It’s the Uncertainty, Stupid
The tariffs against imports from Canada and Mexico have been postponed, but at what cost?
Good Morning!
Here are today’s highlights:
Small business owners are already feeling the impact of the tariffs.
Friend of 21 Hats Harry Elston has a suggestion for dealing with employees who come to work high.
Gene Marks says he needs to start doing less and thinking more.
Do you know what to do if ICE knocks on your door?
INTERNATIONAL TRADE
Yes, the tariffs on Mexico and Canada have been postponed, but as the Economist points out, damage has already been done: “Mr Trump’s unconsummated threats will generate huge uncertainty for businesses in America and beyond. Markets may well be correct to downplay future announcements by Mr Trump. But corporate managers do not have the same luxury when making decisions about how to allocate capital in the years to come. Few will dare to scale up investments in Canada or Mexico while Mr Trump is in the White House. At the same time, apart from making splashy announcements to please the president, they may also be reluctant to launch big projects in America without clarity about whether they can count on unfettered access to global supply chains and export markets.”
“The economic literature has long identified uncertainty as an impediment to investment and growth. In one highly pertinent example, a discussion paper for the Federal Reserve found that trade-policy uncertainty during Mr Trump’s first term—then mainly focused on China—reduced investment in America in 2018 alone by at least 1 percent.”
“This time, Mr Trump’s mooted tariffs cover both far more of the world and a far larger slice of America’s industrial landscape. Whether he follows through on his threats or not, he has already succeeded in stirring up an immense amount of confusion and anxiety for firms. If he continues down this path, the consequences for the global economy will be grave.” READ MORE
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