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[Great Auk]

If tariffs cause inflation then so does VAT. Sounds silly right?

The truth is neither cause inflation.

 

[IntentionalPun]

If tariffs cause inflation then so does VAT. Sounds silly right?

The truth is neither cause inflation.

Does not sound silly. Both are incredibly likely to increase prices for consumers, which is what inflation is.

You could say long term that can be made up for, or sometimes quickly if goods an be sourced from non-tariff'd countries or from inside your own country but to act like there's no link at all is what is silly.

 

[Great Auk]

Does not sound silly. Both are incredibly likely to increase prices for consumers, which is what inflation is.

You could say long term that can be made up for, or sometimes quickly if goods an be sourced from non-tariff'd countries or from inside your own country but to act like there's no link at all is what is silly.

Inflation does not add to government coffers the way VAT and tariffs do. Basically people pay more money for the same good/service and the government gets nothing out of it (unless you want to count the slightly higher tax revenue from higher prices, but it's miniscule.)

VAT is straight up government revenue. So are tariffs. If anything, tariffs are more lenient than VAT. At least with tariffs, it's only foreign goods that are affected. With VAT it's everything.

So if VAT is ok with you guys, then so should tariffs. Inflation also has a compounding effect on costs, tariffs and VAT don't do that.

So they're nothing like inflation.

 

[IntentionalPun]

Inflation does not add to government coffers the way VAT and tariffs do. Basically people pay more money for the same good/service and the government gets nothing out of it (unless you want to count the slightly higher tax revenue from higher prices, but it's miniscule.)

VAT is straight up government revenue. So are tariffs. If anything, tariffs are more lenient than VAT. At least with tariffs, it's only foreign goods that are affected. With VAT it's everything.

So if VAT is ok with you guys, then so should tariffs. Inflation also has a compounding effect on costs, tariffs and VAT don't do that.

So they're nothing like inflation.

Inflation refers to the increase in prices for goods and services to consumers.

That's it, has nothing to do with the government benefiting from taxation when it comes to tariffs/VAT.

I'm not sure who you think is OK with what. Any taxation on goods is regressive to me; we should be using progressive income taxes before sales tax/VAT/tariffs whenever possible.

 

[Great Auk]

Inflation refers to the increase in prices for goods and services to consumers.

That's it, has nothing to do with the government benefiting from taxation when it comes to tariffs/VAT.

I'm not sure who you think is OK with what. Any taxation on goods is regressive to me; we should be using progressive income taxes before sales tax/VAT/tariffs whenever possible.

I know inflation to mean the following:

"Inflation is the rate of increase in prices over a given period of time"

I don't consider sales taxes or tariffs or VAT to be inflation.

Do you?

 

[IntentionalPun]

I know inflation to mean the following:

"Inflation is the rate of increase in prices over a given period of time"

I don't consider sales taxes or tariffs or VAT to be inflation.

Do you?

If you implement VAT and it causes the price of goods to increase, the VAT caused inflation. Who has ever said "VAT is inflation"? Unless companies just eat the cost and keep prices the same, which.. is pretty rare. At the very least they'd then likely hit you with the dreaded shrinkflation (which in reality, is a form of inflation.)

 

[GHG]

I know inflation to mean the following:

"Inflation is the rate of increase in prices over a given period of time"

I don't consider sales taxes or tariffs or VAT to be inflation.

Do you?

Of course the indroduction of or increase in VAT causes inflation. What you "consider" doesn't matter from an economic point of view.

We don't even need to go that far back to get tangible real world examples of this. 5% VAT was indroduced across the middle east in 2018 (from 0%) and it caused a spike in inflation by ~125 basis points.

 

[Great Auk]

I don't consider them inflation because

Of course the indroduction of or increase in VAT causes inflation. What you "consider" doesn't matter from an economic point of view.

We don't even need to go that far back to get tangible real world examples of this. 5% VAT was indroduced across the middle east in 2018 (from 0%) and it caused a spike in inflation by ~125 basis points.

So then what's the big deal with tariffs? If Trump said I'm putting 10% across the board tariffs, that would still equate to a lower total "tax" percentage (sales tax + tariffs) than the EU's average VAT. And the tariffs only apply to foreign goods, so it's actually even less than that.

If he did that, would people still have a problem with tariffs?

 

[GHG]

I don't consider them inflation because

So then what's the big deal with tariffs? If Trump said I'm putting 10% across the board tariffs, that would still equate to a lower total "tax" percentage (sales tax + tariffs) than the EU's average VAT. And the tariffs only apply to foreign goods, so it's actually even less than that.

If he did that, would people still have a problem with tariffs?

Because the magnitude of these tarrifs (along with how suddenly they've been introduced) will lead to other economic events which cause inflation, such as a supply shock.

 

[EviLore]

 

[Maiden Voyage]

Because the magnitude of these tarrifs (along with how suddenly they've been introduced) will lead to other economic events which cause inflation, such as a supply shock.

It's going to be like covid again for a while unless things backpedal.

 

[Gp1]

Call me crazy...

But I don't want the lunatic who called for negative interest rates BEFORE COVID... to have any fucking control of the Fed.


Trump is a walking economic disaster.

This is exactly the reason why CB presidents (in healthy economies) mandates finish in the middle of the presidents term.

Central bank presidents must always be a technical (and orthodox) position, not a political one.

 

[Kittehkraken]

It's going to be like covid again for a while unless things backpedal.

It would appear he already has regarding shipping,

United States eases port fees on China-built ships after industry backlash

LOS ANGELES, April 17 (Reuters) - The Trump administration shielded on Thursday domestic exporters and vessel owners servicing the Great Lakes, the Caribbean and U.S. territories from port fees to be levied on China-built vessels, aiming to revive U.S. shipbuilding.

The USTR exempted ships that ferry goods between domestic ports as well as from those ports to Caribbean islands and U.S. territories. Both American and Canadian vessels that call at Great Lakes ports have also won a reprieve.

As a result, companies such as U.S.-based carriers Matson and Seaboard Marine would dodge the fees. Also exempt are empty ships arriving at U.S. ports to load up with exports such as wheat and soybeans.
Foreign roll-on/roll-off auto carriers, known as ro-ros, are eligible for refunds of fees if they order or take delivery of a U.S.-built vessel of equivalent capacity in the next three years.

https://www.reuters.com/markets/global-shippers-await-word-us-plan-hit-china-linked-vessels-with-port-fees-2025-04-17/

Its impossible to keep track of this shit.

 

[DrFigs]

If tariffs cause inflation then so does VAT. Sounds silly right?

The truth is neither cause inflation.

I was w/ you 100%. i thought that tariffs being a tax would be deflationary because it lowers demand. But i didn't take into account the supply side to it. if tariffs restrict supply, then basic econ also tells us that prices will go up. and it seems like everyone is on the same page that this is the more likely response.

 

[StreetsofBeige]

I was w/ you 100%. i thought that tariffs being a tax would be deflationary because it lowers demand. But i didn't take into account the supply side to it. if tariffs restrict supply, then basic econ also tells us that prices will go up. and it seems like everyone is on the same page that this is the more likely response.

Covid was the same thing.

Prices went up right away in 2020 though the increase inflation % lagged. Thats because with such little supply in some categories as people hoarded, suppliers were running out of stock. Internal cost of goods didnt increase right away. But prices jacked up as suppliers ran out, so we all axed a lot of weekly deals at stores so prices on avg increased. No point putting it on deal if we cant supply. And then we did formally increase prices to retailers as COGs caught up and then retailers increased prices, and then increased it more than we increased because they knew people still have to buy food. And with lots of other businesses closed due to covid policies (each city was different allowing certain retail businesses open), stores might as well jack it up as people had nothing to buy except groceries and any family amped up on home renovations. And any gov giving out handouts of $1000s per month in free money contributed to too much money floating in people's hands begging to be spent.

 

[DownLikeBCPowder]

Inflation does not add to government coffers the way VAT and tariffs do. Basically people pay more money for the same good/service and the government gets nothing out of it (unless you want to count the slightly higher tax revenue from higher prices, but it's miniscule.)

The (US in this example) government loves inflation - they are the primary producers of it as well as the immediate beneficiaries. I see the concept of price inflation being used here, but for me inflation references an increase in the monetary supply, ie the classical sense of inflation. More money chases less goods, hence an increase in price - but the root is the overproduction of value-less currency, ie inflation. "Price inflation" or price-focused inflation is like a parlor trick to keep you focused on the end result and not the cause in similar manner of CPI formula adjustments in order to hide inflationary pressures in the market ("an orange is an apple"). Endless and careless printing, as well as abandonment of sound money, are the underlying causes for the unending price inflation that manifests. These aforementioned CPI adjustments are necessary for them to further conceal the actual impact of the wreckless expansion of the money supply. Until you fix the money and monetary policy, you will never fix or reduce inflation long term - in fact it's a both desired result and a mandatory function of the monetary policy. For many decades, the United States has been capable of "exporting" this inflation overseas (ie creating moral hazard for themselves via delayed accountability), but that time is coming to an end and is one of the reasons you (if you are in the United States) are experiencing more aggressive price inflation at home - those dollars cannot continue to be exported at the same rate, even worse, much of that legacy exported currency will be returning home resulting in even larger price inflation at some point in the future and those issues will compound, resulting in more dollars returning - faster and faster because foreign holders will experience the same incentive. Much of what is happening now is the result of decades of decisions continuing to compound and while there are modern events that either further these results or bring them closer, this result was always inevitable. It was just a matter of when the piper was to be paid.

TLDR: It's a feature, not a bug.

 

[StreetsofBeige]

The (US in this example) government loves inflation - they are the primary producers of it as well as the immediate beneficiaries. I see the concept of price inflation being used here, but for me inflation references an increase in the monetary supply, ie the classical sense of inflation. More money chases less goods, hence an increase in price - but the root is the overproduction of value-less currency, ie inflation. "Price inflation" or price-focused inflation is like a parlor trick to keep you focused on the end result and not the cause in similar manner of CPI formula adjustments in order to hide inflationary pressures in the market ("an orange is an apple"). Endless and careless printing, as well as abandonment of sound money, are the underlying causes for the unending price inflation that manifests. These aforementioned CPI adjustments are necessary for them to further conceal the actual impact of the wreckless expansion of the money supply. Until you fix the money and monetary policy, you will never fix or reduce inflation long term - in fact it's a both desired result and a mandatory function of the monetary policy. For many decades, the United States has been capable of "exporting" this inflation overseas (ie creating moral hazard for themselves via delayed accountability), but that time is coming to an end and is one of the reasons you (if you are in the United States) are experiencing more aggressive price inflation at home - those dollars cannot continue to be exported at the same rate, even worse, much of that legacy exported currency will be returning home resulting in even larger price inflation at some point in the future and those issues will compound, resulting in more dollars returning - faster and faster because foreign holders will experience the same incentive. Much of what is happening now is the result of decades of decisions continuing to compound and while there are modern events that either further these results or bring them closer, this result was always inevitable. It was just a matter of when the piper was to be paid.

TLDR: It's a feature, not a bug.

Inflation is also good for people doing well as it doesn't get too wacky killing markets and home prices. In the long term, they always go up anyway.

When inflation props up prices, so does even boring high interest savings accounts or term deposits. It gets to a point anyone with good money can just milk it living off things like that because despite prices going up, the richer someone is the less chance they need to spend it all back buying stuff. So the rest of the pot of money just sits there getting better interest.

As an extreme example, let's say Bill Gates has $100B. He spends $1B/yr buying stuff. Who cares if inflation is +10% making his $1B spending now $1.1B. His other $99B instead of getting a shitty 1.5% interest during low inflation times might be 4% now. So he's gaining way more milking the savings than his higher costing every day spending.

 

[Nocty]

He's already fired heads of independent agencies.

The Federal Reserve Act allows for the dismissal of Board members, including the chair, "for cause."

Trump can't fire Jerome Powell. His term ends May 2026

The only thing he can do is have Congress vote to repeal the 1913 Act, abolishing the Federal Reserve before the midterm elections

A vote of this magnitude will only pass if there's a 1929 style depression caused by Powell, which is very unlikely. Market is a completely different beast than those days

 

[dave_d]

A vote of this magnitude will only pass if there's a 1929 style depression caused by Powell, which is very unlikely. Market is a completely different beast than those days

Of course if there were a 1929 style depression I think we all know who would get the blame. Here's a hint, it starts with Presi and ends with dent.

 

[DownLikeBCPowder]

The only thing he can do is have Congress vote to repeal the 1913 Act, abolishing the Federal Reserve before the midterm elections

 

[DrFigs]

pretty hard to imagine Trump can get 60 votes for this let alone 50.

 

[DownLikeBCPowder]

pretty hard to imagine Trump can get 60 votes for this let alone 50.

 

[Rentahamster]

 

[Kittehkraken]

U.S. Treasury Secretary Scott Bessent said in a Tuesday speech that the ongoing tariffs showdown against China is unsustainable and expects a "de-escalation" in the trade war between the world's two largest economies.

But in a private speech in Washington for JPMorgan Chase, Bessent also cautioned that talks between the United States and China had yet to formally start.

White House press secretary Karoline Leavitt told reporters Tuesday that Trump told her "we're doing very well" regarding a "potential trade deal with China."

https://apnews.com/article/tariffs-trade-taxes-trump-china-bessent-treasury-66668fa26957ece530a250fa8ea19faa

 

[dotnotbot]

 

[Nocty]

I just kept buying more and more every week.. got a nice average now things have started to recover. Palantir, and Warrior coal and cloudflare doing nicely

 

[Forsete]

So he capitulated?

 

[Nocty]

So he capitulated?

he folded like a deck chair once he saw the bond markets panicking.

China has all the cards now, and Trump knows it. The market seems to be in a state of relief that Powell is not able to be removed and or the tarrifs being reduced but sooner or later the music still stops

 

[Great Auk]

he folded like a deck chair once he saw the bond markets panicking.

China has all the cards now, and Trump knows it. The market seems to be in a state of relief that Powell is not able to be removed and or the tarrifs being reduced but sooner or later the music still stops

Yay China! I am so happy for them.

When they invade Taiwan we will call them brave. When they really do cutoff rare earth metals we will say nice move! When they control almost the entirety of all the technological manufacturing, we will congratulate them.

We are well on our way right now, let's start celebrating!

 

[Nocty]

Yay China! I am so happy for them.

When they invade Taiwan we will call them brave. When they really do cutoff rare earth metals we will say nice move! When they control almost the entirety of all the technological manufacturing, we will congratulate them.

We are well on our way right now, let's start celebrating!

lol, I think China would not risk invading Taiwan. It would isolate them on the world stage much like Russia invading Ukraine.

Not only that, but it would immediately initiate a global conflict since it is the semiconductor breadbasket of the world. It is in no ones interest - Xi Jingping isn't stupid, he plays a long game since he knows Trump wont be here forever

 

[Great Auk]

lol, I think China would not risk invading Taiwan. It would isolate them on the world stage much like Russia invading Ukraine.

Not only that, but it would immediately initiate a global conflict since it is the semiconductor breadbasket of the world. It is in no ones interest - Xi Jingping isn't stupid, he plays a long game since he knows Trump wont be here forever

Doesn't it make more sense then, since there is no way anyone around the world can operate without China or Taiwan's semiconductors, that China invades Taiwan NOW? What are we going to do, shut down our entire economies just to show solidarity with Taiwan? China holds all the cards, just like you said.

Won't the world just back down and shrug, just like you said Trump did with the tariffs?

I warned for years that China has been allowed to get to powerful. If they really want to, they can take over Taiwan and there is nothing we can do about it. This isn't Iran or Russia, those two are easy to isolate. You can't isolate a Taiwan-controlling China. Hell we can't even isolate China with no Taiwan involved. Trump has the right idea about cutting off China as such a critical supplier of all things economic. It's bad for all of us. But people hate Trump so anything he says they just go with the opposite position.

People are almost gleeful that China is strong and can combat Trump, it's like being happy your own house is on fire because you don't like your mortgage lender.

 

[Atrus]

Doesn't it make more sense then, since there is no way anyone around the world can operate without China or Taiwan's semiconductors, that China invades Taiwan NOW? What are we going to do, shut down our entire economies just to show solidarity with Taiwan? China holds all the cards, just like you said.

Won't the world just back down and shrug, just like you said Trump did with the tariffs?

I warned for years that China has been allowed to get to powerful. If they really want to, they can take over Taiwan and there is nothing we can do about it. This isn't Iran or Russia, those two are easy to isolate. You can't isolate a Taiwan-controlling China. Hell we can't even isolate China with no Taiwan involved. Trump has the right idea about cutting off China as such a critical supplier of all things economic. It's bad for all of us. But people hate Trump so anything he says they just go with the opposite position.

People are almost gleeful that China is strong and can combat Trump, it's like being happy your own house is on fire because you don't like your mortgage lender.

The DOW is rallying 1000 points right now because an economically illiterate geriatric has, for today at least, promised not to fire Powell and to soften his insane, America destroying approach to tariffs.

https://www.cnbc.com/2025/04/22/stock-market-today-live-updates.html

That isn't an expression of support for China but an expression of relief that the America annihilating policies that run against every educated, intellectual approach to finance has taken one step away from the brink.

There can be many ways to address China as an enemy but waging a global tariff war against everyone (except enemies like Russia for some reason) is not one of them.

 

[GudOlRub]

Yay China! I am so happy for them.

When they invade Taiwan we will call them brave. When they really do cutoff rare earth metals we will say nice move! When they control almost the entirety of all the technological manufacturing, we will congratulate them.

We are well on our way right now, let's start celebrating!

He played it completely wrong, he could've sided with the US's allies in Europe and North and South America to stand against China together and also put the squeeze on trillionaire companies that successively outsource manufacturing and jobs to China and other Asian countries. Instead he sided with the billionaire CEOs and antagonised the whole world including powerful allies like the EU and Japan and basically gave them no choice other than also retaliating against the US along with China...

It's so fucking dumb, if there's anyone to blame here is Trump, period. He should've fought one battle at a time, he could've still went after the EU and the likes but only after they had defeated China, going against the whole world all at once is... I don't even have the words to describe what it is. It makes no sense and was a doomed strategy since the very beginning.

 

[AJUMP23]

Everyone should watch free to choose, and every country should freely choose to eliminate all tariffs and compete in a truly free market. It would unleash financial capital like never before. It would also create job loss in many places, but creates new markets as well. It would be good for the world to have free markets.

 

[Audiophile]

edit: sorry, wrong thread, had crypto thread open in other tab, lol..

 

[Kittehkraken]

Treasury Secretary Scott Bessent said Wednesday that President Donald Trump will not reduce tariffs on China without an agreement by both governments to de-escalate their trade conflict, which has unsettled global markets by all but severing the flow of goods between the world's two largest economies.

Bessent, who said he is engaged in trade negotiations with more than a dozen nations, said talks between U.S. and Chinese diplomats have not begun. But speaking at the White House, the president said he is "actively" talking to Chinese officials and predicted the two sides would reach agreement on "a fair deal."

https://www.washingtonpost.com/business/2025/04/23/trump-china-tariffs/

Literally nothing has changed.

 

[StreetsofBeige]

Decent day. Started hot out of the gate. Petered out losing 50% of my gains by the close! lol

 

[12Goblins]

 

[Kittehkraken]

HONG KONG — China on Thursday directly contradicted President Donald Trump's claims that Beijing and Washington are actively discussing resolutions to a trade war that threatens to upend the global economy.

While Trump said Wednesday that the world's two largest economies are "actively" talking, a Chinese foreign ministry spokesperson responded that "China and the U.S. have not engaged in any consultations or negotiations regarding tariffs, let alone reached an agreement."

The spokesperson, Guo Jiakun, made the comments at a briefing in Beijing, saying that reports of ongoing talks were false. He added that while China is open to negotiations, "if it's a fight, we will fight to the end."

Trump says the U.S. and China are 'actively' discussing tariffs. Beijing says that's false.

Global concern is growing amid a U.S.-China standoff over high tariff levels that amount to a mutual trade embargo between the world’s two largest economies.

www.nbcnews.com

BEIJING — China on Thursday said that there were no ongoing discussions with the U.S. on tariffs, despite indications from the White House this week that there would be some easing in tensions with Beijing.

"At present there are absolutely no negotiations on the economy and trade between China and the U.S.," Ministry of Commerce spokesperson He Yadong told reporters in Mandarin, translated by CNBC. He added that "all sayings" regarding progress on bilateral talks should be dismissed.

"If the U.S. really wants to resolve the problem ... it should cancel all the unilateral measures on China," He said.

https://www.cnbc.com/2025/04/24/china-says-no-talks-with-the-us-on-trade-calls-for-canceling-unilateral-tariffs.html

 

[DeafTourette]

It's like a comedy. The pres lies something and the other party says "liar liar pants on fire"

LMBO!

 

[dotnotbot]

I'm not sure why TTWO went up so much today

 

[GHG]

I'm not sure why TTWO went up so much today

Technical breakout to new all time highs.

Was on many traders watch-lists this morning.

 

[Gp1]

Inflation is also good for people doing well as it doesn't get too wacky killing markets and home prices. In the long term, they always go up anyway.

When inflation props up prices, so does even boring high interest savings accounts or term deposits. It gets to a point anyone with good money can just milk it living off things like that because despite prices going up, the richer someone is the less chance they need to spend it all back buying stuff. So the rest of the pot of money just sits there getting better interest.

As an extreme example, let's say Bill Gates has $100B. He spends $1B/yr buying stuff. Who cares if inflation is +10% making his $1B spending now $1.1B. His other $99B instead of getting a shitty 1.5% interest during low inflation times might be 4% now. So he's gaining way more milking the savings than his higher costing every day spending.

The thing is... while the rich can simply live of yeld / interest rates (yeld and interest rates and not inflation per se. They may or may not correlate depending on how functional and dovish/hawkish is the central bank) the vast majority of the population gets hammered by prices going up way more than their salaries.

The other point is, money that is yielding interests sitting on a bank account is not fomenting productive sectors of the economy.

A little inflation is good for the economy, as it denotes economical activity and a healthy and functional productive sector. Above a certain level, it turns into a snowball that feed itself until the monetary policy simple isn't effective to counter the inflation.

On the other hand deflation is also bad for the economy as it usually lead to less spending and investment, which will probably result and less jobs and economic growth.

Trust me, I'm a Brazilian. We have 40+ years in knowledge on how these things works

Ps. I can't understand what kind of logic's gymnastics you guys are doing. + taxes or more VAT = higher prices = inflation. It's directly correlated.

 

[Ecotic]

Careful everyone, these initial bear market rallies can linger here at the lower highs for weeks and suck a lot of people in, make them think everything has stabilized and is safe again. Then two, three, or four weeks later we can be back retesting the lows. Bear markets can take months before the real sustained rally back to the all-time highs begins.

 

[dem]

Careful everyone, these initial bear market rallies can linger here at the lower highs for weeks and suck a lot of people in, make them think everything has stabilized and is safe again. Then two, three, or four weeks later we can be back retesting the lows. Bear markets can take months before the real sustained rally back to the all-time highs begins.

You need to pull your money when JayK47 posts about how well its going...

for now we wait

 

[IntentionalPun]

Ps. I can't understand what kind of logic's gymnastics you guys are doing. + taxes or more VAT = higher prices = inflation. It's directly correlated.

I think it's just the one guy lol

The rest of us are confused why they decided to re-define what inflation means.

 

[Great Auk]

I think it's just the one guy lol

The rest of us are confused why they decided to re-define what inflation means.

So every time a government raises taxes or VAT, why don't we hear that inflation is going up?

 

[IntentionalPun]

So every time a government raises taxes or VAT, why don't we hear that inflation is going up?

People don't really need to be told as it's so plainly obvious it will cause inflation.

The word is used most often when there aren't direct causes like taxation, which is I think is what is tripping you up.