Author Topic: Surprised that nobody seems to be talking about tariffs...?  (Read 968 times)

Aardvark

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Surprised that nobody seems to be talking about tariffs...?
« on: February 03, 2025, 08:42:07 AM »
I came here to see what people are saying/thinking/doing about Trump's new tariffs. Seems like this group thinks it's not worth discussing at all. Is that becuase the overall investment strategy remains unchanged? Or is the conversation happening somewhere else on the forum? Or something else?

In general it would be interesting to see a thread where this community discusses how Trump is influencing their investment strategy - if at all.

MaybeBabyMustache

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #1 on: February 03, 2025, 08:43:27 AM »
Many of the top posts throughout the weekend and on the forum are about the tariffs... ? Plenty of posts about them & the overall political landscape.

Scandium

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #2 on: February 03, 2025, 09:06:04 AM »
I came here to see what people are saying/thinking/doing about Trump's new tariffs.

 Is that becuase the overall investment strategy remains unchanged?

yes

41_swish

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #3 on: February 03, 2025, 10:05:01 AM »
I feel like there is already a few threads on here about it. People are definitely worried. Americans, Canadians, and Mexicans. The everyday people are getting caught in the crossfire of all this.


ChpBstrd

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #5 on: February 03, 2025, 01:15:18 PM »
Plus there's a sentiment that who the hell knows what's going to happen.

Day 1: Promise broken to impose tariffs on Canada, Mexico, and China. Punted to February 1st.

Feb 1: Promise kept to impose tariffs on Canada, Mexico, and China.

Feb 3: Mexico tariffs rescinded for one month after a phone call.

bacchi

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #6 on: February 03, 2025, 01:19:47 PM »
Plus there's a sentiment that who the hell knows what's going to happen.

Day 1: Promise broken to impose tariffs on Canada, Mexico, and China. Punted to February 1st.

Feb 1: Promise kept to impose tariffs on Canada, Mexico, and China.

Feb 3: Mexico tariffs rescinded for one month after a phone call.

Business loves chaos.

ChpBstrd

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #7 on: February 03, 2025, 01:29:56 PM »
Plus there's a sentiment that who the hell knows what's going to happen.

Day 1: Promise broken to impose tariffs on Canada, Mexico, and China. Punted to February 1st.

Feb 1: Promise kept to impose tariffs on Canada, Mexico, and China.

Feb 3: Mexico tariffs rescinded for one month after a phone call.
Business loves chaos.
I'm thinking a certain type of voter loves chaos, and excitement, and NEWS, and expectations of big changes. For them, the Biden administration was practically water torture, because we'd go whole weeks without hearing the president say anything.  For this demographic, the internet has burned out their attention span and boredom is their greatest challenge.

Trump's model is to stay at the top of the news Every Single Day. He practically has a programming plan to do unexpected, unwise, or chaotic things for the foreseeable future, because that's what his voters want. The whole MAGA thing fulfills both a lacking sense of belonging and a rock-bottom dopamine addiction for many voters. Trump figured out that more than anything we want entertainment from our government. Expect more of the same twists and turns and incoherence, because that's what gets people talking.


MustacheAndaHalf

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #8 on: February 03, 2025, 02:35:15 PM »
The impact of tariffs was only a 1.6% loss at the market open, and then recovered to -0.7% after Trump gave Mexico another month without tariffs.  To invest based on tariffs, you need to have a view that they will last longer than the market expects, and cause more than a 0.7% loss to the S&P 500.

Trump also plans to impose tariffs on Europe and Taiwan (which means computer chips will get more expensive).

Metalcat

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #9 on: February 03, 2025, 03:09:25 PM »
Plus there's a sentiment that who the hell knows what's going to happen.

Day 1: Promise broken to impose tariffs on Canada, Mexico, and China. Punted to February 1st.

Feb 1: Promise kept to impose tariffs on Canada, Mexico, and China.

Feb 3: Mexico tariffs rescinded for one month after a phone call.
Business loves chaos.
I'm thinking a certain type of voter loves chaos, and excitement, and NEWS, and expectations of big changes. For them, the Biden administration was practically water torture, because we'd go whole weeks without hearing the president say anything.  For this demographic, the internet has burned out their attention span and boredom is their greatest challenge.

Trump's model is to stay at the top of the news Every Single Day. He practically has a programming plan to do unexpected, unwise, or chaotic things for the foreseeable future, because that's what his voters want. The whole MAGA thing fulfills both a lacking sense of belonging and a rock-bottom dopamine addiction for many voters. Trump figured out that more than anything we want entertainment from our government. Expect more of the same twists and turns and incoherence, because that's what gets people talking.

This is a great essay on how the chaos is the end goal

https://robertreich.substack.com/p/what-you-need-to-know-about-trumps?fbclid=IwZXh0bgNhZW0CMTEAAR2hgFrmSSKCWGMl_xidJmcTmDzJjrFfrvHPKGbKuW1FXcVy2UZc4Mk2_Zg_aem_5Q17F9a5iMj5AaZ_Q4I3gA

ChpBstrd

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #10 on: February 03, 2025, 03:30:31 PM »
And just like that, before we can even get a proper thread going, the tariffs on Canada have been postponed for 30 days too.
https://www.cnbc.com/2025/02/03/trump-canada-tariffs-trudeau.html

Imagine if you just shipped a truckload of stuff over the border during the ... what? ... 48 hours tariffs were in effect?

JLee

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #11 on: February 03, 2025, 03:32:31 PM »
And just like that, before we can even get a proper thread going, the tariffs on Canada have been postponed for 30 days too.
https://www.cnbc.com/2025/02/03/trump-canada-tariffs-trudeau.html

Imagine if you just shipped a truckload of stuff over the border during the ... what? ... 48 hours tariffs were in effect?

It really feels like someone got in the great big computer room of government and started mashing random keyboards just to see what would happen.

GuitarStv

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #12 on: February 03, 2025, 04:48:58 PM »
And just like that, before we can even get a proper thread going, the tariffs on Canada have been postponed for 30 days too.
https://www.cnbc.com/2025/02/03/trump-canada-tariffs-trudeau.html

Imagine if you just shipped a truckload of stuff over the border during the ... what? ... 48 hours tariffs were in effect?

It really feels like someone got in the great big computer room of government and started mashing random keyboards just to see what would happen.

That's Musk's DOGE team you're thinking of:

Herbert Derp

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #13 on: February 04, 2025, 03:22:14 AM »
I came here to see what people are saying/thinking/doing about Trump's new tariffs. Seems like this group thinks it's not worth discussing at all. Is that becuase the overall investment strategy remains unchanged? Or is the conversation happening somewhere else on the forum? Or something else?

In general it would be interesting to see a thread where this community discusses how Trump is influencing their investment strategy - if at all.

Isn’t this the main topic on tariffs?

https://forum.mrmoneymustache.com/off-topic/tariff-insanity/

If we want to have a tariff discussion in the investor subforum, we should focus the conversation on investments rather than politics. But this is primarily a political topic, hence the main thread being in Off Topic.

SeattleCPA

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #14 on: February 04, 2025, 05:09:16 AM »
I actually think the tariffs are an investment topic. Also a big issue for small business owners and entrepreneurs.

E.g., if the US doesn't believe any longer or some big chunk of the electorate doesn't buy into international trade, that may slow down economic growth. And real growth in the economy is part of your and my return on equities. Also the volatility we saw yesterday should matter too. (More "Merton share issues"...)

Further, if more uncertainty exists (regulatory, macroeconomic, etc.) and you're a business owner, you need to plan for that. You may want to carry larger inventories for example. You may also want to sit on more cash so you can take advantage of opportunities that come.

I really don't want to be political because (a) I figure the Americans here are probably as evenly split as the voters were and (b) we don't need to polarize another community. But my sense is, people to the left of the center are very and perhaps too pessimistic while people to the right of the center are very and perhaps too optimistic. That chasm in emotion also I think effects managers and parents and those among us responsible partly for making sure we stay one the rails.

ChpBstrd

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #15 on: February 04, 2025, 08:10:46 AM »
It's hard not to wade into politics because the same political leaders who verbally advocate policies that most economists agree would lead to higher inflation and a recession are the political leaders who have in the past compromised their policy goals, rolled back their own policy goals, made "deals", and executed their bold statements with symbolic gestures.

So yes, if the U.S. enacted a stable multi-year policy of 25% tariffs on all other countries in the world, and maybe 60% against China in particular, stagflation would be the result. This would have significant implications for today's inflated stock values, for bonds and banks, and for alternative investments like precious metals and other commodities. I.e. if I knew this would be the future, I would drastically alter my asset allocation. 

Yet, many analysts are calling Trump's bluff, and their arguments make a point. The Mexico and Canada tariffs were put on hold after less than one business day, and we all know what will happen next. After some groveling and compliment gifting, a "deal" will be made and our focus will be shifted to the next villain or the next category of goods. We literally went through this just a few years ago. GDP took a hit, but Trump knew better than to actually enact his promises and tank the economy. What matters in politics is looking like you're doing big things, while not actually pissing off your constituents. Based on these arguments, we can expect tariffs to be an on-again, off-again news frenzy with minor impacts. I am not drastically altering my asset allocation.

Yet there is a counterargument too. Trump does not face the same constraints as a lame-duck president, in a country where the opposition party has been all but vanquished from the federal government, and in a world where the ruling party has a tighter control over media than in 2016-2020. So if we're ever heading toward the fever dreams of libertarian economic policy wonks who dream of ending the income tax, now it the time. And that would mean owning the S&P500 at a PE of 30 might be dangerous.

41_swish

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Re: Surprised that nobody seems to be talking about tariffs...?
« Reply #16 on: February 04, 2025, 10:17:09 AM »
It's hard not to wade into politics because the same political leaders who verbally advocate policies that most economists agree would lead to higher inflation and a recession are the political leaders who have in the past compromised their policy goals, rolled back their own policy goals, made "deals", and executed their bold statements with symbolic gestures.

So yes, if the U.S. enacted a stable multi-year policy of 25% tariffs on all other countries in the world, and maybe 60% against China in particular, stagflation would be the result. This would have significant implications for today's inflated stock values, for bonds and banks, and for alternative investments like precious metals and other commodities. I.e. if I knew this would be the future, I would drastically alter my asset allocation. 

Yet, many analysts are calling Trump's bluff, and their arguments make a point. The Mexico and Canada tariffs were put on hold after less than one business day, and we all know what will happen next. After some groveling and compliment gifting, a "deal" will be made and our focus will be shifted to the next villain or the next category of goods. We literally went through this just a few years ago. GDP took a hit, but Trump knew better than to actually enact his promises and tank the economy. What matters in politics is looking like you're doing big things, while not actually pissing off your constituents. Based on these arguments, we can expect tariffs to be an on-again, off-again news frenzy with minor impacts. I am not drastically altering my asset allocation.

Yet there is a counterargument too. Trump does not face the same constraints as a lame-duck president, in a country where the opposition party has been all but vanquished from the federal government, and in a world where the ruling party has a tighter control over media than in 2016-2020. So if we're ever heading toward the fever dreams of libertarian economic policy wonks who dream of ending the income tax, now it the time. And that would mean owning the S&P500 at a PE of 30 might be dangerous.
Politics and finance go hand in hand. It's hard not to talk about one without talking about the other. When we are talking personal finance, politics aren't as big of a deal. However, when we are talking macro level finance, politics matter a ton.