Good morning. “Be cool!” This was just tweeted out by the president, asking everyone to relax a bit while the tariff battle with China (and others) continues. The question becomes: “at what point in time do tariff increases only affect headline news … as they are so high as to no longer matter?” I mean … a tariff of 104%? What is next? 208? 416? Governments can play this game all day long, but the question might soon enter our minds of … what if there were no (meaning zero) imports allowed from China and other places at all? We could collectively say, “serves them right” … until we see the adjusted prices (or find certain things … as in many … are no longer available). Amazon already announced the cancellation of a few inventory orders from China, according to Bloomberg. I looked around my own home. My cooktop is made in Germany, Hex-clad pans: China, Ninja air fryer: China, New Fios Router: Vietnam, Fios remote: Indonesia, trash can: China, Dyson products: Asia, headphones, China … as are almost all other electronics. Maybe one day we will make these here … but at what cost … and made by who … or what? The issue here is something pointed out over the weekend by Howard Lutnick, U.S. Secretary of Commerce … as he claimed the U.S. manufacturing industry will eventually come back and prosper … while at the same time automation would handle much of the little work, while jobs would go to those maintaining the machines. The jury on this is still out … and probably will be for a while. In a 2020 MIT report, there was a claim that each single robot will replace 3.3 American workers … however more recent reports dispute this. Even so, the effect on American employment … which is the long-term goal … is still unknown due today’s tariff war, as the increase in prices today (for both finished goods and raw materials) are certainly throwing hiring plans into disarray. And I just saw the EU and others are joining in on raising tariffs on U.S.-produced items. Ouch. So, the trade war appears it will continue for a while at least, as investors try not to get hit with any shrapnel. That will about wrap it up for today as I want to figure out things I need to buy before the prices jump up … or stores run out. I do complain about those selfish people that horde … but will admit it sometimes has its benefits. On a final note, any increase in food prices will force me to be more selective in my choices … and maybe I will finally focus on buying low-cal and healthy items. I was munching on chips while watching a crime show last night and it dawned on me … that if I was ever murdered … my chalk outline would be a circle. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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