The Trade War Begins?
18 hours of panic? Few expected it to reach this point, yet tariffs are now in effect, but rumors suggest a deal may be announced today. Below are the additional tariff threats pledged by Trump.
I understand Trump's desire for factories in the US; while it might negatively impact the global economy, revamping supply chains will take decades and may lead to stagflation in the short term. China should be the priority, so I’m unclear why Trump is targeting his allies.
The tariffs hurt rest of world economies but they also cause chaos for US domestic manufacturers. The comments below are from the latest ISM manufacturing survey.
The auto sector is the largest trade component among Canada, the US, and Mexico, accounting for 22% of all goods and services exchanged across our borders. In 2023, we produced approximately 16 million cars, which typically include parts and materials from all three countries. For instance, pistons often cross borders around six times during production.
Maybe Musk is just going after his competition? Tesla manufacturers all their cars sold in the US but they will still have components imported from international suppliers.
Canada and Mexico are most vulnerable to Trump’s chaotic policy.
Retail sentiment has soured, with the percentage of AAII respondents expressing bearish views on stocks nearing all-time highs, similar to levels seen in 1990, 2008, 2009, and 2022, just before significant market rallies. I’m not sure what to make of this.
The poor performance of high beta stocks may account for retail investors' negativity, with these stocks experiencing a decline comparable to the 30% drop in the S&P from March 2020.
Adults over 65 are only 16% of the US population but represent 37% of US healthcare costs. Global entitlement programs were established with the expectation of ongoing population growth. However, declining growth rates and increasing life expectancies mean countries must find ways to finance these obligations. The global debt situation worsens when accounting for these future liabilities.
Healthcare costs increase exponentially as people age.
GLP-1s are viewed as a promising solution for obesity and related health issues. While sales of GLP-1s are projected to rise, there is a common misconception that they are solely for weight loss; in reality, their applications extend far beyond this.
There are multiple GLP-1s in development to address a variety of ailments, 12 top drugs could be doing over $1 billion of sales by 2030.
Re tariffs, stephen mirans wrote a piece " a users guide to restructuring the global economy" where he concludes tariffs are risky but a likely outcome is that the cost is born by the tariffed nation whose currency depreciates apx the amt of the tariff this causing little price change to the tariffing country. So the US could make a ton of money off tariffs without it changing much for their consumers.