Hacker News Reader

Comment by duxup | Hacker News Reader

I'm a little surprised by how much lag there has been, but I suspect a lot of organizations where holding out for some form of "maybe he will change his mind", but as it is Trump and his own people aren't even on the same page about IF they're even negotiating with China or not...

The mantra of some folks response to his more reckless statements has always been "it's just talk", but it seems to not be talk.

View on HN

A lot of companies were building up inventory in Q1, which allows them to buffer the immediate impact. Some are also absorbing the tariffs for now, which will compress their margins for Q2. I think most of them are hoping that we might get a resolution in the foreseeable future, and then they at least have some clarity. But if that does not happen, we are going to see the full inflationary impact from tariffs eventually.

It sort of makes sense: If tariffs are here to stay, you're going to have to fundamentally change how your business operates in a way that's not easy (or cheap) to "undo". So you're better off punting until the last possible minute when you know you have to commit to the new reality.

Considering the reports of imports way down, it seems like retailers and others may be choosing just to not offer product rather than crank up prices in some cases.

That would fit the "can't alter my business that much..." mindset you're referencing I think.

I bet a lot of people in Wall Street are in denial or just playing chicken

it's beginning to look a lot like... 2008

Kind of, but I don't think there's any precedent for the world's most powerful economy performing seppuku.

The Smoot-Hawley Tariff Act of 1930 [1], where a Republican majority enacted extreme tariffs against President Hoover's almost veto, is sometimes considered one of the smoking guns for how the Great Depression got so bad. That's quite a precedent to be concerned about here.

(Though this version is dumber with the President trying to do it through EOs, which is probably illegal and Congress should probably be much more upset their powers to be stupid are being usurped before their eyes.)

[1] https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac...

Bueller? Bueller?

People should have paid more attention

Well... if 2008 were an entirely self-inflicted wound caused by one malignant narcissist who believes himself to be a business genius despite the fact that his understanding of the global economy hasn't evolved since the 1980s or so (and it was already pretty shaky back then).

Wall St is obligated to "buy the dip" is the thing - they're in it to make money now, so there's absolutely a ton of people trying to take a cut of the various market rebounds even if they have no confidence in the long run.

They just don't want to be left holding the bag.

The people in denial are mostly retail traders who keep buying the dip, because they don't understand that the market has fundamentally changed. A lot of the big portfolios, at least the reasonably smart ones, have de-risked and are not eager to jump back in aggressively. But that also means that structural bid that had been underlying the market since 2020 is no longer present. And that means things can fall a lot further and quicker than most people who came into the market after 2020 can imagine.

Reply on news.ycombinator.com