Lisa Anderson from LMA Consulting Group, was asked to comment for an article that appeared in Grant’s Interest Rate Observer. “Canada and Mexico have integrated supply chains with the U.S. in the automobile and aerospace sectors,” Lisa said. “Although I think there might be short term impacts, I don’t think there will be significant tariffs over the medium/long-term. Trump is interested in increasing manufacturing and getting the trade deficits trending towards fairer trade (imports and exports closer to equal). It is likely they’ll find other options to achieve that goal and minimize disruption on long standing, already-integrated supply chains.”
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The dollar is too strong, the trade deficit is too deep and interest rates are too high, laments Donald J. Trump. To put things right, the president and his top advisers want to boost tariffs, weaken the dollar, reduce the 10-year Treasury yield and monetize the asset side of the government’s balance sheet. They want a sovereign wealth fund, too.
Daniel Webster (1782–1852), American politician and orator … almost exactly two centuries ago, spoke against a pending tariff bill in the U.S. House of Representatives with these heartening words: “In this day of knowledge and of peace, there can be no commerce between nations but that which shall benefit all who are parties to it.”
Has the “day of knowledge” come and gone? “The word ‘tariff’ is my favorite word in the dictionary,” President Trump told his raucous fans at the Conservative Political Action Conference last Saturday.
The global trading system is as complex as it is imperfect. According to the Alliance of Automobile Manufacturers, any given auto part can cross the U.S. border seven or eight times before being integrated in the final assembly of an “American-made” vehicle. A moderate rise in tariffs may not inflict great harm, but there’s no predicting the unintended consequences of a perceived hostile action on erstwhile friends (and confirmed adversaries).
Read the full article here.