Tariffs are no longer "Off Topic"

[jpdx]

Happy Liberation Day, Mustachians! Tariffs rates have been announced, and it looks worse than many expected*. There's no doubt this will cause problems for many of us in the FIRE movement -- whether saving or retired -- as it's going to be more challenging to live frugally when everything costs more.

And if these price increases occur simultaneously with a stock market downturn, it's going to squeeze post-FIRE people from both ends.

What's the outlook for the FIRE community and how do we plan to manage this?

*If I'm interpreting the news correctly, tariffs on imports from China alone are going to be as high as 54%!

[FIGardengrl]

I think most folks on this forum are probably better prepared than others to weather a downturn.  It depends on how close to the (Mustachian) bone you are currently living. Unless you're very frugal already there is always room to cut and the madness probably will not last forever - let's say 4 years? So, I really look at my "fixed" expenses because everything else is negotiable - my adult kids don't really need the warm-hand gifts although it's nice, we can travel less or more frugally, eat out less etc etc. until the fever breaks.  If cutting the non-essentials doesn't balance the books then you have to addres the fixed expenses: 50% of our fixed expenses currently are mortgage (PITI), taxes and insurance. We own two homes so YMMV.

Mortgage - can't change that, luckily we're on track to pay this off by this September.  Property taxes probably won't go up any more than they would regardless. Insurance - raise your deductible, drop comprehensive on your cars if you still have that.

Utilities - take a good look at your internet and phone.  I cut my internet bill 25% two months ago just by going down a notch on the speed, and we don't even notice. Switch your phone to an MVNO if you haven't already. Unplug all your vampire appliances or put them on power strips. Throw on a sweater and turn down the thermostat; open the windows at night during summer and close them in the morning. Maybe I'm preaching to the choir?

As for the "squeeze" on the post-FIRE income, I just hope everyone was taking all the advice seriously about asset allocation, buckets etc.  We have at least one year's spending in cash, and another 7 in bonds.  I think it's easy to forget that these stock downturns can happen when things have pretty much been going up and up for more than a decade. So live off the non-stock stuff as long as you can.  If that doesn't work you can always get a nice, low-stress part time job?

My retirement date remains May 31 of this year. I'd rather tighten my belt than keep working at my current rate.  I have the option to come back as-needed 1 or 2 days per week which is a nice backup plan.  Hang in there everyone!

[NotJen]

And if these price increases occur simultaneously with a stock market downturn, it's going to squeeze post-FIRE people from both ends.

As a post-FIREd person, I'm finding it hard to get worked up about it for my situation.  (In general, it's obviously stupid and will hurt a lot of people.)  I don't buy much.  Looking at last year's spending, if my costs for all non-food goods I purchased doubled, I'd still be under a 2% WR.

And I've got 4+ years of potentially increased spending in cash, so I can weather a stock market downturn.

I will need a new car at some point - hopefully not too soon - but I'm most worried about that task being made more difficult than about the absolute price I'll pay when I need that replacement.

[Telecaster]

This is why the 4% rule is the 4% rule.   

[vand]

Peter Schiff put it most succinctly: the effect of the tariffs will be to redirect inflation from financial assets to consumer goods. 

Interesting times.

[Freedomin5]

We were planning to build up our cash cushion anyway because we are repatriating in a few months, so that’s what we have been doing the past several months.

One change is that we were planning to sell our rental unit to pay off our primary residence mortgage, but with the real estate market being so soft, we are now holding off on selling the rental. Instead, we are both planning to work very low stress part-time jobs and stocking up on more cash. Since stock prices and real estate are a bit of a bargain right now, we may focus on staying sort of employed so that we can afford to pick up a few new investments. It also puts less pressure on our stash.

On the spending side, a few years ago, we deliberately purchased a home in a very walkable location in a bikeable city. We also have WFH jobs lined up. We don’t foresee needing the car for much. We found a way to househack to half our housing costs, and we also don’t spend much on groceries. We don’t really spend much on consumer goods.

[Weisass]

We are still accumulating, so this will be, and has been, emotionally rough to watch, but we are continuing to dollar cost average our way forward, and trust that it will even out. Keeping spending down, pushing money in the market, and staying calm.

[NorthernIkigai]

We are still accumulating, so this will be, and has been, emotionally rough to watch, but we are continuing to dollar cost average our way forward, and trust that it will even out. Keeping spending down, pushing money in the market, and staying calm.

Yeah, same here. As Mustachians this will probably affect us less than a lot of other people who either aren't earning enough, don't know how to handle their money, or both.

The tariffs are just another chapter in the shitstorm raging around us at the moment.

[AuspiciousEight]

It will be very interesting to see how long this lasts.

It would not surprise me at all if these tariffs suddenly became smaller and more targeted at specific countries and products in the next few months, as the economic impact becomes more obvious.

I'm not making any changes in my life based on the idea that these will exist forever.

I'm still accumulating and pretty well positioned to ride out any kind of storm.

If they really destroy the economy - a *lot* of other people will be hurt economically before my family is impacted at all.

Eventually it will become obvious to the person in charge that this was a bad idea.

[reeshau]

We are building up for a kitchen remodel.  My asset allocation is a barbell, anyway: very heavy stock, plus heavy cash.  So, we have 3 years' cash right now.

I also think back to the summer of 2022, where we were caught in a market downturn after beginning a summer in Europe to say goodbye properly, followed by water in our house on our return.  Our stache, even if today is down 3%, is about 2x the 2022 bottom.  If I wasn't distracted, that would have been scary in our 3rd year of FIRE.  We got through that drama fine.  We will get through this fine.

On reminder of the implications, DW is insisting we stop to stock up on coffee, on the way to visit friends today.

[2sk22]

The impacts of the tariffs are going to be so complex it is hard for me to predict what's going to happen. I think I am reasonably well position for a downturn but who knows?

[Omy]

DH recently joked that we'd survive if the stock market dropped 50% and all our costs doubled. Hopefully we won't have to test that theory.

I'm more concerned about my friends and family members who live paycheck to paycheck. Losing a job (with a dismantled social safety net) will be more scary than ever before.

My MAGA family member will likely be jobless and homeless at some point soon if the rest of us don't step in to save them. AND they'll probably still be blaming democrats and socialism for their predicament (which will greatly hinder my ability to be charitable toward them).

I'm also concerned about how tariffs (and the related government dismantling to reduce income tax) might lead to supply chain interruptions, looting, civil war, and a generally more hateful and polluted society.

I can imagine needing to spend money on things we never needed before (personal security, oxygen, whole house generator, water filtration, etc).

[Retire-Canada]

What's the outlook for the FIRE community and how do we plan to manage this?

Canadian here. Retired and dealing the US Tariff/Tax hikes from the outside.
- no major changes to my plans due to tariffs
- food may go up, but mortgage costs likely to go down so that'll be a wash
- cancelled trips to US
- boycotting purchase of US goods where possible
- initially I'll stay local this year, but eventually I'll recalibrate travel to Mexico/EU/Asia instead of US
- most of my consumer goods purchasing is optional at least for a few years as I'm stocked up on everything essential
- I expect that other countries will fill in most niches where we are boycotting US products that we'd normally buy
- Life will go on

In terms of the portfolio in particular I'm not overly worried. I've had amazing returns since retiring so I am well above my starting portfolio value. A bit sad that this crash is self-inflicted by the US, but that's life. I've got a few years of cash/bonds to spend before I need to sell any stocks next. Add in a bit of easy PT work and I can stretch that out to 4-5 years if need be. That'll get me into Trump's third term and a lot can happen between now and then.

[Greystache]

I'm sitting on a pile of cash, so the stock market does not worry me too much in the short term. We need to replace our 22 year old car in the next month and that is going to cost us more than we want. Just when inflation was starting to settle down it is going to spike again, and that sucks. But over all, we have been FIRED for 10 years and we are well positioned to ride out the next 4 years. My biggest worry is that we will enter a 1970's period of stagflation that lasts for a long time.

[Kapyarn]

Any positive effect from the tariffs? Like a reduction in consumption of disposable items, reduced waste?

[midweststache]

We are still accumulating, so this will be, and has been, emotionally rough to watch, but we are continuing to dollar cost average our way forward, and trust that it will even out. Keeping spending down, pushing money in the market, and staying calm.

Yeah, same here. As Mustachians this will probably affect us less than a lot of other people who either aren't earning enough, don't know how to handle their money, or both.

The tariffs are just another chapter in the shitstorm raging around us at the moment.

Hard agree on all this. Assuming neither of us lose our "generally recession-proof" jobs, we can strap in on our spending. (We were saving for some major outdoor renovation work, so we a larger-than-normal cash cushion, and our fixed monthly expenses should reduce quite a bit when our littlest starts public school in the fall.)

That said, I'm not eager to ask my parents or in-laws about their experiences with stagflation...

[FireLane]

I'm FIREd, but I'm not breaking a sweat.

Tariffs are a tax on consumption, so the way to beat them is to consume less. Defer big purchases, like cars and electronics, until you absolutely have to; cook at home instead of eating out; practice minimalism and don't blow money on crap you don't need. Those are all things I was already doing, and things that any frugal Mustachian should be doing.

Also, people who live off salaries are in danger of losing their job in a recession, but people who live off investments don't have to worry about being laid off. In the long run, corporations will raise their prices to compensate for tariffs, so their margins won't be affected that much and investors will continue to make a return on their investments.

I can live on 3% of my stash, which would comfortably survive the worst depressions history has seen so far, and I don't think this is going to be worse than that. The average American consumer is going to suffer badly, but we Mustachians are going to be just fine.

[Fru-Gal]

Any positive effect from the tariffs? Like a reduction in consumption of disposable items, reduced waste?

Positive could be a massive contraction of the auto industry. Cars of any stripe are a scourge. The sooner we get to faster mass transit and mass e-bikes, the better.

[Kapyarn]

Positive could be a massive contraction of the auto industry. Cars of any stripe are a scourge. The sooner we get to faster mass transit and mass e-bikes, the better.

I agree with this and was befuddled when Washington state proposed a 10% tax on e-bikes!

[Fru-Gal]

Positive could be a massive contraction of the auto industry. Cars of any stripe are a scourge. The sooner we get to faster mass transit and mass e-bikes, the better.

I agree with this and was befuddled when Washington state proposed a 10% tax on e-bikes!

Washington DC isn’t the only place with idiots.

The answer would be to build your own. Not hard to do. There’s also a healthy resale market now for E bikes. They are definitely not the insane expenditure that they were about five years ago. Of course that will change with tariffs.

[HPstache]

This is nothing compared to the memories of helplessly watching a massive shutdown and resulting drop of the stock market due to Covid.  My family is well-diversified just like we were in 2020 and well-equipped to weather this storm and come out on the other end in a better position than we are today.  It's easy to get used to "the markets always go up" mentality, but I think it's valuable to face tests like this to see if I truly believe in my strategies.  I am sure I will face many more market scares both during accumulation and during FIRE that I will have more confidence to get through after another good test of resilience like this.  Frugal mustachians will prosper in times like these.

[frugalecon]

DH recently joked that we'd survive if the stock market dropped 50% and all our costs doubled. Hopefully we won't have to test that theory.

I'm more concerned about my friends and family members who live paycheck to paycheck. Losing a job (with a dismantled social safety net) will be more scary than ever before.

My MAGA family member will likely be jobless and homeless at some point soon if the rest of us don't step in to save them. AND they'll probably still be blaming democrats and socialism for their predicament (which will greatly hinder my ability to be charitable toward them).

I'm also concerned about how tariffs (and the related government dismantling to reduce income tax) might lead to supply chain interruptions, looting, civil war, and a generally more hateful and polluted society.

I can imagine needing to spend money on things we never needed before (personal security, oxygen, whole house generator, water filtration, etc).

I am probably not very nice, but I would be completely unwilling to step in to subsidize MAGA family who get caught in the aftermath of the policies they voted for. As H.L. Mencken said, "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

[FIRE 20/20]

This is nothing compared to the memories of helplessly watching a massive shutdown and resulting drop of the stock market due to Covid. 

I'm not so sure about that.  The COVID drop in the markets was only (going by memory here, so certainly off a bit) 30%?  And it fully recovered in about 5-6 months?  This looks likely to be the start of stagflation, which can take years or decades to fix.  If the administration pushes through with this it looks like moderate to substantial unemployment, significant and long-term drops in the markets, and high inflation.  That's a hole that is INCREDIBLY difficult to get out of - and that's if you want to get out and have competent people leading the effort.  I suspect they won't back off until things get really, really bad and once that happens the tools to dig out are gone.  If they really stick with this plan I think we're looking at closer to a decade of significant economic problems rather than a couple years of moderate problems. 

But my crystal ball is wrong more often than it is correct, and I really hope I'm wrong. 

[SingleMaltScot]

I think US people seeking early retirement will really need to think about diversifying more as the tariffs and other actions of the Trump administration have really soured lots of people to the US.
As I biased Canadian, I've been actively eliminating all US products, cancelled my US vacation, and have started to eliminate as many US service providers as possible.  In the future, if there are any new US digital services, or similar products I'll not be allowing them into my life as it's been challenging and time consuming to eliminate these services from my life.
It will be a very long time before I consider reversing any of these moves.

With the traditional advice being that the S&P 500 provides enough foreign exposure for American investors, I think this may change as the brand "America" has been severely tarnished and will take a long time to correct. 

Might be worth adding more foreign and emerging market exposure along with the typical US based investments.

I think that we are all in for a very bad recession due to these tariffs.  Working for a large, international, manufacturing company these tariffs are going to be extremely destructive.  Even if we wanted to move more manufacturing to the US, it's going to be impossible given the negative impact these tariffs will have on our company, and the increased cost of new capital to build new lines in the US.
The sad part is we currently have huge problems with turnover in the US due to the low unemployment, and increasing salaries in the service sector.  Turns out most people don't enjoy manual labour!

[HPstache]

This is nothing compared to the memories of helplessly watching a massive shutdown and resulting drop of the stock market due to Covid. 

I'm not so sure about that.  The COVID drop in the markets was only (going by memory here, so certainly off a bit) 30%?  And it fully recovered in about 5-6 months?  This looks likely to be the start of stagflation, which can take years or decades to fix.  If the administration pushes through with this it looks like moderate to substantial unemployment, significant and long-term drops in the markets, and high inflation.  That's a hole that is INCREDIBLY difficult to get out of - and that's if you want to get out and have competent people leading the effort.  I suspect they won't back off until things get really, really bad and once that happens the tools to dig out are gone.  If they really stick with this plan I think we're looking at closer to a decade of significant economic problems rather than a couple years of moderate problems. 

But my crystal ball is wrong more often than it is correct, and I really hope I'm wrong.

Read back at the posts made here during that time.  Yes, it recovered in 5-6mo, but many were convinced at the time that it would be long term with no recovery in sight.  Only 30%?  The S&P crashed 34% in a month and turned back 3 years worth of gains in the market.  We are down 7% YTD...  Still up 5% since this time last year.

[rocketpj]

This is nothing compared to the memories of helplessly watching a massive shutdown and resulting drop of the stock market due to Covid. 

I'm not so sure about that.  The COVID drop in the markets was only (going by memory here, so certainly off a bit) 30%?  And it fully recovered in about 5-6 months?  This looks likely to be the start of stagflation, which can take years or decades to fix.  If the administration pushes through with this it looks like moderate to substantial unemployment, significant and long-term drops in the markets, and high inflation.  That's a hole that is INCREDIBLY difficult to get out of - and that's if you want to get out and have competent people leading the effort.  I suspect they won't back off until things get really, really bad and once that happens the tools to dig out are gone.  If they really stick with this plan I think we're looking at closer to a decade of significant economic problems rather than a couple years of moderate problems. 

But my crystal ball is wrong more often than it is correct, and I really hope I'm wrong.

Read back at the posts made here during that time.  Yes, it recovered in 5-6mo, but many were convinced at the time that it would be long term with no recovery in sight.  Only 30%?  The S&P crashed 34% in a month and turned back 3 years worth of gains in the market.  We are down 7% YTD...  Still up 5% since this time last year.

It recovered largely due to a big jump up in stocks like Amazon who made a killing from the shift away from in-store shopping.  Bezos made mountains of 'money' as those shares skyrocketed.  More generally, countries around the world bent over backwards to keep trade flowing, because that is a large part of our common prosperity.  Even with everyone being on board we had long tail inflation.

Now we have the largest economy in the world starting a trade war based entirely on colossally stupid assumptions while also alienating most of the allies who would normally be at least on neutral in such a thing.  Global trade is taking a massive blow today, and all those companies - looking at you Amazon - are going to be pummeled.  I know here in Canada nobody is interested in buying US products or investments, and that applies around the world.

A country which built its global superpower status on the power of trade has taken a decision to sabotage all of that.  At this point anything can happen.  Autarky is possible, but the current examples (Myanmar and North Korea) don't really appeal as models. 

[Kapyarn]

If it spreads around that Canadians are avoiding any US products, similar thing will happen in the USA where people will avoid Canadian products.  Everyone loses.  Canada exported something like 77% of their stuff to the US market in 2022.

[rocketpj]

If it spreads around that Canadians are avoiding any US products, similar thing will happen in the USA where people will avoid Canadian products.  Everyone loses.  Canada exported something like 77% of their stuff to the US market in 2022.

Good luck avoiding oil and potash.  Wherever will we find other buyers?

[wageslave23]

I'm not really for or against the tariffs, but would like to point out a few things on balance.

1. The tariffs are reciprocal and not even as much as even, so other countries don't have much of a leg to stand on in any outrage regarding the US imposing reciprocal tariffs.

2. The tariffs will be at least as negative for other countries as they are for the US since the US has a trade deficit.

3. Tariffs can't be all bad for the country imposing them, or else why does every other country impose tariffs assuming they are acting in their own best interests?

4. Inflation generally has to do with money supply, so making some goods more expensive by putting a tariff on them does not directly cause Inflation.  Because there is still the same amount of money supply, there is less money to be spent on other things.

5. Trump keeps a very close eye on the stock market and it is assumed that he will not allow it to decrease too much before reversing course. They even have a name for it - the Trump put. So even if he is in principle against what he believes are unfair trade practices by other countries, I don't think anyone thinks he would put his popularity or money under his principles.

My opinion is he should have picked one or two of the worst offenders to go after. I think he realizes he bit off more than he can chew and backs off and tries to claim a small victory within a month or two. And then markets will jump right back up.

[Kapyarn]

If it spreads around that Canadians are avoiding any US products, similar thing will happen in the USA where people will avoid Canadian products.  Everyone loses.  Canada exported something like 77% of their stuff to the US market in 2022.

Good luck avoiding oil and potash.  Wherever will we find other buyers?

I didn't say it would be good for either trade partner but I imagine this current administration would open up more gulf drilling if pressured.  Unsure about potash.

[BNgarden]

I'm not really for or against the tariffs, but would like to point out a few things on balance.
1. The tariffs are reciprocal and not even as much as even, so other countries don't have much of a leg to stand on in any outrage regarding the US imposing reciprocal tariffs.

I do wish people having opinions would actually check out the 'facts'...

See, for example:  https://bbc.com/news/articles/c93gq72n7y1o

He lies all the time...

[GuitarStv]

I'm not really for or against the tariffs, but would like to point out a few things on balance.
1. The tariffs are reciprocal and not even as much as even, so other countries don't have much of a leg to stand on in any outrage regarding the US imposing reciprocal tariffs.

No.  Trump has said that the tariffs are reciprocal.  Like most things he says, that's a lie.  They appear to be based entirely upon trade surplus/deficits.

2. The tariffs will be at least as negative for other countries as they are for the US since the US has a trade deficit.

Yep, this part is true.  Trump is hurting the whole world.

3. Tariffs can't be all bad for the country imposing them, or else why does every other country impose tariffs assuming they are acting in their own best interests?

Typically tariffs are done in targeted ways to protect particular industries/interests.  Trump's tariffs are nearly random, and are applied as a blanket across all industries/products/services.  The way Trump's doing it is pretty bizarre specifically because of the harm that happens when you do it this way.

4. Trump keeps a very close eye on the stock market and it is assumed that he will not allow it to decrease too much before reversing course. They even have a name for it - the Trump put. So even if he is in principle against what he believes are unfair trade practices by other countries, I don't think anyone thinks he would put his popularity or money under his principles.

Here's hoping that you're right and Trump will flip-flop on his decision as markets crash.  Otherwise it seems likely that a worldwide recession is in order.

[bacchi]

If it spreads around that Canadians are avoiding any US products, similar thing will happen in the USA where people will avoid Canadian products.  Everyone loses.  Canada exported something like 77% of their stuff to the US market in 2022.

Good luck avoiding oil and potash.  Wherever will we find other buyers?

I didn't say it would be good for either trade partner but I imagine this current administration would open up more gulf drilling if pressured.  Unsure about potash.

With the price of steel and an uncertain economy? If the oil execs are skeptical of "drill, baby, drill," then expanding gulf drilling is pointless.

[mistymoney]

If it spreads around that Canadians are avoiding any US products, similar thing will happen in the USA where people will avoid Canadian products.  Everyone loses.  Canada exported something like 77% of their stuff to the US market in 2022.

because everyone is using hs football mentality?

i support canadians' boycott. it has a purpose - to put pressure on us companies to put pressure on this amin to end the tariffs.

I have no intention to boycott canadian products just cuz :canandian made:

[Fru-Gal]

If it spreads around that Canadians are avoiding any US products, similar thing will happen in the USA where people will avoid Canadian products.  Everyone loses.  Canada exported something like 77% of their stuff to the US market in 2022.

If our president hadn’t continually threatened Canada with annexation, with no indication prior to inauguration that he was going to do so, then maybe Canada wouldn’t feel the need to send a message.

[JLee]

I'm not really for or against the tariffs, but would like to point out a few things on balance.
1. The tariffs are reciprocal and not even as much as even, so other countries don't have much of a leg to stand on in any outrage regarding the US imposing reciprocal tariffs.

2. The tariffs will be at least as negative for other countries as they are for the US since the US has a trade deficit.

3. Tariffs can't be all bad for the country imposing them, or else why does every other country impose tariffs assuming they are acting in their own best interests?
Inflation generally has to do with money supply, so making some goods more expensive by putting a tariff on them does not directly cause Inflation.  Because there is still the same amount of money supply, there is less money to be spent on other things.

4. Trump keeps a very close eye on the stock market and it is assumed that he will not allow it to decrease too much before reversing course. They even have a name for it - the Trump put. So even if he is in principle against what he believes are unfair trade practices by other countries, I don't think anyone thinks he would put his popularity or money under his principles.

My opinion is he should have picked one or two of the worst offenders to go after. I think he realizes he bit off more than he can chew and backs off and tries to claim a small victory within a month or two. And then markets will jump right back up.

What tariffs do Heard Island and the McDonald Islands, uninhabited and unvisited by humans in nearly a decade, have on US imports?

[Purple_Crayon]

DH recently joked that we'd survive if the stock market dropped 50% and all our costs doubled. Hopefully we won't have to test that theory.

I'm more concerned about my friends and family members who live paycheck to paycheck. Losing a job (with a dismantled social safety net) will be more scary than ever before.

This was almost exactly my response to my dad, who recently asked about my concerns. I'm in the "I barely buy anything so it doesn't impact me much" club. But it will certainly be very impactful to many, and DW already had her job eliminated because of recent antics.

[FIREin2018]

Peter Schiff put it most succinctly: the effect of the tariffs will be to redirect inflation from financial assets to consumer goods. 

Interesting times.

Hm.. Trump never does anything unless it benefits him or a mega donor.

How does he benefit from these tariffs?
If not him, then
Which person benefits from it? And how?

[FIREin2018]

This is why the 4% rule is the 4% rule.

I have 2 yrs expenses in tbill ladder.
No need to sell stocks anytime soon.

Dow dropped 1700 pts today but I'm not going to calc my net worth.
Just like when COVID hit, I have a steel belief in the 4%

[AuspiciousEight]

Peter Schiff put it most succinctly: the effect of the tariffs will be to redirect inflation from financial assets to consumer goods. 

Interesting times.

Hm.. Trump never does anything unless it benefits him or a mega donor.

How does he benefit from these tariffs?
If not him, then
Which person benefits from it? And how?

Well...if one were to hypothetically take out a huge short position on the entire American stock market, then implement policies that conveniently cause the market to crash, then cover the short position, then buy and implement policies that cause the market to rebound....

I know this theory sounds crazy but it would not surprise me at all at this point.

[FIREin2018]

Peter Schiff put it most succinctly: the effect of the tariffs will be to redirect inflation from financial assets to consumer goods. 

Interesting times.

Also, I mainly shop at Costco.
During high inflation, companies raised prices for extra profit and used inflation as an excuse.

Not at Costco since they limit profit on products to 15%.

[Kapyarn]

If it spreads around that Canadians are avoiding any US products, similar thing will happen in the USA where people will avoid Canadian products.  Everyone loses.  Canada exported something like 77% of their stuff to the US market in 2022.

because everyone is using hs football mentality?

i support canadians' boycott. it has a purpose - to put pressure on us companies to put pressure on this amin to end the tariffs.

I have no intention to boycott canadian products just cuz :canandian made:

Not everyone, but 50% of the USA voted for the orange menace and if they are told Canada is targeting them, they will refrain from buying Canadian products.

I think this all gets fixed in 3.7 years so hopefully no hard feelings between the countries.  After all, a lot of us did not vote for Trump.  Not everyone in Germany was a Nazi in WWII.

[dividendman]

Well, Ford is giving "employee pricing" to everyone for a while as a result of the tariffs... I guess that's good even though I don't know what it means exactly.

[deborah]

Peter Schiff put it most succinctly: the effect of the tariffs will be to redirect inflation from financial assets to consumer goods. 

Interesting times.

Hm.. Trump never does anything unless it benefits him or a mega donor.

How does he benefit from these tariffs?
If not him, then
Which person benefits from it? And how?

Well...if one were to hypothetically take out a huge short position on the entire American stock market, then implement policies that conveniently cause the market to crash, then cover the short position, then buy and implement policies that cause the market to rebound....

I know this theory sounds crazy but it would not surprise me at all at this point.

Sounds like you're talking about Warren Buffett. I don't think he's taken out a short position, but he's been selling like crazy, and has a huge stack of cash.

[Dancin'Dog]

Trump sure is in the spotlight today.

[deborah]

I'm not really for or against the tariffs, but would like to point out a few things on balance.
1. The tariffs are reciprocal and not even as much as even, so other countries don't have much of a leg to stand on in any outrage regarding the US imposing reciprocal tariffs.

I do wish people having opinions would actually check out the 'facts'...

See, for example:  https://bbc.com/news/articles/c93gq72n7y1o

He lies all the time...

Australia has a free trade agreement with the USA. We also export LESS to the US than we import. So, despite the agreement and the balance of trade deficit we now have a universal tariff of 10%.

If it spreads around that Canadians are avoiding any US products, similar thing will happen in the USA where people will avoid Canadian products.  Everyone loses.  Canada exported something like 77% of their stuff to the US market in 2022.

because everyone is using hs football mentality?

i support canadians' boycott. it has a purpose - to put pressure on us companies to put pressure on this amin to end the tariffs.

I have no intention to boycott canadian products just cuz :canandian made:

Not everyone, but 50% of the USA voted for the orange menace and if they are told Canada is targeting them, they will refrain from buying Canadian products.

I think this all gets fixed in 3.7 years so hopefully no hard feelings between the countries.  After all, a lot of us did not vote for Trump.  Not everyone in Germany was a Nazi in WWII.

You can hope. The world is learning not to trust the USA.

[Gremlin]

We are still accumulating, so this will be, and has been, emotionally rough to watch, but we are continuing to dollar cost average our way forward, and trust that it will even out. Keeping spending down, pushing money in the market, and staying calm.

Yeah, same here. As Mustachians this will probably affect us less than a lot of other people who either aren't earning enough, don't know how to handle their money, or both.

The tariffs are just another chapter in the shitstorm raging around us at the moment.

Hard agree on all this. Assuming neither of us lose our "generally recession-proof" jobs, we can strap in on our spending. (We were saving for some major outdoor renovation work, so we a larger-than-normal cash cushion, and our fixed monthly expenses should reduce quite a bit when our littlest starts public school in the fall.)

That said, I'm not eager to ask my parents or in-laws about their experiences with stagflation...

I think the rest of the world is trying to work out how to isolate the impending stagflation to the US.  Ironically, the more isolationist the US trade policies become, the easier it will actually be for the rest of us.

[Gremlin]

I think this all gets fixed in 3.7 years so hopefully no hard feelings between the countries.  After all, a lot of us did not vote for Trump.  Not everyone in Germany was a Nazi in WWII.

Reputation takes a lifetime to build and seconds to destroy.  Your nation breaks its treaties.  Trade will never be on as favourable terms as it previously was.

[Metalcat]

I think this all gets fixed in 3.7 years so hopefully no hard feelings between the countries.  After all, a lot of us did not vote for Trump.  Not everyone in Germany was a Nazi in WWII.

Reputation takes a lifetime to build and seconds to destroy.  Your nation breaks its treaties.  Trade will never be on as favourable terms as it previously was.

3.7 years is a loooong time for new trade partnerships to be made that exclude the US. Canada is working at a break-neck pace to shore up it's trade relationships with other regions.

The nuclear fallout from this will persist for ages. And just having the democrats defeat the Republicans wouldn't be nearly enough for the world to trust the US again, the Republicans would have to essentially be demolished and completely rebuilt with a totally different set of values and priorities for the damage to even begin to be reversed. Because as has already been said, the trust is broken. So as long as the US is poised every 4 fucking years to elect a group that can and will pull this shit, the rest of the world will insulate itself against the brutal impacts.

[Gremlin]

I think this all gets fixed in 3.7 years so hopefully no hard feelings between the countries.  After all, a lot of us did not vote for Trump.  Not everyone in Germany was a Nazi in WWII.

Reputation takes a lifetime to build and seconds to destroy.  Your nation breaks its treaties.  Trade will never be on as favourable terms as it previously was.

3.7 years is a loooong time for new trade partnerships to be made that exclude the US. Canada is working at a break-neck pace to shore up it's trade relationships with other regions.

The nuclear fallout from this will persist for ages. And just having the democrats defeat the Republicans wouldn't be nearly enough for the world to trust the US again, the Republicans would have to essentially be demolished and completely rebuilt with a totally different set of values and priorities for the damage to even begin to be reversed. Because as has already been said, the trust is broken. So as long as the US is poised every 4 fucking years to elect a group that can and will pull this shit, the rest of the world will insulate itself against the brutal impacts.

One of the things in Canada's favour (and elsewhere) is that everyone is trying to reset at exactly the same time for exactly the same reason.  Under normal circumstances, free trade agreements can take years to negotiate.  But everyone is equally incentivised to get things happening quickly to mitigate the same existential risk (albeit their exposure to that risk is varying by degrees).

Canada is looking to diversify away from the US at the same time that the EU is, at the same time that Mexico, China, Japan, NZ, South Korea, Australia and the UK are.  If we can accelerate the process of isolating the US, it protects the economies of the rest of the world.  The main cost is the massive decline in living standards for US citizens.