Stocks and Shares ISA current climate

kimwp

Exodi said:

Hoenir said:

creo said:

The 10% tariff is taking effect on april 9th, 

Warrent buffet has little confidence in the market right now is what i meant. Look at the moves he has made. I'm not saying copy him but I would take notice.

The base line10% tariff has already been imposed on imports into the USA (other than for the exemptions). 

Warren Buffett is the most misunderstood and misquoted individual on social media. Berkshire Hathaway is a huge conglomerate. As it's core is an insurance business. It's not an investment fund per se.  

(responding to Creo)

I assume you're referring to the UK's 10% tariff? We are but small fry in the global trade arena, the impact on stock prices will be primarily driven by CH>US trade -  Warren Buffet is unlikely to be making his investment strategy based on ourlittle island. I work as a Sales Director for a company that regularly imports goods from China to the US.

Previously the duty rate on our products was 12.3714% (7.5% of that being from Trump in his previous term in office!).

Since then, he's added 2x 10% increases, making the duty rate on our goods 32.3714%.

Last week Trump announced in his 'Liberation Day' 34% additional tariffs on China, making the duty rate on our goods 66.3714%.

He's now suggesting if China do not back down on reciprocating his tariffs, he will add an additional 50% to the tariff rate, making the duty rate on our products 116.3714%.

(I make this point as the media keeps suggesting that the duty rate of products will be 104% - but keep missing the point that there were already duty rates before trumps recent increases of 10%+10%+34%+(potential)50%).

Suffice to say, we will just be increasing the price of our products, as we have already.

Can I ask what it means for china to reciprocate his tariffs? He's asking them to charge higher amounts on products they import from the us?

Exodi

kimwp said:

Can I ask what it means for china to reciprocate his tariffs? He's asking them to charge higher amounts on products they import from the us?

Take the US and China, they both import products from each other.

The US is feeling hard done by because the US buys a lot more products from China than China buys from the US, meaning overall, money is flowing from the US to China. The US doesn't like this for several reasons, and decides to introduce an import tariff on China. That means when any goods from China ship into the US, the importer will need to pay this tariff to the government (who actually picks up for that cost is up for negotiation, whether it'll end up being the manufacturer, distributor, customer, etc).

China doesn't think that's fair and reciprocates by introducing their own tariff on US goods imported into China. This would be referred to as a reciprocal tariff.

This angers the US, because they introduced the tariffs to address the difference in how much they buy from each other (AKA the trade deficit), so introduces another tariff to again balance the playing field.

China may then reciprocate the tariff again and the cycle goes on and on and on and on. Trump doesn't want his tariffs reciprocated.

It doesn't help that Trump has deceived/confused the US public by suggesting that his own tariffs are reciprocal, leading people to believe that all other countries have really high tariff rates on US goods and the US is only 'returning the favour'. This is simply untrue.

Trumps tariffs are solely based on the trade deficit (the difference between how much the US sells to a country minus how much it buys from that country), but have been deliberately misrepresented as reciprocal tariffs to get the public on side - which is something he strongly needs as the net impact of this tariff war will inevitably be US goods spiking up in price as the higher duties are ultimately passed on to US consumers.

Hoenir

Exodi said:

kimwp said:

Can I ask what it means for china to reciprocate his tariffs? He's asking them to charge higher amounts on products they import from the us?

Trumps tariffs are solely based on the trade deficit (the difference between how much the US sells to a country minus how much it buys from that country), 

Only for goods. Services have been totally ignored. 

Exodi

Hoenir said:

Exodi said:

kimwp said:

Can I ask what it means for china to reciprocate his tariffs? He's asking them to charge higher amounts on products they import from the us?

Trumps tariffs are solely based on the trade deficit (the difference between how much the US sells to a country minus how much it buys from that country), 

Only for goods. Services have been totally ignored. 

Indeed, and to clarify (since re-reading my post I could be seen as agreeing with Trump's logic) I don't think his position is reasonable either.

If you and I go into business selling each other widgets... and you sell me 2 widgets for £1 each and I sell you 1 widget for £1 (meaning there is a £1 trade deficit between us) - I could introduce a 50% tariff meaning every time you sell me a widget, you have to give me an extra 50p, which would technically mean there is no longer a trade deficit between us - but it ignores the fact that I received twice as many widgets from you!

kimwp

Exodi said:

kimwp said:

Can I ask what it means for china to reciprocate his tariffs? He's asking them to charge higher amounts on products they import from the us?

Take the US and China, they both import products from each other.

The US is feeling hard done by because the US buys a lot more products from China than China buys from the US, meaning overall, money is flowing from the US to China. The US doesn't like this for several reasons, and decides to introduce an import tariff on China. That means when any goods from China ship into the US, the importer will need to pay this tariff to the government (who actually picks up for that cost is up for negotiation, whether it'll end up being the manufacturer, distributor, customer, etc).

China doesn't think that's fair and reciprocates by introducing their own tariff on US goods imported into China. This would be referred to as a reciprocal tariff.

This angers the US, because they introduced the tariffs to address the difference in how much they buy from each other (AKA the trade deficit), so introduces another tariff to again balance the playing field.

China may then reciprocate the tariff again and the cycle goes on and on and on and on. Trump doesn't want his tariffs reciprocated.

It doesn't help that Trump has deceived/confused the US public by suggesting that his own tariffs are reciprocal, leading people to believe that all other countries have really high tariff rates on US goods and the US is only 'returning the favour'. This is simply untrue.

Trumps tariffs are solely based on the trade deficit (the difference between how much the US sells to a country minus how much it buys from that country), but have been deliberately misrepresented as reciprocal tariffs to get the public on side - which is something he strongly needs as the net impact of this tariff war will inevitably be US goods spiking up in price as the higher duties are ultimately passed on to US consumers.

Ah ok! Thank you for explaining!

Hoenir

Exodi said:

Hoenir said:

Exodi said:

kimwp said:

Can I ask what it means for china to reciprocate his tariffs? He's asking them to charge higher amounts on products they import from the us?

Trumps tariffs are solely based on the trade deficit (the difference between how much the US sells to a country minus how much it buys from that country), 

Only for goods. Services have been totally ignored. 

Indeed, and to clarify (since re-reading my post I could be seen as agreeing with Trump's logic) I don't think his position is reasonable either.

I didn't think you were in agreement with Trump. Boils down to the fact that Trump needs to raise revenue to fund his promised tax cuts. Also that the administration is fully aware of the ticking time bomb which is the level of Government debt. A huge amount of which is short dated and will need refinancing in amatter of years.  There's a serious macro game in play which isn't simply just going to disappear anytime soon. 

Who knows perhaps the game is to ultimately default on US Treasuries and leave the Chinese with worthless paper. 

kimwp

Exodi said:

Hoenir said:

Exodi said:

kimwp said:

Can I ask what it means for china to reciprocate his tariffs? He's asking them to charge higher amounts on products they import from the us?

Trumps tariffs are solely based on the trade deficit (the difference between how much the US sells to a country minus how much it buys from that country), 

Only for goods. Services have been totally ignored. 

Indeed, and to clarify (since re-reading my post I could be seen as agreeing with Trump's logic) I don't think his position is reasonable either.

If you and I go into business selling each other widgets... and you sell me 2 widgets for £1 each and I sell you 1 widget for £1 (meaning there is a £1 trade deficit between us) - I could introduce a 50% tariff meaning every time you sell me a widget, you have to give me an extra 50p, which would technically mean there is no longer a trade deficit between us - but it ignores the fact that I received twice as many widgets from you!

I didn't interpret it as you agreeing with trump's logic, it seemed to be an impartial report to me.

Lillyplant

Thank you for taking the time out to comment. I think I will ride out the storm. I am in a HSBC conservative C whatever that means! 

eskbanker

Lillyplant said:

Thank you for taking the time out to comment. I think I will ride out the storm. I am in a HSBC conservative C whatever that means! 

Perhaps worth learning about what it means, especially if modest movements cause concern - did you pick it yourself or did someone help you?

daz378

3 weeks ago...I was 450 up on a medium risk all world fidelity  fund...and corporate bonds and property.. today 90 up...started a few years ago just under 3k...put about 40..60 a month  in....had visions of losing half of it...only represents about 10/15% of savings....but I'm hoping to partially retire in a couple years...up to now I've held my nerve