They can, but would incur a tariff. Tariff is based on product of origin not the country it is coming from. A swiss bar coming from London is still a swiss bar from Customs point of view.
@ttmygh The three year timeframe makes sense and I agreed with a great majority of other points. But I am left unsure of whether a world with massively increased automation and lots of old people who consume much less is ultimately inflationary?
@ttmygh Above 6% nominal gdp growth is difficult to achieve and only occurs with high inflation. But the other question I would have asked is about the huge potential deflationary impact of AI, blockchain tech and robotics.
@OldManLefty1 The SWF value ticks over live in NOK on their website:
https://t.co/fW0FDw8K1I
It’s about 10 and change to the $ - falling having topped out at an all time high 11.6.
@LukeGromen I’m a big fan & subr.But boiling last few weeks down to the NATO quote is to miss big chunks of LT strategic impact on U.S. & its allies re way this has been handled. Aligning on stop the war is distinct from waving a white flag & giving up yr strategic position in a heartbeat.
@ttmygh@EpsilonTheory A timely episode, thanks both. I was moved by https://t.co/oaQfia5lkl point you made about sport Grant. For our generation yes. As a Man City ST holder I can attest to community vs success. Record attendances in our div 2 days, we’ll have a great laugh if we go down again!
A critical item in Friday's "America First Investment Policy" White House memo has gone completely unnoticed. The administration is considering terminating the 1984 US-China tax treaty.
Currently, Chinese government entities (who hold almost $2 trillion in US assets) pay ZERO tax on portfolio income from US investments, while bond interest is exempt from withholding for all Chinese investors.
Terminating the tax treaty would restore the statutory 30% withholding rate on Chinese investments - a dramatic shift that would fundamentally alter the economics of Chinese capital flows to the US.
The memo's language is explicit: "That tax treaty...led to the deindustrialization of the United States and the technological modernization of the PRC military. We will seek to reverse both those trends."
In our reports, "The Sovereign Wealth Effect" & “The Dollar’s Dilemma” we predicted this move writing, "until 1984, the U.S. maintained a 30% withholding tax on foreign interest income" and that reimposing this tax could be a key strategy for addressing trade imbalances.
First, it reduces the attractiveness of US financial assets for Chinese investors, helping redirect capital flows toward trade rebalancing.
Second, it potentially generates significant revenue: $360 billion annually from foreign holders of US securities (If done on a global basis).
The US has already set a precedent of using withdrawal from a tax treaty as a policy lever when it withdrew from the US-Hungary treaty in response to Hungary’s posture in the OECD negotiations.
This move, alongside the new US Sovereign Wealth Fund, confirms the administration is implementing a sophisticated strategy targeting capital flows rather than just using tariffs. It's precisely the dual approach we outlined in our report.