A few quick thoughts on the 25% tariffs on Mexico and Canada -- a move that is likely to be considered one of the most self destructive economic policy steps in recent history.
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Brad Setser
86.9K posts
Brad Setser
@Brad_Setser
CFR senior fellow. Views are my own. Writes on sovereign debt, trade, fx reserves and capital flows.
Joined May 2016
- I really struggle to understand the argument for simultaneously decoupling from Canada economically and at the same time partnering with Russia economically -- 1/2This is insane. Marco Rubio explains that America needs to "take advantage of the incredible opportunity to partner with the Russians geopolitically, on issues of common interest and economically".00:00
- The US runs a surplus in manufacturing trade with Canada, so if the goal of the tariffs is to reindustrialize the United States, the trade war with Canada is doubly counter-productive 1/When will the anti-Canadian insanity stop?
- Replying to @Brad_Setsertariffing the US auto supply chain -- and imports of autos from Canada and Mexico that have a ton of embedded US content -- while leaving the market for imports from Korea and Japan open is a bit mad. 2/
- Replying to @Brad_SetserTariffing Mexico but not Southeast Asia is equally crazy -- it is a massive gift to all the Chinese firms using Chinese parts to supply the US consumer market from SE Asia ... 4/
- Replying to @Brad_SetserRussia exports a lot of oil and industrial metals (like aluminum and nickel) ... But we already have a nice supply of oil (we even get it as a discount) from Canada, and lots of clean hydro based aluminum from Canada too. Much less risky than Russian supply ... 2/2
- Turkey is playing a dangerous game. The lira is being pushed up in real terms to limit inflation: the crawl has been removed, and TL rates are high, making the carry attractive while inflation continues. The real appreciation though works against current account adjustment 1/
- To state the obvious, a 25% tariff on Mexico and Canada and a 10% tariff on China, if sustained, would be a massive shock -- a much bigger move in one weekend than all the trade action that Trump took in his first term 1/x
- US pharmaceutical companies charge Americans more than anyone else. They report generating the bulk of the revenue in the US. But they apparently earn almost no (taxable) income in the United States. Rather remarkable. 1/
- I stand by an earlier comment: looking to Russia for "economic development" while fighting with Canada over trade is absolutely nuts ...TRUMP: IN SERIOUS DISCUSSIONS WITH RUSSIA'S PUTIN ON ENDING WAR AND 'MAJOR ECONOMIC DEVELOPMENT TRANSACTIONS WHICH WILL TAKE PLACE BETWEEN THE UNITED STATES AND RUSSIA' -TRUTH SOCIAL POST
- Replying to @Brad_SetserSo mad that i doubt Hyundai and Toyota believe it will last (the auto 232 is coming) but in the interim they should bring put car than can onto a boat ... 3/
- Hmmm. What do these three countries have in common?
- The pace at which China has emerged as a major auto exporter -- and now a major net exporter of autos -- is stunning. 1/3
- Tariffs on allies up; sanctions on Russia down ... an interesting international economic policy ... 1/*US SEEKS PLAN FOR POSSIBLE RUSSIA SANCTIONS RELIEF
