Cutting Trade with China and Asia

What it means if you cut trade with China and Asia. Shipments start to decrease once the announcement is made. The impact is shown in Paul Krugman’s bar chart. I added the numbers in the second chart. Containers also come out of other countries.

Keep in mind. One week (minimum) in the port on either. Not counting transportation time to recipient once landed in the US and to the port from the manufacturer in China. There is time in customs before release on either side. There is three+ weeks on the ocean. Once the faucet is turned off, shipments start to decrease as Paul Krugman’s bar char shows and the numbers in the next chart (I added) show also.

We are going to experience shortages.

A Source for both Charts, The upper being provided by Paul Krugman

Paul Krugman: Hammering out a few words before getting on the bike.

Trump Is a Virus

It has been amazing to watch the stock market gyrating in response to things that aren’t even policy changes — they’re hints and rumors of policy changes. Today’s Washington Post has an article with the headline “White House eases tone on tariffs on China but won’t be cutting them soon.” OK, how much does the change in “tone” tell you about what will actually happen?

Why, then, did stocks rise on this non-news? I’d say that the market is like someone caught in an abusive relationship — still in denial, seizing on every hint of decency as evidence that their partner is really changing their ways.

Apparently, investors and the news media still have not learned that you can not read supposed insider reports on administration thinking the way you could in a normal administration — as indications of where the policy process is headed. There is no policy process. Trump will zigzag based on who talked to him last. Maybe his next move will be determined by what guests say at the dinner he’s throwing for those who gave him the biggest bribes — which is the literal description of major purchasers of the $Trump coin.

I’d say never mind the stock market. Focus on the real economy, where everything says that policy chaos will soon take a real toll. The Fed’s Beige Book, which looks what businesses are saying, says that “uncertainty around international trade policy was pervasive across reports.” And this uncertainty will have dire effects on the real economy.

Many forecasters now expect a recession. But the impact of erratic tariffs and tariff threats may occur even before the economy has time to slump.

Preliminary data suggest that imports from Asia, after surging as importers tried to front-run tariffs, are now collapsing. See the chart at the top of this post.

The CEOs of Target and Walmart reportedly warned Trump that we may be seeing empty shelves within weeks. And foreign trade won’t be revived by hints dropped at closed-door financial conferences. Companies need some certainty about policy, which they won’t get.

In other words, we may soon see a disruption of supply chains reminiscent of what happened during and after the Covid pandemic. But this time a virus won’t be responsible. It will all be about Donald Trump. And this time there won’t be a vaccine coming to our rescue. We’re stuck with this chaos agent for three years and three months.