‘A trade war on steroids’: Donald Trump ushers in new age of US protectionism 

FT (2/01/2025)

The Trump Tariffs have been the subject of most of the big headlines this month. I don’t typically comment on government policy, but as an interested observer, the tariff policies do not seem beneficial or logical. I just don’t see the point – any incremental tax revenue is tiny in relation to the national deficit. The Committee for a Responsible Federal Budget makes the estimation that this would result in over 100 billion dollars of additional tax revenue per year, or just 5% of the annual budget deficit. This is also assuming no negative externalities that would net against this “benefit.” President Trump has also made the argument that this would bring jobs back into the country. You know, 200 years ago we had an agrarian society where most of the population was involved in farming . . . should we excessively tariff international crops such as avocados, grains, and coffee beans to bring these jobs back? Maybe the reshoring initiative would be better focused on tax subsidies for advanced industries rather than trying to reinvigorate the arduous steel mills and coal mines. And why are we actively working against our closest trade partners? Why should any of this make sense? (If you know why, feel free to let me know. I am open to changing my mind.) That said, I am in support of austerity measures, but doubtful that tariffs are the correct path to take. 

Regardless, this is how I view the range of outcomes for the tariff policies: 

• If the tariffs are somehow beneficial to the industrial economy of the United States, companies will do well and there won’t be anything to worry about. 

• If the tariffs are instead a net negative, they’ll likely be short-lived, in my opinion. Presidential terms are only four years and people tend to vote based on their attitudes towards their current wealth. 

• It’s very possible that the tariffs don’t go into effect, get scaled back significantly, or are otherwise subverted. 

There is a lot of uncertainty and noise surrounding tariff headlines, and while it may cause short-term volatility, I don’t find it to be all that worrisome at this point in time. Patient investors may be paid a higher premium for a willingness to hold through the nonsense, and while the path forward is unpredictable, the worries of short-term market participants may provide opportunities that I will gladly take.  

New US fees on Chinese ships may drive demand for Canadian intermodal 

Freight Waves (2/24/2025)

Continuing with that sentiment, here’s an interesting opinion piece.

In my opinion, it’s not a good bet to make any decisions based on the announced tariff policies, because as we’ve already seen, they can change after a short phone call. It’s also impossible to tell where the frictions of these tariffs eventually wind up – tariffs on Canadian imports may reduce demand for cross border freight at first, but as the headline shows, tariff-related docking fees for Chinese barges may increase the volumes handled at Canadian ports that terminate in the U.S.

Global supply chains are incredibly complex. It’s time to remain patient and observant – not the time for making any rash assumptions.

Why Are Eggs So Expensive? What The New CPI Inflation Report Says

Forbes (2/14/2025)

A couple of months ago in Manhattan I was reluctantly forking over $6 for a carton of eggs. Today, the same carton is about $12 thanks to the bird flu. In the January CPI report, egg prices were up over 15% from the year prior, which influenced the headline number that stoked fears of sticky inflation. This only goes to show how much noise can be included in the economic data that the market cheers or cries for each month. Tariffs or no tariffs, the market will always have its noise, and thank goodness for that.