About those tariffs; bad debt; rates after automation; and more

Reporter: Vested staff

This week’s Vested Suggested features stories that the team at Vested is reading and thinking about to begin the week.

This roller coaster isn’t any fun: President Trump, in a reportedly unplanned policy announcement, said last Thursday that the White House will impose tariffs of 25 percent on imported steel and 10 percent on imported aluminum. A Saturday Tweet suggested he could assign new tariffs to European cars as well.

This obviously roiled markets late last week and today, with a top equity analyst estimating the steel tariff alone could cost both GM and Ford $1b each. Then, by today’s close, the markets climbed after Trump signaled (on Twitter, natch) that the tariffs are in essence manufactured leverage against Mexico and Canada for the ongoing NAFTA renegotiation. Still, “the administration is expected to release details of the plan this week, or possibly next,” The Wall Street Journal reported.

So the tariffs dominating the economic news right now are not a sure bet, but they’re also not off the table. Call it a definite possibility. Like it was last Thursday morning.

Quotable: On proposed steel tariffs, “Trump isn’t doing anything radical. He’s just doing it in his own way, which makes it look like it’s really, really radical,” a source told Quartz.

Bad debt: Signaling that consumers are taking on more debt than they can handle, missed payments on credit cards at small banks has risen sharply during the past year, The Wall Street Journal reported. But delinquency rates alone don’t tell the whole story. If the banks in question are making more money off interest by, say, loosening lending standards or expanding their customer base, than they are spending on write-offs, this trend, while still not positive, could be perfectly rational.

Feature or bug? Big brands don’t know how to game Alexa. “For decades, the makers of packaged-food, personal and home-care brands have bought shelf space at retailers like Walmart and Costco that guarantee them nationwide exposure. They have poured billions into branding to make their products instantly recognizable. … Voice shopping, which currently offers customers just one or two product options, could chip away at that tried-and-tested model.”

Interest-ing: How might automation affect interest rates? A bit like this: “Bain estimates that by 2030 American companies will have invested as much as $8trn in automation. As companies scramble to borrow money in order to buy machinery and robots, the resulting investment boom will drive up rates. … [A]fter the initial interest-rate surge, the increase in saving and the hit to demand could cause interest rates to plunge again, falling back to zero in real terms.”

Follow-up: Many financial services companies are holding back reports on equal pay because they are so remarkably bad at it, wrote Rosamund Urwin in The Sunday Times (UK).

A study has found: The once-subtle art of management creeping on employees to make sure they’re doing their work has, with technology’s aid, been mainlined into the modern workplace. Conventional wisdom suggests this is a bad thing. But new research suggests that allowing management to surveil them is one way labor can insulate itself from automation.