Dalal.Holdings

It sounds like Japan will be the likely first big deal

Guess not...

There you go

This is getting to be quite the show

If he believes this, he's fully gone off the deep end

A lot of the people in markets today have never lived through a real bear market. Sorry, March of 2020 was not a real bear market. Real bear markets last much longer than a few weeks. Much much longer…

Bitcoin held up vs rest of risk assets last week, but looks like it's now joining the party.

People might be shocked to learn how little this administration cares about the stock market... This administration doesn't care much about that top 10%. That's why they are bragging about bringing oil prices down. I guess in that respect, they resemble Bernie Sanders. Amazing because a lot of foreigners have piled into U.S. stocks as well lately

It will take time to break the "buy the dip" habit

That’s wrong. Ships are highly critical for national defense and take decades to build out infrastructure to create a viable shipbuilding industry. China has replicated U.S. AI capabilities overnight with Deepseek without free access to Nvidia GPUs. Whatever edge U.S. companies seemingly had with AI evaporated overnight. Technology is easily replicable for China as it has shown with stolen IP over and over again. Building ships, tanks, etc from the raw materials and layers and layers of supply chains (“the machine that builds the machine”) is not something that can be done overnight. Once a country loses the ability to do something like that, it becomes near impossible to regain it, especially in times of crisis and war.

People would be saying this even if there were just 10% tariffs put on China. If your country can’t build ships anymore and their rival can, your kids will be far worse off than a metaphorical “flogging”

Yep and now you’re seeing even the “pro-trade” Europeans freak out over China which stole their IP, heavily subsidized their auto/solar/batteries/etc, and now are on track to devastate European auto industry. Now with U.S. tariffs, they’re all freaking out that China will “dump” its goods on their markets. China has gotten away with too many abuses. Trade with China has never been “fair” or “free”.

Lol, didn’t see that. I do think the endgame of this administration is lowering the rates towards 10% for countries for “good behavior” (UK starts there). I don’t think China will get down to 10% during this administration though…

It’s always funny hearing economists say all Tariffs are bad and all free trade is good. They never consider the tails for one: if the U.S. can’t build ships anymore. If China manipulates its currency and engages in massive subsidizing of its export industries. You almost never hear economists, pundits, etc talk about these manipulations that China has engaged in everyday for the last 2-3 decades.

Yes as I edited I think Trump’s proposed rates are way too high. I do think China deserves much higher rates though and we should work on decoupling from china over the long term as long as Xi and the current CCP regime is in place.

I think there is something to it. I think Trump’s current proposed tariff rates are too high, but something close to 10% for most makes sense for a while. A consumption tax partly paid for by foreigners And China probably deserves much higher rates than everyone else thanks to Xi, their persistent manipulation of currency/IP theft/and many other such abuses they’ve gotten away with over the years.

Running endless trade deficits and hollowing out your own manufacturing base and expanding you rival's "because you are the reserve currency" is all fun and games until one day when you actually have to fight a war and realize you can't build ships anymore ... I don't think Adam Smith would have pushed free trade to such an extent where it makes a nation incredibly vulnerable (survival risk)

My point is that Europe or Japan or Korea or India isn't going to run to China as an alternative to the USA. For obvious geopolitical reasons.

Amusingly, this was written when the trade deficit was a fraction of what it is today. Buffett's solution would have almost instantaneously eliminated the deficit which would have been far more disruptive and hit all our trading partners equally (unlike now where we hit the biggest violators like China the hardest).

It's not going to be the end of the world unless you loaded up on P/E > 30 AI stocks, crypto, or other similar garbage assets. Recessions will still occur. U.S. stocks were trading at ridiculous levels for a long time. Maybe the U.S. will no longer be a > 70% consumption oriented economy. Maybe that will revert to something a bit...healthier. If you made money while the sun was shining, good, but you can't get > 20% returns every year forever. The signs were all there: PLTR, MSTR, Mag 7, crypto, etc etc https://www.stlouisfed.org/on-the-economy/2019/may/historical-u-s-trade-deficits

Yes, China can continue to steal EU's IP and destroy auto and the rest of their industry. China is also arming Putin. If that's the partner they want, then let them go for it.

https://www.bloomberg.com/news/articles/2025-04-03/trump-tariffs-on-india-how-is-country-economy-impacted-what-is-modi-doing China is not the only offender. U.S. has long had among the lowest of barriers of even our friends

The number of import certificates that would have been created would be equal to the dollar value of U.S. exports. Hence, U.S. imports would be forced to equal U.S. exports. The tradable value of the certificates would rise to a high enough level to achieve this which would be a massive tariffs on all imports. He even said this right in the article: https://fortune.com/2016/04/29/warren-buffett-foreign-trade/ The U.S. currently imports > $1.1 Trillion more than it imports. Those $1.1T imports would be forced to disappear...that is, people sending good here would have to pay up for ICs (which would rocket in price) until they are all used up. This disappearance of $1.1T in imported goods would be massively more disruptive and cause prices of the goods that do make it into the U.S. to rise much more.

https://www.investopedia.com/articles/forex/030616/why-chinese-yuan-pegged.asp#:~:text=A currency peg is a,against a basket of currencies “What Is China's Currency Peg?”

The logic: Tariffs are only bad when the U.S. does them. China can tariff and peg their currency to an artificially weak level for decades and no complaints or much of anything from “freetraders” and economists