#182 - The Great Tariff Debate

Unless you’re living with your head in the sand, you probably have a position on Trump’s most recent reciprocal tariffs. I’ve been digging into the arguments for and against the strategy, and I can only say one thing - for students of economics and history, we live in the most interesting of times.

Here’s what you need to know at a high level, along with some links to the best content I have found for arguments on both sides of the tariff policy.

President Trump’s new tariff policy imposes a 10% baseline tariff on all imports, with higher rates (20–54%) on nations with "unfair" trade practices. Here’s a quick breakdown:

What’s targeted?

• Countries: China (54%), Vietnam (46%), EU (20%), Japan (24%), India (26%) among many others

• Industries: Auto, electronics, consumer goods, retail, apparel

Policy Goals:

• Rebalance trade deficit

• Reshore U.S. manufacturing

• Use tariffs as leverage in global negotiations

Policy Concerns:

• Estimated $3,000–$4,000/year added cost per U.S. household

• Consumer price inflation; margin pressure for import-reliant businesses

• Retaliation from countries like China (34% counter-tariff on U.S. goods)

Recent Market Impact:

• Nasdaq: –6%, S&P 500: –5%, Dow: –4% in one day (BAD)

• Oil down ~10%; gold & Treasurys up (GOOD)

• 10-Year Treasury yield dropped to ~4.0% from 4.6% (GREAT)

Engineered Recession? Some speculate this could be a strategy to cool growth → force Fed rate cuts → help the U.S. refinance debt. U.S. interest payments are nearing $1T/year. Many are skeptical that the administration is using the effects of their policies in this way, but some are making the case for this “3-D chess move”.

What do you think - is this smart trade strategy or economic gamble?

Arguments in favor of tariffs

1. The ‘smart’ argument FOR tariffs (Link - John Caple)

2. James Altucher on the effects of Trump tariffs on the economy and markets (Link)

3. Warren Buffett on how to fix the trade deficit - 2003 article (Link)

4. Treasury Secretary Scott Bessent Breaks Down Trump's Tariff Plan and Its Impact on the Middle Class (Link)

5. How tariffs are part of a much bigger Trump Administration strategy (Link)

Arguments against tariffs

1. How tariffs force the world into China’s hands and makes America weaker (Link)

2. Trump tariffs are a mistake - Mises Institute (Link)

3. Ray Dalio on tariff implications (Link)

Tech Corner

GTC March 2025 Keynote with NVIDIA CEO Jensen Huang (Link)

The ultimate cheat sheet for solving the AI energy bottleneck (Link)

Balajis.com on the implications of free / ubiquitous AI (Link)

Accelerating Scientific Discovery with AI - lecture by Sir Demis Hassabis (Link)

Investor’s Corner

Rising toxicity and the threat to capitalism and life itself - GMO paper (Link)

Why GOOG 0.00%↑ is a huge buying opportunity right now (Link - disclosure: long GOOG 0.00%↑ )

UBER 0.00%↑ cash flow over time (Link - disclosure: long UBER 0.00%↑ )

Giverny Capital annual letter (Link) - sidenote Giverny has delivered 15.1% annualized returns for 30 years since 1993

Recapitalizing the GSEs through Administrative Action: Former CEOs Explore Conservatorship Release (Link - Disclosure: Long $FNMA)

Massive insider buying at $LVMH (Link)

Kyle Bass: Why the Chinese Economy is Going to Collapse (Link)

How NVDA 0.00%↑ makes money (Link)

Great exchange between $BRK.A shareholder and Buffett (Link)

Politics & Philosophy Corner

Conflict: Niall Ferguson on Ukraine, Taiwan, and His War of Words with V. P. Vance (Link)

Jeffrey Sachs on the 3 Most Important Things Trump Has Done So Far and America’s Global Dominance (Link)

44 Harsh Truths About Human Nature - Naval Ravikant (Link)