The U.S. has over a century’s worth of dominance and control built in, so it’s not gonna unravel anytime soon and countries will need to grovel along for a bit.
But the decoupling has begun, is almost certainly irreversible and is gonna hit Americans hard at most a decade from now.
We have no idea the the chain of motion that has already been set in. Trillions of dollars worth of goodwill and respect has been lost in months.
And that’s also a good illustration of sentiment toward the US today.
Well for the OECD it worked out pretty fine, Japan and Korea provided new markets for USA while standards of living improved. But when you are realistically not expecting to maintain balanced import dependency or public foreign ownership, then it becomes zero-sum. A cynical projection from those less fortunate.
I'm an American traveling through Scandinavia and Northern continental Europe for the last three weeks, now in the UK.
I haven't experienced a bit of grief. Their opinion of our politics is generally separate from how they treat me personally, and I do the same for people of other nationalities.
American cultural dominance is everywhere. I can barely find a pub or restaurant not playing American music, for instance.
From my Eastern European perspective, this is something fundamentally different. Sure, many people were critical of Bush Jr., but still, you could, with a bit of effort, construct some semi-reasonable narrative even around Iraq and Afghanistan. But Trump? That feels like an entirely different league.
I grew up in Czechoslovakia, still occupied by Russians at the time. Seeing Trump clap at Putin's landing, seeing US soldiers on their knees rolling red carpet for Putin... this broke something in me. I honestly almost threw up. And that meeting with Zelenskyj in the White House, that will stay with me until I die.
I spent some time in the US when I was at college, and I will always cherish those memories - these were the best seven months of my life. Coincidentally, I was in the US during the Bush Jr. presidency. And despite my dislike for him, I was always defending the US. Somewhat irrationally, I was always trying to justify even the questionable things. But now, that's gone and buried. As far as I am concerned, the US I loved no longer exists. Now it is another Russia-like hostile country that we need to protect ourselves from.
And the personal experience you mention - sure, most people can separate citizens from their state. I can have a civil discussion with a Russian. I was always friendly to my Russian colleagues, immigrants who now live here. But that does not mean I am not hoping with all my heart that their state goes to hell.
I know a ton of Russian emigrees, and basically nobody gives them grief (until some of them start talking politics).
Yes, but the decline is precipitous now. It's gone from "eh, we don't like Americans much, but they're a useful ally" to "wow these guys are fucking insane and we need to divest ASAP".
That is such a sane thing to do. I was always astonished and sad how often strangers in foreign countries instantly link my origin to the actions of the people in power. As if this is completely under my control and with no doubt I support and approve whatever they do.
EU countries with government infiltrated by russian agents are buying russian oil.
I've never witnessed this happen. People (in person) are usually not aggressive and would not tell what's on their mind. Maybe if a Ukrainian and a Russian are to meet in a bar, things can get heated.
Mind to share the countries where you saw this happen?
Hell, here in the UK I'm happy to hear Sheeran even though he's not really my style typically.
I don't mention that because I like American cultural dominance, merely because it is so ubiquitous.
I was in the middle of South Africa in the oughts and there were bootleg Britney Spears albums... Kind of shocking and I honestly don't exactly understand the appeal of American pop, but it's widespread...
After looking it up, I found it was produced and recorded in California, by an American label.
People are nice and will continue to be nice to nice American tourists but make no mistake, there has been a severe shift both in the actions of regular people and business.
And for nothing. Normally you can at least get a good price for selling your reputation.
My only vantage point is from inside the U.S., but I find the loss of prestige completely believable.
What amazed me was discovering that my own countrymen would vote in, and continue to support, someone like Trump.
My political views are pretty centrist, and I thought I understood the views of most liberals and conservatives.
But I never thought there would be so little resistance to the lies, corruption, authoritarianism, and the breakdown of the separation of powers. And the simple incompetence w.r.t. running the executive branch.
It's like my mental framework has no way to model whatever is going on here.
If you don't like one party what other option do you have but to vote for the other party?
So as a result it's enormously easy for radicals to take over a big tent party and still achieve remarkable support.
(I also think Bernie could not have won in 2020.)
That said, most Libertarians are now under the RLC (Republican Libertarian Caucus) as disaffected neo-socialists have come into the separate party, and the Democrat party has become more Socialist itself.
Also, Bernie should have one, but the DNC leadership absolutely cheats... this was incredibly apparent in 2016 and 2024. Talk about an oligarchy/autocracy...
How, exactly? Clinton received 12% (55.2%-43.1%[0])/three million-plus more primary election votes than Sanders.
And he only received that many because Clinton wasn't a great candidate, and more importantly, the decades-long campaign to smear her and her husband.
What's that? 'Muh "superdelegates!"' Those actually didn't matter -- the actual votes by actual Democratic voters is what did it.
What's more, even if Sanders had not lost by 12% and had become the Democratic nominee, the ads just write themselves:
Pan in on Bernie Sanders saying "I am a proud Socialist!"
with shimmering backgrounds of the Soviet and CCP flags
and portraits of Stalin and Mao smiling down on him. "I'm
Joe Stalin, and I approve this message!"
Then video of Soviet/Chinese armies parading with tanks
and all sorts of other "socialist" imagery.
Go ahead. Call me a liar. But actual vote counts from actual elections have nothing to do with "superdelegates" or any of that.
[0] https://en.wikipedia.org/wiki/2016_Democratic_Party_presiden...
Edit: Added more detail to the imagined "campaign ad"; Fixed prose.
It's a cult around Trump and then a (quite diverse) set of politically/culturally/economically-motivated opportunists surrounding him and trying to leverage the Donald's cult-building magic into whatever future United States they dream of.
Whoever speaks to him most recently before he steps in front of a microphone gets policy priority for the next media cycle!
Certainly, I’m not here to spread conspiracy and I agree with you here, the results are the only evidence we have of the current situation. Given that, I think many of us were amazed.
If you aren't, then what exactly are you saying?
It is historically in line with the U.S.A. The last few decades were the exception.
I think that effect comes from astroturfing, algorithms, and tribalism.
The only way imo that a person gets any kind of genuine small sample of the varying vibes outside their circle is to speak with randoms in different geographic regions with a sense of humility, curiosity, and friendliness, in real life.
What you mistook for respect was fear.
In the 80s and 90s USA was idolized and admired. Yes, even in the 80s when officially Poland was still in a soviet influence sphere with soviet and communist propaganda being everywhere.
The word "Ameryka" was a colloquial used to describe something amazing, rich, high tech. The myth of American freedom, that in America hard work can lead to personal eneichment were told like fairy tales.
When Poland joined NATO it was like dream come true. There was this huge enthusiasm of becoming officially friends and allies of USA.
We looked up so much to the USA.
It's really sad to see that completely disappear.
Kind of insane that the American President just made up a lie that tariffs are paid by foreign countries and rest of the administration just went along with it. It flies in the face of any common sense.
Hard to see why companies would pass on a government imposed tax if it is an income tax but not a tariff.
If anything you'd expect it to be the other way around, because an income tax allows deductions for much of the cost of making that income which generally means the amount of tax is lower in times when the business is not making much money, whereas a tariff is on the cost if the businesses imports which can remain high even in times where the business is not making money.
The U.S. has lost so much in terms of even being able to produce anything that it's in a weak position not just in terms of trade, but in domestic security in and of itself. The lesson from COVID should be that ensuring domestic production of at least SOME of everything that CAN be produced domestically in the US should be ensured to exist.
As examples... IMO, all prescription medications/devices should require dual sourcing and at least 50% domestic production. This ensures actual patent licensing as well as being able to ramp up from 50% in case of a need (war/pandemic). It's nearly impossible to ramp up from 0, but easy to ramp up from 50%. This can/should be extended to essential infrastructure, communications and technologies.
Most countries don't have the size/scale/scope to do this... the U.S. and a handful of other countries are and should take advantage of that and ensure it for their own critical security.
I don't say any of this from an isolationist PoV, I think trade is important... I think diplomacy is important... I just feel that a level of domestic security in terms of self-reliance at a certain level is more important.
What is insane, though, is that people voted for him. Elect a clown, expect a circus.
I guess most voting Americans didn't need much to throw the country's century long superpower streak down the toilet. Or worse yet, just pretend that both sides are equally bad and not use their voice that many died to give them.
So, people will just buy more american watches in your example, no?
You have to look at the elasticity of demand across every component to determine the correct ratio.
What i can tell you, as a GSM, from a CapEx perspective, sensors, motors, cables, and batterys made in the US just got significantly more competitive. It was already trending that way due to JIT demands and rapid factory buildouts, but the tarrifs were a huge marketing boon for american supply chains.
And i can tell you for the first time as someone in the supply chain business i can confidently ask the question "Should we be buying this bolt from Insert country here?".
It's almost like i've been given the authority to source products from the United States even if we are paying some percent higher.
As it is, American spending is way down and hurts everyone. A small stock crash (the thing propping the US up as of now) would truly hit with a 2nd depression at this point.
Combine this knowledge with some maneuvers as of late that reflect the Dotcom bubble and we're rife for a crash that will take the world economy with it once the bubble pops. Its a bull asset market right now, but its certainly not a healthy one
And that's just the economic side of it.When you consider the history of such extreme wealth inequality, ignoring rising unemployment and disresr among the working class can get ugly quickly. That can also go down an expensive route if taken to the extreme.
These companies are absolutely money printing machines at the scale we have never seen.
Some of the individual standout figures:
Apple’s trailing 12-month net income is around US$99 billion. Microsoft’s trailing 12-month net income is about US$101 billion. Alphabet (Google) is estimated around US$111 billion net income.
On revenue, one list shows: Amazon ~$670 billion, Apple ~$408 billion, Alphabet ~$371 billion, Microsoft ~$281.7 billion.
Have you ever read the soverign individual? He kinda predicted this. Tech companies will rise into unfathomably rich while the countries inability to tax foreign revenues will lead to the collapse of the nationstate.
Its all speculation, so it's not really going to be true or false until it happens (or the economy recovers without a crash).
Listing tech companies who have all pledged into AI certainly isn't reassuring me otherwise, that's for sure
>Tech companies will rise into unfathomably rich while the countries inability to tax foreign revenues will lead to the collapse of the nationstate.
So, we're going to crash but the tech companies will be okay for a little longer? Sure, we can phrase it that way.
But economic considerations are not the only ones. Opposition to the American Revolution is a fundamental theme in Canadian history. People shouldn't be surprised when Canada acts accordingly.
There are no winners in the trade war.
Not after factoring in the 35%-50% tarrif Trump has imposed on many Canadian goods.
In the same way that Trump is punishing Americans with the import tariffs, yes. However that is just the primary effect, not the goal.
If you eat less you might go hungry, but that doesn't mean the goal was to go hungry. Rather it was to lose weight, and going hungry is just the direct effect.
Part of the goal of retaliatory tariffs is symbolic, part is to indirectly put pressure on Trump by affecting US export industry.
That is a very simplistic way of looking at it.
Tariffs are taxes on exports and like every tax tool it has its specific purpose.
Lets say US for example has surplus diary. It can export the surplus to other countries. Without tariff the only barrier is the exchange rate. If the diary prices are cheaper than local produce, US diary takes over the market and the US farmers make bank.
Canadian government might want to protect local diary industry. Or Canadians might have concerns about the chemicals in US diary. They have more stringent requirements from their farmers. Either way they raise tariffs for US diary products so that is on par or costlier than local produce.
Tariffs are normally a precision tool. Countries target specific goods and industries.
Now what Trump has done is taken a blunt hammer to it and said all goods from all countries will have tariffs. But if you look at retaliatory tariffs, imposed by other countries, it is precise and meant to hurt very specific industries.
For example, China has raised tariffs on US soyabean. In way it is targeted at US rust belt farmers. The idea being that farmers are a politically active class and if tariffs cause them pain, maybe Trump will come to the table. But that has happened yet. Maybe US farmers just don't care as they are winning too much.
Punishing their own nationals is very explicitly how this is sold to the voter base. "Prices are going to go up for you but unfortunately we have to do this to try to stop our neighbor from raising their import tax explicitly on goods from us".
Taxes are not a problem if everyone plays by the same rules. The problem for the economy is that some imports are subject to tax and others aren't, or when domestic goods aren't subject to the same tax. Picking winners and losers in an economy by political has never before in history turned out a winning concept.
Only silence or absolute truth should be accepted.
Sounds like a foolproof plan.
Did we not read 1984?
But yes, we'd need some truly neutral Ombudsmen to back up such a system. And they themselves would need to be accountable should they corrupt. I don't think it's impossible, but hard to do with the current power structures.
Perjury is.
Within this administration, a lot of people feel that there has been an assault on constitutional protections, but the people who trumpeted the Second Amendment as being fundamental to protecting American liberty and democracy have largely been silent in the face of it.
Microeconomics 101: https://www.khanacademy.org/economics-finance-domain/microec...
The consumer paying the tariff is merely an optimization over the exporter paying the tariff such that the tariff money passes through one less hand. Practically they seem pretty similar.
Before a tariff is imposed, the seller sells the good for $10 and keeps $10 in revenue.
If a tariff of $1 is imposed under these hypothetical circumstances, does the buyer pay more? Does the exporter get paid the same as before?
Clearly, it's neither guaranteed that the buyer will "pay more" nor that the export will "get paid the same as before". In reality because demand is neither 100% elastic nor 100% inelastic, what tends to happen is that the cost of the tariff is split in some ratio between the buyer and seller.
I find it mildly amusing that there are so many people claiming that it's 100% on one side or other, when it's trivially easy to see why that can't be GUARANTEED TO BE the case.
And the data shows that American buyers are not paying their international supplies less for goods than they were before. In fact, if anything, they are paying slightly more, which maj be explained by general inflation and the fact that tariffs mean American buyers are placing smaller orders and therefore getting smaller percentage volume discounts.
you cannot just carbon tax everything locally and then let the other corner of the word produce at a fractional price polluting the same world, exploiting worker etc, without wrecking your internal labor market.
What you see as customer paying more is cause by government letting this shit go on for too long, and now the correction is ugly. But it not like its not needed, and at some point needs to happen before it reaches the breaking point.
I'm not in favor of the current round of tariffs as used by current administration which seem a baseless negotiating tactic, but the effect of outsourcing to bad faith actors has pushed the working class out of balance, they simply have no way of competing internationally unless by accepting a step downgrade in working and living conditions
My country mostly produce pine wood (and other soft wood). I like hardwood furniture, but its only imported stuff because we have very few producers. Putting a tariff on hardwood furniture could be a good idea to increase local production, as long as hardwood is not tariffed. If both hardwood and hardwood furniture get taxed, i will have to pay more, and local production will never have greater margin, as those will be hit by base material tariffs.
(To be clear: I live near on of the biggest hardwood harbour in Europe, and buy my wood directly out of the sawmill, but my point stands)
It opens up a larger profit margin for local producers for sure. Production? Maybe. Maybe not. Because there is no incentive to produce more or better. Because the cheap bad faith actor is gone and prices can now match the export price or be just slightly below it.
>but the effect of outsourcing to bad faith actors has pushed the working class out of balance, they simply have no way of competing internationally unless by accepting a step downgrade in working and living conditions
> What you see as customer paying more is cause by government letting this shit go on for too long, and now the correction is ugly. But it not like its not needed, and at some point needs to happen before it reaches the breaking point.
You don't seem to see the contradictions in both these statements. If the prices go up and working class isn't paid as much for their effort then it is for naught. The failure hasn't been to continue outsourcing, failure has been to improve wage conditions - because market was supposed to correct it or worst case it is "socialism" to even try and raise wages.
But as always people want to test economic theories for themselves and they should. See if their lives improve under a capitalist government which is going to trample on their rights.
[1] https://www.ussc.edu.au/chinas-trade-restrictions-on-austral...
The correct thing to say is that the tariff has an effect on demand because of the impact of adding a tariff on top of the price.
If it's a company, the company pays and might pass it on.
Edit: to be accurate, the importer is legally responsible for the customs declaration and the tariffs, regardless of who does the declaration and who pays. Typically someone else does the declaration on your behalf, and typically they forward any tariffs to you.
That is the argument of the Administration:
>> Kevin Hassett's theory of tariffs: "China has got to sell a lot of stuff to us to maintain political stability. And so if we put a tariff on their stuff, then they cut the price so that our consumer is basically still able to demand as much stuff as they need to sell to be politically stable."
> If he were right, the import price index (which measures pre-tariff prices) would have fallen by enough to offset the sharp tariff hike. It didn't.
> [graph of said index]
* https://twitter.com/JustinWolfers/status/1981928861547041162...
Yup. And it can't be guaranteed that the sun will rise tomorrow.
As such, want to bet on it?
Some companies might chose to loose the margin (few but still passable ). Some might try to pass some or all to the sale price (which creates all sorts another dynamics) and finally the customer does not have to buy that product. There are many note breakdowns that all adjust who pays and when they pay.
To be fair most people on one side think they know better than Adam Smith and the people on the other side usually never opened a book, so it's a tough bargain.
One problem with this analysis is that I can't imagine Trump doing it, or even understanding it. Well, it's not a problem with the analysis, but with the overall situation.
In particular your "Let's imagine" case is sort of ridiculous. There are no such goods, nor anything even comparable. The very existence of inflation disproves the idea (since if those inelastic goods existed, they'd see demand drop to zero if the price needed to inflate).
If the demand curve is very price sensitive - like people might stop buying wool blankets if the price went up 50%, and buy cotton blankets instead - then the tariff will be paid by the suppliers, because they must lower their prices to make the final price the same.
And similarly, if the buyers are inelastic, they will pay the tariff. Like for baby formula, maybe parents are willing to stomach significant price hikes without changing how much they buy.
And the people buying cotton blankets are materially worse off than they were before the tariffs were imposed. They have to accept an inferior product until the wool supplier’s prices have adjusted. Or the wool supplier folds and not nobody can buy wool blankets anymore.
Did those not introduce inefficiency? Actually, it probably produced more inefficiency because most people were probably under thr impression most of the world was under free trade, hence the existence of the WTC.
Not knowing a tax is much more inefficient than knowing a tax.
> Not knowing a tax is much more inefficient than knowing a tax.
Why would this be true?
Nobody can predict this. Tariffs are used by trump mostly as a negotiation and distraction tactic. In that sense they've been extremely effective.
yes, as a pump and dump scheme. He and people in his administration have made a lot of money with tariffs!
Exporter pays: Consumer ends up paying price + tariff, then seller pays the tariff to the shipping company, which pays it to the government.
Importer pays: Consumer pays price, then later pays the tariff to the shipping company, which pays it to the government.
In both cases the consumer is paying price + tariff. A small difference is that some consumers could be psychologically tricked by the lower price tag in the importer pays model. Note that what I'm saying doesn't concern itself with changes in pricing due to this.
If the exporter charges the same price, the consumer pays more, the exporter get the same as before, and the consumer pays the tariff to the government.
The consumer always pays the tariff. The exporter never pays the tariff.
If the foreign supplier pays the tariff the country COULD be better off in net terms when you add the consumer + government together assuming the government spends all it takes which in a deficit situation is a reasonable assumption.
the fact is that IRS is collecting money from the suckers who voted for this and you're desperately trying to make it sound like the exporters are paying for it.
That's the problem with your semantics then. If the manufacturer no longer makes the same income because they can't increase the final price, in effect the consumer didn't pay the tariff.
if exporters paid tariffs, every country would put tariffs on things that they didn't make themselves. they only do it for things they're trying to compete in making. can you figure out why?
Consumers pay all of the operating costs and taxes of a company. That's not the debate.
With tariffs, the cost of an imported product becomes higher than a domestically produced product, making consumers purchase the domestically produced product. This is the purpose.
The long-term purpose is that foreign companies start making their products in your country to avoid tariffs and be able to compete.
The discussion about if the buyer or seller pays the tariffs or taxes is non-sensical and a distraction.
There is no long term in the US anymore. TACO flip flops every few days, based on who he spoke to last.
Promote the consumption products provided by a different vendor. Namely ones that tariffs don’t apply to.
It’s not a hard concept to understand, and talking about who pays is a distraction. Namely because it will be case by case involving 3 or more parties who won’t all chose the same choices they have every time.
Tariffs are a tax, paid on the value of imported good, by US citizens who are buying things from outside of the USA. That's it. They are not paid by anyone outside of the US.
Now tariffs are imposed, my import cost per widget is $139. Not only do I have to jack up my US price to $189, I have to jack up my UK price to £142, meaning UK customers are also paying the tariff now.
Even if you’re a bit smarter about your logistics and use an FTZ or drawback against the import duties, imagine you sell two widgets, one where you don’t pay import duties (bound for the UK) and one where you do (remaining in the US). Your total cost to import is $239.
Instead of making your US customers eat all the cost of the tariff, you might instead adjust your retail prices to $170 and £128 respectively. Again, now your British customers are paying an increased price due to the tariffs.
Edit: for that matter, if you could raise your prices without losing any customers, why did you wait for the tarrifs? You should have already done it.
I didn’t say I wouldn’t lose any customers. I probably will, but this way I probably lose the fewest.
Thus, the change may simply be that profit margin for sales into the US drops (or rather than it skews that way).
But there are still many commodities where you're not pricing the product based on branding.
These commodities will likely still have the same price on the international market. And thus, consumers in the US will see the effects of tariffs in the price.
Such commodities could be finished goods, but also parts, machines or feedstock for industry in the US.
I'd also guess that if you look at what middle class people buy, these commodities make up a larger percentage of the expenditure -- than it does for wealthy people. Making tariffs a very regressive tax.
Most people won't care about the price of luxury watch. But most people will buy aluminum cans, etc.
Of course not. They charge the highest price they possibly can in each market, regardless of other factors. They're not compensating this here or that there. Every company always charge as much as they can get away with, that is the core function of business.
Did they lower the US import price before the tariff is applied in the US?
Sony and Microsoft did price hikes outside of the US at first as an example of how other countries may be paying for US tarriffs indirectly. But as of a month ago these had to relent and eventually they did both do price hikes on their systems.
Operating costs for coffee shops mainly come from other things than the beans, such as rent, utilities, wages.
The whole idea of Swatch is based on simplicity, reduction of parts count and automated manufacturability.
But no, it hurt import businesses in unforseen ways. I saw entire shipment crates get discarded because it was suddenly too expensive to get into the country overnight and too expensive to ship back. Just senseless, pointless waste.
Here’s a link to the Swiss store which has more details, like price: https://www.swatch.com/en-ch/what-if-tariffs-so34z106/SO34Z1...
Tariffs never make domestic goods cheaper. In fact if the supply chain has anything imported then domestic goods become more expensive.
The best argument is that it makes domestic good relatively cheaper, thus supporting US manufacturing and so keeping jobs and profit in the country.
However... that would require domestic goods to be an actual option. I don't see many US manufactured watches available, and the ones that are still don't really compete.
When one turned away, the message would instantly become different, like changing "Down with the heat" to "Down with the cops" - https://sztukapubliczna.pl/pl/precz-z-u-palami-pomaranczowa-...
https://en.wikipedia.org/wiki/Orange_Alternative
the whole world is a work of art, so even a single policeman standing in the street is a work of art
Greatest feature, you can glance at it sideways! And the built-in reminders of 39%.
If it were a Rolex or a Patek Philippe that did the same, I'm sure there'd be another zero at the end.
٣
Some watches still use Roman numerals (XII, III, VI, IX), Swatch specify here that those are Arabic (12, 3, 6, 9).
Ok, I can give you a Skin Irony, but then you would be paying +200 for a Quartz, why not buy an Orient Bambino or a Hamilton Khaki? much better bang for the buck.
Not to mention the clicking noise of a Swatch quartz. In silence, it drives me nuts.
The most understated watch they make is the Swatch Pay!. Super useful, never fails.
Whether the quartz movement bothers you depends on why you bought the watch. It doesn't bother me, but it's certainly true that you can get similar watches for much less money.
I’ll stick with my Patek Philippe Nautilus 5811 [1], thanks ;)
Also Swiss btw.
[1] https://www.patek.com/en/collection/nautilus/5811-1g-001
I lean to the minimal style, so I recently got one from Obaku. The one I got is technically in their women's line; women's watches tend to be simpler, and I have small wrists so women's watches tend to fit me better. Skagen also makes nice minimal stuff.
I also sometimes dig around used watch forums like WatchUSeek. You can find dozens of cool watches from the 60s-80s, many mechanical, for like $50-200.
Thank you.
I am not designing own watch if that is what you mean. I settled on cheap plastic ones, because well, since there is nothing better looking that cheap plastic I can go cheap.