Posted on 02/04/2025 7:50:51 AM PST by Diana in Wisconsin
President Trump has now started implementing his promise to impose new or additional tariffs on goods from various countries, starting with China, Canada, and Mexico. Trump already imposed tariffs in 2018 against various countries. Now, once again, the media are all over how prices are going to jump for consumers because tariffs are a “regressive consumption tax,” and how tax receipts from tariffs won’t go up, etc. etc.
Now we’ll look at what tariffs did and didn’t do last time. One, they didn’t trigger inflation, which stayed below the Fed’s target. Two, they more than doubled tax receipts from customs duties. And three, they hit stocks, and the S&P 500 tanked 20% in 2018.
Sure, “This time it’s different” – but those are the four most expensive words on Wall Street.
Charts and graphs at link. Very informative as to what Tariffs did and did not do last time around. (All positive!)
(Excerpt) Read more at wolfstreet.com ...
The PCE price index for durable goods remained negative throughout that time…
…while the CPI for durable goods – CPI usually tracks a little higher than the PCE Price index – moved in a range of -2% to +1% year-over-year.
Customs duties more than doubled in less than two years.
It’s not the end of the world for stocks. Crazy overvaluation is a far bigger problem for stocks. In 2018, QT-1 was also beginning to bite, and the Fed was nudging up its policy rates at snail’s pace. A mix of things came together in 2018, and the S&P 500 tanked 20%. But it didn’t last long.
You tell them.
iirc....some tariffs went directly to our farmers and they were happy...
Did Biden remove any of Trump’s tariffs?
Don’t think so!
They’re called “protective tariffs” for a reason.
Whose stocks were hit? Importers? Companies with heavy foreign investment?
That might be true in the short term. But as domestic suppliers come back on line, their sales and profits should increase and the SP500 / DJIA / Nasdaq should all recover.
“That might be true in the short term. But as domestic suppliers come back on line, their sales and profits should increase and the SP500 / DJIA / Nasdaq should all recover.”
That’s what the article said. :)
Gold & Silver took off again like a rocket, yesterday. Diversity (in THIS case) is my friend. Mama Like! :)
How can anyone attribute stock market performance to any single thing? It always sounds like reading tea leaves, to me.
I would think that tariffs could be used correctively. The stock market seems to “like” trade imbalance and “not like” correction. Loonies, if you ask me.
This was entirely designed to be nothing more than a hit piece. Too bad they missed the entire target by a wide margin.
Avacados were up a dollar. I can live with that to punish that narco terrorist s hole.
“This was entirely designed to be nothing more than a hit piece.”
I read the whole article before posting. I didn’t find it to be a hit piece on Trump.
It showed that the markets will survive this ‘blip’ on the radar screen and we’ll benefit from it in the short and long runs as we did before the 2020 STEAL.
I stopped buying Avocados from MX a number of years back. I will buy them if they’re from CA or FL.
It is nothing compared to credit card interest rates rising to outrageous 38% & beyond. Making it more likely that more people will abandon paying their credit balances as a result, which helps no one, including the banks. It was their doing in a large way.
Stocks were down for 14 trading days.
“In 2018, QT-1 was also beginning to bite, and the Fed was nudging up its policy rates at snail’s pace. A mix of things came together in 2018, and the S&P 500 tanked 20%. But it didn’t last long.”
Yes, I noted that in the first comment. We’ll more than likely see that again if the tariffs are fully implemented.
However it seems that just a whiff of Tariffs is already doing the trick with MEX and Canada.
If you’re diversified, you’ll survive. :)
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