Political Posts

[gary17]

ok so tariffs will impact low gross margin businesses the most 

and less on high gross margin ones as they can afford that 25%
 

like an LV bag selling for $3500 is made of plastic - doesn’t cost $200 IMO

 

so 20% tariff on a bag is like $40 for a $3500 bag

Edited April 7, 2025 by gary17

[dwy000]

2 minutes ago, gary17 said:

ok so tariffs will impact low gross margin businesses the most 

and less on high gross margin ones as they can afford that 25%
 

like an LV bag selling for $3500 is made of plastic - doesn’t cost $200 IMO

 

so 20% tariff on a bag is like $40 for a $3500 bag

No way LV is going to let that mark up happen in a high tax country.  They probably mark it up in Asia or a low tax region before transferring it to the US distributor at high value so the taxable profit in the US is low. 

[nwoodman]

Stuff it, its a shitshow but this did give me a chuckle

 

 

Edited April 7, 2025 by nwoodman

[lnofeisone]

3 minutes ago, dwy000 said:

No way LV is going to let that mark up happen in a high tax country.  They probably mark it up in Asia or a low tax region before transferring it to the US distributor at high value so the taxable profit in the US is low. 

US is fairly vigilant about this, and most importers don't want to deal with compliance risks from CBP and IRS. Even if you consider a wild example like Nike using the first sale rule, or Converse altering designs slightly to reduce tariffs (tariff engineering is a thing), most companies are not that sophisticated when it comes to tariff engineering. In fact, the IRS and CBP are probably far better equipped (or were anyway) to deal with this change than any private sector participant. There is some public information it if you are interesting. Look up CBP's Automated Commercial Environment (ACE). 

[Blugolds]

My concern reminds me of what Warren said re: 

 

"in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don't have the first, the other two will kill you".

 

The same can be said about people controlling policy. Before we get into the “but Biden was dumb too!” Yup you’re right, but he was also low energy lol. Trump et al do not strike me as high integrity for a variety of reasons. I also don’t have a ton of faith the intelligence box is checked. But the energy part of the equation is certainly there. 
 

With the major component being integrity, we should hope for them to be dumb and lazy, but my fear is that we have a lack of integrity, lack of intelligence and high degree of energy and the end result is undesirable.

 

Im perfectly fine being wrong about this, in fact I genuinely hope I am. 

[gary17]

Am I right market may be over reacting ?

[lnofeisone]

2 minutes ago, gary17 said:

Am I right market may be over reacting ?

You are looking at one puzzle piece - end price for a consumer good. Some businesses buy raw materials, and these tariffs introduce a fair amount of unpredictability. Unpredictability leads to a pause in decision-making, which can then initiate the vicious cycle of layoffs, reduced demand, and so on. This is why this game is very high risk. If other participants don't respond how you expect them to, it can lead to some real bad results. 

[Luke]

I am down -35% since trump came out with the tariffs. Slowly getting to -40%.

 

How do the guys feel who voted trump and now get a significant amount of their assets wracked? Is this what you wanted and are willing to pay for?

 

[Luke]

I hope countries are not letting him get away with this and start to isolate the US together. China already made a headstart.

[Paarslaars]

That will only make things worse for your portfolio. I think there are better, more constructive ways forward. Most of the world is simply looking to survive his antics with minimal impact on their people. Things will be different when he is out of the white house.

[Luke]

15 minutes ago, Paarslaars said:

That will only make things worse for your portfolio. I think there are better, more constructive ways forward. Most of the world is simply looking to survive his antics with minimal impact on their people. Things will be different when he is out of the white house.

Trump will be here for multiple years. If people bow down to his demands then he will fuck them over and further enrich the US. Thats not smart long-term, also not for my portfolio since i barely own US assets.

[Paarslaars]

I agree about that part. Just saying that leaders in Europe should not retaliate just to retaliate. They need to take the appropriate measures to protect the livelyhoods of their people.

[Milu]

Not sure if this was already posted but very fascinating to read Buffett’s article from 2002 discussing runaway deficits and potential approaches to resolve. This was when the deficit was  ‘only’ 4%.

 

[Spekulatius]

3 hours ago, Luke said:

Trump will be here for multiple years. If people bow down to his demands then he will fuck them over and further enrich the US. Thats not smart long-term, also not for my portfolio since i barely own US assets.

Trump is fucking everyone over, except himself. He won’t make the US rich either. I think countries need to establish trade without the US and do their own deals bilaterally. The worst thing to happen is that every country establishes blanket tariffs.

 

I think the right way to deals with this is to do targeted countermeasures/tariffs and do mitigations to reduce the impact.

 

Here is one example of self harm: Howmet declared force majeure due to tariffs. That means they can and likely will cancel existing contracts. The auto and now apparently aerospace supply chains are messed up from tariffs which means that we are looking at a major mess here, similar to COVID-19 for these particular sectors.

https://www.aerotime.aero/articles/jet-component-supplier-howmet-may-halt-shipments-amid-tariff-challenges-report

Edited April 7, 2025 by Spekulatius

[mattee2264]

Trump's demands are unreasonable. The tariff math doesn't add up. It is all based on a gut feeling that America is being ripped off by the rest of the world and an arrogant belief that the USA can win any trade war and extract significant concessions from its trading partners. It is usual for Trump to start by asking for the moon but the rates he has set are more likely to encourage retaliation or inaction rather than bringing trading partners to the negotiating table. 

 

 

 

[Dalal.Holdings]

 

 

This is getting to be quite the show

[John Hjorth]

6 minutes ago, Dalal.Holdings said:

... This is getting to be quite the show

 

Yeah, @Dalal.Holdings,

 

It's just great!  :

 

 

 

Edited April 7, 2025 by John Hjorth

[Luke]

47 minutes ago, mattee2264 said:

Trump's demands are unreasonable. The tariff math doesn't add up. It is all based on a gut feeling that America is being ripped off by the rest of the world and an arrogant belief that the USA can win any trade war and extract significant concessions from its trading partners. It is usual for Trump to start by asking for the moon but the rates he has set are more likely to encourage retaliation or inaction rather than bringing trading partners to the negotiating table. 

 

 

 

Yeah, the insensitivity and ludicrous math behind the tariffs and the total disregard of conversations about these tariffs is unacceptable on a political level. It completely destroys trust and reliability. I think Nato is also quite at risk now because you just can not rely on trump.

 

Trump needs to feel now that there are limits to his power and that he can not push countries around like pawns on a chess board. So i think the rest of the world collaborating on how to use this blunder could lead to a huge shift in economic power, maybe in favor of the EU but also China... Problem as always is that trump has one man power while the EU has to discuss everything through multiple instances...

[Viking]

Not sure if this has been posted. Here is a short take on tariffs from the Economist. i liked the comment about what tariffs do to a domestic economy - it gets fat and lazy. Yes, the (‘protected’) US car industry back in the 1970’s was a train wreck. I think of that time/industry every time I hear the slogan ‘Make America great again.’ 
 

 

[no_free_lunch]

Let us not forget that the EU and Canada are putting tarriffs on the US as well...  For some reason everyone else gets a free pass but we discuss what the US does.  Canada could certainly just not stand up tarriffs and tell the US they are being stupid.  We voluntarily tarriff as well.  Lets at least be consistent with the rhetoric.

[Jaygo]

9 minutes ago, no_free_lunch said:

Let us not forget that the EU and Canada are putting tarriffs on the US as well...  For some reason everyone else gets a free pass but we discuss what the US does.  Canada could certainly just not stand up tarriffs and tell the US they are being stupid.  We voluntarily tarriff as well.  Lets at least be consistent with the rhetoric.

 

Can you illustrate the amount of tariffs that are being collected by Canada at the expense of the USA?

 

I know we have some that are meant as stop gaps for critical industries like Agriculture but as far as I am aware most items are free.

 

I order parts and equipment from the USA and its generally without duties.

[changegonnacome]

8 minutes ago, no_free_lunch said:

Let us not forget that the EU and Canada are putting tarriffs on the US as well...  For some reason everyone else gets a free pass but we discuss what the US does.

 

The great lie that Trump has told his supporters.........is that the US is a victim of the world trading system......when conversely the US owns basically every globally dominant company you've ever heard of in tech, biotech, enterprise software, pharma, early stage, banking, investment management, insurance........victimhood used to be the preserve of the socialist left.......pathetic to see it leach into the minds of the conservative party.

[lnofeisone]

1 minute ago, changegonnacome said:

 

The great lie that Trump has told his supporters.........is that the US is a victim of the world trading system......when conversely the US owns basically every globally dominant company you've ever heard of in tech, biotech, enterprise software, pharma, early stage, banking, investment management, insurance........victimhood used to be the preserve of the socialist left.......pathetic to see it leach into the minds of the conservative party.

This here is a fantastic take. Victimhood was once the preserve of the social left. The horseshoe theory rears its ugly head, yet again. 

[John Hjorth]

16 minutes ago, Viking said:

Not sure if this has been posted. Here is a short take on tariffs from the Economist. i liked the comment about what tariffs do to a domestic economy - it gets fat and lazy. Yes, the (‘protected’) US car industry back in the 1970’s was a train wreck. I think of that time/industry every time I hear the slogan ‘Make America great again.’  ...

 

@Viking,

 

I think this is true.

 

Especially @Spekulatius has posted [as one the few CofB&F members knowledgeable about culture, conditions, policies etc. in both Europe and USA] about why there really, but also in general, are no takers for American cars here in Europe, while some European car brands are in demand in at least parts of the American society.

 

- - - o 0 o - - -

 

Another place in the US economy, where things are quite similar, at least to a degree, is certain areas in the American military industrial complex, which exists in its recent shape and form only by being an elephant on clay feets having the trunk deep dived into the US defence budget. It will likely never really surface it is so, unless the US military budget gets DOGE treatment, which is highly unlikely, I think.

[changegonnacome]

If this continues I think the unthinkable could occur……DXY depreciates & the 10yr appreciates….like an emerging market economy would in a crisis.

 

The flight to safety in Trump 2.0 is to places where a moron isn’t running the show.

 

The only exceptional thing about the United States now is how exceptionally incompetent the leadership of the country is.