Brad Setser
speaker
466 appearances
2 recordings
1 series
first heard Nov 2024
last heard Apr 2025
Brad Setser’s voice in public audio — every appearance, attributed to the second.
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Appearances
That's just fundamentally a different vision.
I think it's a a more costly form of disengagement.
There are two potential arbitrages that have opened up.
If Wednesday night is maintained.
So the first is
There are a set of countries, generally countries which have now relatively balanced trade with the US, that only got the baseline 10% tariff.
So if you reoriented uh your supply chains and took the increase in shipping costs and found a bunch of say workers in Brazil, you could employ those workers in Brazil to put together components from China and send them to the US and only pay a 10% tariff.
That's better than Vietnam's 45% tariff and the 55% tariff ballpark that China that any good from China faces with some goods facing higher tariffs.
So opportunity number one is basically move.
production or at least final assembly to countries that already have balanced trade with the US and thereby only have a ten percent tariff.
Note the irony that if these countries become centers for final assembly, bilateral trade uh will no longer stay balanced.
It'll quickly uh shift.
The other big uh e exception, again, for now, and it doesn't apply to autos and it doesn't apply to steel and it doesn't probably won't apply to pharmaceuticals and it probably won't apply to some other sectors.
Is that for now, and I mean I do find it a bit shocking given how much emphasis President Trump has placed on Canada in the first two months of its administration, for now.
Most trade with Mexico and Canada outside of autos is still relatively low tariff.
It has to be US MCA compliant.
You can generally achieve that.
The US MCA compliance, uh yeah, a lot of people weren't doing it because there was no advantage in say electronics, because electronic tariffs were zero inside US MCA and zero for Vietnam.
Now there's a huge incentive to be USMCA compliant.
So if you can do USMCA compliant production assembly in Mexico, and there's no really right now, but it'll probably change over time.
Showing 41–60 of 466 · page 3 of 24
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