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President Trump has signed a presidential memorandum directing the U.S. Trade Representative Robert Lighthizer to draw up a list of Chinese products on which tariffs could be imposed. The list will be made public in 15 days, and tariffs will take effect after a 60-day comment period:
The US plans to impose tariffs on up to $60bn (£42.5bn) in Chinese goods and limit the country's investment in the US in retaliation for years of alleged intellectual property theft.
The White House said the actions were necessary to counter unfair competition from China's state-led economy. It said years of talks had failed to produce change. China said it was ready to retaliate with "necessary measures". Beijing also said it would "fight to the end" in any trade war with the US.
US stock markets closed lower on Thursday, as investors responded to the announcement. [...] The White House said it has a list of more than 1,000 products that could be targeted by tariffs of 25%. Businesses will have the opportunity to comment before the final list goes into effect.
Reuters portrays the action as "far removed from threats that could have ignited a global trade war". Bloomberg notes that many industry trade groups and companies are opposing the tariffs.
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Major US Solar Company Blames Job Cuts On Trump's Solar Import Tariff
U.S. Steel and Aluminum Imports to Face New Tariffs
(Score: 5, Interesting) by tonyPick on Friday March 23 2018, @08:53AM (10 children)
https://www.theguardian.com/business/2018/mar/23/china-promises-to-hit-us-with-tariffs-as-stocks-plunge-amid-fear-of-trade-war [theguardian.com]
(Score: 2) by c0lo on Friday March 23 2018, @09:33AM
It begins [xkcd.com] - except this is not a minor story.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: -1, Troll) by Ethanol-fueled on Friday March 23 2018, @02:44PM (1 child)
The Chinks have a stranglehold on rare-earth metals, even less rare ones like Neodymium that are used in fucking everything. And according to this, [investingnews.com] most other countries that have them don't have nearly as much or are Russia, and we've been pissing Russia off a lot lately.
We could go the India route, but their relationship with us has become more dubious in recent years, and they're in a powder-keg zone. I guess we could harvest what little we have domestically or enlist help from the Favela Monkeys of Brasil.
(Score: 3, Informative) by c0lo on Friday March 23 2018, @10:08PM
Mmmm... China Russia India Brasil... how do you spell BRICS [wikipedia.org]?
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 3, Interesting) by DeathMonkey on Friday March 23 2018, @04:54PM (6 children)
It's almost like he's purposely trying to tank the economy. God only know why...
I moved most of my 401k into bonds and other safer bets earlier this month. Interest rates are going up as well (which I actually think is a good thing) and that makes them a bit more attractive.
(Score: 2) by legont on Friday March 23 2018, @08:54PM (5 children)
When interest rates go up, bonds go down. Sorry for 101.
Now personal opinion. Bonds are in the mother of all bubble.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2) by DeathMonkey on Friday March 23 2018, @09:29PM (4 children)
The bond market does. Actual bonds just pay whatever interest you get them at.
The fund I'm in mostly buys short term bonds and holds them until maturity. Hence, rising interest rates are good.
(Score: 2) by legont on Friday March 23 2018, @10:18PM (3 children)
True, for the bonds hold to maturity, but the question is if the fund will be able to hold on its strategy when investors start to withdraw cash during the crisis.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 1) by khallow on Saturday March 24 2018, @04:47AM (2 children)
Depends on how big the crisis is. We don't know how far Trump actually plans to take this or for how long, much less the damage that will result. But yes, a big, escalated crisis could result in a mass withdrawal from the US market. But that's not going to be specific to US bonds. And some things will be hit less hard than others or even be attractive (the money that gets pulled out won't just disappear though it may end up in another country). He may well have found a niche that is more of a place to flee to rather than flee from.
(Score: 2) by legont on Saturday March 24 2018, @09:11PM (1 child)
I actually don't' think it has anything to do with Trump. The reason I commented on your portfolio change is that I believe bonds are in the mother of all bubbles that is way bigger than 2008 real estate one. I think being in bonds is to take the highest risk right now and for almost no reward.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 1) by khallow on Sunday March 25 2018, @05:25AM
In 2008, it was possible to be leveraged with 50 dollars of borrowed money for every 1 dollar of actual real estate asset. What that meant was that even a small decline in the value of such an investment resulted in a large decline in actual wealth combined with a modest threshold at which a forced sell-off (in order to maintain reserve) could happen.
Sorry, that's not happening now. There's been huge games played with the bond markets by the central banks (particularly, "quantitative easing"), but for the most part, they got away with it in terms of short term consequences. The fallout from that is not massive leverage since, for example, the central banks could, and perhaps did, buy many trillions of dollars of junk bonds and then write it all off. They didn't trigger inflation (which would have been the primary short term consequence) and due to higher reserve requirements they didn't generate a lot of highly leveraged bonds. Similarly, there's probably a bunch of banks with weak asset sheets, but that's a straightforward sort of banking failure that's happened numerous times over the years, including during the real estate crisis.
My view is that any near future downturns will have little to do with the various investment bubbles that currently exist (though I don't see these bubbles helping matters any), and a lot to do with the fallout from a couple of decades of bad economic policy, triggered perhaps by a tariff war. I think a lot of the big problems of the next decade will have to do with the poor institutional and business behaviors that have been rewarded.