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Originally Posted by Slava
What indicates the market is in meltdown? The stock markets at all time highs? Low inflation? Rate cuts likely coming next month? Unemployment isn’t soaring and honestly, things seem pretty good for the US at this point.
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Markets are behaving irrationally, and that should be concerning. The AI tech bubble is on the verge of imploding catastrophically, and that is going to wipe out a lot.
But the chaos of Trump's tariff strategy has companies mostly biding time. The de minimus thing is pretty catastrophic for some businesses, especially Canadian companies that ship from Canadian DC's. The tariffs have largely been eaten by bigger companies while they adjust supply chains and try to figure out the best minimization strategy, or wait for Trump to figure out his final end state for them. But it's costing huge money and that isn't going to remain the same for much longer. Those tariffs are going to start being passed down to consumers directly.
For my organization it's caused hiring pauses and is eating into our revenue by BIG numbers while we're trying to build more presence in the US. So far the decision is to eat the tariffs, but the appetite for that is waning, and the more investors understand it, the less they'll tolerate that.
Tariffs as a strategy to on-shore manufacturing are not going to work. It takes far too long to bring that supply chain online domestically, and China has been working on streamlining this for DECADES. Plus China is probably one of the most consumerist countries on the planet right now.