Last edited Wed Apr 30, 2025, 05:25 PM - Edit history (1)
They are reasoning "what goes up must come down" -- that is to say, if our traditional methods require us to make an irrational adjustment this quarter in response to a completely unprecedented set of circumstances, then that arithmetic will automatically fix itself the next quarter.
But as you suggest, there is a psychology setting in. Corporations anticipated this disastrous chaos from Trump and pre-ordered inventory as much as they could. But nobody can stock a year ahead, and Trump seems hellbent on continuing the chaos long past when the pre-shipped inventory runs out. Of course, he is making exceptions every single day now, mostly in response to bribes and tributes, I believe. But if tomorrow morning, Trump said "OK, I'm done with tariffs. Forget I ever brought that up", there has already been enormous damage. In particular, our best partners (Canada, Mexico, Japan, the EU countries) will never trust Trump. They will trade with us as absolutely necessary, but they are already working hard to open new trade partnerships that leave the US out.
The economists are just wrong. This will not snap back to where it was.
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