Tariffs???

[jimcasada]

I just watched Sec Bessent try to explain away why we shouldn't worry about all these new tariffs effecting the economy, after someone tried to compared todays situation to high tariffs enacted back in the 1920~30's. So, I did some research and found some interesting reading on this via Britannica.com:

"Smoot-Hawley contributed to the early loss of confidence on Wall Street and signaled U.S. isolationism. By raising the average tariff by some 20 percent, it also prompted retaliation from foreign governments, and many overseas banks began to fail. (Because the legislation set both specific and ad valorem tariff rates [i.e., rates based on the value of the product], determining the precise percentage increase in tariff levels is difficult and a subject of debate among economists.) Within two years some two dozen countries adopted similar “beggar-thy-neighbour” duties, making worse an already beleaguered world economy and reducing global trade. U.S. imports from and exports to Europe fell by some two-thirds between 1929 and 1932, while overall global trade declined by similar levels in the four years that the legislation was in effect.

In 1934 President Franklin D. Roosevelt signed the Reciprocal Trade Agreements Act, reducing tariff levels and promoting trade liberalization and cooperation with foreign governments. Some observers have argued that the tariff, by deepening the Great Depression, may have contributed to the rise of political extremism, enabling leaders such as Adolf Hitler to increase their political strength and gain power."

Any thoughts?

https://www.britannica.com/topic/Smoot- ... Tariff-Act

[alpe9942]

We just need President Trump to “cook.” I just learned this phrase from my son.

One thing that wasn’t available almost 100 years ago was “the art of the deal.”

[Aitrus]

The problem arises when one side (the US) has low or zero rates, but the other side (pretty much everyone else) doesn’t lower theirs.

Although FDR lowered rates and the US kept rates low for the last 80 years, most of the rest of the world didn’t follow suit. Some nations - such as China and Russia - placed such stringent requirements that their markets were effectively closed to American businesses. Others who we regularly traded with - Canada, the EU, and more - had rates so high that American products were priced out of those markets.

So what’s the solution? The Breton Woods Agreement meant that the US patrolled the world’s waters so that trade could happen unhindered, and opened up market access for everyone. And in exchange everyone else jacked up tariffs on US goods, and didn’t contribute as much to mutual defense pacts as they had pledged to, and gladly took any aid dollars we offered. In short: they took advantage of the US’s generosity.

Asking nicely didn’t work through multiple changes of Presidential administration going back to Carter. So what’s the solution?

[jimcasada]

I don't know what the solution is, but I don't like all these sudden big changes (or threats of changes) affecting swings in the economy and markets. I would prefer things be done more gradually over time. As for Trump "cooking," I hear he likes "Taco"s. He says Friday tariff deadline will not be extended, but todays markets don't seem to be buying this.

Trump says Friday tariff deadline 'will not be extended'

https://www.cnbc.com/2025/07/30/trump-t ... idappshare

[mrwawa]

All I know is that the seasonal strategy I have been following to great success is around 0% this year. I had thought about not seasonally investing this year because hindcasting can't take into account the current volatile trade policies. I am in the market today, Aug 1, but almost pulled out because of the tariffs. Wish I had, but I am sticking with the plan for this year