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Forbes: Trump Tariffs and economic policies were a bigger disaster than previously thought
#1
Not saying I told you so  but I told you so .... *cough cough A1Janitor* ..... but this article is saying EXACTLY what I said 2 years ago that Trump's tariffs were tanking the stock market:  $3.3 TRILLION LOSS from Trump Tariffs

https://www.forbes.com/sites/stuartanderson/2021/05/20/trumps-tariffs-were-much-more-damaging-than-thought/?sh=1b67619d65bd&utm_campaign=socialflowForbesMainFB&utm_source=ForbesMainFacebook&utm_medium=social&fbclid=IwAR0M4dra-W9DzTXCu6HSzoYZs5RphaHS6SuJ_gBN6EwmUE61-Tevptk77-4

May 20, 2021,12:07am EDT|33,602 views
Trump’s Tariffs Were Much More Damaging Than Thought
Donald Trump’s tariffs and the trade war his administration launched against China turned out to be far more damaging than many believed. That is the conclusion of research finding companies, consumers and the U.S. economy paid a heavy price for the Trump administration’s protectionist trade policies.
In new research, Mary Amiti, an economist at the Federal Reserve Bank of New York, and Sang Hoon Kong and David Weinstein, both economists at Columbia University, used movements in stock prices to measure the response to policy announcements on tariffs and the escalation of the U.S.-China trade war initiated by the Trump administration. “Stock prices are well suited for this purpose because firm market value equals the expected present value of future firm profits,” according to Amiti, Kong and Weinstein. “Therefore, movements in stock prices tell us about changes in the expected future value of firm-specific capital (both tangible and intangible).”
“The results suggest that markets interpreted the impact of the tariffs as much more negative than what economists initially estimated,” said David Weinstein in an interview. “Part of the reason stems from the fact that the U.S. tariffs rose significantly in 2019, and the earlier studies didn’t include these higher rates. Moreover, the new analysis suggests that the tariffs’ impact on productivity is likely to be a factor holding down U.S. growth rates. The tariffs protect the least efficient firms and reduced their incentives to innovate while hurting the most successful U.S. firms, reducing their ability to innovate.”
“We consider three ways in which firms are exposed to China: importing, exporting, and foreign sales (either through exporting or subsidiaries),” note the economists. “It is important to capture indirect imports that are ultimately purchased by U.S. firms because many firms do not import directly from China but instead obtain Chinese inputs through their subsidiaries or the U.S. subsidiaries of foreign firms. For example, Apple Computer’s exposure to China can arise through direct imports, imports obtained by its subsidiary (Beats Electronics), or from the purchase of iPhones from the U.S. subsidiary of Foxconn.”
Among the key findings of the research:
-        The economists found a long-term decline in U.S. consumer well-being (or “welfare”) of 7.8%: “Our results show that the trade-war announcements caused large declines in U.S. stock prices, expected TFP [Total Factor Productivity], and expected inflation largely by moving macro variables, but also by causing declines in the returns of firms trading with China. We find that markets expect the trade war to lower U.S. welfare by 7.8 percentage points.” 
-        The decline in stock market value caused by trade war announcements “amounted to a $3.3 trillion loss of firm value (equivalent to 16% of U.S. GDP [Gross Domestic Product] in 2019).” That is larger than the $1.7 trillion estimate in the loss of firm value in an earlier paper from the economists.
The economists identified “11 trade-war announcement dates, comprising six U.S. tariff events and five China retaliation events.” The Trump administration announced tariffs on solar panels and washing machines on January 22, 2018, which were imposed on imports from China and other countries. On February 28, 2018, the administration announced it would imposed tariffs on steel and aluminum, which also affected China and other countries. “All of the subsequent U.S. tariff events only apply to China,” as discussed in the study, including the announcement on May 29, 2018, of a 25% tariff on $50 billion of Chinese imports, the announced U.S. decision to raise tariffs on $200 billion of Chinese goods up to 25% and others.
“The data reveal that there were large and persistent movements in stock prices and inflationary expectations following these trade-war announcements,” according to Amiti, Kong and Weinstein. “We see that the stock market fell on all of the event dates except one U.S. event date and one China event date, with a total drop of 10.4% over all of the events, and 12.9% over the three-day windows (beginning the day before the announcement and extending one day after). These drops in the market imply substantial drops in expected profitability for U.S. firms—a factor that . . . suggests will drive decreases in the expected wage.
“We explore the persistence of these stock-market movements . . . The data reveal that in the five trading days before our events, stock-price movements were quite small. Indeed, there is little evidence of anything out of the ordinary happening in the market before the announcements. However, on the announcement days . . . we see that there was a large decline of over 10%. Moreover, it is also quite striking how persistent this decline is. Even if we track the market five trading days later (approximately one week of calendar days), we see that the market did not recover. Thus, there is little evidence that markets overreacted and bounced back from their initial negative assessment of the trade war on expected returns.
Amiti, Kong and Weinstein used a sample of 2,859 companies across sectors that are publicly traded on the U.S. stock market and present fascinating data that show more than half of publicly traded companies in the sample were connected to the Chinese economy and affected by the trade war: “We see that only 10% of the firms in our sample import directly from China, and only 2% export directly to China. However, if we take subsidiaries into account, these numbers rise to 24% and 4%, respectively. 
Because the courts and Congress have ceded authority over trade to presidents, Donald Trump had a free hand to conduct trade policy during his presidency. With that free hand, the evidence shows he inflicted significant damage.
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#2
Event DateStock Market ReturnEvent Description
Jan. 22, 20180.75%U.S. imposes tariffs on solar panels and washing machines
Feb. 28, 2018-1.07%U.S. will impose steel and aluminum tariffs
March 22, 2018-2.57%Trade war escalates as China says it will impose tariffs on 128 U.S. exports
May 29, 2018-1.00%White House to impose 25% tariff on $50B worth of Chinese goods
June 15, 2018-0.10%China announces retaliation against U.S. tariffs on $50B of imports
June 19, 2018-0.41%U.S. announces imposition of tariffs on $200B of Chinese goods
Aug. 2, 2018-0.59%China announces tariffs on $60B of U.S. goods
May 6, 2019-0.41%U.S. to raise tariffs on $200B of Chinese goods up to 25%
May 13, 2019-2.58%China to raise tariffs on $60B of U.S. goods starting June 1
Aug. 1, 2019-1.00%U.S. will impose a 10% tariff on another $300B of Chinese goods
Aug. 23, 2019-2.64%China retaliates with higher tariffs on soy and autos
Total-10.43%ALL


Talk about posts that won't age well .... I know there's a few threads where I literally outlined these dates with huge losses by Dow Jones and had a few of you Facebook Economists trying to explain that Trump's announcements and resulting stock market plunges weren't related, or it had nothing to do with Trump's policies and that we were WINNING   LOL


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#3
Quote: @SFVikeFan said:
Not saying I told you so  but I told you so .... *cough cough A1Janitor* ..... but this article is saying EXACTLY what I said 2 years ago that Trump's tariffs were tanking the stock market:  $3.3 TRILLION LOSS from Trump Tariffs

https://www.forbes.com/sites/stuartanderson/2021/05/20/trumps-tariffs-were-much-more-damaging-than-thought/?sh=1b67619d65bd&utm_campaign=socialflowForbesMainFB&utm_source=ForbesMainFacebook&utm_medium=social&fbclid=IwAR0M4dra-W9DzTXCu6HSzoYZs5RphaHS6SuJ_gBN6EwmUE61-Tevptk77-4

May 20, 2021,12:07am EDT|33,602 views
Trump’s Tariffs Were Much More Damaging Than Thought
Donald Trump’s tariffs and the trade war his administration launched against China turned out to be far more damaging than many believed. That is the conclusion of research finding companies, consumers and the U.S. economy paid a heavy price for the Trump administration’s protectionist trade policies.
In new research, Mary Amiti, an economist at the Federal Reserve Bank of New York, and Sang Hoon Kong and David Weinstein, both economists at Columbia University, used movements in stock prices to measure the response to policy announcements on tariffs and the escalation of the U.S.-China trade war initiated by the Trump administration. “Stock prices are well suited for this purpose because firm market value equals the expected present value of future firm profits,” according to Amiti, Kong and Weinstein. “Therefore, movements in stock prices tell us about changes in the expected future value of firm-specific capital (both tangible and intangible).”



Hmmmm.......Okay, let's assume all of the above is true. 
 (btw, a normal schmoe like me cannot access the above study...try clicking on "new research" from your OP...."In >>new research, <
And if all the above is true... shouldn't the Biden administration have immediately rescinded the Trump executive orders that instigated the tarriffs?  
Yet the Biden administration, didn't rescind. 
On the contrary.  Here are 5 msm left-of-center news outlets "defending" the Trump XO China tarriffs: 

Opinion | Joe Biden hasn’t lifted Trump’s tariffs on China. Good. - The Washington Post

Tariffs: Why Biden has left Trump's China taxes in place - CNNPolitics

Biden says he won't immediately remove Trump's tariffs on China (cnbc.com)

Biden may leave Trump’s China tariffs in place (yahoo.com)

Biden White House Defends Trump China Tariffs in Legal Showdown (bloombergtatwitter.com)


Why doesn't the Biden administration recognize your sage wisdom/prognostications and immediately rescind all the Trump XO-China Tarriffs?  
He could do it tomorrow.  


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#4
Quote: @SFVikeFan said:
Event DateStock Market ReturnEvent Description
Jan. 22, 20180.75%U.S. imposes tariffs on solar panels and washing machines
Feb. 28, 2018-1.07%U.S. will impose steel and aluminum tariffs
March 22, 2018-2.57%Trade war escalates as China says it will impose tariffs on 128 U.S. exports
May 29, 2018-1.00%White House to impose 25% tariff on $50B worth of Chinese goods
June 15, 2018-0.10%China announces retaliation against U.S. tariffs on $50B of imports
June 19, 2018-0.41%U.S. announces imposition of tariffs on $200B of Chinese goods
Aug. 2, 2018-0.59%China announces tariffs on $60B of U.S. goods
May 6, 2019-0.41%U.S. to raise tariffs on $200B of Chinese goods up to 25%
May 13, 2019-2.58%China to raise tariffs on $60B of U.S. goods starting June 1
Aug. 1, 2019-1.00%U.S. will impose a 10% tariff on another $300B of Chinese goods
Aug. 23, 2019-2.64%China retaliates with higher tariffs on soy and autos
Total-10.43%ALL


Talk about posts that won't age well .... I know there's a few threads where I literally outlined these dates with huge losses by Dow Jones and had a few of you Facebook Economists trying to explain that Trump's announcements and resulting stock market plunges weren't related, or it had nothing to do with Trump's policies and that we were WINNING   LOL
I'm admittedly way out-side my lane here (macroeconomics), but I have heard one "axiom" of markets...is....markets prefer "predictability"? 
Conversely, markets dislike un-predictability/volatility? 
I could be wrong....anyone else heard that?  

My point is...if the #1 world economy (US) is in a tarriff war with the #2 world economy (China)....wouldn't most reasonable people expect short-term 
negativity ("stock market plunges")  due to that volatility/un-predictability?  

The authors of this study admit they're reporting stock market changes  on 5 days prior to announcement of Trump's tarriffs, and the stock market reaction one 
day after the announcements.  And there's down-turns?  SHAZAM!  

So....what about longer term market analyses?   (Again, you can't access the NBER study from the link you provided.  You can rely only on the Forbes commentator's
analysis of the NBER's paper).  Maybe longer term analyses are also down....again....can't access the data in the study. 
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#5
No way in hell Biden is going to rescind the tariffs right now.

It would be political suicide and you know what? I dont think it would help our standing vs China in the eyes of our allies (or China). 

History wont be kind to the previous administration and Trump is a pos of a human being from my perch. But he is a decent enough businessman, and I agree calling out China to the mat.

It's an elementary take on my part, I'm way over my head with the macro-economics of this. I speak to the optics. 
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#6
I’ve never had luck attaching photos with my phone but I bet quantitative tightening which coenciedes entirely with your timeline had nothing to do with it.  You can get the picture by googling qe tightening. 

Next, why cherry pick your end dates lol. The S&P closed on Trumps last day with all these tarrifs still active at 3768. Your first date on your timeline 1/22/18 the S&P closed at 2810. 


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#7
Why do you assume Biden won't rescind the.?  It's political leverage right now.  If Biden keeps them in place I will be disappointed.   We are the losers of the tariff war, and again if I'm posting Forbes It's obviously not just me.  In fact this is what most economists predicted 2 years ago 


Oh and Savannah, since you're so disappointed you can't  access the data, you do know how a calendar and Google works?  You can look at the Dow on these dates too and see a similar pattern, which is what I pointed out 2 years ago and you boys laughed it off.

And FYI, you should actually read the details.  My dude, I even highlighted it in bold for you:

"The data reveal that in the five trading days before our events, stock-price movements were quite small. Indeed, there is little evidence of anything out of the ordinary happening in the market before the announcements. However, on the announcement days . . . we see that there was a large decline of over 10%. Moreover, it is also quite striking how persistent this decline is. Even if we track the market five trading days later (approximately one week of calendar days), we see that the market did not recover. Thus, there is little evidence that markets overreacted and bounced back from their initial negative assessment of the trade war on expected returns.”


5 days before little movement, followed by 10% drops, and 5 days after, there was no recovery.   

Did most companies recover after years later?  Well yes, DUH.  Do you think that long term growth was due to the tariffs being a help?  Please.  It just shows you WHO paid for them

It wasn't China
It wasn't the companies or Wall St
YOU did
$3000/yr raised in cost of living for the average American 


Here's one example:  washing machines.  Trump puts a tariff on all washing machines.  In return, manufacturers price on all washing machines go up by $100  to pay for tariffs.  There is no tariff on dryers.  Yet nearly every company out there pounced, and raised the price of dryers by $100 each too, despite no tariffs on it.  

So now, courtesy of the Trump economic policies, every American is paying $200 a set MORE for every washing machine and dryer since 2019'ish.  

Costs everywhere were already being driven up from tariffs, Covid just exasperated the issue economists were warning about.  Trump's retarded "America First" solationist policies were doomed to fail,, when more than 1/3 of all American companies source some portion of their materials from China.  No doubt we need a better deal with them but tariffs were an absolutely catastrophic way to go about them, and are literally taught in Econ 101 of what NOT TO DO.



Smoot-Hawley says hi, we enjoyed watching history repeat itself 


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