Developments

[Trevor]

Well, it looks like China's carrying out on their threats of Retaliation, since they've just raised automobile tariffs to nearly 22%. Our response will likely be a similar one. I wonder if the morons in charge of both the United States and China realize that this will end up destroying both economies. We're already calling for revenge and thus, the cycle continues.

[Marc]

President Obama may well try to resist a retaliatory tariff on Chinese automobile imports to the US, based upon pragmatic considerations. However, the grandstanding of American politicians and the anger of the American people may be too strong to resist such a retaliatory tariff. Of course, if the Chinese really keep throwing high tariffs on all manner of goods at the US, it would be very hard to resist retaliatory tariffs on grounds of fairness, although it is likely that such retaliatory tariffs would inexorably lead to an economic global downslide, and possibly even significantly increase the chances of a military conflict. —Best regards, Marc

[Trevor]

Problem is, a lot of the pressure is coming from his own party. Hoover spoke out against Smoot-Hawley, but ultimately bowed to pressure and signed the bill. What happened afterwards was a disaster. Unemployment was 8 percent in 1930 and 16.3 percent a year later.

[Higgenbotham]

This immediately reminded me of the 2009 tire tariffs which are mentioned in the news today. Seems these tariffs are mentioned as being in retaliation for the 2009 tire tariffs. In 2009, I looked at the tire tariffs as being a sign the economy and stock market would turn down and was I ever wrong. A good question would be why more tariffs now? Is it because the economy in China is so poor that they feel desperate enough to place this tariff? Or will placing this tariff make a worsening situation worsen more? Probably both, but perhaps more of the former.

[Trevor]

I think this is primarily retaliation for the tariffs we've slapped on them. This seems to be starting off slowly, but we'll see what our next move is going to be. China's economic difficulties have only begun and once they truly do, it'll help drag our already weak economy down with them. I'd say China is where we were around 2007, when our problems were becoming obvious.

Once their economy collapses, war won't be far off.