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POLL-Skin in the Game of Trade/Tariffs


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It's BS-detecting time.  Who is credible about his actual beliefs, and who is BS-'ing?


The 25% number I use is arbitrary, but you get the idea:  meaningful reduction in equity allocation because of belief it will result in a 1930s-style trade war and Depression; meaningful increase in equity allocation because it will result in fairer/freer trade and better global economy for all.


Here are some representative opinions from the board (smart guys all): 


When both sides are losing a lot, it's not a huge consolation to think that the other side is losing more. We had to destroy that village to save it? Hurting 99% of the US economy to try to set up photo ops with steelworkers and coal miners is worth it?


Well in the long run you'll be poorer. Not by much really, just somewhat poorer. But in the short run you'll inflict a lot, and I do mean A LOT, of pain on the very people who you're trying to help. Also these people that are going to take the pain are the ones that are least able to shoulder it. So you're being really cruel for no gain.


All I know is I have been watching the economy, basically daily, for 20 years and it is much more resilient than people give it credit for.  Oil prices went up to $140 barrel and it sustained that.  The GFC was supposed to be the mother of all bear markets and it was but the US at least bounced back fairly quickly.  I don't see how adding tarriffs on $200-300B of products in a $20T economy is going to tank things.  I don't have the formula's but I suspect this will drop GDP by .1% or thereabouts, if at all.


Ideally, I think we'd all like to see the most vocal members in the Tariffs thread leave a comment below identifying themselves with their poll answer.  That would be a measure of their personal reputational skin in the game.




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In which case we've got the "what are you buying/selling today" threads.


That said I cashed out mid-January to buy a house. Fortuitous timing (in my opinion). Everything left over is in cash or berkshire.

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I will add to my holdings if the market continues to drop. Not fully invested currently but that is due to valuations.


I really dont think this will help equity prices. Thats not what this is about. I just want the US to solve its deficit issue before it becomes more of an issue. I would rather take some pain now and fix this than have some future president start nationalizing assets to resolve foreign ownership stakes.

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Slightly updated numbers:


USA GDP in Q4 2017 is 19.75 trillion (https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm)

Trade deficit: 800 B, i.e., 4% of GDP. 375B deficit is with China as of 2017.



While the issue is not limited to China.  I find this to helpful in terms of the big picture.

US GDP 18.7 trillion (18,700 billion).

US trade to China 170 billion

China trade to US 479 billion.

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So far, voting in this thought experiment suggests that the opinion of dire consequences to Trump's trade maneuvers is actually not really believed by those opinionators themselves that strongly, not matter what such opinion-holders say.


There may be more people who actually believe Trump's strategy is not only good, but good for their portfolio.


I'd like to see this poll question posed to the TV cable-news pundits.

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