Bigworld, Well, I decided to exit the individual stock side and go back to just using the S+P 500, possibly in combination with the 'equal weight' version (RSP). I had some decent profits built up in the individual stocks, so figured it's best to take them before they evaporate. It was either that or try hedging the long position with a short ETF like SH, but I decided to keep it simple. Anyway, zero in stocks right now, so will have to figure out a new strategy.
Trump reportedly decided to give Mexico another month before the tariffs take effect, which reinforces the idea that Trump is mainly using the tariffs as bargaining chips. But listening to him, he appears to be a big believer in permanent tariffs to facillitate the re-industrialization of the US. His main trade advisor is Robert Lighthizer, who is a big believer in the long term permanent tariff approach (link below). Lighthizer was also Trump's main trade adviser during the first administration, so Trump is likely now a 'true believer' in the approach. Rickards has discussed this in some depth, and it's a modern version of the 'American System' which was in place in the 1800s with Hamilton, Clay, and Lincoln. In addition to Rickards, historian Webster Tarpley has also discussed this approach in depth. It's actually a great system for a country that wants rapid industrialization. and in addition to the US, it was used by Germany under Bismark in the 1800s.
One problem with trying to use that approach right now is that it takes a fairly long time -- more time than we have. The US debt bomb is a looming existential threat (in addition to the rapid rise of BRICS), and by keeping % rates elevated, the tariff approach will accelerate the debt bomb. As great as a re-industrialized US would be, there just isn't enough time before the debt bomb hits (3-5 years), and by keeping % rates high, the tariffs will merely hasten the debt bomb unraveling, and accelerate BRICS expansion as countries flee the US orbit. So not the right strategy for today's situation. Trump started the tariff / reindustrialization strategy in his first term, and had won in 2020, there could have been time for it to work. Back then inflation and % rates were low, and the debt bomb was not nearly as imminent.
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