries and against countries like China to help avoid hurting American consumers with higher inflation and making American companies less competitive as many studies have shown from anti dumping duties.


https://cepr.org/voxeu/columns/antidumping-protection-good-bad-firms-bad-good-firms

Lighthizer lays the groundwork for Trump's massive new tariffs - POLITICO

According to the article, a universal tariff up to 20% on all goods and at least a 60% on Chinese goods is under consideration. They also believe that the tariffs will offset the tax cuts.

I can't believe that Trump would implement tariffs at this magnitude, but what do y'all think would be the repercussions if this came to fruition?

Joseydog said:

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Lighthizer lays the groundwork for Trump's massive new tariffs - POLITICO

According to the article, a universal tariff up to 20% on all goods and at least a 60% on Chinese goods is under consideration. They also believe that the tariffs will offset the tax cuts.

I can't believe that Trump would implement tariffs at this magnitude, but what do y'all think would be the repercussions if this came to fruition?

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Expensive stuff until a lower cost alternative can be found for China at 60%. We eat the 20% alternative

Very little if any meaningful manufacturing finds it's way back to the US. If it does, it will also be more expensive and probably poorer quality

Double whammy if all the illegals working in US manufacturing jobs get deported


I'm hoping the whole thing is a negotiating ploy

jamey said:

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Expensive stuff until a lower cost alternative can be found for China at 60%. We eat the 20% alternative

Very little if any meaningful manufacturing finds it's way back to the US. If it does, it will also be more expensive and probably poorer quality

Double whammy if all the illegals working in US manufacturing jobs and get deported


I'm hoping the whole thing is a negotiating ploy

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I hope it is a negotiation ploy as well.

And I agree with your assessment of its effects. I just wanted confirmation from the wise B&I since I have not studied economics since undergrad.

Trump has a habbit of not listening to others.

I don't know if he really believes it doesn't increase costs for US citizens and that foreign counties pay the tarrifs or was that just campaign junk talk

Seems like an important key

jamey said:

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Trump has a habbit of not listening to others.

I don't know if he really believes it doesn't increase costs for US citizens and that foreign counties pay the tarrifs or was that just campaign junk talk

Seems like an important key

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For someone with as much business experience as he has, I can't think of any major business investment he has done that is truly a global business competing with imports/exports.

Real estate, golf courses and USFL teams are impacted a little bit by global trade but it isn't a key driver.

What good or harm have we done to our country by using comparative advantage as a trade incentive regarding labor costs? My first thought is fewer unions and cheaper goods. My second thought is stagnant wages and fewer jobs here at home.

Is it a wash? I don't know...

It would seem that tariffs would inspire higher wages with higher costs of goods. Never seems to work out that way though.

And here we go.

Trump ratcheting up from the 10-20% tariff talk, up to 25% on products from Canada and Mexico. Hard to see how this is just talk, he certainly seems to be moving pretty squarely towards fulfilling his promise, and then some.

I hope I'm wrong, and that he's just doing some negotiating before officially taking the White House.

Dreigh said:

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Moy said:

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Dreigh said:

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Definitely Not A Cop said:

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My thoughts on tarriffs have changed a lot since COVID. I was against any form of tariffs before. Since then I think they are somewhat needed for any critical industry to keep enough necessary infrastructure stateside in case of another black swan event.

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Can you define 'critical industry(ies)'?

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For critical infrastructure/industries, I would say that it is manufactured goods used in the electric & power production industries, oil & gas, specific healthcare equipment/products, pharmaceuticals, raw material products (steel, etc)…..

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I agree these are critical industries. Do you think there are longer-term solutions to onshoring these industries beyond tariffs? My concern is that tariffs do not seem like a viable longterm solution to keep in place.

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Yes, slashing regulations, lowering corporate tax rates, advancing technologies, and empowering entrepreneurs and business owners.If you are still needing infrastructure stateside, then tariff to get to an acceptable level.

I cannot understand how so many people are so bad at negotiating, or maybe it's just hatred of Trump preventing basic thinking skills, so I'm going to lay it out like you're 5:

Step 1. Trump posts:

"Thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before. On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders. This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!"

Step 2a. The president of Mexico responds immediately by saying:

"Caravans of migrants no longer reach the border," Sheinbaum said on Tuesday while presenting a letter she plans to send to Trump in the coming days. She also emphasized Mexico's efforts to curb the flow of drugs, including the synthetic opioid fentanyl, while noting that it remains "a public health and consumption problem within your country's society."

https://www.newsweek.com/caravans-not-reaching-border-says-mexico-president-after-trump-threats-1991916

Step 2b: Canadian leaders respond similarly:

The premier of Ontario, the most populous province and the country's industrial heartland, said Trump had good reason to be worried about security of the long shared frontier.

"Do we need to do a better job on our borders? 1,000 percent ... we do have to listen to the threat of too many illegals crossing the border," Doug Ford told reporters.
"We have to squash the illegal drugs, the illegal guns."

https://www.reuters.com/world/americas/canadas-trudeau-meet-provincial-premiers-this-week-discuss-us-ties-2024-11-26/

Step 3. There is no step 3. Trump accomplished what he aimed to do with a single quick and simple social media post. Get our neighbors kicked into high gear doing what he wants. This is what leadership looks like. You may not agree with the policy aim, but what he did was immediately effective.