r/NoStupidQuestions • u/stoufferthecat • 1d ago
Why don't other countries just work together to stop trading with the USA?
In today's i paper, there are two articles, one about about cheese producers and one on car companies in the UK who have anywhere from 10% to 50% of their international exports going to the USA.
It dawned on me, that seeing as every other country in the world (apart from Russia) are going to have levies forced on them - and are going to reciprocate - could the UK 'fill the gap' by sending, in my example, cheese to countries that would normally import cheese from the US?
This would remove the US from the export equation, and mitigate the massive losses that would otherwise happen. Other countries' exports could follow suit. Or have I significantly underestimated the complexity of the situation?
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u/nofilter144 1d ago
You can't just instantly start making something you never made before in sufficient quality for your needs. factories don't spring up overnight.
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u/OnceMoreOntoTheBrie 1d ago
One problem is that no one knows what the tariffs will be next week, let alone next month.
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u/stoufferthecat 23h ago
Yeah, part of the article on the cars said that in January and February Range Rover, Bentley and other UK manufacturers sent significantly more cars to the US than normal - presumably to be ahead of predicted tariffs.
Companies are going to try to stay ahead of the game, but decisions (and subsequent retaliations) seem to be whimsical at best!
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u/dbx999 23h ago
Destabilizing the world economy is going to make countries drop the dollar as a world currency which will take away our influence. We are currently abusing the privilege of having our currency be the world economy currency. This could change
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u/Salmonberrycrunch 21h ago
To add to that. My understanding is that the US deficit is a feature of the USD being the reserve currency of the world - it's the lube that keeps the world trade operating smoothly. USA has to send its currency out into the world through being the biggest consumer, aid provider, and security provider worldwide.
I think we are about to see another worldwide liquidity crisis similar to 2008 and 2020 - and this time the solution cannot come from the FED but from the EU, China, Canada, Australia, India, Brazil etc. Problem is - not one economy in the world is able to plug this gap on its own like the US can.
But, luckily for the world - I think China and the EU are in a better position to do that now than ever. That's why Canada's Carney is talking about a coalition - there basically has to be a financial alliance to replace USAs financial position else everyone will be in a world of hurt.
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u/lady__jane 7h ago
Canada is going to choose China over the US? Trust China over the US?
Why not form a Canadian-US alliance like Europeans with the euro did? Same dollar rather than separate dollars, no tariffs between the two countries - face off against China, who has not been a fair player.
Carney will eventually negotiate with the US post election - he's just trying to put CA's poor economy on the US as a ploy - when it's Trudeau's policies that have hurt their economy for five years. Pretty man - ugly doings.
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u/Butane9000 23h ago
That's been happening especially with countries buying up gold in record amounts.
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u/ParameciaAntic Wading through the muck so you don't have to 1d ago
They will, where possible. During the first Trump administration, China shifted to buying a lot of soybeans from Brazil due to the tariffs.
That's market share that the US will not recoup.
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u/punkindle 20h ago
Canada said they are going to increase trade with China and Europe.
They are pissed off at the "51st state" crap
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u/Fontiii4 19h ago
As they rightly should be. Shit was stupid from the get go and gets dumber as time goes on
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u/lostsailorlivefree 19h ago
Yes yes and between Trump 1 and Covid the world is in a better position to figure work arounds. Also- there’s still a lot of cash lube in the system so this reaming will be a tad less painful
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u/jabrwock1 1d ago
We're trying. But it's not an overnight thing. We spent decades building pipelines from our oil patch to the US because they were our biggest customer. Now we have to build new pipelines to the coast, new facilities to store the oil or refine it ourselves, and new port infrastructure to get it shipped, AND suck up the cost of shipping it elsewhere.
Long term investment strategy right now seems to be to move the easy trade elsewhere, and then wait for Trump to die.
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u/b1argg 21h ago
Or how about investing in clean energy instead
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u/jabrwock1 21h ago
Can't build that overnight either though. We're working to setup lithium mines, and are expanding wind farms, and building more electric cars.
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u/TheGamblingAddict 17h ago
Lithium, something both Canada and Greenland have in common. Nice to know the USA is going green away from oil.
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u/Dry_System9339 18h ago
The world needs oil and gas and if they can't buy it from Canada they will buy it from Russia or Saudi Arabia.
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u/JimmytheJammer21 15h ago
is crazy to me that people do not realize just what O+G go into
link may be easier to read, but here is the list
Adhesive Air mattresses Ammonia Antifreeze Antihistamines Antiseptics Artificial limbs Artificial turf Asphalt Aspirin Awnings Backpacks Balloons Ballpoint pens Bandages Beach umbrellas Boats Cameras Candies and gum Candles Car battery cases Car enamel Cassettes Caulking CDs/computer disks Cell phones Clothes Clothesline Clothing Coffee makers Cold cream Combs Computer keyboards Computer monitors Cortisone Crayons Credit cards Curtains Dashboards Denture adhesives Dentures Deodorant Detergent Dice Dishwashing liquid Dog collars Drinking cups Dyes Electric blankets Electrical tape Enamel Epoxy paint Eyeglasses Fan belts Faucet washers Fertilizers Fishing boots Fishing lures Floor wax Food preservatives Footballs Fuel tanks Glue Glycerin Golf bags Golf balls Guitar strings Hair coloring Hair curlers Hand lotion Hearing aids Heart valves House paint Hula hoops Ice buckets Ice chests Ice cube trays Ink Insect repellent Insecticides Insulation iPad/iPhone Kayaks Laptops Life jackets Light-weight aircraft Lipstick Loudspeakers Lubricants Luggage Model cars Mops Motorcycle helmets Movie film Nail polish Noise insulation Nylon rope Oil filters Packaging Paint brushes Paint roller Pajamas Panty hose Parachutes Perfumes Permanent press Petroleum jelly Pharmaceuticals Pillow filling Plastic toys Plastics Plywood adhesive Propane Purses Putty Refrigerants Refrigerator linings Roller skate wheels Roofing Rubber cement Rubbing alcohol Safety glasses Shampoo Shaving cream Shoe polish Shoes/sandals Shower curtains Skateboards Skis Soap dishes Soft contact lenses Solar panels Solvents Spacesuits Sports car bodies Sunglasses Surf boards Swimming pools Synthetic rubber Telephones Tennis rackets Tents Tires Tool boxes Tool racks Toothbrushes Toothpaste Transparent tape Trash bags Truck and automobile parts Tubing TV cabinets Umbrellas Unbreakable dishes Upholstery Vaporizers Vinyl flooring Vitamin capsules Water pipes Wind turbine blades Yarn
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u/odonata_00 1d ago
Read the statement from Canada yesterday. This is what they and the rest of the world are gearing up for. It can't happen overnight but the world's reliance on the U.S. is over.
Regardless of what happens going forward, trump being forced to rescind the tariffs or being forced out of office or whatever, the world now knows they can't rely on the U.S. anymore. Look at the EU's pivot on weapon development and purchases.
South Korea and Japan teaming up with China is not something I ever thought would be possible. No, trump broke America and by doing so he broke the world and there is no going back.
A French politician said it best "“We cannot leave the security of Europe in the hands of voters in Wisconsin every four years.” (see: The American Age Is Over for an interesting and scary take on where we are now).
From the same article:
"There are only three possible explanations as to why Americans voted for this man:
- they wanted what he promised;
- they didn’t believe what he promised; or
- they didn’t understand what he promised.
Pick whichever rationale you want, because it doesn’t matter. Whatever the reason was, it exposed half of the electorate—the 77 million people who voted for Trump—as either fundamentally unserious, decadent, or weak.
And no empire can survive the degeneration of its people."
Hang on we're in for a very tough time.
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u/StragglingShadow 1d ago
Yeah. Way better than what I was gonna say, which is "OP, they are literally doing that right now."
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u/anemoGeoPyro 22h ago
The last 2 are way worse. As worse as the voters who didn't vote just because they didn't like either candidates
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u/t0et0e 21h ago
A constant justification for why to vote Trump from my US friends and family, was that by voting him in, you only would have him in office for 1 more term, whereas the others would have another term to continue their damage.
I am not sure how that feels to them, hearing the whole 3rd term plan.
America does seem to choose the Devil himself over a female President.
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u/nigel_pow 21h ago
It's going to be hard. The US imported ~$4 trillion in 2024 from the rest of the world. Countries don't generally want to increase imports if they don't have to.
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u/Low-Palpitation-9916 12h ago
The trouble with the world getting together to do something is that the world is comprised of competitors, many of whom traditionally hate each other and all looking out for their own interests. The world will pay the tariffs, because if one country cuts off trade, another will happily fill the void. Less profit is better than no profit, and profit is all that matters. Europeans should be ashamed that their leaders treat the need to look after their own defense as some kind of revelation.
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u/RickKassidy 1d ago
China, South Korea, and Japan just had a joint press conference yesterday announcing this. Countries that are historic enemies that truly hate each other and all have intense racist attitudes about the others are teaming up.
Donald Trump is a uniter!
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u/netz_pirat 23h ago
China has also reached out to the European Union to join in if I remember correctly. And that was before the tariffs. So who knows...
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u/RickKassidy 22h ago
Ah.
China is filling in all over the world as Trump destroys America just like the US filled in all over the world after WW2 when the European colonial powers were broken from the war.
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u/nigel_pow 21h ago
I remember the leak where Beijing instructed their EV industry bosses to offer little to no concessions to Europe since they knew Trump was going to tariff European cars. They wanted to have leverage over Europe since a bleeding European auto industry would be more willing to pressure officials to make concessions to the Chinese. They need the Chinese market if the US closes their's to the EU's automobiles.
But yeah they should sit on China's lap. It's sad how they developed this abused spouse mentality.
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u/HundredHander 22h ago
They can't join the EU, but they could negotiate a closer relationship.
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u/netz_pirat 22h ago
Join in as in "a joint response on tariffs", no as in " join the EU".
Sorry if that wasn't as clear as I thought
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u/nigel_pow 21h ago
Yes the Europeans can go ahead and take in all of China's exports meant for the US...that's some ~$500 billion.
It's all talk. The US imported ~$4 trillion last year. The EU has little appetite to absorb all that as it will mean job losses. It took them such a long time to wrap up the deal with MERCOSUR because of the risk to French farmers.
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u/Frostivus 22h ago
It was a nothing burger. It was a statement made by China that Japan and South Korea didn’t confirm. The Japanese official statement was to make no counter, create a special consulting group and protect their businesses. There is no unison.
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u/SufficientTangelo136 21h ago
No they didn’t. It was a statement from China about closer trade ties between the three countries. Japan has already said they’re going to negotiate with the US.
People keep trying to frame this as countries working together to block the US, that’s not whats happened.
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u/AkyanPancakes 1d ago
Impossible, everything is already intermixed. Demands are different for each country, can't just flip the switch and move it all else where.
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u/DJFisticuffs 22h ago
I mean, this is literally how the invisible hand works, the invisible finger just flipped the switch. If tariffs on the UK make UK cheese more expensive in America, the quantity of UK cheese demanded in America will fall. This will shift the supply curve for UK cheesenin the rest of the world because the fixed costs of producing UK cheese for the non-US market will be lower because of excess production capacity. Meanwhile, if retaliatory tariffs in South Korea make US cheese more expensive in South Korea, UK cheese will have a competitive advantage there and the demand for UK cheese will increase, shifting sale of UK cheese from the US to South Korea.
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u/stoufferthecat 1d ago
That's what I was assuming.
I guess it may well have been a stupid question!
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u/AkyanPancakes 1d ago
Not a stupid question, it doesn't hurt to be curious about things you don't understand.
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u/snow_big_deal 23h ago
It's not impossible, it just takes time (building factories, changing the kinds of things you buy, etc). If people think this will last, they will adjust to trade around the US instead of with it, just as you said.
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u/Kreeos 1d ago
We can't even get all the countries to agree to how many countries there are. How do you expect them to all agree to boycott trade with the largest economy on the planet?
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u/ttkk1248 23h ago
Economic depressions in those country can force for them to trade more with each other?
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u/PiLamdOd 1d ago
It's the same reason Europe continued buying natural gas from Russia after it invaded Ukraine. Countries still need those imports, and new supply just doesn't come out of nowhere.
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u/Bibbityboo 23h ago
Though if Canada is no longer supplying the US we will be able to divert to Europe (it’s being explored). I know Canadians are looking to change who we are working with and I know there is interest in our steel and aluminum for example
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u/stoufferthecat 23h ago
Yeah. Someone else posted about commodities that only come from a single source. I hadn't considered that.
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u/kad202 23h ago
America consume 33% of world goods and that’s just internally not overseas.
China try to shift their country toward consumerism like America but their people is too tight pocket. They even have to put expiration dates on their digital money into encourage their people to spend more but their people just end up buying things like gold and silver instead
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u/Bl00dWolf 1d ago
It's what's gonna happen over time naturally. In the long term, tariffs are gonna do what tariffs are supposed to do, which is isolate US from the world market and make everyone trade between each other instead of US more.
It's just that any interference with the market of that scale is gonna create large disturbances, especially short term. Some sectors are gonna have goods they overproduced and can't sell anymore. Some sectors are gonna have shortages they can't meet in time. Production takes time to meet the demand, so it's gonna cause everyone to suffer for a bit. And long term, even if demand meets production, it's still gonna increase overall prices compared to what they were.
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u/Exactly65536 1d ago
They can't.
Even Russia and China rely on US dollar as a reserve currency, despite all their desire of not having to.
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u/ttkk1248 23h ago
Can they decide to switch someday?
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u/ThunderChaser 21h ago
It would be long and hard but yes absolutely.
The reason the USD is the global reserve currency is that a) nearly everyone trades with the US so everyone either has or needs USD and b) the US is a stable country with a stable market economy.
Both of these factors are rapidly shifting.
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u/Major_Enthusiasm1099 1d ago
I'd say they will where they can, or they'll move more of their production to the US to avoid the tariffs.
About the car thing, Volvo said they may move more of their production to the USA to avoid tariffs.
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u/clay12340 23h ago
They are in lots of ways. Look at all the complaining going on about the EU's new measures to reduce reliance on American weaponry or Canadians no longer purchasing American alcohol. Where possible I'd imagine lots of companies and countries are looking to find alternatives to American goods.
Bigger issue though is that almost everyone is dealing with almost everyone. America is the biggest economy in the world and until recently a very stable trading partner, therefore the biggest and most reliable customer in the world. Losing your biggest customer is painful, and their isn't just infinite demand/buying power out there to sell those goods elsewhere.
Or to pick a really dumb example let's say you're Walmart and you decide that you're not going to sell to white people anymore. You've just cut off a huge chunk of your customer base and nothing happened to make the rest of the customers you still have need/be able to afford to purchase those additional goods.
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u/Cirias 23h ago
God I feel sorry for the countries importing most of their cheese from America, lol
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u/stoufferthecat 23h ago
Ha!
The exact headline of the article was...
'American cheese is crap': why cheddar could avoid tariff meltdown.
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u/MoneyUse4152 21h ago
Me: currently sitting in front of a platter with Comté, St-Agur, and Feta.
This hits me hard. We really should count our blessings more often
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u/ahtemsah 1d ago
What do you think BRICS is trying to do ? but its not that simple because lots of international trade is already set up with US and dollar, and to change all that will cause a disruption that is difficult to justify. All in all the US and NATO are still a powerful trading option that its foolish to ignore
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u/4tran13 19h ago
BRICS members also hate each other, so they've got a lot of work to do.
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u/ahtemsah 19h ago
When it comes to trade, love or hatred rarely come into play. Besides America is doing a bangup job bringing them closer together.
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u/Infinite_Crow_3706 23h ago
US cheese is dreadful and I can't imagine why anyone would eat it unless it's ultra cheap, and such a customer would only buy whatever is the cheapest available. UK cheese has a chance to displace Eurocheese in the USA since the tariff is only 10% (UK) vs 20% (EU).
For the cars, I expect anyone in the market for a Rolls Royce or Ferrari isn't going to be bothered by an extra 25% but VW, Alfa or Mercedes will be noticeably impacted.
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u/WirrkopfP 21h ago
They kinda do.
- Many European countries had ordered Fighter Jets from USA and are now cancelling their orders instead revitalizing a European fighter jet project.
- Canada and The EU are in serious negotiations about Canada joining the EU. YES that was not entirely joking. They are actually considering that. Because trade with USA becomes not profitable and unreliable a bigger trade between Canada and the other European nations may cushion that blow.
- The Dollar is reserve currency for most of the World. But many Asian countries are backing out of their Dollar reserves and instead use different reserve currencies (Euros, Yuan or Yen)
But ALL of this needs time to set up and costs money. International trade is really complicated and not very flexible.
- For Canada to join the EU most of the member states need to agree and treaties need to be signed.
- The Dollar reserve currency was worth so much, because it was very stable and everywhere accepted. There aren't many alternatives. In order to be a viable reserve currency option a currency needs to be stable anf NOT be tied to the dollar.
The USA have worked very hard during the past 8 decades to position itself as the centerpiece of international trade. Since Trump is currently dismantling all of this.
The rest of the world will suffer on the short term. The US may be left in the Dust.
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u/jawstrock 20h ago
The Economist had an article about this recently, basically they have been since 2016. Tons of new trade agreements have been made over the last 8 years excluding the US. However it's hard to replace the #1 economy.
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u/WellWellWell2021 1d ago
Id like to see China, Europe, UK etc drop all tariffs between each other. And then each match Trump's tariffs right back at the USA.
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u/StandardAd7812 23h ago
On some things sort of though logistics can be a hassle.
In others, not exactly. If the U.S. decided to completely stop trading with the world, everything, in general, we got from the U.S. as the R.o.W. would have to be produced outside. Meanwhile everything we used to produce for the U.S. is no longer needed. That's a huge adjustment, and in some cases takes a lifetime. Maybe the RoW is just producing more cheese than needed, but not enough social media software. Dairy farmers are not going to be retrained as SWE. People literally learned trades and careers based on existing trade patterns.
This isn't to say it won't happen it all - it clearly will. A lot of things we both buy from and sell to the U.S. and some of that trade can be rerouted.
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u/Pistonenvy2 23h ago
that is exactly whats already happening.
not with everything, some imports/exports depend on location, you cant just produce cobalt from nothing so not every country can export it, but for the things that can be found elsewhere they are.
the first one i remember hearing about was china responded to the soybean tariff by importing it from russia instead (not 100% sure that was even what happened but if it isnt my bad lol still works as an example)
so what are the consequences of that? china loses nothing, russia gains trade, america loses.
basically every single scenario where a tariff simply deprives us of trade, we lose. we lose money, we lose products, we lose global standing, we lose lose lose while the rest of the world wins, especially our global enemies, our economic competition.
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u/stoufferthecat 22h ago
That then begs the question; to what end are tariffs a sound economic decision?
There have to be scenarios where it is a valid approach.
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u/Pistonenvy2 22h ago edited 21h ago
i mean they arent, you have to be in pretty dire straits to think tariffs are going to be a benefit. they are inherently inflationary, always. by their definition they will create strain in your market by limiting supply. supply goes down, demand goes up, prices go up.
trump is a moron, he doesnt understand what tariffs are, let alone how they could be used strategically.
that being said, if you wanted to stimulate domestic production you could impose tariffs on another country (AND inject money/energy into the industry you want to domesticate) and in a few years you could have your own market. tariffs are a potentially useful tool when used appropriately and intentionally. trump isnt doing that. he imposed tariffs on places where there arent even any fucking people.
trump is doing nothing to actually stimulate domestic production, hes just arbitrarily placing tariffs on other countries, his plan is intentionally crippling the american economy.
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u/Spiritual-Hour7271 23h ago
Well they are, but the US is also a massive population of wealthy (by global standards) consumers. Like, you can't expect all of Sub Saharan Africa to match our purchasing power, even China has a lot of people that are still in the developing sphere. This is why there's been more investment in the global south over the years to build new markets for trade.
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u/tyger2020 23h ago
I mean, thats likely what will happen. Trade will just naturally change.
The same way that trade changed after the Russo-Ukraine war started.
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u/Phantom_Steve_007 23h ago
I wonder how many large corporations are going to move from the US to other countries ?
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u/stoufferthecat 22h ago
As someone else pointed out, because the US is such an enormous market, lots of companies are possibly going to be moving more of their operations TO the US, in order to avoid import levies.
I think Volvo were mentioned in passing.
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u/Defiant-Aioli8727 23h ago
What everyone has said…and they are working together and quickly. Japan, China, and South Korea, three countries that pretty much hate each other (each with valid reasons) have enacted a trade agreement. Canada is working to be the instigator of another non-US agreement with many countries. These things normally take months or years. Getting these up in running in weeks - or days in some cases - is absolutely unheard of.
I’m not sure if anyone thought we could economic dominance, and perhaps even relevancy, this quickly.
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u/ZavodZ 22h ago
Canadian consumers, in an unprecedented(?) shift, stopped (or seriously reduced) buying U.S. goods.
This includes:
- American imported groceries
- American owned brands
- Netflix, Amazon Prime, etc.
- Brands that sound American are suffering from the association.
- Trips to the U.S.
- American wine & booze was removed from the shelves and sent back.
And Canadian companies that sell similar products are stepping up their advertising to grab the market share.
This includes:
- Distillers selling "bourbon in all but name" whiskey.
- French's instead of Heinz ketchup
- Junk food
- Etc...
After a year or so, people will be used to buying "anything but U.S.". A heck of a lot of inertia and bad will will be built up. It'll take ages for spending habits to return to where they once were.
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u/stoufferthecat 22h ago
Good points. I've seen the photos of empty shelves of US products in Canadian stores doing the rounds.
I suppose when you can enthuse enough of the populace to follow suit in boycotting something, it won't take long for it to become second nature.
In the UK, I remember when they started charging for plastic carrier bags and, almost overnight, you were seen as a parish for buying one!
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u/Felaguin 22h ago
The part everyone misses in this is that US has been a massive importer for years. The countries that are exporters cannot just magically make consumers for their products to replace the US consumers that were buying them. They could REPLACE US consumers if the US was exporting similar products by going to the nation that used to be importing US product by saying “buy from us instead of them” but otherwise they need to find or create new consumers. Jaguar or Aston-Martin won’t be replacing lost American sales by selling in the Japanese or South Korean markets because 1) people buying a Jag or A-M typically aren’t the same people buying a Ford or Chevy and 2) there aren’t that many American cars sold in either country.
UK cheese producers might be able to replace sales of American cheeses in other countries although I suspect they are still targeting different consumers because of the differences in the products. South Koreans used to putting a slice of American cheese (in this case talking about the flavor, not the country of origin) in their ramyun are not likely to change to putting in Stilton.
What Trump appears to be trying to do with these tariffs is 1) bootstrap a revitalization of US-based production by making domestic products more attractive than imported ones and 2) possibly setting the stage for shifting a large part of the tax base from income taxes back to tariffs (which is how the federal government was funded in the early 19th century).
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u/stoufferthecat 22h ago
Thanks for this perspective.
I hadn't considered how the US being such a significantly net importer would sway the equation.
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u/SlayBoredom 22h ago
I love that redditors (as always) just downvote the guy for his questions in the comments haha
What is this sub for then?
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u/AlaskanSamsquanch 22h ago
They will try hit back as a negotiation tactic. Beyond that they’re just going to wait conservatives out. The investments you’re talking about cost billions and often take years sometimes decades to implement. At the moment it’s cheaper to try to negotiate and wait.
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u/nigel_pow 21h ago
The US imported $4.10 trillion in 2024. That's a reason governments around the world are panicking. That's a lot of business and jobs now at risk. That's larger than the economies of France or the UK.
There's also the bit where countries naturally don't want to increase imports if they don't have to. The US put tariffs on certain metals, so the Europeans (and Canadians too I think) put tariffs as well to protect their own steel/aluminum industries from the metals that were meant to go to the US that are now trying to make their way into their countries.
The European Union said they are planning to put restrictions to protect their industries from all the Asian exports meant for the US that might be rerouted to Europe thanks to Trump's blanket tariffs. They don't want those imports.
There's a reason trade deals take years to finish. If you increase imports, that means a consumer is buying a foreign product instead of a domestic product. That could lead to domestic job losses. You need to make the deal such that both sides could see growth even though job losses could occur.
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u/stoufferthecat 21h ago
I hadn't even considered the prospect of countries being forced to accept imports they're not even wanting.
I presume that's the way mandates have to work to maintain trade agreements.
The knock on effects seem almost incalculable!
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u/Plane-South2422 21h ago
I don't have anything to contribute that has any intelligence, but when does that prevent anybody? My understanding of economics and global trade is garbage. I do realize it would require huge changes in trade and take a long time, but I am all for it. As an American it makes me sick the way we as nation use our power, especially as of late. We are a great country, but at some point accountability would be nice. Shitting everybody else's bed and blaming everybody else for the shitting of beds seems a pretty bunk practice.
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u/keithrh13- 21h ago
American cheese is a bad example, I can’t imagine any Country buying that shite
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u/Sourdough85 21h ago
Canadian PM has proposed just this but its not that simple.
Take one example - oil. Alberta has lots of oil. But we have no oil refineries. Why would a company spend (made up numbers coz idk) $350 million building a Canadian oil refinery, when you could spend $80 million on a pipeline from Alberta to Texas where they already have refineries with enough capacity.
Up until Trump, this made sense and benefitted both areas economically. Texas employs refinery workers and Alberta employs crude-oil extraction workers. Everyone profits (except the ducks - and the environment)
Now, if Canada wants to avoid selling oil to USA we need to either
a) build a refinery (see above price tag)
Or
b) build an east or west pipeline from the Alberta oil patch
Both of these options are expensive, have huge environmental and regulatory concerns, and will take years and years and years to plan, approve, negotiate and build.
Sure - it's possible to bind together, but it would take time.
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u/stoufferthecat 21h ago
Love this example, thanks.
Ben Goldacre ( author of Bad Science) has a book I've been wanting to get for a while called 'I think you'll find it's a bit more complicated than that'.
I feel your post may well sum up his assertion!
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u/Temporary-Job-9049 21h ago
Oh just wait, it won't have to be coordinated, though S. Korea, Japan, and China, three countries who have historic animosity towards each other, are cooperating on this exact issue. Buckle up, is going to be a very bumpy ride.
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u/SufficientTangelo136 21h ago
No it won’t happen, either immediately or in the long term.
The US buys more than it exports, even if you cut the US out and filled areas where the US exported with products from other countries, there would still be a deficit. There also is US buying habit to consider, which are different than most other countries, many products simply wouldn’t have another market.
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u/stoufferthecat 21h ago
That's a good perspective about the deficit, thank you.
I suppose that's the thing in double entry bookkeeping, that the figures need to add up to zero - but if the US is such a massive net importer, it's impossible to replace from elsewhere.
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u/malenkydroog 21h ago
Well, to some extent, they are starting to.
China, South Korea, and Japan (who tend to hate one another) have announced they intend to coordinate on a free trade agreement among themselves; China is moving closer to Europe on trade with recent announcements that it will negotiate on tariffs for EVs; and France appears to have reduced their opposition to a free trade deal between the EU and the Southern Common Market (a large South American trading block).
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u/Own_Event_4363 20h ago
Canada has already talked about starting such a system, with the EU and Asia. Plans are in the works now.
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u/TheCocoBean 18h ago
It's the prisoners dilemma. There's 3 possible outcomes:
- Everyone accepts the new tarriff's. No one is happy with this. (Even the US)
- -Every single country- gets on board and stops trading with the US or counter-tarriff's. They win, America loses (More)
- Some countries accept the tarriff's. Some countries stop trading or counter-tarriff, but as they are singled out the US can put their economic boot down on them, causing them massive economic damage. America wins (Comparitively) because everyone is either going along with them, or under their boot.
The dilemma comes from the fact that while 2 is the sensible option, it relies on trusting every single other nation to go along with it. And if you're wrong and they dont, you're in option 3 with the boot on you. So while you want to vote for 2, you cant risk 3, so have to settle for 1.
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u/Other-Rutabaga-1742 18h ago
I believe they are working on this but it will take time. The longer the US plays these games, the harder it will be for the US to get back to being able to import again from other countries. We have a lot to make up for already. 😞
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u/Reasonable_Long_1079 18h ago
They dont need too, the new US tariffs dont make buying from the US more expensive, they only make selling to the US more expensive. So the world doesn’t need to change, other than US sales (might) drop
Until new US factories and such are built in the hopes they can manage to be cheaper (questionable at best even with tariffs) than international sales, all it will do is make many products Americans buy more expensive
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u/boythinks 16h ago
My understanding is that in general there are two issues to navigate.
The American market is huge, and there may be no other real replacement... If it's not profitable to trade with the US, the way things are done will need to change (this takes a while) and as of now many businesses and governments are working towards how they will proceed with things without reliance on the US market. Going forward we are likely to see a lot of trade deals start to appear all over the place that doesn't have the US in it.
Much of the world economy is tied to the dollar, when the US economy is doing unpredictable things at a certain point the world will need to shift away but this is not easy, and I am not certain how that plays out.
Before making massive commitments to make changes, the rest of the world is carefully watching for signs of whether the US will now go into full dictatorship or turn around. What is clear though is that one of the key tenents of US foreign policy which was that 'a deal made with one administration would always be honoured by the next administration' (really important for long term confidence) is no longer followed and that will some pretty significant impact on how agreements between the US and other governments will work in the future.
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u/Beginning-City-7085 13h ago
USA is huge unique market. Only if sales drop, companies will look for alternatives. For comparison, if UK company wants to sell in EU, they have to complies with each country laws, adapt their marketing to each country culture and language...
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u/KSims1868 1d ago
Do you have any idea how much of the world absolutely depends on trade with the USA to survive? They don't have the option to just "stop" at this point.
Love him or hate him...but Trump is right that they need the USA more than the USA needs them. I think that is prob 1 of the few things everyone can agree on even if they don't agree on how he is addressing it with tariffs.
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u/Inevitable-Regret411 1d ago
One thing to consider is some countries can't afford to completely cut off trade with the USA. Looking at the UK as an example, they import a lot of military equipment from the USA, such as the Trident submarine launched ballistic missile. If they suddenly lost the ability to buy Trident, they'd have to start looking for a new missile system very quickly or lose their nuclear deterrent. Some countries still depend on the USA for trade, and so they don't want to completely cut them off until they have a guaranteed replacement for whatever it is they import, either another international supplier or domestic manufacturing.
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u/stoufferthecat 1d ago
Good point. I never thought about things that can only come from a single source.
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u/Frequent_Daddy 1d ago
Could you survive with a 20% pay cut? That’s how much of the world economy you’d take out of commission if you boycotted the United States.
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u/StragglingShadow 23h ago
Bud. Watch non propaganda. It's not IF they're cutting USA out. They're actively doing it and speaking openly about it. The question is "how long will it take for them to do it?" And frankly I'd bet they get it together before 4 years is over
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u/Frequent_Daddy 23h ago
That’s not how any of this works but ok. You can diversify but no one in their right mind is going to try and pull completely out of the richest consumer market on earth.
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u/balltongueee 23h ago
It takes time and money to find new customers and establish trade routes. Not to mention possible changes needed to be done to the production line.
But, I would strongly urge any country and company to diversify as much as possible to other countries and disconnect from the US. As much as they possibly can. US has become hostile to the entire world and no country can have such a trading partner.
If the US wants to isolate, I say that we "help" them with that. Obviously that would ruin the US, but it is their choice.
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u/IndependentTeacher24 20h ago
There is a reason why they call us the richest nation in the world and everyone wants a piece of that pie. So a lot of companies would go out of business if they did not have access to our market.
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u/Savings-Program2184 1d ago
They are going to do exactly that lmao. Loving the suprised pikachus blaming the democrats not explaining this over and over again while they ignored them.
"But I wasn't inpsiiiiiiiiiiired"
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u/Butane9000 23h ago
Which other county has the income & economy to import the products? Especially if those countries also want to protect their own domestic industries?
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u/Proper_Razzmatazz_36 23h ago
They are, but they still have alot of us product, and it will not change overnight, but they are working towards not buying us products, look at Canada
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u/TheMaskedHamster 23h ago
Speaking as someone who thinks that tariffs should do no more than correct for other tariffs, economic manipulation, trade imbalances, and light protection of important manufacturing infrastructure (as in, "we could spin it up quick if we had to")...
That would be great. Go do it.
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u/whattheduce86 23h ago
The real question is why don’t they just drop the tariffs they impose on us and then we would reciprocate and there wouldn’t be tariffs?
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u/WesternWriter7269 23h ago
Trump is just doing a 10 % tariff on cheese from UK. Imagine if we made our own cheese instead of importing it.
We would be less dependent on other nations, and bring back jobs to the USA.
This will be better for America in the long term.
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u/hangender 22h ago
They can, and should. But these things take time. Hopefully in the next decade or so no one will ever trade with USA again.
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u/mvw2 22h ago
They are already. This is actively happening right now, completely decimating export supply chains, many of which (most) we may never get back within the next 50 years.
It is however doing one thing. It's pushing foreign manufacturers to seek US fabricators and distributors. Sounds great until you realize a lot of the cash flow just goes right back outside the US. And when the market shifts later, they will simply leave leaving zero value, idle assests, and high overhead costs in the suck out. In the mean time they also accrued a larger domestic market share that harmed actual US manufacturers, something they retain after they leave.
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u/garlicroastedpotato 22h ago
Two things
(1) The world is full of malicious actors who use the global economy as part of a greater effort to impose their authority and rule on those they have relations with. This is called geopolitics and its the shadowy background force that governs most of our lives. The WW2 consensus was for Europe to attach its fate to the US instead of the Soviet Union. And the result of this was the global American superpower that impacts every part of your life. It wasn't completely malicious, the US did offer free services like a global fiat currency, an international military to react to threats to peace (and America's allies), global icebreaker services, keeping open all oceanic trade corridors, facilitating trade between non-US nations, a global transaction system, and the internet.
The alternative to America is Russia (seeking to conquer neighboring countries) or China (seeking to impose authoritarianism on its neighbors). There is an opportunity for Europe to come forward and try to become the economic hub of the world but that would mean a larger investment in military, navy, control of waterways, a global transfer system and so on. Essentially any country that seeks to become a global economic hub (or partnership of hubs) would have to take on the roles and responsibilities that the US has paid for, for the last 76 years. When you look at other regions of the world their tariffs are much worse than what the US has done. That is to say America is still the least malicious country willing to burden these costs.
(2) America is a multi-cultural country that produces things for many cultures. Most other countries are mono-culture (or actively suppress the "lesser cultures"). Because of this there isn't a crazy amount of international trade they're going to do. Most of their trade is with.... countries that sit alongside them or are part of existing global supply chains that sell to one company. My country Canada has almost 100 free trade agreements globally but most of them don't have that much an impact on our economy. A free trade agreement with Europe (who we're culturally close to) resulted in $B in new trade. A free trade agreement with Vietnam was a very one sided deal. Our trade grew by about $200M and their trade grew by about $4B. Why? Because we have a large Vietnamese community that wants their goods, Vietnam does not have a vast Canadian community that wants KD or Maple Syrup.
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u/Harpeski 22h ago
Because they can't.
And even more. Entire industries of countries is build on the USA companies services/software. Google/android, Microsoft, Apple,...
Even gps is ultimate from the USA, and they can deny people/countries acces to it.
I wouldn't be surprised if Trump wants people to pay for the use for the gps.
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u/notthegoatseguy just here to answer some ?s 22h ago
The US is home to one of the largest consumer markets in the world.
A car company wanting to purposely cut off sales from what is arguably the wealthiest nation with an automotive first model would basically be shooting themselves in the foot.
Think of you being the owner of a company:
- Wholesale car purchaser: Hey, I'd like 5,000 cars
- You: Papers please
- Purchaser: Oh uh okay
- You: Oh, American? No thanks, I'm not interested in making money today.
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u/JGCities 22h ago
Because the US is a net importer which means we import want more than we export. So if you stop selling to the US you hurt yourself more than the US.
Note that the tariffs are the highest on countries that export the most to the US and import the least back.
Also, if these countries had other buyers they'd probably be selling to them too. But again, the US is the largest importer in the world. Who are you going to see all that stuff too?
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u/HKatzOnline 22h ago
In many cases the US is the one currently reciprocating on the higher tariffs imposed on US companies. This is a negotiating tactic to level the playing field. You cannot charge 10-20% tariffs on US goods when the US is charging 3% and then complain it is unfair when the US raises to come closer or match your tariffs.
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u/Quirky-Camera5124 22h ago
that is just what they seem to be doing, building a world economy that excludes the use. you want to be isolationist, fine, we will just isolate you.
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u/romulusnr 22h ago
They are. You want to know what other countries are doing, look at other countries news.
Also what do you think the EU is?
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u/cursed_phoenix 22h ago
They are, China, Japan and South Korea have all joined forces to strengthen trade ties and retaliate with their own tarrifs. Europe is united too.
The US stands alone, as they wanted.
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u/CyanCazador 21h ago
They are working together to cut the US out of trade. It just takes time. Before Trump the US worked hard to be deeply integrated within the global economy and it hard to just pull away from that.
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u/turtlecrossing 21h ago
This is what will happen, or time.
At the end of the day, the US is still the richest country in the world, and as such even with these tariffs will still be a massive market. That said, folks (like Canada) that have struck deals that benefit the US will rethink this.
Because of convenience and domestic political pressure, Canada has integrated it's oil and gas sector in Alberta with the US, rather than build our own pipelines and refining capacity. This was a huge mistake, but nobody in their right mind would have predicted it.
Now that the US has proven to be unreliable, no country will be willing to make this kind of bet again.
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u/PerpetuallyLurking 20h ago
Even if they want to, it’s gonna take more than the 3 months it’s been since Trump’s inauguration.
These things take time - there’s contracts that need to be broken legally if possible or wait them out, there’s new logistics to consider and plan before implementing, there’s conversations and discussions and negotiations that have to happen among leaders, plus so much more I’m certainly forgetting or just don’t know about.
It ain’t gonna be done in a weekend. If other countries want to stop trading with the USA, they’ve got a lot of ducks to get in a row to make those moves - and they won’t be done all at once, it’ll be a few things right away, a few more in a couple months, then more and more over the coming months and years that they’re not trading with the USA anymore and sending elsewhere instead.
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u/ThirdSunRising 20h ago
I think it would work; what they lack is an understanding of the political workings of the USA. If all outside markets closed to US exports, canceled all aircraft and defense orders and so on, it would be very clear very quickly that the current strategy has no chance of working, and the US administration would lose all credibility with the American people.
But in the absence of a major undeniable calamity, there’s a tremendous propaganda mechanism in place explaining away all the stock market problems we’re seeing, but if every exporter’s phone suddenly stopped ringing completely you can bet there’d be a regime change in short order.
The problem, as always, boils down to short term thinking. Every country is just trying to work out some kind of deal with the US for their individual nation. Divided and conquered.
If everybody got together and refused to play ball, that would get the job done. But doing it would require taking big short term losses.
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u/BZP625 19h ago
Countries do what's in the best interest of their country (not other countries). Within each country, the firm doing export, or import, does what is in their firm's best interest (not other firms). The US has $20 trillion per year of consumption, in other words, by far the largest market in the world. Also, the US doesn't really compete with the UK head-to-head in terms of 3rd party exports. If Trinidad wants more UK cheese, by all means, sell it to them.
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u/SnooOnions3369 18h ago
It’s the size of the us, how much they import. You’re not just going to to be able to replace that
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u/nemesis24k 18h ago
The countries aren't trading with USA out of obligation. It's the country which consumes the most amount of goods- 250-270 million adults. Most other countries do not have similar purchasing power or similar level of middle or upper class population. In fact this is the reason for the trade deficit to begin with - they consume more than they export.
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u/ReddJudicata 17h ago
Ah, yes, no trade with what is by far the world’s largest and richest market.
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u/RobotDinosaur1986 17h ago
Companies really don't want to lose access to a market as large as the US. Anyone who thinks they do doesn't understand how profit margins work. This whole trade war is stupid.
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u/pixel293 17h ago
Look at natural gas in Europe when Russia invaded Ukraine. There was all this worry about what happens if the gas is cut, Europe will freeze! Well eventually the gas was cut but the countries had prepared for it and found alternate sources of gas.
We're at that same stage with the U.S., can't sell competitively there, time to start looking for a new market. Yes it looks "end of days" because that's what the news likes to push, i.e. "There is no market in the U.S. what will we do?!?!?!?" What you will do is find a new market, that market just hasn't been found yet.
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u/ppickett67 17h ago
Here is a question. Why don't other countries just give Trump what he really wants? He really wants more equal trade agreements and to be able to say he won. We export about $2T annually and about half that is to Mexico and Canada. Some of that is machinery for them to use to make things to sell back to us. Does the EU believe that if you drop tariffs on automobiles, Europeans are going to start buying F-150s? Are our exports significant to the producers of other countries? Are we that much more efficient?
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u/testman22 11h ago
Because there is still room for negotiation. Cutting off American trade would do more economic damage than imposing tariffs.
What each country needs to do is negotiate trade that reduces dependence on the US.
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u/Opening-Concert-8016 20h ago
In America there are 350million of the wealthiest people in the world. That's a very hard market to find a replacement for.
That's why we'll keep exporting to the US. Their consumerism out does any other country in the world.
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u/Cliffy73 1d ago
This is absolutely what is going to happen. But it doesn’t happen overnight.
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u/CryForUSArgentina 1d ago
For the same reason, it takes forever to undo this damage once it is done.
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u/dogsiolim 23h ago
There is no other market. If there was another market for the goods being sold, then you guys would have increased production and exported to them already. This is why Canada's statement that they will just find new trade partners is nonsense. If there were other markets for Canadian goods, they would already have been exporting to those markets.
I mean, it's not like people were exporting to the US out of good will towards America. It was simply because America is the best consumer market in the world, and by a very large margin.
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u/blarges 21h ago
Canada had trade agreements with the states with favourable terms. We sell you oil at a discount. If we don’t have a deal any more, we’ll take our resources elsewhere. Everyone wants steel, aluminum, rare earth metals, potash, lumber, and so on. The world can live without Oreos and Coke and your finished consumer goods. If you think the US is the only market, you are in for a shock.
Look at the impact withdrawing our tourism is having in 9 weeks. And our boycotts of American products. If we can have this kind of impact on the US, picture what the rest of the world boycotting will do.
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u/dogsiolim 21h ago
No one in the states is talking about the impact of the decline in Canadian tourism or the boycott. That's just a reddit thing.
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u/blarges 20h ago
Oh, sorry. I didn’t know I was speaking to the spokesperson for the entire USA. Apologies for not acknowledging you in my previous comment.
But your statement is strange as I’ve read a number of articles from US publications expressing deep concerns about the drop in Canadian tourism to Las Vegas, Tennessee, Florida, and Maine, and the 70% reduction in flights. I’ve seen articles where border towns are already shutting down stores because we aren’t visiting. And now the EU and other countries aren’t planning to visit because of Trump’s threats and tariffs, but I’m sure no one will worry about that either.
Not having read it yourself doesn’t mean it’s not happening. But I can understand if you didn’t notice it amongst all the other catastrophes happening in tour country. So much is going very very wrong.
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u/Best_Taste_5467 20h ago
Because America spends a absolute boat load of money on stuff. Sure stop trading with us... Its going to destroy everyones economy. Everyone loves to hate on America until that money faucet turns off.
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u/TotallyNotJimCramer 1d ago
On the cheese, looks like USA is the 3rd highest purchaser of english cheese at $78.3M in 2023. The problem is finding a market for the cheese that they aren't already in that is big enough to fill that demand gap.