Everyone needs to take a deep breath and wait to see what Trump's actual play is on tariffs. His cabinet is made up of a bunch of very smart businessmen who surely all know that trade wars are not a good thing. We also know that Trump's style of negotiations is always to start the discussion with some extreme position and then back off from there. Typical New York developer style.
There is no question the US has done some really dumb trade deals over the decades, and is in an undesirable situation on certain products. The Japanese and Chinese have erected non-tariff barriers of all sorts of regulations and other requirements which make it nearly impossible for some US products to compete. Countries levy VAT on many products coming in from the US which can add up to 20% in some cases to the cost of American products. The Chinese demand access to the technology, or other business information to let in a US company which keeps out some US companies. All of these things are worse than tariffs in that it is not just a matter of pricing, but these are outright bars to getting anything into the country in some cases. Or look at tech companies like Google and Facebook which are now being subject to all sorts of regulations and fines in the EU, like Apple is in Ireland. These are clearly meant to create a non competitive cost to American tech giants because there are no similar competitors in the EU.
It is yet unclear what will happen, and how it will all unfold. In the past the US has backed down when faced with retaliation when we have imposed steel tariffs, and so US steel companies suffered. The Chinese use their giant state owned companies as a place to employ millions of their people even though the companies operate very inefficiently and poorly. The Chinese government just subsidizes them to keep people employed. It is the main reason there is so much debt in China. Much of it has gone to the state enterprises. As a result the Chinese sell steel and other goods at below actual cost in many cases, and are dumping. Apparently the WTO has not been an effective governor of this sort of non competitive action.
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Joel Ross
Joel Ross began his career in Wall St as an investment banker in 1965, handling corporate advisory matters for a variety of clients. During the seventies he was CEO of North American operations for a UK based conglomerate, and sat on the parent company board. In 1981, he began his own firm handling leveraged buyouts, investment banking and real estate financing. In 1984 Ross began providing investment banking services and arranging financing for real estate transactions with his own firm, Ross Properties, Inc. In 1993 Ross and a partner, Lexington Mortgage, created the first Wall St hotel CMBS program in conjunction with Nomura. They went on to develop a similar CMBS program for another major Wall St investment bank and for five leading hotel companies. Lexington, in partnership with Mr. Ross established a hotel mortgage bank table funded by an investment bank, and making all CMBS hotel loans on their behalf. In 1999 he formed Citadel Realty Advisors as a successor to Ross Properties Corp., focusing on real estate investment banking in the US, UK and Paris. He has closed over $3.0 billion of financings for office, hotel, retail, land and multifamily projects. Ross is also a founder of Market Street Investors, a brownfield land development company, and has been involved in the acquisition of notes on defaulted loans and various REO assets in conjunction with several major investors. Ross was an adjunct professor in the graduate program at the NYU Hotel School. He is a member of Urban Land Institute and was a member of the leadership of his ULI council. In 1999, he conceived and co-authored with PricewaterhouseCoopers, the Hotel Mortgage Performance Report, a major study of hotel mortgage default rates.
