“Pandora doesn’t go back in the box, he only comes out”
Courtesy of Joshua M Brown
I don’t have a lot to say on the opening of the trade war that, supposedly, began at midnight…
I just want to make the comment that 70% of sales and profits for the S&P 500 come from overseas markets that our companies sell into and that supply chains have truly become global for almost all US industries over the last 30 years. I don’t really think there’s any “winning” something like this, it’s really just a question of how much is lost, and for how long, and what the unintended consequences of something this aggressive might be.
This is now a war that will be fought on multiple fronts – with Canada, one of our biggest trading partners, with Europe, one of our most strategically important trading partners and with China, our obvious rival for influence and power around the globe. None of it had to go down this way, but the President has displayed a clear preference for blowing things up and then having his aides explain the damage being done afterward.
International trade hasn’t been this disturbed and poked at in a long time, so we’ll have to see what happens.
“The monkey’s out of the bottle, man.”
“What?”
“Yeah.”
“That’s not even an expression.”
“Pandora doesn’t go back in the box, he only comes out.”
– said one stoned moron to the other in Pineapple Express.
Read these two links please.
Trump’s Trade War Against China Is Officially Underway (New York Times)
U.S. Has Launched ‘Largest Trade War in Economic History,’ China Says (Wall Street Journal)
****
Read also:
Trump Tariffs Primarily Hit Multinational Supply Chains, Harm US Technology Competitiveness (Mary E. Lovely and Yang Liang)
This reference is from the NY Times article cited above: "Many international companies route their supply chains through China, and American companies may end up feeling the effects of a trade war more keenly than their Chinese competitors. Research by Mary Lovely and Yang Liang of Syracuse University shows that in the field of computer and electronics products, for example, non-Chinese multinational corporations operating in China supply 87 percent of the products that will be affected by tariffs, while Chinese firms send only 13 percent."
