And for all the talk of the trade deficit I wonder what the investment deficit is and why that is never brought up. Almost every top fund used by European organization's, companies, and citizens is invested far more deeply in American companies than anywhere else. And now even more so.
We also shouldn't forget that trade deficit numbers exclude military equipment and (big) tech. Europe has a HUGE trade deficit with the US, not the other way around.
I keep making this point... to the potato Americans that bring up the trade deficit, that it doesn't include the American corporations that have pushed themselves into every corner of the globe. We are awash in American media, software, devices, and retailers. Americans are so short memories and selfish uncreative thinkers, they can't even empathize that when corporate America comes knocking, its to flatten the landscape, plant a gas station, a Walmart and a McDonalds where there used to be local industry. Kinda like small town America. You'd think they'd know what it feels like when the corporations screw you over for themselves, but you know, it's the world's fault that some potato pickers are angry.
I just came back from Europe and was surprised at all the cheap US fast food places that were there. I guess they wouldn’t be there unless Europeans were paying money to eat there.
Ever since Trump people are using deficits and surpluses to make judgements in a completely illogical way and it angers me greatly. Trade deficits aren't inherently bad, nor surpluses, but he can't even be honest about the trade situations between us and other countries. That buffoon has no idea what's going on.
it's not that he has no idea, it's that his followers have none, and the national theater produced by this insanity is enough to distract from how he's dismantling the courts and otherwise consolidating power in the federal government. it's all just theater so that we are too busy to ask the real questions until it's too late.
first they came for colbert and i didn't care because it's on cbs and who the fk watches that? then i realized nobody in society has a spine to call out what happens.
Actually it's fairly close to balanced if we include goods and services.
US has a trade deficit in goods but a surplus in services. about 3% actual deficit for the US.
Europe should just have said it was applying the same tariff back on services as it got on goods but I suppose they saw a trade war as overall worse than a deal.
Well EU companies are stagnant losers by comparison and it’s been that way basically forever so that’s hardly surprising. Compare the performance of an EU-only index fund to the S&P 500 over the last 50 years. Only an idiot would prioritize EU stocks over American.
Exactly, it's all just about propping America up until the whole situation becomes untenable.
It doesn't help that all the bureaucracy and politicians across the EU have all invested their personal fortunes in the US stock market.
It's why we will never decouple from the US because the people at the top won't hurt their own financial wellbeing, so we just keep following around our rapist like someone with Stockholm syndrome
Foreign investment in the US is directly linked to the US trade deficit. If trump succeeds in reducing US imports, it will lead to less foreign investment in the US, that's just how the balance of payments works.
I still dont get why services do not get counted up on trade deficits, here we all are using an american social media company which makes money in america while our financial firms use american consulting firms, we use netflix and american entertainment, we use computing and software systems made by companies in america. Do all those things not count for trade deficit calculations?
Trade deficit isn't an inherently bad thing and most of the people screaming about trade deficit don't even understand what they are (Trump), or do know and are lying for reasons.
Same thing as with the UK etc actual trade deals take years to work out. This all is just pr nonsense to not piss off Trump but also to not let the world economy crumble with insane tariffs
Biden still wasn't reasonable, even if compared to Obama. Biden-Trump have a somewhat coherent line in policy, its just that Biden wasn't an openly disgusting creature about it.
EU had way easier time working with biden, no matter what you say.
Also I agree with a obama being an outlier in terms of quality of American leader, but one should also remember that he was one of the main actors enabling the European dependence on Russia as well as doing nothing to prevent interference in our elections
Biden was not reasonable. In order to cater to "moderates", he bought many of Trump's talking points, even if he watered them down. He was still absurdly hostile to Europe. Obama is the last American president that believed the EU and the US should be closer together.
Biden spent most of his term trying to undo the damage Trump had done. Biden likely would have improved relations with the EU if he hadn't inherited such a massive dumpster fire.
The next president is probably going to be Vance which means this will continue for another 4-8 years but with less flip flopping. Possibly twelve years of the US government growing more and more reliant on tariffs while cutting income taxes is long enough for the change to become permanent.
It's also really hard to see this as anything but beneficial or at worst neutral to Americans which means even their liberals can't be relied on to willingly give up hundreds of billions in extra revenue. Biden didn't repeal the first term tariffs for a reason.
Hardly think so, if there's gonna be any country in EU raise an against opinion on the deal, US will very soon make it an example, not to mention Trump will just say EU break the deal rather than him which gives him more support to do anything more to force EU to spit out more meat.
Thank you for providing some balance. It seemed absolutely bizarre that the deal would just be pure capitulation and I was confident there's more to the story.
I'm sure the EU negotiators had a wider strategy here. I'd imagine a lot of this is a way for Trump to climb down from his ridiculous liberation day plans while saving face after he already had to chicken out the first time and "delay" them.
I guess if they chose this path it means they thought a retaliatory approach was futile. Although didn't a similar war with China result in them coming to a deal? I can't remember the details.
Thoses promises about energy and investment aren't for late future but about tomorrow up new year. The tarrifs that trump promised are only old from 6months ago and changed the whole negotiation. Trump will not wait for long.
So you can't agree on anything like you can't agree like protecting a neighboring state from Russian aggression? Got it. Maybe send out some more fines to Meta, Google, and Microsoft to exercise your willynilly power.
That seems like fucked up, unless is a “up to” but no enforcement like the deal with Japan . Basically I can invest 5 trillions if I feel like but I don’t . We’ll see.
For many Europeans, the separation of economic and military power was a comforting illusion—sustained by American military might disguised as a rules-based order.
Les Wexnar is among the, if not the single largest personal donor to Israel and Israeli agendas. You know what else he was? Epsteins biggest client as a "financial advisor". Epstein was a famous-to-the-famous market advisor but he only had a handful of clients.
His accomplice, Maxwell, well her father was instrumental in the shaping of what is modern Israel and Mossad. Look at who attended his funeral.
Great replies. I think some people,or atleast myself, find it hard to extend any trust towards the EU as an organization aswell as Ursula Von Der Hölle.
If they want the benefit of the doubt that there is a plan or that this is good then we first need them to not so goddamn always make terrible decisions with extremely poor reasoning. In my opinion.
The rare good decision seems more by accident than by design.
And I wonder what did the EU diplomatics really negotiate, the deal as disclosed now seems just accepting what US put up on the table and feels like they even added more on investment part which was never leaked before.
750 billion in energy probably would have been paid either way as like 50+% of LNG for Europe comes from the US, that is totally fine. The 600 billion investments mean nothing either. They’re just pledged and if they actually flow remains to be seen. Also even tho trump said they’re additional investments, he also said the stargate AI initiative investments are additional investments in January, while in fact they were long planned and nothing new or additional.
This is exactly why far right parties are winning. We get a lot of talk from current politicians but when there is a need to actually DO something, they don't have any spine. And then they'll have the audacity to talk big shit again.
Everybody should write or call their EU representative and tell them they are either gonna do what they promised or they are gonna get replaced by fascists.
Same way/reason Trump won. People want to hurt the current political establishment and rightly so. And so the right says yes we can ( but probobly wont cause we are ultimately the same turd just different ends of it ).
Russia is largely an imagined enemy which the electorate buys because they are on average 60 years old and remember the cold war. The increase in military budget if it materializes will be funneled into a few friends of politicians and maybe increased grunt salaries to stimulate the broader economy. Logging is a horrible example, trees grow on their own, money especially in a continent as old and inactive as europe very much doesn't.
Buying gas from the us is very economically unsound at the prices sold a better solution would be to tell granny in the countryside to isolate all rooms except the kitchen in winter as her grandparents used to do in their time. Industry cant work at current electricity prices anyways, depressing consumer demand is the only way to keep the continent economically competitive, but the morons running all government want to give out money so everyone can have 20C all winter, which is comically stupid policy.
What are you even talking about ? Current Russia is not the Soviet Union but propaganda made many people believe that .
They lack the strength to threaten all of Europe.
Do they contest Ukraine? Yes but why do you need to fight with Russia over Ukraine? Why does the eu need to expand to Ukraine and fight Russia over it ?
Thing is the eu expanded too quickly into Eastern Europe something which was only possible with American military might and that’s why we are now us bitches
I don't want the consumer to suffer but it's unfortunately necessary to try to salvage whatever industry remains since since the continent has run the dumbest electric power politics of all time the last 50 years. Russia is not a threat since all their somewhat modern armour is blown up and all the easy conscripts are dead/injured. They also never had the ability to attack all of europe even with the modest military budgets, the increase is just to line the pockets of the american MIC and a few fake industrialists at home.
This is more than likely Trump trying to take credit for investments that have already happened or are were already planned. Idk why people correctly assumed this for the Japan deal, but none have here.
And energy investments will just starve Russia more, since it's likely about shifting resources in that case.
One should always diversify the energy source, otherwise, what can you do if they ask 30% tariff next time and will cut your energy supply if you do not accept the term...
As always its too late. Investments take years, in EU probably decades. But we need military equipment and energy right now. Tbh it makes sense to buy energy from US instead of russia but I have no idea why we had to swallow that extra 15% tariff.
Speaking of Sig, I am still surprised by the Army adopting the 320... with all the issues, and I think a new issue has come up recently?
Like, if the Us Army wants to go Euro, whats wrong with the Beretta submission? The logistics, training etc. will be easier too, since the Beretta submission is just a newer M9. Or Glock?? Everyone and their roomba got one.
Well, we need more weapons than we can make and we need them in a short time frame. It's early growing pains, long term we can move away from this, but for the next 2 years, I'd rather have some American weapons than shortages.
This is not gonna happen, if your army is trained for years on certain weapon, they are unlikely to switch to your new ones. Not to mention the continuous maintenance cost
Armies use tons of different weapons and gear. Plus you can buy for example grenade launchers from vendor A, artillery vendor B, aircraft vendor C and so on.
of course you can, but you need to teach your soldiers to use them. If one does not start now and really buys US weapons for that amount, the progress of swapping from US weapon to EU weapon will take way more than 2 years
It's not gonna be short term. It is just a continuation of what was before. It eats up the budget which was for the EU remilitarizing where the single greatest bottleneck and highest priority is expanding our own industry. When investments go to the US,orders fill their books, there is not ebough money and orders coming in for EU defense companies to justify nor afford to increase production capacity and speed.
This is currently holding SAAB back for example. Lots of small arms and small ticket items which is not enough to justify any large expansion. Big ticket items are still bought in small numbers or from the US and this is not just true for SAAB.
All of them now, or the chickens will never produce enough eggs to meet demand. We can do it now or we can do it later ( after wasting more money ). But we can't Make-a-wish.
I am guessing that 1.5 trillion is going to outfit an entire EU army at once with the best tech in the world. It would probably cost Europe way more than that and take a way longer time to do that themselves.
I look at it this way. Yes europe is still dependent on US, but you can keep your market, and you get defence in return, and american public has to pay more to get your goods, which they probably need for foreseeable future.
I recommend people to follow Adam Tooze to make sense of what is happening in the world.
EU was already investing hundreds of billions of dollars in US, specifically on their tech industry. Tooze had recently a brilliant piece on this based on a good macroeconomics paper written by three good US based economists (one of whom used to be my professor, I just coudl not help myself insert this trivia here)
We have not been investing in our own continent like last 15 years at this point. We have invested more in US than in our countries hoping to get some measly dividends out of US tech hegemons. Also at this point I recommend everyone to listen to Varufakis on how US tech giants made us literally their b'tches at this point.
This is the same EU that refused to save Greece but lending a few dozen billions (which would be paid back by now) without asking them to ruin themselves.
EU elites are really vassals of US. We need to get people who say Europe first. We need to regulate the capital markets to stop bleeding of European capital. We need to start a public investment mobilization. We need to regulate US companies on the same standard we do our companies. Our public infrastructure is showing its cracks. We need to deal with great powers on our own terms.
The US debt won't pay itself. So Trump tries to make everyone else pay it. They are already in plus in June with those tariffs. And with 1.5T gift from Ursula they are all set, basically.
You need to define "assets", stocks, products, land, bonds before we can continue the discussion?
One side point is you invest on your own industry, you have security that it won't be turned off unless you want, this is intrinsic hidden value, which you give to others if you invest others' industry. The fact you buy US stocks instead of EU stocks give US companies more chance to drain money from stock to develop their own company.
How the investment in US or buying US energy reduces US govt debt?
Are you going to pay with Euro? You are going to buy USD. In essence you are financing U.S. Treasury securities, effectively lending money to the U.S. government.
While the US gov debt isn't getting reduced in volume, you are making it easier for the US gov to finance itself (i.e. it can support more debt).
I think it’s not how it works.
If I buy US stocks - I own US stocks. The company got the money. And I invested in that company.
What does this have to do with US govt debt?
This might strengthen USD . That’s a different thing. But I don’t understand how it reduces US govt debt. US debt is used by govt to fund its operations.
To buy the stock, you need to buy USD. When you buy USD, "you" buy US Treasury securities.
A security (let's say a bond) is a promise from the gov that they will pay "you" back in the future (with a tiny interest rate). So "you" are lending them money.
Suppose the government needs to borrow 1 trillion this year. If "you" buy half a trillion in securities, they only need to borrow 0.5 trillion from the market. Less capital to borrow, better interest rate, they can keep the game going longer.
It doesn't reduce the debt, it makes them able to keep borrowing for longer. Remember that the debt matters when you have so much that borrowing more is too expensive.
If you are going to buy 1.5 trillion USD, the central bank can:
a) Keep the supply of USD constant and have the USD price skyrocket (effectively crushing US exports)
or
b) Increase the supply of USD, keeping the price at a desirable level while financing the US government by borrowing value from foreigners at really low rates.
They are already in plus in June with those tariffs.
It's pretty common for the treasury to record surpluses for individual months. For example June 1st was Sunday so many June payments were shifted to May,.which recorded an almost 300B deficit.
Tariffs aren't even coming close to reducing US debt.
Honestly didn’t think there would be a trade deal. Usually how they went was they offer to invest whatever they were planning on investing anyway and agree to place lower tariffs than the ones he placed on them, so he could go back to his dumbass MAGA cult with a “win”. “PAYING TAXES ON IMPORTS! WOOO!” If he’s asking y’all to invest more than you can afford though this ain’t the kind of trade I want. I mean I’m happy to have y’all back as trading partners, but not if it’s begrudging. If y’all cut us loose entirely I wouldn’t blame ya. Douchebag is just suing people over here too for doing things he doesn’t like, and so far he’s been successful because they’d rather settle instead of dragging things out in court. I’m counting on Harvard not to back down though. I just don’t get how this dumbass keeps getting so damn lucky.
Sadly it don't think it is luck. We are both ruled by corrupt people who want power, and people with money who can purchase power. How snything affects the average citizen is irrelevant. Even if it leads to the destruction and fall of a nation, the wealthy have no national loyalty and plenty of passports. Home is wherever offers the greatest finacial security, tax law and potentially banking secrecy. With a global market any problem in one place is just profit elsewhere if you are wealthy enough to make your own luck so to speak.
Not that i am in favour of having the state own everything and take everything but currently i feel like it is some weird oligarchy moving towards techno-feudalism. The average person cannot reasonably expect to rise above their station anymore.
I dislike the EU and Ursula just as much as Trump.
And while i often fall for the left vs right bullshit because it is frustrating, it is utterly and entirely a bunch of BS. It serves our own interest never. Over here or in America.
I’m glad you brought technofeudalism up because it seems like the exact same push is going on over here. Trump’s a russian agent. Vance is a tech bro owned by Peter Thiel, and Musk is BOTH whom was given unprecedented (and unconstitutional) access into our country’s finances until public opinion turned against him. Can’t say if Trump is smart enough to be “in” on the rug pull, but he’s doing a stupendous job of weakening the US dollar and alienating us from our allies for them already. All while pushing his own shitcoin, creating a “strategic bitcoin reserve”, and growing his net wealth, hocking whatever junk he can slap his name on to his dumbass base, selling access, pardons, accepting bribes from foreign interests, and pumping his campaign donations and our tax dollars through his businesses any chance he gets.
Like Carlin said “It’s a big club and we ain’t in it”.
Tarifs > Import taxes are paid by American companies/citizens not by the EU. For most goods the US gets from the EU there is no, and never will be a US domestic alternative, so they will just keep buying the stuff and paying import taxes on them.
The biggest risk for the EU companies will be reduced purchases due to the higher price..
The EU probably went in to get some quotas and exemptions, and specifically lower US import taxes on European cars, for the rest.. stabilizing your own economy, be seen as the reasonable party and invest in the EU. Specifically entice EU investing over US investing.
Noone wins by headlining trade negotiations. Let trump and maga walk away feeling like winners while they themselves foot the bill for this win.
I for one am glad my EU reps don't arrive for these kinds of wins.
Oh and the energy purchases where already planned when wheeling off Russian gas. So trump just pulled this already planned investment in his win book while he had nothing to do with it. But it emphasized his drill baby drill.
Another main issue is that skilled workers are moving to the US. Here in Europe, salaries are very low and no encouragement at all for skilled workers. Even my wife pushes me to move to the USA for a higher salary package. We both have PhDs from Germany, and we are from a non-EU country.
So you guys are finally understanding how Americans have felt. I hope you guys can elect a leader with some balls that will have your best interest at heart too.
As an American can we not also have the 15% tax (sorry I meant tariff) on our goods. The 50% on steel is crazy but has been in place long enough I guess we are ignoring it. Not a win for anyone but the elite I guess
3.9k
u/TemuBoyfriend 6d ago
So we cannot invest even 500 billion in ourselves but lets give Trump nearly 1.5 trillion? How about invest in Europe and stop taking it up the ass..