July 25, 2018 glacierinvest

So I have been pretty outspoken about my personal view that tariffs will not cause much disruption to the U.S. economy. The recently released Beige Book by the Fed suggests otherwise with specific complaints from certain manufacturers about the negative impacts on their businesses from new trade policies.

You really can’t argue against real life experiences like these. I’ve been in the camp that the supposed trade war was having more of a psychological impact versus an actual business impact. Looks like that’s not entirely the case right now. While some pain might be felt, I still feel like the trade disputes will be resolved with little damage done and some minor changes to the international trade order.

It appears U.S. government officials aren’t backing down though at this point so my view on the outcome is moving closer to a 50/50 probability that eventual outcome will not be detrimental to the U.S. economy and its many components (It’s currently closer to 60/40 in my mind). Subsidies are now being offered to farmers to help offset the tariff blow so that helps support my thesis but isn’t really what I thought would happen. There’s obviously time for an eleventh hour deal to be made but I’m not sure either side is budging at this point. It sure seems like this situation could be political dynamite for POTUS and his party.