There is a "maybe 35% probability" that the U.S. will enter a recession this year, says Alec Kersman, managing director and head of Asia-Pacific at Pimco.
Trade wars could cause countries to “go back to being insular,” Bhatia said, which could cultivate “spurts of patriotism that translate into people spending more locally in their own nation.”
Consumer spending on goods and services account for around two-thirds of U.S. gross domestic product. There is therefore is a “high probability” that a tariff-induced increase in domestic expenditure will cause the country’s GDP to “do better than you anticipate,” Bhatia said.
None of that sounds all that bad, to me, but Americans have gotten very used to buying cheap goods imported from foreign countries where labor and other costs are much lower. The whole point of tariffs is to make those foreign made goods more expensive so that American made goods can better compete with them on price, but that doesn’t result in things getting less expensive for consumers (or producers, for that matter, since they’ve also gotten used to cheap, foreign made parts and components). Prices will go up, and if they go up too much American consumers might stop buying.
Or will they? Americans be shoppin’, and I’m not sure how high prices would have to go for them to stop. I don’t know where people get the money to just keep consuming, but they do, somehow.
Edit: I think there is the threat of American producers trying to keep prices from going up too much by finding ways to suppress wages for workers and by just making products crappier, since their primary focus will be squeezing every possible penny of profit out of every sale.
I think there is the threat of American producers trying to keep prices from going up too much by finding ways to suppress wages for workers and by just making products crappier, since their primary focus will be squeezing every possible penny of profit out of every sale.
America never had good labour laws, and the anti-union propaganda has created generations who don’t know why unions were created in the first place. I don’t see this ending well for American labour.
Donnie doesn’t have a stable policy, and the immediacy of the tariffs simply will result in higher prices. Farmers can’t go back in time and plant alternate crops - the imports are necessary. Steel plants can’t just re-tool for a product that used to come from Brazil or Canada overnight. If the goal is to bring back the jobs, companies need time to adjust and plan and invest.
None of that sounds all that bad, to me, but Americans have gotten very used to buying cheap goods imported from foreign countries where labor and other costs are much lower. The whole point of tariffs is to make those foreign made goods more expensive so that American made goods can better compete with them on price, but that doesn’t result in things getting less expensive for consumers (or producers, for that matter, since they’ve also gotten used to cheap, foreign made parts and components). Prices will go up, and if they go up too much American consumers might stop buying.
Or will they? Americans be shoppin’, and I’m not sure how high prices would have to go for them to stop. I don’t know where people get the money to just keep consuming, but they do, somehow.
Edit: I think there is the threat of American producers trying to keep prices from going up too much by finding ways to suppress wages for workers and by just making products crappier, since their primary focus will be squeezing every possible penny of profit out of every sale.
America never had good labour laws, and the anti-union propaganda has created generations who don’t know why unions were created in the first place. I don’t see this ending well for American labour.
Donnie doesn’t have a stable policy, and the immediacy of the tariffs simply will result in higher prices. Farmers can’t go back in time and plant alternate crops - the imports are necessary. Steel plants can’t just re-tool for a product that used to come from Brazil or Canada overnight. If the goal is to bring back the jobs, companies need time to adjust and plan and invest.
That seems to be the case.