20250410 Trump Tariff Days again
Trump posted various tariff rate on item/product they import into thee State, effectively called import tax, if you may. The intention is to increase the price of import product and to encourage locals to buy their local product. The lesser spending on those imports, the more USD is kept within the country.
On 8th April, US say to increase Tariff on China import for 104%
On 9th April, China intend to increase the Tariff for US product to 84%
On 10th April, Trump announce a 90 Days Delays on it plan Tariff on all the countries involves, but remain 10% on the Tariff for those countries.
Excluding Canada, Mexico to remain on the previous announced Tariff. However, China Product to b increase to massive 125%. And a correction is made on the later of the same day.
From CNN news, since 2018, China has been reducing their volume to US from 20% to currently 15% of their overall export for the country.
Anyway, my guess on the end game of this approach will end with a final rate for most of the countries with reducing the discounted Counter Tariff of 50% into 25%. Which is to cut another half of what he initially plan. He would has concern on the local demand for import product and the pressure of the local GDP and incoming high degree of inflation. Without more measure to increase local spending power, the current government will go no way but failed to gain the confident of the country.
What will likely to happened next?
Stage 1
- Their current Local available import product will be reducing without proper stock pile
- Example 1, Tesla and iPhone price would increase from 30% to 60%. This is to factor in that these companies will put up some measurement and alignment to flip flop on their current ecosystem to somewhat reduce China made item into their product. By moving part and factory production back to US
- Example 2, Nike - Price to be increase, so they would stock pile stock from now on and hopefully whatever nightmare gonna happened it would happen after 90Days(the delay)+60Day(the stock pile)
Stage 2
The discounted Counter Tariff of 50% will be cut off another 50% or 70%. Which would give us a chart of Tariff charges ranging from 10%(starting with Singapore) to 22%(Vietnam, Myanmar), and this is still depends if the country would contribute some form of compensate to the State. And the likely to in in a form of investment into the State, buying USD Bond to support US, or to give a piece of land for their free trade(which is unlikely but possible). And maybe CO-Tax rebate on the tax that US company pay to the target country(not sure if this is possible)
Having say that, Stage 2 is where would start to see the impact of his Arm muscle with other countries, and this is where he would see more Cash flowing in for his Government.
China might end up with 20% to 32% Tariff charge at this stage, he would loss a lot of voter if anything more than this Tariff rate. Whatever impose to China would not be too high as this is to factor in China +1 effect to spillover to more countries
Before Stage 2 start, he might announce some form of Cash support for below Bottom 40% of US citizen, and this it to increase their purchasing power. There might be a program to have getting them to receive the extra for a 6month to 10months.
Stage 3 would be the time to revise the effectiveness of this Trade war. However, he might not survive to Stage 2 if he play the Tariff Card wrongly. Any countries that has 20% Tariff charge would be a very unlucky country as they could basically forget about exporting goods to US.
Of course, if he could survive his first 60%. today 10% 90day delay and 10% tariff is a good chess move which give a head turn to many investor and create a temporary Safe Heaven to readjust their strategy to jump into this hot water.
Okay, is time to rethink what Smart Money is, and what is Zero risk investment.
CashOut, go to Bond.... to accumulate wealth, please...
posted by CoolRunning at 11:07 AM
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