The Trump Tariffs Are Here
The Trump tariffs are here... China threatens a 'justified and necessary response'... Forgive our nagging... Last call: Doc's live demonstration is about to begin...
Well, that didn't take long...
Yesterday, we noted that President Donald Trump was reportedly close to announcing new tariffs on steel and aluminum imports to the U.S.
Last night, it became official. As the Wall Street Journal reported...
President Donald Trump is expected to sign a decree this week laying out his plan to impose new tariffs on steel and aluminum...
The moves came as more than 100 Republican House members sent an urgent letter Wednesday to the White House pressing for Mr. Trump to change course. In their letter, the GOP lawmakers urged the president to reconsider "broad tariffs to avoid unintended negative consequences to the U.S. economy and its workers."
The proclamation signing, which could happen as soon as Thursday afternoon, would cap a tumultuous few weeks in the White House, where advisers have been sparring over the direction of U.S. trade policy, with the tariffs handing a victory to the protectionist wing led by adviser Peter Navarro and playing a part in Tuesday's resignation of Gary Cohn, director of the National Economic Council.
By the time you read this, it will likely be done.
We remain concerned these moves could backfire...
They're unlikely to produce the intended benefits. But the prices of goods produced with these materials could rise significantly.
Meanwhile, these tariffs risk triggering a "trade war" if other countries retaliate with additional tariffs and curbs of their own.
As we noted yesterday, the European Union is reportedly preparing to do just that. This morning, we learned that China is, too. As news service Reuters reported...
China's foreign minister Wang Yi said on Thursday that China would [respond] in the event of a trade war with the United States, but added that such a war would only harm all sides...
Wang said that history has shown trade wars were not the correct way to resolve problems.
"Especially given today's globalization, choosing a trade war is a mistaken prescription..." Wang said. "China would have to make a justified and necessary response," he said.
We'll reserve judgment until the details emerge...
But no matter how these events shake out, we expect greater volatility in the months ahead. Proper risk management is absolutely critical.
At the risk of "nagging," we'll again remind you to be sure to have a trailing stop loss or other well-defined exit strategy for every position you own... stick to reasonable position-sizing (or better yet, risk-adjusted position-sizing)... and make sure some of your money is diversified into assets outside of the stock market.
We'll also urge you to take one additional step...
Less than two hours from now, our colleague Dr. David "Doc" Eifrig will be kicking off an important event. We hope you'll join us.
That's because Doc will be leading a live demonstration of his favorite trading strategy... a strategy that's tailor-made for volatile markets.
This is the same simple yet powerful strategy he's used in his $3,000-a-year Retirement Trader advisory to rack up an unbelievable 95% win rate over the last eight years. And he'll be showing all interested Stansberry Research subscribers exactly how it works – in real time – tonight.
As we've discussed, this strategy is incredibly versatile. It can help you make more money, while taking less risk, in virtually any market environment.
It works incredibly well in big bull markets, as Doc's Retirement Trader track record shows.
But this strategy works even better during periods of higher volatility, making it an ideal addition to your investing toolbox today.
To be clear, this strategy involves options. And we know that can be intimidating. If you're like many folks, you may believe options are too risky or too complicated to learn. But please don't let that stop you from attending.
You see, Doc's strategy is far from risky. As you'll hear tonight, it can actually be less risky than simply buying a stock. And it isn't nearly as complicated as you probably think. In fact, Doc says he can teach virtually anyone – regardless of age, education, or background – to use it successfully in just minutes. He's so sure of it, he's doing something he's never done before...
As part of tonight's live demonstration, he will be showing one of our young Stansberry Research colleagues – a novice investor with zero options-trading experience – how to use this strategy to collect hundreds of dollars for herself, live on the air.
Again, this entire event is absolutely free for Stansberry Research subscribers. Simply click here to register before 8 p.m. Eastern time. We hope you'll join us.
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A busy day in the mailbag: More on Buffett's downfall... anger and confusion about tariffs... and a comment about our lovely hometown. Send your notes to feedback@stansberryresearch.com.
"Porter, I really liked your write-up regarding how Berkshire Hathaway has changed its approach. I remember earlier articles on Buffett and how he focused on capital efficient businesses, which are a great fit to insurance company investments because P&C companies are capital efficient.
"Some years ago, I learned Buffett bought a railroad and wondered what I was missing. When you enjoy outsize returns due to capital efficiencies how can you buy a capital-intensive business? Railroads are low margin businesses that take billions in capital per year on rolling stock, track maintenance and upgrades, etc. So, yes, I very much agree with your take.
"As I read your article I was reminded of a Buffett saying and I searched the Internet to confirm it. It's attributed to Buffett and very appropriate: 'When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.'
"Isn't it amazing how people don't take their own advice? Hubris." – Paid-up subscriber Mark Pittman
"Doesn't anyone see the importance of steelmills to our national security? What do you think would happen if they all shut down because of unfair dumping? Wow..." – Paid-up subscriber C.K.
"Like you, I'm for free trade and against war but I don't want to depend on China for military grade products so if that means a tariff at the expense of Lee Jeans and Harley Davidson profits then I think it's a win. I'll pay the extra $150 on my next new car. I actually expected y'all to be more like Cramer than CNN, but all I hear is a media parrot!
"Ps: What is China going to? Stop exporting dollar store crap to us? Or dump our debt? Never, they're too worried about preventing civil unrest... at any cost!" – Paid-up subscriber Ed W.
Brill comment: Rest assured, we're no media parrot... The facts simply don't support these arguments.
First, the U.S. makes all the steel and aluminum it needs for national security. According to a recent memo from the Department of Defense itself, U.S. military requirements for steel and aluminum represent only 3% of existing U.S. production.
So these tariffs will do absolutely nothing to improve national security. But they will likely drive up the prices of everything you buy that's made with steel and aluminum.
These industries' own trade associations admit they have little capacity to replace what's currently imported. So if you think U.S. companies will all suddenly "buy American," think again. They will have no choice but to continue to buy imported steel and aluminum. They'll just have to pay more for it... which means you will, too.
It's a similar story with China's consumer exports. U.S. retailers have no good alternative for many of the cheap consumer goods they source from China. They'll continue buying plenty of its "dollar store crap." You'll just pay more for it.
"I just spent a few days in and around Baltimore, MD... you all should be investing in shocks, struts, and front-end alignments, what a disgrace." – Paid-up Tricia Stone
Brill comment: You're right, Tricia... Despite sky-high property-taxes and some of the highest spending per citizen of any major city in the U.S., the roads in Baltimore are in total disrepair. Just one of the many perks of living in "Charm City."
Regards,
Justin Brill
Baltimore, Maryland
March 8, 2018