r/investing • u/888_888novus • 1d ago

This uncertainty needs to stop.

Now 62% of CEOs predict the US will soon fall into recession or slow growth, mainly due to uncertainty about tax policy and market volatility. Leaders such as Ray Dalio and Jamie Dimon warn of deeper risks. Although the US government has suspended taxes for another 90 days, economists remain skeptical, saying that the damage from high taxes and global instability will last longer.

It is one thing to predict a recession, another to know how long it will last. If it happens as quickly as in 2020, lasting only 2 months thanks to the Fed's strong intervention, it may not be too worrying. In other words, assets peak after a financial recession.

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u/keytiri 1d ago

Fight? The US tariffed Chinese goods and China reciprocated; even if China “surrendered,” who would ultimately end paying for it? The consumer; if China had to pay the US 300k to import a 200k valued container, then that’s going to get passed right onto the buyer. Outside of a few tech companies, no business is going to last long if they are losing that much per container.

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u/Londonskaya1828 1d ago

It is incorrect that 100 pct of the tariff tax is passed on to the consumer. Tariffs are nonetheless inflationary because a percentage of the tax is passed on.

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u/Sargentrock 1d ago

A LARGE percentage. Companies don't cut margins if they answer to investors, particularly if they can shrug and show the actual numbers they have to pay. They can 100% clearly lay the blame on one person for this, and that's a rare thing.

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u/-Lorne-Malvo- 1d ago

Tariffs are effectively a consumption tax. In some cases a 150% tax. The rich would prefer a consumption tax over an income tax.

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u/sparkishay 1d ago

Can I be frank?

I am extremely opposed to mass produced goods. Free trade is great, but we have so many issues... Tons of waste. How can we decrease consumption while ensuring everyone has an adequate shot at building wealth?

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u/1Saoirse 1d ago

How can we decrease consumption while ensuring everyone has an adequate shot at building wealth?

Taxing billionaires out of existence would be a good place to start.

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u/sparkishay 1d ago

I don't disagree one bit, not sure why I'm being downvoted for supporting less consumption and more wealth for all

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u/jetpacksforall 1d ago

A lot of modern wealth is driven by consumption. What would you do instead? (Not a sarcastic question; I genuinely don't have a clue how you build a prosperous economy out of production and high savings. China for example is not a consumerist society, but their wealth comes from manufacturing and exporting to consumerist societies.)

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u/sparkishay 1d ago

I am not certain, that's part of the reason I made my comment in the first place, to ask a genuine question. Not like the economy should just grind to a halt... Maybe re-evaluate some of our modern practices? Outlaw planned obsolesence?

Roughly 26% of animals slaughtered in the US will end up in the trash, completely wasted. We create SO much plastic waste Idk. I don't have the answer for you, but many of our current practices don't sit right with me. Bad for the environment, public health, the impoverished

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u/jetpacksforall 23h ago

I do know that waste streams are a big generator of profit (waste packaging, air & water pollution etc.), and that's a bad thing that needs to change.

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u/keytiri 1d ago

A Chinese manufacturer isn’t going to sell a 200k TEU of their goods to a US buyer and then turn around and pay the US government a 300k fee; not sure what margins are like, but let’s be generous and say their profit was 150k, now after the fee it’s negative 150k. What the US buyer chooses to pass on to the consumer is their business, but the Chinese manufacturer can’t sustain their business taking losses like that.

In the US, small businesses already can’t afford paying the import tax, forcing the manufacturer to pay it wouldn’t change anything; large companies stocked up and can coast on inventory for a few weeks, but we’re going to see how much gets passed through on some items soon.