Bonus post … ask AI about tariffs

‘sudden stop’ is about to enter the lexicon.

The tariffs are a good case study for doing research with ChatGPT deep research. - ChatGPT

US tariffs are projected to rise by a similar amount compared to the infamous Smoot-Hawley tariffs at the start of the Great Depression.

Let’s see what happened to stock markets then

With the trend toward globalizing supply chains, trade today is running at about twice the level it was relative to GDP prior to the Great Depression.

So, Boeing is importing all this stuff and has contracts to sell planes at agreed prices. Then the price of imports suddenly goes up by 25%. Not good. A ton of transactions already agreed suddenly became un-economical. Now, multiply that by every company in America.

And then there are retaliatory measures taken by US counterparties in response to US policies.

For 30 years, supply chains and markets have been integrating. Throw that into reverse, you add a huge amount of risk to every transaction.

You break everything. You get a ‘sudden stop’.

A ton of manufacturers and retailers will go bust and take banks and real estate with them. There aren’t even decent models for something of this magnitude.

Retribution for imaginary grievances is not ‘reciprocity’. Normalizing criminal insanity will have tragic consequences that no one will escape.

"May God have mercy for my enemies because I won't." - George S. Patton

Good luck everyone.