This may seem odd, but Viet Nam, after all that has happened is more pro USA than pro China (which supported their colonial war, when the US was fighting them).
This was explained to me in 2013 when I was travelling China in Vietnamese company.
Marvelous discussion closing the end of a 7 day marathon. It's been Exhilarating.
"Bespoke" When I heard Bessent use that word for customized relationships deals on Tariff's, I smiled... Scott Bessent is the image of Bespoke. I would not expect anything other from him. Hope everyone has time to decompress and relax over the next two days. Thanks John, and the Hulsman Team.
I am returning from a trip to Florida and see I have a lot of homework to do, looks like I missed some great podcasts and will catch up.
Wanted to share with the group, I went to the Ringling Museum in Sarasota, it was amazing! It
was the summer home of John and Mabel Ringling. The home is absolutely gorgeous, with Mediterranean and Islamic influences. They hosted eclectic parties with the global elite of their time. Ringling purchased quite a bit of Renaissance art which is also on display. I never realized the social impact the circus had the American way of life. I went from not knowing what to expect to this beautiful museum being one of my favorites….
Agree with your assessment of the Trump feat of turning the multi-lateral rules-based trading system on its head into a US-centric hub-and-spoke model as revolutionary. But as you noted previously, the clumsy and sclerotic WTO “couldn’t go on anymore”. I think this underscores your comparison of Trump to Nixon as the latter’s 1971 suspension of the convertibility of dollars into gold was also unavoidable and yet shocking. The draining of US gold reserves in 1965 by France’s de Gaulle, followed by other so-called US/European allies as they witnessed a deterioration in the US balance of payments, the collapse of the Gold Pool in 1968 and the rise of the London gold price to $43/oz - these all caused the last vestige to the BW $35/oz gold price to disintegrate. Nixon blamed the end of the gold window on “international speculators,” but it was a structural breakdown. The WTO has similarly become unfit for purpose, allowing China to become the mercantilist power of the century. The WTO ruled against China in 2008 for discriminatory tariffs on foreign auto parts but the issue re-emerged in 2011, this time based on China’s use of anti-dumping and countervailing duties. This dragged on until 2014. This is just one example of China’s numerous WTO circumventions and the glacial pace of dispute settlement.
But I want to echo some other commentators regarding "end game" and "What's next?" The demise of the multi-lateral rules-based system brings the following conundrum: Trump’s goal is to reindustrialize/reinvigorate the nation’s heartland. How does he propose to make the US competitive with a country like Vietnam [mentioned earlier as US friendly] with which it has $120bn trade deficit, when Vietnam’s gdp per capita is $4000/yr?
This feels very much like the gung-ho American feeling I remember after 9/11.
Yes, the US does need to change the world system, which has been turned against the West. But is this the right way? Will it end up being like Afghanistan and Iraq? The key question that determines the outcome: What is Trump's endgame? What is his exit strategy? Without a strong analysis of possible exit strategies it's not possible to say what will happen yet.
Also, other places are going to use this as part of their strategy. There has been talk of a Pacific conflict in 2027, likely China will use this to reroute it's trade so that the US can't use trade bans to damage their economy then, reducing the chance of unrest then. The thing about using these sorts of powers like trade is that you can only use it once, like Russia with it's gas supply to Europe. Also, this is a great opportunity to give away their overproduction to developing countries to secure resources, land and to bring places to their side. Also, as the factories reduce workers this gives them a cheap workforce to increase missile and drone numbers. Other places are also looking to gain from these changes, and may well do.
Dropping tariffs on US goods is easy, but this won't change the US trade deficit, to do that they would have to reduce financial services and tech gains, because this is what gives US citizens the money to buy more. Reducing the tariffs will increase the dollar strength to compensate. If the endgame is fixing the trade imbalance then this will be a forever war. There are other choices for his endgame, perhaps friend shoring or splitting the world, with the allied nations having a new UN, WTO and WHO that is properly managed by people that aren't trying to use the systems to damage the West.
Incredible week, John. No doubt, so much change in such a short time. Only Trump could have pulled it off like this. Whether it is good for all of us, only time will tell.
To the tune of Brick in the Wall: “Leave our services alone!”
Hi John, thank you for the round up and another excellent podcast. The 10% across the board makes a lot of sense. One thing I wondered last weekend is would it even be possible to implement such a wide range of varied tariffs. Imagine being a customs officer when a shipping container arrives trying to implement multiple different tariffs on various goods, it sounds like an administrative nightmare! The weather is beautiful here in South Manchester, I think I will finish early and have a stroll with the family to the pub. Hope you all have a great weekend and get some rest, congratulations to you all and a big thank you to you and your excellent team.
Hi Rob, thanks, awfully, for your kind words about the gang here; boy do they (and me) need a weekend! So glad we’ve been on top of this crazy week. As you say, there are all kid of unthought of practical impediments ahead (bespoke trade deals and how to administer them, not being the least) but I remain generally optimistic. And yes, getting the 10 percent rate across the board without complaint is a policy curing trick! Have a pint for me at the pub, and enjoy the break. Here the water is also lovely so perhaps a glass of wine with Sara outside on the patio tonight and letting the staff go early is the least I can do!
This may seem odd, but Viet Nam, after all that has happened is more pro USA than pro China (which supported their colonial war, when the US was fighting them).
This was explained to me in 2013 when I was travelling China in Vietnamese company.
Marvelous discussion closing the end of a 7 day marathon. It's been Exhilarating.
"Bespoke" When I heard Bessent use that word for customized relationships deals on Tariff's, I smiled... Scott Bessent is the image of Bespoke. I would not expect anything other from him. Hope everyone has time to decompress and relax over the next two days. Thanks John, and the Hulsman Team.
I am returning from a trip to Florida and see I have a lot of homework to do, looks like I missed some great podcasts and will catch up.
Wanted to share with the group, I went to the Ringling Museum in Sarasota, it was amazing! It
was the summer home of John and Mabel Ringling. The home is absolutely gorgeous, with Mediterranean and Islamic influences. They hosted eclectic parties with the global elite of their time. Ringling purchased quite a bit of Renaissance art which is also on display. I never realized the social impact the circus had the American way of life. I went from not knowing what to expect to this beautiful museum being one of my favorites….
Ok, time to get started on some homework!
Should have said Venetian and Islamic influences.. my wall size geo political map is getting delivered this week!
Agree with your assessment of the Trump feat of turning the multi-lateral rules-based trading system on its head into a US-centric hub-and-spoke model as revolutionary. But as you noted previously, the clumsy and sclerotic WTO “couldn’t go on anymore”. I think this underscores your comparison of Trump to Nixon as the latter’s 1971 suspension of the convertibility of dollars into gold was also unavoidable and yet shocking. The draining of US gold reserves in 1965 by France’s de Gaulle, followed by other so-called US/European allies as they witnessed a deterioration in the US balance of payments, the collapse of the Gold Pool in 1968 and the rise of the London gold price to $43/oz - these all caused the last vestige to the BW $35/oz gold price to disintegrate. Nixon blamed the end of the gold window on “international speculators,” but it was a structural breakdown. The WTO has similarly become unfit for purpose, allowing China to become the mercantilist power of the century. The WTO ruled against China in 2008 for discriminatory tariffs on foreign auto parts but the issue re-emerged in 2011, this time based on China’s use of anti-dumping and countervailing duties. This dragged on until 2014. This is just one example of China’s numerous WTO circumventions and the glacial pace of dispute settlement.
But I want to echo some other commentators regarding "end game" and "What's next?" The demise of the multi-lateral rules-based system brings the following conundrum: Trump’s goal is to reindustrialize/reinvigorate the nation’s heartland. How does he propose to make the US competitive with a country like Vietnam [mentioned earlier as US friendly] with which it has $120bn trade deficit, when Vietnam’s gdp per capita is $4000/yr?
I like the piccata Milanese in the Grand et de Milan on Manzoni.
Open until very late, even after I fly in late.
Next time your over let me know and we can have lunch
Honestly, I wish I could go!
This feels very much like the gung-ho American feeling I remember after 9/11.
Yes, the US does need to change the world system, which has been turned against the West. But is this the right way? Will it end up being like Afghanistan and Iraq? The key question that determines the outcome: What is Trump's endgame? What is his exit strategy? Without a strong analysis of possible exit strategies it's not possible to say what will happen yet.
Also, other places are going to use this as part of their strategy. There has been talk of a Pacific conflict in 2027, likely China will use this to reroute it's trade so that the US can't use trade bans to damage their economy then, reducing the chance of unrest then. The thing about using these sorts of powers like trade is that you can only use it once, like Russia with it's gas supply to Europe. Also, this is a great opportunity to give away their overproduction to developing countries to secure resources, land and to bring places to their side. Also, as the factories reduce workers this gives them a cheap workforce to increase missile and drone numbers. Other places are also looking to gain from these changes, and may well do.
Dropping tariffs on US goods is easy, but this won't change the US trade deficit, to do that they would have to reduce financial services and tech gains, because this is what gives US citizens the money to buy more. Reducing the tariffs will increase the dollar strength to compensate. If the endgame is fixing the trade imbalance then this will be a forever war. There are other choices for his endgame, perhaps friend shoring or splitting the world, with the allied nations having a new UN, WTO and WHO that is properly managed by people that aren't trying to use the systems to damage the West.
Incredible week, John. No doubt, so much change in such a short time. Only Trump could have pulled it off like this. Whether it is good for all of us, only time will tell.
To the tune of Brick in the Wall: “Leave our services alone!”
Wishing you and the team a restful weekend.
Thanks friend! I’ll pass it on to my sleep deprived staff!
Hi John, thank you for the round up and another excellent podcast. The 10% across the board makes a lot of sense. One thing I wondered last weekend is would it even be possible to implement such a wide range of varied tariffs. Imagine being a customs officer when a shipping container arrives trying to implement multiple different tariffs on various goods, it sounds like an administrative nightmare! The weather is beautiful here in South Manchester, I think I will finish early and have a stroll with the family to the pub. Hope you all have a great weekend and get some rest, congratulations to you all and a big thank you to you and your excellent team.
Hi Rob, thanks, awfully, for your kind words about the gang here; boy do they (and me) need a weekend! So glad we’ve been on top of this crazy week. As you say, there are all kid of unthought of practical impediments ahead (bespoke trade deals and how to administer them, not being the least) but I remain generally optimistic. And yes, getting the 10 percent rate across the board without complaint is a policy curing trick! Have a pint for me at the pub, and enjoy the break. Here the water is also lovely so perhaps a glass of wine with Sara outside on the patio tonight and letting the staff go early is the least I can do!