The All Things Political Topic - What's Going On...?

[uuuhhii]

seem like everyone finally figure out how to bribe the new dumber version of usa

pool investment that are already going to happen or simply doesn't exist together for a impressive big number

as long as usa get to brag about their ability to extort weaker nation

everything is fine

[BruceVC]

43 minutes ago, uuuhhii said:

seem like everyone finally figure out how to bribe the new dumber version of usa

pool investment that are already going to happen or simply doesn't exist together for a impressive big number

as long as usa get to brag about their ability to extort weaker nation

everything is fine

No 

I cant understand why people are getting so emotional about these tariff agreements? Its all about the benefits to be able to export to the USA because the USA has such a strong consumer driven economy

China agreed to worse tariffs compared to the EU, China has 30% tariffs 

The main point is all these countries want to continue to export to the US because they know this benefits there economies 

Yes Trump is using the strength of the US domestic economy to pressure countries to agree but obviously it still benefits the likes of the EU, China or Japan or they wouldnt agree to these tariffs 

 

 

 

[majestic]

1 minute ago, BruceVC said:

No 

No, not no. Yes. Trump doesn't even notice that the EU just "agreed" to buy more energy from them in the next three years than US companies could feasibly supply, even if there was enough transportation capacity. If US based companies would ramp up oil and gas extraction to meet the demand and transportation capacity would be redirected entirely to trading with the EU, the energy market would collapse. That's not going to happen. 

The bridge offer's still on the table, by the way. I can see you're interested. C'mon. I know you always wanted a bridge.

4 minutes ago, BruceVC said:

Yes Trump is using the strength of the US domestic economy to pressure countries to agree but obviously it still benefits the likes of the EU, China or Japan or they wouldnt agree to these tariffs 

Obviously that is what Trump thinks he is doing, but nation after nation says these trade "deals" are more like frameworks. Point being, they get a reduction in tariffs - for car imports the EU now joins Japan in having US dealerships pay less tariffs for imports than domestic car manufactures because they still have to pay the regular tariffs on Canda and Mexico. Look at Australia, they "opened" their markets for American beef. Australia doesn't import beef beyond wagyu from Japan. They export beef worth billions and import beef worth millions. Do you really think anyone is going to sell US beef on the Australian market? It's more expensive and of lesser quality than locally sourced beef.

Besides, the beef population in the US is at an all-time low, similar to the current situation in the EU where beef prices are exploding due to a lack of cattle. Trump can go home and tell people that he now opened up formerly closed markets for the ranchers and farmers suffering under his killing of USAID to placate them. Markets that aren't going to buy. Just like the Japanese aren't going to buy cars larger than their roads from US companies.  

[Gorth]

What happens if/when a country goes bankrupt? I.e the moment they can no longer service their sovereign debt, what happens then? I remember Sri Lanka, but that one was in such a sorry state anyway that its unlikely anyone noticed and one African country being bailed out by the IMF within the last decade, but if the debt is beyond the means of any single institution, what would happen then?

[BruceVC]

14 minutes ago, Gorth said:

What happens if/when a country goes bankrupt? I.e the moment they can no longer service their sovereign debt, what happens then? I remember Sri Lanka, but that one was in such a sorry state anyway that its unlikely anyone noticed and one African country being bailed out by the IMF within the last decade, but if the debt is beyond the means of any single institution, what would happen then?

 

Are you just asking what if the amount of debt is so high the likes of the IMF cant provide the money? So if the US collapses how would the $36 trillion get paid back?

[uuuhhii]

34 minutes ago, Gorth said:

What happens if/when a country goes bankrupt? I.e the moment they can no longer service their sovereign debt, what happens then? I remember Sri Lanka, but that one was in such a sorry state anyway that its unlikely anyone noticed and one African country being bailed out by the IMF within the last decade, but if the debt is beyond the means of any single institution, what would happen then?

 

everyone bounce back from the last great depression eventually

the poor will suffer and lost all their property

some of the rich will get much richer

Edited 6 hours ago by uuuhhii

[Gorth]

7 minutes ago, BruceVC said:

 

Are you just asking what if the amount of debt is so high the likes of the IMF cant provide the money? So if the US collapses how would the $36 trillion get paid back?

Pretty much, yes. After all, the current CEO and Board of Directors (I.e. the president and congress) is running the ship into the ground full steam ahead and he has a long history of high profile bankruptcies behind him because he lacks business skills. A private company, yeah, sure, the shareholders and the employees suffers alright, but the CEO and board are usually free to start up a new project right away. But when the corporation is a sovereign state, who picks up the pieces?

[BruceVC]

43 minutes ago, majestic said:

No, not no. Yes. Trump doesn't even notice that the EU just "agreed" to buy more energy from them in the next three years than US companies could feasibly supply, even if there was enough transportation capacity. If US based companies would ramp up oil and gas extraction to meet the demand and transportation capacity would be redirected entirely to trading with the EU, the energy market would collapse. That's not going to happen. 

The bridge offer's still on the table, by the way. I can see you're interested. C'mon. I know you always wanted a bridge.

Obviously that is what Trump thinks he is doing, but nation after nation says these trade "deals" are more like frameworks. Point being, they get a reduction in tariffs - for car imports the EU now joins Japan in having US dealerships pay less tariffs for imports than domestic car manufactures because they still have to pay the regular tariffs on Canda and Mexico. Look at Australia, they "opened" their markets for American beef. Australia doesn't import beef beyond wagyu from Japan. They export beef worth billions and import beef worth millions. Do you really think anyone is going to sell US beef on the Australian market? It's more expensive and of lesser quality than locally sourced beef.

Besides, the beef population in the US is at an all-time low, similar to the current situation in the EU where beef prices are exploding due to a lack of cattle. Trump can go home and tell people that he now opened up formerly closed markets for the ranchers and farmers suffering under his killing of USAID to placate them. Markets that aren't going to buy. Just like the Japanese aren't going to buy cars larger than their roads from US companies.  

I think Im not explaining my point properly or you not understanding it 

We must separate the objective and advantages of any country exporting goods to the US and then agreeing to US tariffs from the other aspects of these agreements 

So for example like the  Japanese agreement the EU has agreed to the following 

https://www.bbc.com/news/articles/czxpdv5x54ko

"It also means EU carmakers will face a 15% US import tax, rather than the 25% global tariff that was introduced in April.

But in return the EU is "opening up their countries at zero tariff" to American exports, Trump said.

EU steel and aluminium will also continue to face a 50% tariff when sold into the US.

For Trump, still feeling the glow from last week's tariffs deal with Japan, the announcement marks another major victory.

The EU deal brings with it the expectation of roughly $90bn (£67bn) of tariff revenue for US government coffers – based on last year's trade figures.

As part of the agreement the EU will also buy US energy products and arms worth hundreds of billions of dollars.

Trump said the EU would boost its investment in the US by $600bn, including American military equipment, and spend $750bn on energy. " 

 

Much of this is vague  around specifics and you can call it a " bribe " which as I mentioned I wouldnt call it that. And then these other things still have to be negotiated with further supply chains and other contracts 

This could take years and Trump will be gone in 4 years so who knows if we will ever see " Trump said the EU would boost its investment in the US by $600bn, including American military equipment, and spend $750bn on energy"

But tariffs on exports are something that happens almost immediately and is felt almost immediately. There is a massive difference between the EU facing 30% or 15 %

So this is also a win for the EU because its primary objective is to continue to export to the US

The other alternative to not agreeing to these tariffs  is for the EU to find other export markets and ignore the US completely 

Thats something in South Africa some commentators think is an " obvious " solution to USA tariffs. We should just trade with BRICS or other African countries 

But obviously thats a solution because we have a   trade deficit with BRICS and  BRICS countries arent really interested in that changing because it undermines there own domestic economies and most African countries dont have the money to absorb our exports 

I think you putting much attention on Trumps childish and sensationalized  comments around how these agreements are " wins " for him and how he is this incredible negotiator 

These agreements are fundamentally about one main thing for all the countries cutting deals, they want to export to the US because it benefits there local economies 

And the likes of China, Japan and the EU have succeeded in that endeavour 

 

 

 

 

[BruceVC]

33 minutes ago, Gorth said:

Pretty much, yes. After all, the current CEO and Board of Directors (I.e. the president and congress) is running the ship into the ground full steam ahead and he has a long history of high profile bankruptcies behind him because he lacks business skills. A private company, yeah, sure, the shareholders and the employees suffers alright, but the CEO and board are usually free to start up a new project right away. But when the corporation is a sovereign state, who picks up the pieces?

Its  a good question and its an interesting one but its also very complex and nuanced because US debt is not the "simple " debt we know about. Like when anyone borrows from the IMF its easy to understand because the money is owed to the IMF

Here is a good link that breaks down the US debt and how its structured 

https://www.pgpf.org/article/the-federal-government-has-borrowed-trillions-but-who-owns-all-that-debt/

Most of the US debt is owed to  various domestic US institutions 

" At the end of December 2024, the nation’s gross debt totaled $36 trillion. Of that amount, $29 trillion, or 80 percent, was debt held by the public — representing cash borrowed from domestic and foreign investors. The remaining $7 trillion (20 percent) was intragovernmental debt, which simply records transactions between one part of the federal government and another.

Domestic holdings of federal debt have increased notably over the past decade, rising from $7.0 trillion in December 2014 to $20.3 trillion at the end of December 2024. The Federal Reserve, which purchases and sells Treasury securities as a means to influence federal interest rates and the nation’s money supply, is the largest holder of such debt." 

So if the US " collapses " its greatest debt holders are itself

So nothing can happen because the bigger problem would be its own collapse 

Im not sure if Im explaining it properly 

But that wouldnt be our concern, we all would  be dealing with the massive global economic consequence of an economically failed USA. It would make the Great Depression seem like a picnic 

 

 

[majestic]

That's the point @uuuhhii was making. People just promise Trump eleventy billion billion dollars in investments that will never materialize and he agrees to screw over the local automobile companies to sell a quick win now that his base is falling apart over electing a pdf file. Personally I find that rather hilarious - I mean cognitive dissonance or not, people knew who and what Trump is. It is bewildering to see even the QAnon Shaman being weirded out by Trump's handling of the Epstein list and its implications.

You're too hung up on the word bribe. Yes, relenting and giving the US meaningless wins so Trump agrees to lower tariffs isn't bribery in the legal sense. Not that anyone in the Trump administration would be stopped by doing something illegal, but one can dream of a world where actions being illegal isn't the stopping point for politicians. There's still an ethical layer that used to sit well above the legal one. Alas, o tempora, o mores. 

[Elerond]

3 hours ago, BruceVC said:

https://www.bbc.com/news/articles/cx2xylk3d07o

The EU had now also cut a tariff deal with the USA, 15% on most EU goods

And the EU has committed to certain other trade agreements  with the USA

Both sides will benefit from this 

 

" Trump said the EU would boost its investment in the US by $600bn (£446bn), including American military equipment, and spend $750bn on energy.

That investment over the next three years in American liquified natural gas, oil and nuclear fuels would, von der Leyen said, help reduce European reliance on Russian power sources.

Some goods will not attract any tariffs, including aircraft and plane parts, certain chemicals and some agricultural products. A separate deal on semiconductors may be announced soon."

This was bad deal for EU and we will most likely see increase of support of Russia and China among politician and people, as deal does not have single positive change for EU it has only negative impacts compared to current state and it does not even guarantee long term agreement or that USA does not try to blackmail with withdrawing their military support or putting punitive tariffs.

I am not sure that this deal will give even USA any clear benefits. Only positive thing that economist can say about deal is that it decreases instability on market, but even that is questionable as US and EU politician don't seem to agree are cars and medicines part of the deal. So at end day deal is bad faith deal and only reason it exists is that it is seen better than market instability, but it will create most likely create much more market chaos in coming years as it almost guarantees win for anti-eu, anti nato and pro russia/china parties in next elections, because it will increase unemployment rates, national debts, cause decrease in tax income. And it will work as example how EU can't even do the main thing why it exits. 

$600bn (£446bn), including American military equipment, and spend $750bn on energy - this is also empty claim as it does not have any legality, although EU countries were already planning to buy military equipment as part of their plan to increase defense spending and lack of European options.  With energy question is very big question mark, as even though some EU countries are planning to buy US gas and oil to replace gas and oil that they have bought from Russia, $750bn is absurd sum, considering that USA capacity to sell  LGN is  ~4 billion square meters, which is about 1% of gas that EU uses in year. So USA should increase their LGN exports to 10x (current plan is to double export capacity to 2028) what is now and still it would take over 20 years to spent that $750bn (currently EU countries uses 310 billion euros year to buy oil and 90 billion euros to buy gas). 

 

Quote

"It also means EU carmakers will face a 15% US import tax, rather than the 25% global tariff that was introduced in April.

this was 2.5%  before April, so this is not win for EU carmakers in anyway. Estimated impact for them is massive loss, only compensated by fact that for some reason USA carmakers are currently suffering from higher tariffs, but this will anyway will case decrease of sales.

 

[BruceVC]

15 minutes ago, majestic said:

That's the point @uuuhhii was making. People just promise Trump eleventy billion billion dollars in investments that will never materialize and he agrees to screw over the local automobile companies to sell a quick win now that his base is falling apart over electing a pdf file. Personally I find that rather hilarious - I mean cognitive dissonance or not, people knew who and what Trump is. It is bewildering to see even the QAnon Shaman being weirded out by Trump's handling of the Epstein list and its implications.

You're too hung up on the word bribe. Yes, relenting and giving the US meaningless wins so Trump agrees to lower tariffs isn't bribery in the legal sense. Not that anyone in the Trump administration would be stopped by doing something illegal, but one can dream of a world where actions being illegal isn't the stopping point for politicians. There's still an ethical layer that used to sit well above the legal one. Alas, o tempora, o mores. 

 Im not concerned with Trump and what he thinks and says on Truth or what people say on SM . These tariffs could backfire on the USA because it could make inflation worse but we wont know that until 9-12 months

But that will be a US self-inflicted problem created by Trump and these tariffs

Im concerned with the economic reality of getting the best deal for South Africa around US tariffs. We face 30% tariffs so if can negotiate 15% tariffs like the EU or Japan that would be great

So any country that can negotiate reduced  tariff terms is better than the initial tariff terms 

 

[BruceVC]

29 minutes ago, Elerond said:

This was bad deal for EU and we will most likely see increase of support of Russia and China among politician and people, as deal does not have single positive change for EU it has only negative impacts compared to current state and it does not even guarantee long term agreement or that USA does not try to blackmail with withdrawing their military support or putting punitive tariffs.

I am not sure that this deal will give even USA any clear benefits. Only positive thing that economist can say about deal is that it decreases instability on market, but even that is questionable as US and EU politician don't seem to agree are cars and medicines part of the deal. So at end day deal is bad faith deal and only reason it exists is that it is seen better than market instability, but it will create most likely create much more market chaos in coming years as it almost guarantees win for anti-eu, anti nato and pro russia/china parties in next elections, because it will increase unemployment rates, national debts, cause decrease in tax income. And it will work as example how EU can't even do the main thing why it exits. 

$600bn (£446bn), including American military equipment, and spend $750bn on energy - this is also empty claim as it does not have any legality, although EU countries were already planning to buy military equipment as part of their plan to increase defense spending and lack of European options.  With energy question is very big question mark, as even though some EU countries are planning to buy US gas and oil to replace gas and oil that they have bought from Russia, $750bn is absurd sum, considering that USA capacity to sell  LGN is  ~4 billion square meters, which is about 1% of gas that EU uses in year. So USA should increase their LGN exports to 10x (current plan is to double export capacity to 2028) what is now and still it would take over 20 years to spent that $750bn (currently EU countries uses 310 billion euros year to buy oil and 90 billion euros to buy gas). 

 

this was 2.5%  before April, so this is not win for EU carmakers in anyway. Estimated impact for them is massive loss, only compensated by fact that for some reason USA carmakers are currently suffering from higher tariffs, but this will anyway will case decrease of sales.

 

What do you think the EU should have done around these tariff negotiations?

Is it better to not export to the US and then they dont have to agree to anything Trump says?

[Elerond]

6 minutes ago, BruceVC said:

What do you think the EU should have done around these tariff negotiations?

Is it better to not export to the US and then they dont have to agree to anything Trump says?

they should have used their service tax weapon and put high tariffs for targeted products to kill exports from republican controlled states and lowers tariffs for democratic controlled states to cause internal turmoil in USA. 

Also offer zero tariffs for Mexico and Canada. Make deals with India and Brazil, decrease tariffs for Australian beef. Look deals with Argentina and Vietnam. Offer support for Taiwan, Korea and Japan. Offer massive investment funds for companies that build semiconductor and battery factories in EU.

This would lead short term lost but long term independence and better competition on markets. Current deal offers short term stability but long term losses both in European manufacturing and global trade. But clearly EU's leadership is trying to give Trump political wins in order to avoid facing their past idiocies.

[Zoraptor]

52 minutes ago, Elerond said:

..considering that USA capacity to sell  LGN is  ~4 billion square meters, which is about 1% of gas that EU uses in year. So USA should increase their LGN exports to 10x (current plan is to double export capacity to 2028) what is now and still it would take over 20 years to spent that $750bn (currently EU countries uses 310 billion euros year to buy oil and 90 billion euros to buy gas). 

Yeah... there is one way it could work.

Rebadge Russian hydrocarbons. Already being done extensively by Azerbaijan, India and Turkey at very least. You know Trump would love to be in on that rort considering how much cash it's making the Aliyev and Erdogan families.

(OK, even that would struggle to get to 250bn p/a, but it would get a lot closer)

 

Edited 4 hours ago by Zoraptor

[uuuhhii]

37 minutes ago, Elerond said:

they should have used their service tax weapon and put high tariffs for targeted products to kill exports from republican controlled states and lowers tariffs for democratic controlled states to cause internal turmoil in USA. 

Also offer zero tariffs for Mexico and Canada. Make deals with India and Brazil, decrease tariffs for Australian beef. Look deals with Argentina and Vietnam. Offer support for Taiwan, Korea and Japan. Offer massive investment funds for companies that build semiconductor and battery factories in EU.

This would lead short term lost but long term independence and better competition on markets. Current deal offers short term stability but long term losses both in European manufacturing and global trade. But clearly EU's leadership is trying to give Trump political wins in order to avoid facing their past idiocies.

 

eu doesn't even dare to think about resist to usa

how could they take over the global vassal network of usa

purely wishful thinking

the one they have decent chance to poach are turkey

even that would be long and painful

[BruceVC]

1 hour ago, Elerond said:

they should have used their service tax weapon and put high tariffs for targeted products to kill exports from republican controlled states and lowers tariffs for democratic controlled states to cause internal turmoil in USA. 

Also offer zero tariffs for Mexico and Canada. Make deals with India and Brazil, decrease tariffs for Australian beef. Look deals with Argentina and Vietnam. Offer support for Taiwan, Korea and Japan. Offer massive investment funds for companies that build semiconductor and battery factories in EU.

This would lead short term lost but long term independence and better competition on markets. Current deal offers short term stability but long term losses both in European manufacturing and global trade. But clearly EU's leadership is trying to give Trump political wins in order to avoid facing their past idiocies.

Just to be clear are you saying the EU should not have made trade concessions with the US like it did and just paid the 30%  but it should have also done what you suggesting in this post. So basically a tariff war with the US because that is exactly what tariffs on GOP states would  create?

And where does the EU find new export markets because these examples seem to be about imports to the EU? Or when you mention Brazil and India do you mean they could replace the US as an export market

 

[BruceVC]

1 hour ago, uuuhhii said:

 

eu doesn't even dare to think about resist to usa

how could they take over the global vassal network of usa

purely wishful thinking

the one they have decent chance to poach are turkey

even that would be long and painful

Is China also a US vassal, they have agreed to 30% tariffs ?

I assume it must be if the definition of a US vassal state is negotiating terms around the tariffs?

 

[Elerond]

20 minutes ago, BruceVC said:

Just to be clear are you saying the EU should not have made trade concessions with the US like it did and just paid the 30%  but it should have also done what you suggesting in this post. So basically a tariff war with the US because that is exactly what tariffs on GOP states would  create?

And where does the EU find new export markets because these examples seem to be about imports to the EU? Or when you mention Brazil and India do you mean they could replace the US as an export market

 

EU needs to find new export markets because of this deal. For example 70% of Finnish exporting small business companies say that 15% tariffs will remove their ability to work in US market. Only companies that already have production in US say that they are able to continue the trade with the US. So getting 15% instead of 30% is next nothing. Avoiding trade war with US does mainly help the those businesses that don't have competition in US market, so they will not suffer from the tariffs. Other businesses needs to find new customers, because they can't live with profit margins that they get from US trade. 

Increasing trade with Mexico and Canada would help with exports. India, Brazil, Australia and Argentina would help also with exports, but it would also help with products where we EU has given import quota to US, to move that quota import quota to other countries.

Putting tariffs for GOP states would force GOP politician in congress to do some thing or risk billions of dollars worth of trade in their states, as US companies could just continue with 0% tariff trade with EU by moving to democratic state, which would cause internal conflict in US that would make trade war more difficult to run.

But anyway this was victory for European nationalist parties, as it showed that EU failed to protect EU's trade and it does not help to say it could have been worst when they failed to get single positive change in their negotiation.

[BruceVC]

26 minutes ago, Elerond said:

EU needs to find new export markets because of this deal. For example 70% of Finnish exporting small business companies say that 15% tariffs will remove their ability to work in US market. Only companies that already have production in US say that they are able to continue the trade with the US. So getting 15% instead of 30% is next nothing. Avoiding trade war with US does mainly help the those businesses that don't have competition in US market, so they will not suffer from the tariffs. Other businesses needs to find new customers, because they can't live with profit margins that they get from US trade. 

Increasing trade with Mexico and Canada would help with exports. India, Brazil, Australia and Argentina would help also with exports, but it would also help with products where we EU has given import quota to US, to move that quota import quota to other countries.

Putting tariffs for GOP states would force GOP politician in congress to do some thing or risk billions of dollars worth of trade in their states, as US companies could just continue with 0% tariff trade with EU by moving to democratic state, which would cause internal conflict in US that would make trade war more difficult to run.

But anyway this was victory for European nationalist parties, as it showed that EU failed to protect EU's trade and it does not help to say it could have been worst when they failed to get single positive change in their negotiation.

But here  is the real problem, I dont think these other markets are as accessible or a realistic alternative to the US for several reasons 

To create new markets you need 3 main things

• you need functional supply chains 
• you need a trade agreement 
• you  need a country that can buy your goods and can absorb what the US buys

China is an export driven economy, its the second largest global economy and twice they  have been subjected to US tariffs from Trump and yet they still haven't found  alternative export markets so they can bypass the US. Why would China continue to export to the US if they could export to other markets? The US is still Chinas biggest export market 

And then South Africa is part of BRICS and that includes Brazil and India and yet after 15 years we have a massive trade deficit,  R270 billion,  with BRICS because these countries also protect there own markets. But we have a R37 billion trade surplus with the USA

Im not saying its a bad idea to find other markets outside the US, I wish South Africa could do it. Im  saying its not that easy or realistic as you seem to think