Tariffs - response...

Altior

Qyburn said:

Hoenir said:

Struggling to remember a US President that during his election campaign told his faithfull that taxes were "not going to be a cost to you, it’s a cost to another country".

Did he actually think the tariffs would be paid by Mexico, China, Canada, rather than by US importers and ultimately US consumers?

Why does the EU have a vast swathe of tariffs, if it's EU consumers who pay for them, iyo?

Why has the UK left some tariffs in place, that are a hangover of our membership of the EU?

Like many things economic, it's not as simple as tariffs bad, no tariffs good. We saw how countries are exposed if they can't produce the things they consume in their own country during lockdowns. What Trump is trying to achieve is having production in the US instead of being undercut by (often state sponsored) foreign suppliers. Or tax revenue. Both work for him, as he sees it. 

Potentially that might mean higher costs for some items, however it might mean cheaper costs in the long term if domestic production can be stood up. It might mean more skilled jobs, and higher wages in the domestic economy. Nobody actually knows for sure, as human behaviour is difficult to predict, and there are multiple moving parts of an economy.

For example, I heard a commentator talking about the price of Canadian beer potentially increasing for US citizens due to US imposed tariffs. So, say the majority of US people who bought Canadian beer switch to beer produced in the US (which is now more competitively priced). Who gains and who loses? 

Hoenir

Altior said:

Qyburn said:

Hoenir said:

Struggling to remember a US President that during his election campaign told his faithfull that taxes were "not going to be a cost to you, it’s a cost to another country".

Did he actually think the tariffs would be paid by Mexico, China, Canada, rather than by US importers and ultimately US consumers?

For example, I heard a commentator talking about the price of Canadian beer potentially increasing for US citizens due to US imposed tariffs. So, say the majority of US people who bought Canadian beer switch to beer produced in the US (which is now more competitively priced). Who gains and who loses? 

Florida exports around 37% of it's total orange juice production to Canada. Who loses? 

Mid Western oil refineries in the US obtain around 60% their crude oil from Canada. Tariffs are going to ripple through the entire local economy. Given the importance to many products and for Americans their transport. 

Altior

Hoenir said:

Altior said:

Qyburn said:

Hoenir said:

Struggling to remember a US President that during his election campaign told his faithfull that taxes were "not going to be a cost to you, it’s a cost to another country".

Did he actually think the tariffs would be paid by Mexico, China, Canada, rather than by US importers and ultimately US consumers?

For example, I heard a commentator talking about the price of Canadian beer potentially increasing for US citizens due to US imposed tariffs. So, say the majority of US people who bought Canadian beer switch to beer produced in the US (which is now more competitively priced). Who gains and who loses? 

Florida exports around 37% of it's total orange juice production to Canada. Who loses? 

Mid Western oil refineries in the US obtain around 60% their crude oil from Canada. Tariffs are going to ripple through the entire local economy. Given the importance to many products and for Americans their transport. 

Depends on the demand elasticity of that orange juice product in Canada. And what are the alternatives, and the alternatives for sourcing crude oil, or having it domestically produced.

Nobody knows the net overall impact, certainly not me, you, or even Trump. And the strategy needs to be played out for an extended period to get any certainty, which is long past the time Trump will leave office. 

Hoenir

Altior said:

Hoenir said:

Altior said:

Qyburn said:

Hoenir said:

Struggling to remember a US President that during his election campaign told his faithfull that taxes were "not going to be a cost to you, it’s a cost to another country".

Did he actually think the tariffs would be paid by Mexico, China, Canada, rather than by US importers and ultimately US consumers?

For example, I heard a commentator talking about the price of Canadian beer potentially increasing for US citizens due to US imposed tariffs. So, say the majority of US people who bought Canadian beer switch to beer produced in the US (which is now more competitively priced). Who gains and who loses? 

Florida exports around 37% of it's total orange juice production to Canada. Who loses? 

Mid Western oil refineries in the US obtain around 60% their crude oil from Canada. Tariffs are going to ripple through the entire local economy. Given the importance to many products and for Americans their transport. 

Depends on the demand elasticity of that orange juice product in Canada. And what are the alternatives, and the alternatives for sourcing crude oil, or having it domestically produced.

Nobody knows the net overall impact, certainly not me, you, or even Trump. And the strategy needs to be played out for an extended period to get any certainty, which is long past the time Trump will leave office. 

From the person on the ground's point of view the impact is going to be very real. Whether you are buying or selling a product. It's your pocket that feels the pain. Likewise possibly even the loss of your job. Price changes people's habits. There's often alternatives. 

granta

Shimrod said:

Grumpy_chap said:

aroominyork said:

So the first round of tariffs was not a bluff. How does it affect fixed interest investments? It is not going to dampen inflation, so my first thought is to move money from an aggregate bond fund into cash pretty quickly (something like CSH2).

For me, I will do nothing.

I would also do nothing - however I am in the process of transferring former workplace pensions into a SIPP which requires a sale into cash before the transfer. As the process is underway, timings for any of this are outside my control - but I just know that the sale will happen at the dip, and by the time the cash is available for reinvestment the markets will have recovered!

Is it too late to change the transfer request into a series of smaller value requests? I have done this in the past when forced to sell out of old workplace pension to move to a SIPP and it helped mitigate the risk. 

Martico

China's not all cheap labour and sweatshops, remember (I'm not suggesting that you say otherwise) - it's also pumping enormous levels of funding into R&D and clean energy generation

Altior

China is obviously massive, strategic (counted in decades) and tactical. 

But the predominate reasons why China's goods are still much cheaper even after being shipped around the world, are very low labour and energy costs. 

Not all Chinese work in sweat shops and assembly lines in poor conditions, but enough do to make similar production in the west uncompetitive. Yes, the west can compete on quality, branding etc. But not the cost of production. 

tigerspill

Grumpy_chap said:

aroominyork said:

So the first round of tariffs was not a bluff. How does it affect fixed interest investments? It is not going to dampen inflation, so my first thought is to move money from an aggregate bond fund into cash pretty quickly (something like CSH2).

For me, I will do nothing.
I suspect any drop in share values will bounce back quickly as the dust settles.  A bit like the drop in tech stocks when the alternative AI was launched - sharp drop and back to where things started within a week.
If I was going to do something to move money away from stocks because of the impact of US tariffs, the time for me to do that was a week ago.  I did not.  If I move away from stocks now and into cash I will just be locking in the fall.
That's my current opinion.
My opinion may change.
I have no knowledge or experience in matters around finances and stock market movements, so my opinion is worth no more than any other opinion that you may find proffered by anyone you meet in the pub, supermarket, bus stop, golf course or wherever.

This is exactly what I did ten days ago.
Markets have been high and have risen steeply in recent months.  I have been dithering on the timing of my withdrawal plan.  I pulled the trigger and am happy with this - even if markets go up.  I got good prices for what I sold.  This cash will top my 5 year cash bucket up again after spending parts of it in the past couple of years.

Shimrod

granta said:

Shimrod said:

Grumpy_chap said:

aroominyork said:

So the first round of tariffs was not a bluff. How does it affect fixed interest investments? It is not going to dampen inflation, so my first thought is to move money from an aggregate bond fund into cash pretty quickly (something like CSH2).

For me, I will do nothing.

I would also do nothing - however I am in the process of transferring former workplace pensions into a SIPP which requires a sale into cash before the transfer. As the process is underway, timings for any of this are outside my control - but I just know that the sale will happen at the dip, and by the time the cash is available for reinvestment the markets will have recovered!

Is it too late to change the transfer request into a series of smaller value requests? I have done this in the past when forced to sell out of old workplace pension to move to a SIPP and it helped mitigate the risk. 

It's four pensions in total, (two each his n' hers), so effectively staggered already. Scottish Widows have been impressively quick, taking just over a week to complete the transfer. Two of the others are L&G pensions which I am expecting to take several weeks (having seen feedback on other L&G transfers), so it's a complete unknown as to when the trades will go through.