I think an under-appreciated aspect of all this is the complete schadenfreude from everyone. The story goes tariffs only hurt yourself but then we see retaliatory tariffs in response. "Oh yeah I'm going to cut off my leg to show you whose boss!" Very funny.
And then you have people predisposed to higher-taxes who are contorting themselves over the economic cost of this tax while supporting significantly more economically destructive tax policies. Very funny.
And, of course, the opposite. Republicans in my state are campaigning on lowering taxes and inflation while also defending tariffs! Very funny.
That's how the story goes with someplace like China. If you impose tariffs on imports you have no cost-effective alternative for, yes, the tariffs will only hurt the importer, because buying habits will not change. (I suppose Chinese cars are a big exception here)
But in this case, the math is probably different because none of these tariffs affect products the US must realistically buy from Canada (e.g. oil and potash). So Canadian exporters will feel some pain and American importers will feel some pain.
What should Canada do in this case if the two can't come to a trade agreement? Continue to import from the US at the same rate as before?
Canada can apply export taxes on things like oil & gas, and bring americans the pain they would feel if american tariffs were applied, except Canada would keep the taxes.
Alt text: "You legs may have a comparative advantage at running, but we arms have a competitive advantage at swinging hammers, so unless you accept that we're the dominant limbs and stop hogging the oxygen, that running advantage won't be around for long."
Ricardo's comparative advantage result is contingent on the assumption that capital is not mobile across borders. This was a good assumption in 1817. Is it a good assumption today?
Furthermore, he's very up front about this in On the Principles, and from this information you can calculate the exact number of people who read the damn thing between the person repeating the talking point and the person originating the talking point.
It doesn’t really matter what Ricardo said in 1817: every US academic economist surveyed in 2018 by the Kent Clark Center disagreed that US aluminum and steel tariffs would increase the welfare of the American people ([0]), and this is with the benefit of >200 years in advances in economic scholarship and analysis since Ricardo.
Good industrial policy is made from positive economic actions. State investment, interest free loans for factory expansion, strong antitrust law, subsidies and tax reforms that promote industry growth instead of shielding it from competition.
Tariffs can be a good way to pay for this but they are always negative for consumers, and most of the time also net negative for domestic industry. Hard quotas and trade bans put up a wall that completely removes buyer choice and turns everything into a corrupt seller's market.
The American tradition is using negative tools because of their anti competitive effects. Car makers really don't want people buying cheaper cars from overseas so they lobbied for the chicken tax. In a country where funding from corporate super PACs is the most reliable way to win elections no president will change policy if it means losing a big sponsor.
The fact that he has two and a half years left in office, along with Congress not willing to do anything, means industrial policy cannot be done. We can certainly try again when something changes, whether that’s the required turnover in Congressional representation (maybe midterms, maybe two more years from now) or federal administration regime change (January 2029). “We are at an impasse.” Until then, the country keeps burning down, as voted for by the electorate.
I do not see another path, but perhaps I am mistaken. I am always open to being corrected when wrong.
If only all those academic economists were as loud about how to keep tech and industrial capacity from withering and moving to China, as they are with their criticism of attempts to prevent that. They don't even complain when China engages in protectionism, dumping, and general "market distorting" subsidies. Listening to them, you'd never learn that none of the advanced economies got that way by following their laissez-faire trade prescriptions [1].
And of course they limit their analysis to "welfare of the people", first-order, ignoring how loss of industry will (and is already) come back to bite us. As if our only interests were those of passive consumers.
[1] " ... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules." - https://en.wikipedia.org/wiki/Comparative_advantage#Criticis...
Many academic economists are loud about those. It is the politicians who pick and chose the ones they prefer and want to promote. Just see how Laffer and his "Laffer curve" have been embraced by the right to cut taxes despite having no evidence at all about the shape of the curve. An idea literally born during a cosy dinner between Laffer, Rumsfeld, Cheney and a WSJ journalist.
Economist here. Yes! Politicians choose to promote certain economists. I’m tired of answering questions about Modern Monetary Theory, which Bernie Sanders chose to promote. The creator is from an economics department ranked 259th. It’s a duuuumb theory.
I don't know it makes much difference. People could walk from country to country in Europe back then and still can, likewise you could move money and equipment and still can.
The limiting factor on deploying capital abroad was never the ability to move gold or even equipment, it was the ability to have faith that over many years the remote authorities would continue to enforce your remotely held claims on the operation.
But that's been true for your locally held claims as well, and even more so in modern times with tax rates hovering around 50% in many European countries. It's just that they take their cut every single month, instead of doing so at will.
> The present understanding is that the tale's moral supports team effort and recognition of the vital part that all members play in it. In more authoritarian times, however, the fable was taken to affirm direction from the centre.
A current account deficit is a capital account surplus. Persistent deficits shift the balance between Asset vs Export sectors, dumping the export sector and pumping the asset sector. Put differently, we can pay for imports with shit that we make or shit that we own -- and this has implications for people in our country who make shit vs own shit.
A better analogy for the trade deficit would be sitting on the couch slamming potato chips and observing the shift in our body away from muscles and towards fatty tissue. Should we be excited to see this example of specialization in action? Is it wrong to want to fix our diet and push our body composition in the opposite direction?
It’s reasonable to want to bring back american manufacturing. But the random, temper-tantrum, market-manipulation tariffs are not going to do that. America isn’t going to all of a sudden produce tonnes and tonnes of xmas decorations every year just because of a 50% tariff on all chinese goods that may or may not be around in 6 months. All that’s going to happen is xmas decorations are going to be more expensive.
An actual plan would be targeting specific industries where america has the ability to scale up, and having congress pass tariffs that slowly ramp up over time to allow a smooth transition.
The insane thing about this discussion is that America does still manufacture a huge amount of products that are used all over the world, and the people that make them are paid salaries that are the envy of the world! Many of the people working in this industry are posting on this site!
It's just that because those products don't come in boxes anymore but are distributed over the Internet people think they don't count?
It's one hell of a gamble to rely so much on software "products", while anything that software actually runs on is made in Asia. Building up a software industry will be a lot easier than it was to grow the industrial and tech ecosystem. And that ecosystem will give sweetheart deals to homegrown software, while extorting yours. Sorry, did I say "will"? I meant it's already doing so:
Apple CEO Tim Cook "secretly" signed an agreement worth more than $275 billion with Chinese officials, promising that Apple would help to develop China's economy and technological capabilities - https://www.macrumors.com/2021/12/07/apple-ceo-tim-cook-secr...
The balance of trade accounts for "export of computer services," because of course it does, and the account is in deficit in spite of these, because of course it is. The insane thing is that you tried to offer this "insight" without even bothering to check!
My point is that people are over focusing on manufacturing of physical goods while ignoring all the other aspects of the balance of payments, or indeed the internal US economy.
(Also, if you're trying to reduce imports, that messes up the balance of payments of your trade partners who get mad, and if you do it obnoxiously enough then other countries start substituting away your exports)
My read of "manufacture a huge amount of products" was that it's not even about software. America is still the world's second largest manufacturing economy, and per capita produces more than China!
It isn't just about that. You need industrial policy. And not just stuff like the CHIPS act.
In China a small outfit can get financing and open a factory anywhere.
You can't do that in the USA. You are too small for the lenders or investors who do such things to care yet too risky for traditional financial institutions to risk anything on you.
If I want to buy a couple of CNC machines and start making a product in my garage I have to hope I have enough room on credit cards to do it because I cannot get the money from anyone. Doesn't matter if I have a good idea. Doesn't even matter if I have some initial customers/orders.
If the government is going to piss away money then at least piss it away on that sort of economic activity. If you can present a coherent business plan or product design then lend people the capital secured by the equipment and/or IP with generous repayment terms. Set progressive milestones to unlock additional financing... for example give a gov backed credit account at SendCutSend. When you have an engineer's report on the prototype to turn in you unlock financing to order your first CNC machines. Develop a pipeline. A script to follow. Something a person can follow to get big enough to become a real business.
Grant time to pivot if necessary. If that doesn't work then ultimately the government takes possession of the equipment. Make it clear so long as you return everything in good working order then in X years you're eligible to re-enter the program. Then hand that equipment over to the next person in line.
Wait. I remember reading about this. Doesn’t SBA 7a cover your use case? I’m sure there’s an SBA loan category for you. It’s backed by the machine. Recently they changed the valuation of things or something.
SBA loans are just regular loans from a bank, except with government backing.
You need a high credit score (680 at least) to even have a hope and 10% cash to put down if not more.
Unless you can prove experience managing a business forget it. You have to demonstrate other outside income (hope your spouse works a good job) or enough cash in the bank to cover living expenses for a year or more.
If the business is going to be a new venture you have to put together financial projections that demonstrate how you are going to start making money and it had better be quickly. You will not get 2 years to ramp up. And if you fail to meet projections they can call in the loan.
Oh and by the way: you must sign an agreement to take unlimited personal liability for the loan. So if the business fails they get to take away your savings, retirement, even your house. In fact if you don't have significant assets they will put a lien on your house as part of the loan closing!
In China if you want to start a factory in an area the national government lists as desirable the state-owned bank will almost shove money into your hands. Repayment timelines are extremely generous. You mostly don't take on personal liability - instead they focus on the assets, land rights, etc. That is if the business starts to fail you will own machinery, a lease on the land, and/or a factory building so they are content to secure the loan against those things.
When the state bank underwrites your loan in China they only care that your project is technically viable and you have some kind of plan. They assume you will find a way to be profitable and worst case they can take the factory away from you and give it to someone else. As long as your plan makes sense - if your plan says you're going to make robot arms but your plan doesn't mention buying any CNC machines or hiring any electrical engineers you will have difficulties. And if you want to build a factory to make lathes expect serious pushback - the Chinese government considers that sector to be "over-capacity" so they are reluctant to finance new factories for such things.
Not that it matters because unlike the USA if you aren't a Chinese citizen then you can piss right off because you aren't going to be approved for anything and you aren't allowed to own property anyway. Not that any court would ever side with you in any case either.
The entire philosophy is different and I'm saying we should adopt the Chinese philosophy. Instead of letting risk-adverse private banks make the decision the government should make the decision. And instead of focusing on credit score and making you sign an unlimited personal liability contract - do the opposite and secure the loan against the actual factory, machinery, and assets. Build a network of such so if a business fails you can turn around and offer it to the next suitable applicant who can bootstrap their business instead of selling everything for pennies on the dollar at auction.
Huh, what you’re describing is what I assumed it was. I thought it was secured against the asset itself. I can see why they hesitate somewhat. In the US, this is usually a covert bailout for a vote bank. Grant loans for their machines and then the state takes possession and discharges the loan and you have a bailout in disguise.
But you’re right. Everything is in execution and for critical manufacturing it makes sense to pay the fraud price to boost it.
An actual plan would look like the IIJA, IRA, CHIPS Act -- what Biden was doing, but act larger scale. The problem with globalization is not that free trade failed to create a surplus, it's that 150% of the surplus went to capital and -50% went to labor, which can and should be fixed with tax and spend. Instead, of course, we didn't tax capital and we spent the money on stupid wars. That said, good industrial policy includes tariffs too, but Democrats knew this! Biden wasn't allergic to tariffs! The 100% EV tariff (and EV subsidies and battery subsidies) happened during his administration. Aside from the fact that giving Elon everything he wanted was a massive political miscalculation, it was good industrial policy, we just needed more of it in order to affect the macro.
That's the tragedy of it -- Democrats in office understood the macro picture and worked diligently and intelligently to fix it, the spurned labor interests in the MAGA movement understood what had hurt them and correctly rejected it, but the former didn't know how to message to the latter so a demagogue swooped in and here we are.
The gonzo free-trade rhetoric of the Clinton era should never have happened, second best time to get rid of it was 10 years ago before Trump I, third best time was a few years ago before Trump II, but the fourth best time is now.
An important point is that "capital" is essentially just another way of saying "investment". Investment is what creates opportunities and demand for labor. Strong demand for labor increases wages e.g. construction wages going through the roof because of data center investment.
If you disincentivize investment, economic surplus tends to shift toward rent-seeking behavior which creates relatively little labor demand. Many economies in Europe are poster children for this phenomenon. Ideally you want an economy that strongly incentives investment over rent-seeking.
Absolutely not! The word "investment" according to most definitions in most economics classes would encompass the activity of merging together all of the companies in a sector for mega rent extraction. They would even call that a successful investment! If you want investment to create jobs, you must ensure it is going somewhere with a track record for job creation. Historically, the export sector did a good job of employing people per unit investment while the asset sector did not. In general the point is that you have to check.
There are circumstances in which tilting tax, labor, trade etc policy towards capital is actually good for everyone, in which trickle-down economics actually does work, but they are rare and specific, typically apply to developing economies, and are not nearly as universal as they are portrayed in the typical American econ class. Here's how you judge: look at interest rates. Real rates, not nominal rates. The price to rent money. Is it high? Then the economy knows how to productively deploy a marginal dollar of capital, as evidenced by people willing to pay to do it. Is it low? Then the economy has no idea how to deploy the marginal dollar of capital, as evidenced by its willingness to let you try for dirt cheap. In the latter case, proposals to shift tax, labor, and trade policy towards capital are simply propaganda put forward by the wealthy for purely self-serving reasons.
> Democrats in office understood the macro picture and worked diligently and intelligently to fix it,
I agree with everything you're saying except this bit. I don't think democrats were working to fix it in any fundamental way. They're too beholden to corporate interests to do anything that overturns that apple cart. They were trying to tweak the program slightly to make it less bad, sure. But that's not a real fix for such a broken capital/labor split.
I don't think proposed plan with tariffs will be effective, because once scaled up and generating enough revenue, MBA will come and outsource everything, to make more money
If that were seriously on the table, we could have just used the proceeds from having the world reserve currency to do that. Instead, their open plan for that national asset is to squander it.
In general, stop trying to steelman the looters. Sometimes a con artist is really just a con artist.
I don't think that really changes my interpretation? There is an all-too-common dynamic of people working overtime to connect actions the administration is doing with what could be a sensible plan.
If that was not your intent, then please don't take it personally.
From what I understand having the dollar be our main export is a reason why we haven’t had real industrial policy. We export dollars so we have to buy from overseas.
You're missing the other choices that link those two things. Being able to export dollars lets the government create new dollars out of thin air, which can be traded for real goods and services - a great deal by any measure. But the political mantra of the last thirty years has been a fake "fiscal responsibility" where the government has been stopped from spending that new money for most deliberate purposes, especially on a large scale (eg subsidizing domestic manufacturing in strategic industries). Yet instead of the natural price deflation that true fiscal responsibility would have brought, economists have declared that our currency still needs to inflate. And so the Fed still creates just as many new dollars, but instead gives them away to banks in the form of low interest loans (fueling the ever growing asset bubble, essentially a handout to asset holders). The combination of all of these are what has decimated our industrial base.
Yeah, tarrifs are a step in a plan to bring back manufacturing. The last step. I don’t remember where I saw the breakdown of how to do it. It was detailed by an expert, the kind that this administration wants to do with, lest said expert disagree with POTUS and hurt his feelings.
> Capitalism produces where it is convenient to do so.
Laughably untrue.
Is it most convenient to produce semiconductors in taiwan? No. Decades of taiwanese industrial policy produced that outcome.
Capitalism takes advantage of current conditions, but those conditions aren't inherent or natural, they're the result of history and specific choices by specific people.
Capitalism is great as long as it works just for you. When others learn to play the game and even outrun you, it’s time to put the finger on the scales. Essence of the free market.
No, bringing the price of 50" 4k TVs down to $300 does not make up for lost jobs. That's an easy choice, which is why it was never presented to the American worker but rather foisted upon us by shareholders in pursuit of profit and a government content to look the other way.
1. For the n-th time: manufacturing jobs are being lost to automation. Globally, not just in America. This is true in Asia as well.
Manufacturing is facing the same fate of agriculture: machines and robots will keep displacing people. Nothing is going to stop it.
2. There is no such world where we'll choose to do things less efficiently to artificially save few jobs. And it's not about your TV being 100$ more expensive, it is about everything you touch and see being considerably more expensive, with a cascade effect on the businesses that need the equipment.
3. Average Joe in US is as much a shareholder as some imaginary person you have in mind. And a company's duty is towards shareholders first, workers second.
No, Average Joe (Median Joe) is not a shareholder, asset appreciation is not a meaningful fraction of his income so policies which dump labor to pump capital hurt Average Joe on net by a wide margin. Shareholders are 30/30/30 top 0.1%/1%/10%. You and I may be in those categories, but Average Joe is not.
Advanced manufacturing requires cheap global inputs.
Before tariffs, unemployments was ~3.5% and real wages were rising, and part of why wages have been rising is because the cost of goods like TVs have been falling.
Yes. And everyone that's pointed it out in the past go shouted down for one reason or another. Sending oil down south and buying refined gasoline back is asinine. Same with raw timber to buy back finished products. And now that the national-security chickens have come home to roost, it's waaaaaaay too late.
Unless we plan on manufacturing our own shoes and clothes, competitive advanced manufacturing is going to require cheap industrial inputs from around the world.
I think the whole trade deficit argument to be beyond stupid.
1. Sending machinery, food, equipment in exchange of pieces of paper with national heroes printed on them should make you think who's benefitting really from the deficit
2. This is the 21st century, you can't ignore services. How many Office and Adobe licenses, credit card transactions, Netflix subscriptions, Hollywood movies and shows, advertisement space online, US companies sells and it doesn't enter the trade argument?
America can feed every person in the country easily, we import luxury goods cause we like coffee and out of season vegetables not because we’ve lost the production capability. If anything we are over subsidizing calories.
We also have enough nukes to glass the surface of the planet, enough firearms for every man woman and child to dual would them and 7x the rest of the worlds military.
The US’s people don’t need protection from other nations we need protection from each other.
1. What's up with this obsession to be a "real" power? Plenty of countries in the world do just fine actually avoiding confrontation and minding their business. We should get back at competing at sports, culture, scientific achievements. I can understand the vanity of politicians making up enemies for the sake of it, a bit less what should be an educated crowd here to fall for this narrative.
2. We're talking about the US, the last country on the planet to have to worry about wars. First because it's blessed by geography and separated by two oceans from anything relevant. The US has fought many wars. None of them on their soil since the war with Canada 200 years ago. Second because it is always the aggressor, not the victim. Always. Third, it's the last country on the planet that has to worry about feeding its citizens or having the capabilities to fight a war. Be real and serious. Either in conventional or non conventional wars the US can destroy everything on this planet multiple times over. Drop all of that insecurity.
3. Even more the trade surplus of countries like Germany, Italy. China or Japan isn't good. These countries are working their assess to send stuff abroad, and getting pieces of paper in exchange. Those pieces of paper won't magically materialize tanks, trucks, drones, ships and food in case of a sudden need.
The world has had interdependencies since trade began centuries ago. If a nation was independent, it usually meant that they had nothing anyone else wanted, and they were almost always poorer for it. And interdependency is good for peace: you don’t generally get into wars with your trading partners.
Independence is a stupid goal that’s promoted by selfish small-minded people who don’t understand how the world is better off when people trade.
I'm not sure food is a concern at all in the US. We have a shit ton of agriculture, and we have some of the highest obesity rates on the planet due to our immense surplus of food.
We also have the biggest military by far, and it's not even close. So that covers your two bases.
obesity and food-supply are not in a linear relationship, pumping out some high sucrose corn syrup is one thing, having all the nutrients the population needs to stay healthy is another
We most definitely have all the nutrients the population needs to stay healthy. We have basically every vegetable ever, available all year. Ditto for fruits. Meat is in abundance, same with dairy and eggs. I don’t think it’s an issue.
Also, America has no advantage in services. Americans aren't any smarter than anyone else. America has a lot of land, highways, and infrastructure - that's actual advantage. So we're just letting that rot or selling it to overseas oligarchs.
We may not be “smarter” than others but our culture, which prioritizes innovation and creativity, makes us comparatively better at inventing goods and services that people want to buy.
It actually sounds like you live in an era where these things are guaranteed by a hyper power and are frankly out of touch with how international relations really work
Please, professor, teach us how international relations really work. Just let me grab my popcorn first.
(Seriously, knock it off with the attitude. You have no idea who you’re talking to. People with highly varied educational and career backgrounds are represented here.)
Appealing to credentials is irrelevant and bad faith, the fact is your ability to make a good living purely in services is irrelevant to the fact that nations have real national defense to consider and the last 80 years of global trade has been upheld by American military might. Your credentials mean nothing if you can’t appreciate how spoiled we have all been by this very unique system, and your arguments should stand on their own and your current argument is to respond to a discussion about securing vital industries with “I’m able to feed myself with just services” as if that scales to an entire nation that has been the one upholding global trade rather than a benefit of, and downstream, of that nation doing that. And that nation has until recently taken very serious steps at every turn to ensure its military and resource dominance so that people like you and I can feel comfortable with our office jobs.
I don’t have an attitude, it’s just annoying hearing people still pretend history is over and great power conflict is no longer a concern because we’ve reached utopia, and thinking that because they have a certain job that means real, cold and calculating, geopolitics is no longer a requirement.
The thing is, you're not really making a clear and persuasive case as to your position, which sounds like you're arguing against interdependency. Perhaps you mean something else, so if I'm mistaken, some clarity would be appreciated. As far as I can tell, you're only contending, without much support, that alternatives are worse.
> the last 80 years of global trade has been upheld by American military might
Have you considered whether these might be coincidental, not causative, and that the Bretton Woods system is largely responsible for this? Leading by example and through persuasion and making friends tends to be much more effective than building armies and making implied threats, dangling a Sword of Damocles over the world. (Case in point: the U.S. has never been able to bring Afghanistan, North Korea, or Iran into the fold, and keeps holding to the same failing strategies regarding these nations despite their persistent ineffectiveness.)
> I don’t have an attitude
I'm telling you how it's coming across. Calling someone "out of touch" is demeaning.
Yeah the comic seems to imply that tariffs are always always bad. Which maybe what's in mind for free trade absolutists, but is certainly not my opinion. Current administration may wield it very horribly, but it's still a useful tool.
Another analogy that's in my mind is cancer. You certainly don't want to provide more nutrition for those literally parasitic cells.
US investment markets are attractive to foreign investors for much the same reasons that they're attractive to US investors. As a result, much of the money that the US spends on imports gets invested in the US. You make that sound like a bad thing.
An even better analogy for the US using trade deficit as an excuse for tariffs would be a billionaire hedge fund manager complaining about payments made to his janitor. Essentially the janitor just takes money from the hedge fund manager without ever buying any financial services in return. The solution, of course, is to fire the janitor and start cleaning toilets himself.
They're explicitly pointing out that the US (and most of the western world) has abandoned the manufacturing sector of their economy, outsourcing work that used to employ millions of people to the developing world.
This is a trade-off that can benefit both countries, but, it is wise to consider both WHO benefits from this, and what the LONG-TERM implications of this entails. It's great for an investor class in America that has the capital to create factories in China, and it's great for China to take USD and start to employ their workforce. But, the question is whether or not this is actually a good thing for the American worker.
The rust-belt would certainly have an opinion on this. My father was a factory worker that was able to support a family on a single income, and when that manufacturing plant closed, it absolutely destroyed the finances of my family.
You're conflating the goal with the approach. If the goal is to bring back or grow US manufacturing, the question is whether the current tariffs are an effective way to accomplish that relative to their trade offs. From the evidence so far, the historical research, and most economic analysis, the case doesn't look particularly strong. We haven't seen a meaningful revival in manufacturing employment, and even analyses that project some growth in manufacturing find that it comes with substantial costs elsewhere in the economy, including higher input and consumer prices, weaker growth in other sectors, and lower overall GDP.
I personally believe that strategic tariffs should be used to protect our national interests, including providing meaningful employment.
This administration has no interest in strategic tariffs. Instead, they are made overbroad (50% on everything from Canada vs, say, cheap imported steel) and they are made and removed capriciously (tariffs on English whisky dropped after King Charles' visit to the White House).
If Trump really wanted to bring your dad's factory job back, he'd specifically target whatever industry he was working in AND ideally spend the tariff money boosting that industry. This is precisely the strategy countries like Japan used to reach first world status.
Instead Trump uses tariffs like a cudgel -- much closer to what the XKCD comic depicts. There is no chance his tariffs will lead to your father's factory ever being reopened, as that would require, at the bare minimum, a tariff that investors know will stay in place for years, as opposed to one that could be lifted with the visit of a charismatic member of nobility.
[...wanted to bring your dad's factory job back, he'd specifically target whatever industry he was working in AND ideally spend the tariff money boosting that industry.]
Which was more or less the intent of the CHIPS and Science Act for the semiconductors industry.
The chips act used tax dollars and subsidies to incentivize companies to build here. This and tariffs on semis are not much different the only difference is with a tariff you only pay the tax when you buy imported goods
Subsidies ensure a certain sector has money. CHIPS pays for semiconductor fabs no matter what. Tariffing foreign semiconductors doesn't ensure there will be money for semiconductor fabs here - there could just be no semiconductors at all.
There will not be zero semiconductors. Tariffs incentivize domestic production by raising imported prices allowing our industries to be competitive. There is no world where the military and industry just don’t have processors anymore they will be forced to invest locally that’s THE point of tariffs traditionally (see: the us after its founding)
Oh, I agree that the way that the tariffs are currently being levied is embarrassing on a national scale. Also on the fact that meaningful economic change won't happen when these tariffs will disappear/re-appear at the drop of a hat.
It's also worth pointing out that while, yes, there is 50% tariff on Canadian goods, this only effects ~5% of imported goods, meaning 95% of the Canadian imports are unaffected by this nonsense.
It's also worth pointing out that some of these tariffs actually are being used to help build out US industry, like the CHIPS act.
I don't think that we disagree on anything here, haha
Yes, but I'm pretty sure he doesn't know that and thinks flapping between protectionism and TACO is a brilliant strategy for achieving the best of both worlds rather than an idiotic strategy guaranteed to result in the worst of both worlds.
"Destroy American affluence so that we can't pay with assets instead of exports" is probably the worst conceivable way to unwind the exorbitant privilege of the American Economy. We could have spent that money helping people, instead we spent it on wars and tax breaks for billionaires. We could have spent that money on targeted industrial policy (the IRA and CHIPS acts under Biden were examples of this done right, just not at the scale we needed) but instead we are doing it the hard way. Sigh.
The context here is that president Trump has an interesting view of trade deficits / surpluses. Specifically, he frequently cites cases where the US has a trade deficit with another country -- where the US is spending more in that country than that country is in the US -- as if that country is "taking money" from the US.
This is a bit peculiar, because it ignores the whole "the money we are spending is being exchanged for goods that come back to the US" part of the trade. I.e. it's not a problem that I have a "trade deficit" with the grocery store, because I have my groceries.
Actually you, like most of us, have a trade deficit with the grocery store and the movie theater, and a trade surplus with your employer. Which one is more enjoyable to have?
The experience of the trade deficit with the grocery store and the movie theater is more enjoyable, overall. I get films and ice cream and a good time out of it. From my employer I get a lot of sitting in meetings -- they have to pay me to make me put up with that!
My point is that reducing it entirely to "did I gain or receive cash-money from this?" isn't a particularly useful framing.
Yeah that's the point. If you can get away with having a trade deficit not balanced by a surplus, that's a good thing because you get more movies and ice cream for less meetings. Trade deficits are good, people are just sending you free stuff.
I think it's what can happen when we shift more towards an exchange orientation and away from a communal orientation. Or in other words, as we see the world more win-lose and less win-win.
I dislike this analogy because a nation is not a person grocery shopping and anyway if a single grocery store was the only way to get food that would put me in a very lopsided relationship with them and the power dynamics in such a case are obviously bad for the person.
Nations have interests and there’s a real conversation to be had that a country should ensure it has strategic industries so its existence is never at the whims of another.
In academic and think tank circles it is. Too many people treat political theatre and, frankly, entertainment pieces as reflective of the actual policy debates when they are mass media designed to get clicks.
Right but this is actual policy. The Trump Administration does actual policy built off poorly formed fiscal reasoning. That's why we see blanket tariffs. There is no strategy.
Maybe some smart people, somewhere, would hypothetically have a strategy. Those people currently hold no power. It's not "political theater", it's our ACTUAL politics. It's just so ridiculous that it looks like theater. Which just means the situation is worse than you originally thought.
This is one view. Another view is that maintaining economic interdependence between countries — aside from making both countries richer via specialization and comparative advantage — is a great way to incentivize cooperation and prevent them from killing each other.
Needs to be two-way though. What if we rely on China, but they don't rely on us? Well then they can destroy us at any moment. It needs to be MAD to be a deterrent.
OK, so someone wrote a book and was wrong at the time. Times change. It's like saying in 2003 that nobody should launch a social network because the first one, Six Degrees, failed to take off. (https://en.wikipedia.org/wiki/SixDegrees.com)
It’s a silly question, since (short of a major life change or economic system change) you need the grocery store and the job to have decent quality of life.
You need to trade your labor for money, and you need to trade your money for food. I would argue that there isn’t a huge difference in the fundamental nature of those two trades. Framing them in terms of “trade deficits” is pointing out which direction money is moving in each instance, but fundamentally they’re both just trades.
Indeed that is true, which is the point of both OP(or at least my takeaway). Attaching a moral value to trade deficits or surpluses, as the current administration seems to be in favor of doing, is fairly nonsensical.
Used to favor the US. Trump's policies and behaviors are ruining the US' reputation as a stable trading partner by demonstrating what damage can be done by an idiot with unchecked power. The rest of the world is going to permanently veer away from US services because it's not impossible (and sadly likely) another feckless imbecile will get put in charge.
He doesn't have a view on trade deficits. To imply he does is giving him far too much credit. The "most powerful person on earth" in charge of the United States fundamentally doesn't understand trade deficits or tariffs.
We do a disservice when we act like he has a strategy or view about these things. He doesn't. He is ignorant of how they work, and to prove it you only have to listen to his own words.
Economically, it's a problem long-term. Dollars only have value if you can buy things with them. Japan, China, Saudi Arabia - countries we've had trade deficits with - have been buying our business, infrastructure, and real estate.
Not defending tariffs, but there's a reason people care about trade deficits.
i'm a little bit confused by the current news. I thought the supreme court said the tariffs are illegal without congressional approval and the government started refunding the money.
now the news is full of all these tarriffs about canada?
What's the factual non-partisan reasoning by which trump has been found not to have the power to create tarriffs, but is still doing it with canada?
The Trump Administration first used the International Emergency Economic Powers Act to declare a national economic emergency and impose tariffs on countries under the pretence that they were economic threats to America.
The Supreme Court ruled against the tariffs because while it allows the president to regulate foreign imports as a measure against economic threats; it does not specifically grant the president power to impose tariffs, duties or other taxes which is typically a power that belongs to Congress.
The tariffs on Canada are now being imposed under Section 338 of 1930's Tariff Act which allows the president the authority to apply up to 50% tariffs on countries the president finds has "discriminated", directly or indirectly, against the United States.
> I thought the supreme court said the tariffs are illegal without congressional approval
The ruling wasn't as generalised as that. What it said was that the president doesn't have the authority to impose tariffs under the provisions of the International Emergency Economic Powers Act, which Trump had cited as the basis for some tariffs. That made those tariffs effectively illegal, but the ruling said nothing about tariffs which had other legislative provisions as their legal basis. The tariffs that you see today cite some other rule as their basis rather than the IEEPA.
If tariffs are so obviously and universally bad, then why do tariffed countries respond with retaliatory tariffs instead of letting the first country shoot themselves in the foot and getting on with their own business?
Maybe reducing trade with a country that is taking bad/strange/stupid decisions might be worth it. If your industry can change some trade partners (and diversify) it might a plus.
Tariffs (and retaliatory tariffs) can be universally economically negative and still be rationally pursued by individual politicians.
For example: if Donald Trump tariffs the country you are in charge of, you are likely willing to pay the economic cost of a retaliatory tariff to seem like you are standing up to America to your constituents. The politician’s goal is to be re-elected.
The politician may aim to deter getting tariffed in the first place, and promising a retaliatory tariff if another country tariffs you first is also reasonable as a deterrent from a game-theoretical perspective.
All it takes is for one world leader to not understand or care about the clear economic negatives to tariffs to start the chain: everyone else can be a rational actor.
The broader tariffs are the worse they are. Targeted tariffs can have a function but if targeted at a country that function isn't an economic good for either country it's only good as a political tool. You could argue that industries that you are the second cheapest in compared to that country could reap some benefits from supplying local markets (but not if there are other countries cheaper than your own that aren't also tariffed that can supply more of the demand) and then a targeted tariff may make some (long term) economic sense.
Targeted tariffs can have more nuanced effects. You'll notice that Canadian politicians are talking about targeting red states with their tariffs. These tariffs will also economically hurt Canada, but you won't see a retaliatory tariff on things that hurt Canada disproportionately which would be the case with universal tariffs. You can expect them to pick luxury industries (like they did with bourbon) where preferences can be changed or industrial/commercial ones where (preferably) local or other suppliers are near parity with the US rather than say gasoline.
1) (all) tariffs aren't obviously and universally bad, only when applied universally without any coherent long term goal/strategy.
2) retaliatory tariffs are targeting the hostile actor, not widely against all (other) trading partners, thus redirecting trade towards less hostile country.
Because the other non-isolationist countries have the rest of the world to trade with. Their tariffs on USA don't make all of their imports more expensive, only redirect trade to other countries.
During Trump 1.0, retaliatory tariffs were targeted at swing states. E.g., on Harley-Davidsons manufactured in Wisconsin. The goal was to make it politically painful to the president and undermine his reelection chances.
I imagine Carney is picking industries that are assymetricly painful to the USA or, since Trump isn’t up for re-election, congressional Republicans.
Doesn't feel realistic. The comic version at least makes sense at some level; the real-world one doesn't.
The real world version is "they're ripping us off by giving us cheap stuff that our producers can't compete with on price." Which is arguably a problem, yes, but the one thing it's not is a "ripping us off" problem.
The real world version is even funner because it's not about receiving cheap stuff, rather the complaint is about receiving free stuff (trade deficit).
The most impressive thing about Trump is that he managed to shorten up the feedback loops on an overwhelming number of his policies.
You would expect the US industry to silently absorb his trade policies and only break decades after he leaves. Somehow, they aren't healthy enough for that.
>You legs may have a comparative advantage at running
that's not what comparative advantage means except in a degenerate sense.
if country A is worse than country B in both making clothes and making paper, their comparative advantage is in the product which they are less worse at; they can maximize their GDP making that product.
The United States proposed a deal to France, Germany, Japan, and Britain (the G5): you buy up your own currencies, the dollar falls, and in return we reduce our budget deficit, meaning you no longer have to effectively finance U.S. development.
The United States agreed to reduce its budget deficit and lower interest rates. The other parties to the agreement committed to raising theirs. In addition, West Germany agreed to cut taxes, while Japan agreed to allow the yen to appreciate. As a result, over the following two years the U.S. dollar fell by 46% against the German mark and by 50% against the yen. However, the U.S. government ultimately failed to reduce its budget deficit. Meanwhile, the sharp appreciation of the yen made Japanese exporters less competitive in foreign markets. In the United States, by contrast, the period following the agreement saw substantial economic growth and low inflation.
A classic American move: promise the world — we’re all in this together, we’re marching toward a brighter future — and then screw everyone over.
No, what I'm saying is it's bad for "domestic producers of stuff" too.
Source: domestic producer of stuff (me.) My products require components and materials that we don't currently make here in the US and won't be making anytime soon. I can't do anything about that. So why am I getting hosed?
Please explain why tariffs a "good thing" to protect a French winery but a "Bad thing" when it is used to protect an American worker.
Everyone loves the EU and Canada and their tariffs. In Canada for example American poultry and dairy have as much as 200-500% tariffs. Usually it is seen as a big win to prevent undercutting the working class with cheap foreign labor. But as soon as it has any association with Trump all of a sudden the Progressives forget everything they believe in and turn into laissez faire libertarian capitalists.
> In Canada for example American poultry and dairy have as much as 200-500% tariffs.
In the US the dairy industry is supported through subsidies. In Canada the dairy industry is supported through supply management.
If the US would be willing to stop 'artificially' supporting their farmers (and allowing some to go bankrupt) then perhaps Canada would be willing to stop 'artificially' supporting theirs. Otherwise it's a tom-ay-to/tom-ah-to stand-off.
Who is "Everyone"? EU is trying in various ways to reduce tariffs, like (biggest example I know): Mercosur, to quote "both the EU and Mercosur will gradually reduce import duties on 91–92% of exports" (https://en.wikipedia.org/wiki/EU%E2%80%93Mercosur_Partnershi...).
Of course European farmers complain (they will get competition and potentially lower quality products), so yes, some people like the current tariffs.
Behind every tariff there will be an interest group. If you are producing X in a country and there is an import tariff on X you are happy. If you are buying X you are not happy.
There can be strategic industries that you want to encourage, but the issue is if tariffs are applied with a plan or not. Opinions might differ on this one but history will tell.
I'd love it if chicken breast in Canada was cheaper. I think maybe there need to be some controls or regulation so meat coming from the US isn't lower quality than what we currently have but if the price went down i wouldn't complain
It's breaking EXISTING free trade deals that's angering people. And also using them as geopolitical cudgels against allies. Every country has protectionist measures in various sectors, trade deals are decades-long work to chip away at them in a way that's agreeable to everyone involved.
Liberals and progressives don't agree on most things related to (free) trade, but agree on not "bullying" allies for no reason and little profit.
> but agree on not "bullying" allies for no reason and little profit.
This is what confuses me most about Trumps tactics. These are longtime friends and allies who would’ve gladly worked together to try to improve any perceived imbalances.
I cannot fathom treating a friend this way. It makes no sense to me and is destructive.
It depends on the details though. That survey was just on a one sentence "new US tariffs on steel and aluminum will improve Americans’ welfare" question. They can have a place if say you want to maintain manufacturing for military strategic reasons.
The Biden administration kept the Trump tariffs. His own policy-makers, technocrats, said that they were a necessary geopolitical tool, cited China's extensive use of tariffs (amongst other states), and noted that they must be used to protect manufacturing and in tandem with allied states.
I think the comic captures that nuance by exaggerating the stupidity of the trump tariffs. If your trade strategy is "we must eliminate all trade deficits" youre gonna have a bad time
this ignores evolution theory: the cells in the leg, arm, brain, etc. share the exact same genome variation, so selection pressure rewards coherent action in the interest of the individual organism.
thats not true for different players in some level-or-not playing field
What actually happens at the scale of the organism is mostly irrelevant except how it affects reproduction.
A genetic predisposition towards chopping legs off would be selected for, if
chopping legs off resulted in more children than otherwise.
Chopping legs off after having no more children (e.g. after menopause or vasectomy) has no direct genetic outcome (instead indirectly via improved/worstened reproduction of children or relatives).
To be clearer: reproduction is the key (survival matters for reproduction and upbringing).
People are very quick to make kneejerk reactions to tariffs while assuming the other guys have different opinions.
The Biden admin went after Canada repeatedly for unfair trade practices, and issued a blanket 10% tariff on Chinese goods.
The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
The one thing the current admin does have a point on is non-tariff meddling. Numerous countries make it almost impossible to sell goods in their countries while the same is not true in reverse, or they levy a high price in garbage regulatory fees (see the EU's new packaging identification directive that completely destroys small business), or in completely made-up fines for vague behaviors not even they can define (see the EU's DSA which is exclusively used against monopolizing American companies while completely ignoring monopolist and predatory EU ones like Booking.com).
I don't really have any idea if tariffs are good or bad. What I do know is that just announcing that they will go into effect with very little notice and then they won't go into effect and then they do but then they are decalared illegal because they weren't passed through the official methods isn't good.
It was _great_ for the companies that collected billions in tariffs and got refunds when the obviously illegal tariffs were declared illegal while training their customers to accept higher prices... that certainly won't go back to pre-tariff levels.
> I don't really have any idea if tariffs are good or bad.
tariffs are objectively* bad from a "big picture" perspective.
There are some situations where they create winners and losers so that some people in some countries will win, but they always do more damage than good "overall"(or in aggregate across all parties).
*in almost all cases... For certain goods where you actually want to lower consumption such as cigarettes, then maybe arguably they are good? Same argument as for https://en.wikipedia.org/wiki/Pigouvian_tax
The “big picture” perspective is missing a bunch of reasons beyond just lowering consumption in the short term. For example even if you can buy cheaper food elsewhere it is still important to have a domestic food production industry.
> The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
Which is a huge difference. Targetted tariffs can induce compliance with desired trade practices and influence purchasing towards more desirable sources.
Global blanket tariffs on products without domestic sources of substitute goods is effective for increasing domestic prices and encouraging foreign producers to enhance their ex-US trade networks.
If you wanted to encouage local manufacturing, you would add tariffs on finished goods, but leave raw materials untariffed. You might consider tariffing raw materials with ample local capacity. You might carefully consider tariffs for machine tools and other finshed goods which are necessary for manufacturing where there's not current local production capacity.
You might consider reciprocal tarrifs that were actually reciprocal tariffs... you tarrif me, I tariff you. Not tarrifs on countries that have an export surplus because they can't afford to import goods from the US.
> The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
You are ignoring a massive difference. Trump wants balanced trade with each individual country. Pretty much everyone else who wants the US to reduce or eliminate its trade deficit just wants that to apply to total trade, not to each individual country.
The main reason money was invented was so you don't have to have balanced trade with each individual trading partner.
It's also not the only European company to be designated as VLOP, as you'll find some EU-based adult content sites on that page as well, but if you really want a European company that is inexplicably missing from this list, I'd go with Spotify.
> The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
I mean that's the point, no? Swing the hammer carefully at a nail or with maximum force at your own leg?
Or to drop the metaphor - much of the difference between good and bad policy is a difference in degree. So your counterargument here is valid against "all tariffs are bad" but I believe the point most are making is "the current admin's use of tariffs is bad" which makes your counter appear as a bad-faith mischaracterization.
The other difference is the legality of it. Trump is trying to do all this at his personal order, without Congress. And he's trying to jump through all kinds of shenanigans to do so.
For example, he declared a state of emergency about fentanyl, and used that as cover to create tariffs toward every country on earth. That, obviously, has nothing to do with fentanyl; it's just a smoke screen.
He wants to rule by decree. Biden didn't do that. (OK, didn't do it to anything like the same degree. I'm sure someone can find an example where he did. It still wasn't like this.)
There was a big discussion of this recently here, which will give you more information, but yes, it is in fact destroying a large number of EU small businesses.
The EU has recognized this and they are scrambling to fix it in legislation due later this year.
This regulation forces very small businesses to pay thousands and thousands of dollars to comply and register in EACH EU country (what the hell's the point of the union, exactly?). Even if they sell only 10 widgets to Belgian buyers, they need to register in Belgium and pay the fee. Insane.
So a small business selling 5-10k of widgets in EU now has to pay 2-5k in business destroying regulatory compliance fees, putting them out of business. Incredible incompetence from the people who brought you ineffective cookie nag screens.
It's not possible to exist as a small business in the EU because they create regulations to destroy you.
Try creating a business in Germany. You need 25,000 euros to create a GmbH! In the US you can walk into the office in New York City and have an LLC for $9 per 2 years.
The EU is a nightmare hellscape of over-regulation. This is why there are essentially zero EU unicorns. EU bureaucrats support ONLY large and entrenched businesses.
Why does the restaurant across the street from my house need to register in Belgium?
Sounds like you've identified an opportunity to make a company that helps EU startups navigate bureaucracy. You could do all the packaging registration on their behalf.
This is a pretty reductive take. If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours.
Protecting workers from that kind of competition seems fair. Tariffs aren't bad in itself. They are just a tool.
Unfortunately fools wielding a tool like this can cause a lot of damage, but that's true for any tool.
"If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours." - This is not obviously true to me, can you explain why it is for you?
Although it is not a law of nature, and it is not linear across the hours.. In general if I work M-F more work will be done that if I just work on Monday morning.
"As of July 2022, more than 80 UK companies and organisations are recognised as having permanently implemented a four-day working week"
"As 50% of workers claim improved productivity during the period, the Manufacturing Technology Centre (MTC) announced it will permanently provide a four-day workweek to its 820 employees"
So you’re saying if I work at mcdonalds 60 hours a week i’ll make more than an investment banker working 40 hours a week? Awesome, i’m filling out a job application now!
Imagine a factory line where each worker makes 10 items per hour.
In, say, China a worker doing 996 will make 720 items. Te average working hours in the Netherlands are 36 hours or so per week. Making 360 items.
As long as there is free trade the Chinese factory will simply outproduce the Dutch one since they utilise their capex better.
Obviously European workers can't be reasonably asked to compete in an open market when labour laws, salary, health inspection etc... in China are at a 1920 Dutch level.
Are you aware of comparative advantage? What matters is opportunity cost, not raw output. (Also, unit labor cost is wage per hour divided by output per hour, so the number of hours worked is not really relevant. In other words, longer hours make workers richer and not their output cheaper.)
This was worked out by David Ricardo 200 years ago. You still benefit from trade even if (granting the argument) you are worse at producing everything.
You seem to be assuming that productivity scales linearly with time spent working, which doesn't seem to inherently be true.
If your factory workers spend twice as long working, it's likely that more widgets will get made. I'm not certain you can generalize too far from that, though.
So this is just not correct.
First off a factory can run 24/7 regardless of the shift length, which is what will determine the total productivity.
Second off it assumes there are no trade offs in terms of more errors or anything else by having longer shifts.
Third off it assumes that factories in different countries are going to be equally effective with each other, instead of different nations/areas within nations specializing in certain areas.
It also ignores the economic benefits that come with having people in your nation having more leisure time, higher education, more time with children, etc. It's a very simplistic model that is also very incorrect.
Protecting Workers, I'd add a couple more; it's not smart to be fully dependent on a trading partner or partners for critical and essential products, such as food, tariffs can help ensure you maintain domestic industry. Also helping to control dumping by an aggressive trade partner to ensure a domestic industry isn't destroyed.
Eh, I think every industrial society has independently arrived at something like 36-44 hours of factory time per week (plus overtime up to a max of something like 55 hours) , simply because that's the actual optimum[1]. While tariffs might work for other stuff [2], I think you're right that they can be a narrowly applicable scalpel, but plausibly you accidentally picked a bad example.
[1] Caveats apply. For example more advanced machinery with higher stress may necessitate shorter shifts; while highly motivated creative work might permit longer shifts at times.
[2] Adam Smith -for instance- was mostly against tariffs, though he identified certain exceptions such as national defense reasons.
Right at first approximation you'd certainly think so!
At second approximation, the <Dutch> factory in that example might net make a larger number of items per hour because the workers are more alert and concentrated and make less mistakes. So the <dutch> factory and the <chinese> factory might actually be producing the same number of items.
Of course then there's more steps to this, and you need to start actually looking at systems and what you're optimizing for etc etc.
And, not everything is factories. For instance, if your operator (at eg. Smit or Mammoet) is operating a large crane that's lifting a 100 ton oil platform, maybe you'd prefer them to be wide awake and on the ball, regardless.
The comic satirizes the 2026 US tariff rationale, vs. worker protection tariffs. But I do often think about Noam Chomsky's opposition to NAFTA[0] when talking heads explain why tariffs are bad.
Just as a note: if you work 6x12 shifts, you're actually working less efficiently, because you'll be regularly fatigued, make more mistakes, need more rework, etc etc. You might end up with the same net yield as if you'd done 3x6 hour shifts.
(edit: And only if you don't fall asleep at the controls and destroy the factory first. 12 hour shifts are brutal. At least one place I know bans you the next day if you exceed 11h, for your own protection if nothing else)
(edit2: This was documented in the 1st world war when munitions factories that tried to ramp up by increasing shift durations past a certain point ended up hardly improving productivity, but did increase accident and sickness rates to the point that it was starting to hurt the war effort. )
> Protecting workers from that kind of competition seems fair. Tariffs aren't bad in itself. They are just a tool.
At the cost of consumers paying for goods/services?
Your take is as reductive as the take in the comics.
People in a nation working 5 days a week for 8 hours are getting paid less and less over time. Heck lot of people now need double shifts to make ends meet totaling up to 12 hr or even more. They can only afford a Christmas light from the nation mass producing it by working 6 days a week, 12 hr shift.
And lets not pretend this was only about protecting workers. There were multiple agendas:
1. Bring back jobs 2. Remove trade barriers between countries 3. Make US rich by collecting huge amount of tariffs
All three can't be true at the same time. If jobs are brought back then you aren't going to collect huge amount of tariffs because nothing is being produced outside. If trade barriers are removed then that comes at a cost of slashing tariffs so you can't really collect huge amount of tariffs.
The foolish reasoning highlighted in the comics is the reason there is so much trade war.
> If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours.
If a nation has a decades-long technological lead over another nation, then obviously it will outcompete it in many industries and enjoy major advantages in trade. But somehow that advantage doesn't seem to count in your argument. Cherry-picking one side's advantages is not an analysis of international trade; it's just bias.
Unfortunately in our hyper partisan, sound bite, climate you can’t discuss the trade offs of tax policies anymore you either support the party line or you’re the enemy.
Context is important. 100% tariffs on Canada is stupid, 100% tariffs on China because we don’t want any industry dependent on a major military adversary is something worth discussing even if the answer is to not do that in the end
It would certainly help if people wouldn't believe flat-out lies.
Like, "other countries pay the tariffs."
No. They don't.
How can we have nuanced conversation about the trade-offs, if the leader of one political party blatantly lies about a fundamental detail of how tariffs work?
600% reduction in the price of drugs?
We can't even start a discussion with people who believe this. At all. They reject any information, even their own knowledge of how numbers work.
I have never met anyone who thought other countries paid the tariffs. Im sure they exist but this seems more like something retractors say to make themselves feel smarter than people in support of tariffs. People who care at all about tariffs tend to know how they work.
The president says a lot of really stupid things and those stupid things are highlighted, but that’s not indicative of the average and one of the main talking points about tariffs is that they increase costs in order to incentivize local suppliers
Merriam-Webster: "The meaning of TARIFF is a schedule of duties imposed by a government on imported or in some countries exported goods."
Apparently the dictionary is "woke."
Wikipedia: "A tariff, or import tax, is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer."
Oxford Economics: "Tariffs are taxes imposed by a government on goods and services imported from other countries."
I totally agree trade should feel fair. If the US sends jobs, money, food or goods to other countries, then we shouldn't get garbage back.
Tariffs are a way of warning other countries "don’t take us for a ride." They help American workers, factories and towns that were hurt when jobs went overseas.
Tariffs shouldn't feel like hurting yourself for no reason. They are an important tool for standing up for yourself when other countries (to say nothing of bad trade deals) want to take advantage of you
Tarrifs are the worst decision a politician can make.
The main reason we have open-ish border for people and goods is to reduce the risk of war. You are not going to wage war with a country that do business with.
> Maybe letting other countries rob us blind is worse.
I find this argument interesting because the US economy is the largest in the entire world by a fairly wide margin. That the US is being robbed implies it's operating from a position of weakness, which is an absurd idea.
Are other countries with factories really responsible for US companies outsourcing manufacturing to them? Do you want cheap goods or do you want your fellow Americans paid pennies?
They're not robbing us blind. They're taking care of our manufacturing so that we can invest in things like the financial industry, fossil fuels, and AI.
Feel free to start your own factory in US, nobody is stopping you. Just keep in mind that for commoditized products (most consumer stuff, for example), prices are all that matter. "Buy American" is not a product feature.
Some years ago. I learned about a new -ish technology that fascinated me. I started to research ways to get in on the development of this technology: i.e. what sort of opportunities might there be for a startup or small business in the space.
The answer I found was very sobering and mildly depressing. There was no room for developing the technology itself. That had already been done by large companies with the capital and resources to commoditize things early.
Instead, the real opportunities were found in business/management consulting selling the product and tangential things, like having a construction company to help build out infrastructure needed for the technology.
At this point I think technology no longer interests me because it doesn’t have a place for me.
No, we're robbing them blind. We used "free trade" to dump subsidized agricultural goods into countries, destroy their farmers, then buy up their farms. We used it to push wages down both here and overseas so that our poor got poorer, and so in other countries they couldn't take advantage of the work to improve their lives, just inflate the incomes of a bunch of elite middle men.
The international monetary system as envisioned by Keynes was supposed to use a central world bank and settlement currency (the Bancor) to make sure that strong countries couldn't be parasitic on weak countries. This was sabotaged by a US official who was also working as a Soviet spy, Harry Dexter White. Neither pole of the new postwar bipolar order wanted anything that would limit their dominance.
The long-term outcome, however, was that the poverty of the world was much more attractive to exploit than the workers of the US, the consumer base for all of this production was left to deteriorate - to shrink to just the wealthy whose income came from investments, as all production shifted overseas.
Everything would have gone great if it weren't for those dastardly Chinese, who didn't let oligarchs shape their economy, and planned for the well-being of China, not their own personal well-being. Western oligarchs were going for a slave planet controlled by the largest bank accounts; this required no competition because it had (and desired) few real assets. China cultivated a manufacturing powerhouse, perfected its infrastructure, and operated from a base of actual, controlled domestic capital.
The West is now stuck trying to trade paper, and manufacturing whose only value is the poverty surrounding it, for Chinese goods. Now they're going to treat the US like the US treated Mexico. Manufacturing will come back in the US, owned by the Chinese.
Tariffs and the well-being of US workers are the only way out of this. Elite Americans will do anything but this, because they are 1) bad people, and 2) barely American.
The idea that trade decreases the risk of war is old. It dates back to pre-WW1.
Think tanks around Europe were celebrating an "end to hostilities". And then WW1 happened. Trade does not prevent war. War is not always a rational consequence or act.
What does prevent war is a good standard of living. Eliminate resentment, and one of the great causes of war is lost.
Whether you need tariffs or not to ensure good standard of living I don't know. But the goal should always be to increase standard of living and uphold justice, tariffs or not.
It's a surplus tax, and one that apparently doesn't exist for the majority of dairy imports: https://archive.is/kKsYc
that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement (USMCA).
[...] the U.S. has never gotten close to exceeding our USMCA quotas
thanks, key quote from the link (for others)
"“It is accurate that Canada imposes a tariff of approximately 250% on U.S. exports of certain dairy products into Canada, and even more with Canada’s 25% retaliatory tariffs in place. However, that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement (USMCA). Frustratingly, the U.S. has never gotten close to exceeding our USMCA quotas because Canada has erected various protectionist measures that fly in the face of their trade obligations made under USMCA."
So I think this supports the point that Canadian politicians are bad for protectionist trade policies, right?
You act as if it's the countries that are doing the trading; it's not. It is the businesses and other entities within the countries that are doing it. They are doing it because it benefits them. If a company is doing overseas manufacturing it is because they benefit and it isn't the United States that made that decision.
This is hilarious and I agree.
I think an under-appreciated aspect of all this is the complete schadenfreude from everyone. The story goes tariffs only hurt yourself but then we see retaliatory tariffs in response. "Oh yeah I'm going to cut off my leg to show you whose boss!" Very funny.
And then you have people predisposed to higher-taxes who are contorting themselves over the economic cost of this tax while supporting significantly more economically destructive tax policies. Very funny.
And, of course, the opposite. Republicans in my state are campaigning on lowering taxes and inflation while also defending tariffs! Very funny.
> The story goes tariffs only hurt yourself
That's how the story goes with someplace like China. If you impose tariffs on imports you have no cost-effective alternative for, yes, the tariffs will only hurt the importer, because buying habits will not change. (I suppose Chinese cars are a big exception here)
But in this case, the math is probably different because none of these tariffs affect products the US must realistically buy from Canada (e.g. oil and potash). So Canadian exporters will feel some pain and American importers will feel some pain.
What should Canada do in this case if the two can't come to a trade agreement? Continue to import from the US at the same rate as before?
Canada can apply export taxes on things like oil & gas, and bring americans the pain they would feel if american tariffs were applied, except Canada would keep the taxes.
> but then we see retaliatory tariffs in response. "Oh yeah I'm going to cut off my leg to show you whose boss!"
Agree. Much better to lower the tariffs on other countries that compete with the US.
If Trump wants to kill Canadian auto industry then we'd better open wide our markets to Chinese or European cars.
Alt text: "You legs may have a comparative advantage at running, but we arms have a competitive advantage at swinging hammers, so unless you accept that we're the dominant limbs and stop hogging the oxygen, that running advantage won't be around for long."
Ricardo's comparative advantage result is contingent on the assumption that capital is not mobile across borders. This was a good assumption in 1817. Is it a good assumption today?
Furthermore, he's very up front about this in On the Principles, and from this information you can calculate the exact number of people who read the damn thing between the person repeating the talking point and the person originating the talking point.
It doesn’t really matter what Ricardo said in 1817: every US academic economist surveyed in 2018 by the Kent Clark Center disagreed that US aluminum and steel tariffs would increase the welfare of the American people ([0]), and this is with the benefit of >200 years in advances in economic scholarship and analysis since Ricardo.
[0] https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
The fact that the dumbest president in American history is bad at industrial policy does not mean that industrial policy cannot or should not be done.
Good industrial policy is made from positive economic actions. State investment, interest free loans for factory expansion, strong antitrust law, subsidies and tax reforms that promote industry growth instead of shielding it from competition.
Tariffs can be a good way to pay for this but they are always negative for consumers, and most of the time also net negative for domestic industry. Hard quotas and trade bans put up a wall that completely removes buyer choice and turns everything into a corrupt seller's market.
The American tradition is using negative tools because of their anti competitive effects. Car makers really don't want people buying cheaper cars from overseas so they lobbied for the chicken tax. In a country where funding from corporate super PACs is the most reliable way to win elections no president will change policy if it means losing a big sponsor.
The fact that he has two and a half years left in office, along with Congress not willing to do anything, means industrial policy cannot be done. We can certainly try again when something changes, whether that’s the required turnover in Congressional representation (maybe midterms, maybe two more years from now) or federal administration regime change (January 2029). “We are at an impasse.” Until then, the country keeps burning down, as voted for by the electorate.
I do not see another path, but perhaps I am mistaken. I am always open to being corrected when wrong.
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If only all those academic economists were as loud about how to keep tech and industrial capacity from withering and moving to China, as they are with their criticism of attempts to prevent that. They don't even complain when China engages in protectionism, dumping, and general "market distorting" subsidies. Listening to them, you'd never learn that none of the advanced economies got that way by following their laissez-faire trade prescriptions [1].
And of course they limit their analysis to "welfare of the people", first-order, ignoring how loss of industry will (and is already) come back to bite us. As if our only interests were those of passive consumers.
[1] " ... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules." - https://en.wikipedia.org/wiki/Comparative_advantage#Criticis...
Many academic economists are loud about those. It is the politicians who pick and chose the ones they prefer and want to promote. Just see how Laffer and his "Laffer curve" have been embraced by the right to cut taxes despite having no evidence at all about the shape of the curve. An idea literally born during a cosy dinner between Laffer, Rumsfeld, Cheney and a WSJ journalist.
Economist here. Yes! Politicians choose to promote certain economists. I’m tired of answering questions about Modern Monetary Theory, which Bernie Sanders chose to promote. The creator is from an economics department ranked 259th. It’s a duuuumb theory.
https://ideas.repec.org/top/top.econdept.html
In 1817, capital did not cross borders. Borders crossed capital.
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Arguably studying derivative works, such as a volume on economics, would be sufficiently acceptable as to void your calculation…
I don't know it makes much difference. People could walk from country to country in Europe back then and still can, likewise you could move money and equipment and still can.
The limiting factor on deploying capital abroad was never the ability to move gold or even equipment, it was the ability to have faith that over many years the remote authorities would continue to enforce your remotely held claims on the operation.
But that's been true for your locally held claims as well, and even more so in modern times with tax rates hovering around 50% in many European countries. It's just that they take their cut every single month, instead of doing so at will.
Reference to Aesop's fable?
https://en.wikipedia.org/wiki/The_Belly_and_the_Members
> The present understanding is that the tale's moral supports team effort and recognition of the vital part that all members play in it. In more authoritarian times, however, the fable was taken to affirm direction from the centre.
Oof.
Exactly what I was going to post.
Here's a direct link to ... several versions of ... the fable:
<https://fablesofaesop.com/the-belly-and-the-members.html>
A current account deficit is a capital account surplus. Persistent deficits shift the balance between Asset vs Export sectors, dumping the export sector and pumping the asset sector. Put differently, we can pay for imports with shit that we make or shit that we own -- and this has implications for people in our country who make shit vs own shit.
A better analogy for the trade deficit would be sitting on the couch slamming potato chips and observing the shift in our body away from muscles and towards fatty tissue. Should we be excited to see this example of specialization in action? Is it wrong to want to fix our diet and push our body composition in the opposite direction?
https://yalebooks.yale.edu/book/9780300261448/trade-wars-are...
It’s reasonable to want to bring back american manufacturing. But the random, temper-tantrum, market-manipulation tariffs are not going to do that. America isn’t going to all of a sudden produce tonnes and tonnes of xmas decorations every year just because of a 50% tariff on all chinese goods that may or may not be around in 6 months. All that’s going to happen is xmas decorations are going to be more expensive.
An actual plan would be targeting specific industries where america has the ability to scale up, and having congress pass tariffs that slowly ramp up over time to allow a smooth transition.
The insane thing about this discussion is that America does still manufacture a huge amount of products that are used all over the world, and the people that make them are paid salaries that are the envy of the world! Many of the people working in this industry are posting on this site!
It's just that because those products don't come in boxes anymore but are distributed over the Internet people think they don't count?
> America does still manufacture a huge amount of products
US industrial (absolute, not per capita) production hasn't grown since 2007: https://fred.stlouisfed.org/series/INDPRO
But the population has increased by 13.5%: https://en.wikipedia.org/wiki/Demographics_of_the_United_Sta...
It's one hell of a gamble to rely so much on software "products", while anything that software actually runs on is made in Asia. Building up a software industry will be a lot easier than it was to grow the industrial and tech ecosystem. And that ecosystem will give sweetheart deals to homegrown software, while extorting yours. Sorry, did I say "will"? I meant it's already doing so:
Apple CEO Tim Cook "secretly" signed an agreement worth more than $275 billion with Chinese officials, promising that Apple would help to develop China's economy and technological capabilities - https://www.macrumors.com/2021/12/07/apple-ceo-tim-cook-secr...
The balance of trade accounts for "export of computer services," because of course it does, and the account is in deficit in spite of these, because of course it is. The insane thing is that you tried to offer this "insight" without even bothering to check!
My point is that people are over focusing on manufacturing of physical goods while ignoring all the other aspects of the balance of payments, or indeed the internal US economy.
(Also, if you're trying to reduce imports, that messes up the balance of payments of your trade partners who get mad, and if you do it obnoxiously enough then other countries start substituting away your exports)
My read of "manufacture a huge amount of products" was that it's not even about software. America is still the world's second largest manufacturing economy, and per capita produces more than China!
https://en.wikipedia.org/wiki/Manufacturing
Most of this manufacturing is just not consumer facing.
It isn't just about that. You need industrial policy. And not just stuff like the CHIPS act.
In China a small outfit can get financing and open a factory anywhere.
You can't do that in the USA. You are too small for the lenders or investors who do such things to care yet too risky for traditional financial institutions to risk anything on you.
If I want to buy a couple of CNC machines and start making a product in my garage I have to hope I have enough room on credit cards to do it because I cannot get the money from anyone. Doesn't matter if I have a good idea. Doesn't even matter if I have some initial customers/orders.
If the government is going to piss away money then at least piss it away on that sort of economic activity. If you can present a coherent business plan or product design then lend people the capital secured by the equipment and/or IP with generous repayment terms. Set progressive milestones to unlock additional financing... for example give a gov backed credit account at SendCutSend. When you have an engineer's report on the prototype to turn in you unlock financing to order your first CNC machines. Develop a pipeline. A script to follow. Something a person can follow to get big enough to become a real business.
Grant time to pivot if necessary. If that doesn't work then ultimately the government takes possession of the equipment. Make it clear so long as you return everything in good working order then in X years you're eligible to re-enter the program. Then hand that equipment over to the next person in line.
Wait. I remember reading about this. Doesn’t SBA 7a cover your use case? I’m sure there’s an SBA loan category for you. It’s backed by the machine. Recently they changed the valuation of things or something.
SBA loans are just regular loans from a bank, except with government backing.
You need a high credit score (680 at least) to even have a hope and 10% cash to put down if not more.
Unless you can prove experience managing a business forget it. You have to demonstrate other outside income (hope your spouse works a good job) or enough cash in the bank to cover living expenses for a year or more.
If the business is going to be a new venture you have to put together financial projections that demonstrate how you are going to start making money and it had better be quickly. You will not get 2 years to ramp up. And if you fail to meet projections they can call in the loan.
Oh and by the way: you must sign an agreement to take unlimited personal liability for the loan. So if the business fails they get to take away your savings, retirement, even your house. In fact if you don't have significant assets they will put a lien on your house as part of the loan closing!
In China if you want to start a factory in an area the national government lists as desirable the state-owned bank will almost shove money into your hands. Repayment timelines are extremely generous. You mostly don't take on personal liability - instead they focus on the assets, land rights, etc. That is if the business starts to fail you will own machinery, a lease on the land, and/or a factory building so they are content to secure the loan against those things.
When the state bank underwrites your loan in China they only care that your project is technically viable and you have some kind of plan. They assume you will find a way to be profitable and worst case they can take the factory away from you and give it to someone else. As long as your plan makes sense - if your plan says you're going to make robot arms but your plan doesn't mention buying any CNC machines or hiring any electrical engineers you will have difficulties. And if you want to build a factory to make lathes expect serious pushback - the Chinese government considers that sector to be "over-capacity" so they are reluctant to finance new factories for such things.
Not that it matters because unlike the USA if you aren't a Chinese citizen then you can piss right off because you aren't going to be approved for anything and you aren't allowed to own property anyway. Not that any court would ever side with you in any case either.
The entire philosophy is different and I'm saying we should adopt the Chinese philosophy. Instead of letting risk-adverse private banks make the decision the government should make the decision. And instead of focusing on credit score and making you sign an unlimited personal liability contract - do the opposite and secure the loan against the actual factory, machinery, and assets. Build a network of such so if a business fails you can turn around and offer it to the next suitable applicant who can bootstrap their business instead of selling everything for pennies on the dollar at auction.
Huh, what you’re describing is what I assumed it was. I thought it was secured against the asset itself. I can see why they hesitate somewhat. In the US, this is usually a covert bailout for a vote bank. Grant loans for their machines and then the state takes possession and discharges the loan and you have a bailout in disguise.
But you’re right. Everything is in execution and for critical manufacturing it makes sense to pay the fraud price to boost it.
An actual plan would look like the IIJA, IRA, CHIPS Act -- what Biden was doing, but act larger scale. The problem with globalization is not that free trade failed to create a surplus, it's that 150% of the surplus went to capital and -50% went to labor, which can and should be fixed with tax and spend. Instead, of course, we didn't tax capital and we spent the money on stupid wars. That said, good industrial policy includes tariffs too, but Democrats knew this! Biden wasn't allergic to tariffs! The 100% EV tariff (and EV subsidies and battery subsidies) happened during his administration. Aside from the fact that giving Elon everything he wanted was a massive political miscalculation, it was good industrial policy, we just needed more of it in order to affect the macro.
That's the tragedy of it -- Democrats in office understood the macro picture and worked diligently and intelligently to fix it, the spurned labor interests in the MAGA movement understood what had hurt them and correctly rejected it, but the former didn't know how to message to the latter so a demagogue swooped in and here we are.
The gonzo free-trade rhetoric of the Clinton era should never have happened, second best time to get rid of it was 10 years ago before Trump I, third best time was a few years ago before Trump II, but the fourth best time is now.
An important point is that "capital" is essentially just another way of saying "investment". Investment is what creates opportunities and demand for labor. Strong demand for labor increases wages e.g. construction wages going through the roof because of data center investment.
If you disincentivize investment, economic surplus tends to shift toward rent-seeking behavior which creates relatively little labor demand. Many economies in Europe are poster children for this phenomenon. Ideally you want an economy that strongly incentives investment over rent-seeking.
Absolutely not! The word "investment" according to most definitions in most economics classes would encompass the activity of merging together all of the companies in a sector for mega rent extraction. They would even call that a successful investment! If you want investment to create jobs, you must ensure it is going somewhere with a track record for job creation. Historically, the export sector did a good job of employing people per unit investment while the asset sector did not. In general the point is that you have to check.
There are circumstances in which tilting tax, labor, trade etc policy towards capital is actually good for everyone, in which trickle-down economics actually does work, but they are rare and specific, typically apply to developing economies, and are not nearly as universal as they are portrayed in the typical American econ class. Here's how you judge: look at interest rates. Real rates, not nominal rates. The price to rent money. Is it high? Then the economy knows how to productively deploy a marginal dollar of capital, as evidenced by people willing to pay to do it. Is it low? Then the economy has no idea how to deploy the marginal dollar of capital, as evidenced by its willingness to let you try for dirt cheap. In the latter case, proposals to shift tax, labor, and trade policy towards capital are simply propaganda put forward by the wealthy for purely self-serving reasons.
> Democrats in office understood the macro picture and worked diligently and intelligently to fix it,
I agree with everything you're saying except this bit. I don't think democrats were working to fix it in any fundamental way. They're too beholden to corporate interests to do anything that overturns that apple cart. They were trying to tweak the program slightly to make it less bad, sure. But that's not a real fix for such a broken capital/labor split.
I don't think proposed plan with tariffs will be effective, because once scaled up and generating enough revenue, MBA will come and outsource everything, to make more money
Not if you make it extremely costly with tax policy and tariffs.
Maybe even use the tariff proceeds to provide incentives to those very same domestic industries? (I am not an economist.)
If that were seriously on the table, we could have just used the proceeds from having the world reserve currency to do that. Instead, their open plan for that national asset is to squander it.
In general, stop trying to steelman the looters. Sometimes a con artist is really just a con artist.
| In general, stop trying to steelman the looters. Sometimes a con artist is really just a con artist.
Re-read my comment in the context of the message to which it replied.
I don't think that really changes my interpretation? There is an all-too-common dynamic of people working overtime to connect actions the administration is doing with what could be a sensible plan.
If that was not your intent, then please don't take it personally.
From what I understand having the dollar be our main export is a reason why we haven’t had real industrial policy. We export dollars so we have to buy from overseas.
You're missing the other choices that link those two things. Being able to export dollars lets the government create new dollars out of thin air, which can be traded for real goods and services - a great deal by any measure. But the political mantra of the last thirty years has been a fake "fiscal responsibility" where the government has been stopped from spending that new money for most deliberate purposes, especially on a large scale (eg subsidizing domestic manufacturing in strategic industries). Yet instead of the natural price deflation that true fiscal responsibility would have brought, economists have declared that our currency still needs to inflate. And so the Fed still creates just as many new dollars, but instead gives them away to banks in the form of low interest loans (fueling the ever growing asset bubble, essentially a handout to asset holders). The combination of all of these are what has decimated our industrial base.
Yeah, tarrifs are a step in a plan to bring back manufacturing. The last step. I don’t remember where I saw the breakdown of how to do it. It was detailed by an expert, the kind that this administration wants to do with, lest said expert disagree with POTUS and hurt his feelings.
> It’s reasonable to want to bring back american manufacturing.
Capitalism produces where it is convenient to do so.
And no politician can change it.
You can try to protect very few critical sectors, but not whole "manufacturing" which by the way keeps rising in US since ever.
What politicians want to sell is the "good old times of well paying manufacturing jobs".
Robots have long come for those.
> Capitalism produces where it is convenient to do so.
Laughably untrue.
Is it most convenient to produce semiconductors in taiwan? No. Decades of taiwanese industrial policy produced that outcome.
Capitalism takes advantage of current conditions, but those conditions aren't inherent or natural, they're the result of history and specific choices by specific people.
Capitalism is great as long as it works just for you. When others learn to play the game and even outrun you, it’s time to put the finger on the scales. Essence of the free market.
There isn't much you can do about it, you can't have the cake and eat it too.
If you want to protect your whole "manufacturing", you also need to make peace with the idea that consumer and industrial prices will balloon.
You can only compete, choose your battles, but you can't live in a world that does not exist.
No, bringing the price of 50" 4k TVs down to $300 does not make up for lost jobs. That's an easy choice, which is why it was never presented to the American worker but rather foisted upon us by shareholders in pursuit of profit and a government content to look the other way.
1. For the n-th time: manufacturing jobs are being lost to automation. Globally, not just in America. This is true in Asia as well.
Manufacturing is facing the same fate of agriculture: machines and robots will keep displacing people. Nothing is going to stop it.
2. There is no such world where we'll choose to do things less efficiently to artificially save few jobs. And it's not about your TV being 100$ more expensive, it is about everything you touch and see being considerably more expensive, with a cascade effect on the businesses that need the equipment.
3. Average Joe in US is as much a shareholder as some imaginary person you have in mind. And a company's duty is towards shareholders first, workers second.
No, Average Joe (Median Joe) is not a shareholder, asset appreciation is not a meaningful fraction of his income so policies which dump labor to pump capital hurt Average Joe on net by a wide margin. Shareholders are 30/30/30 top 0.1%/1%/10%. You and I may be in those categories, but Average Joe is not.
Where are you getting these numbers? 54.3% of US households held a retirement account in 2022. https://www.federalreserve.gov/publications/files/scf23.pdf
Everything you said is objectively true, except for one thing.
> a company's duty is towards shareholders first, workers second.
This is just like, an opinion, man. There's no reason a company has to be like that.
It just benefits company management to act like it's an objective truth because their pay is stock-based.
> There's no reason a company has to be like that.
Law. Board and CEO have fiduciary duty towards shareholders.
If you search fiduciary duty on just this site you'll find hundreds of replies dating back years refuting your point.
That doesn't mean what you think it means.
Management has to act in shareholders' best interests especially when those conflict with their own.
That's not the same thing as shareholders above workers (or anyone else for that matter).
Good thing the birth rate is depressed then
If it’s such an easy choice, why wasn’t that the outcome?
Advanced manufacturing requires cheap global inputs.
Before tariffs, unemployments was ~3.5% and real wages were rising, and part of why wages have been rising is because the cost of goods like TVs have been falling.
Just because the dumbest president in American History can't do industrial policy doesn't mean that industrial policy can't or shouldn't be done.
Your framing is ridiculous. Canada sends raw materials to the USA and purchases it back once transformed. If anyone has been bleeding it is Canada.
And for aluminum in particular, the US is essentially importing dirt-cheap hydro energy.
Yes. And everyone that's pointed it out in the past go shouted down for one reason or another. Sending oil down south and buying refined gasoline back is asinine. Same with raw timber to buy back finished products. And now that the national-security chickens have come home to roost, it's waaaaaaay too late.
It's just an immensely dumb policy.
Unless we plan on manufacturing our own shoes and clothes, competitive advanced manufacturing is going to require cheap industrial inputs from around the world.
I think the whole trade deficit argument to be beyond stupid.
1. Sending machinery, food, equipment in exchange of pieces of paper with national heroes printed on them should make you think who's benefitting really from the deficit
2. This is the 21st century, you can't ignore services. How many Office and Adobe licenses, credit card transactions, Netflix subscriptions, Hollywood movies and shows, advertisement space online, US companies sells and it doesn't enter the trade argument?
Services can’t fight a war or feed you. A nation that wishes to be a real power must be able to guarantee it can feed and protect its people.
America can feed every person in the country easily, we import luxury goods cause we like coffee and out of season vegetables not because we’ve lost the production capability. If anything we are over subsidizing calories.
We also have enough nukes to glass the surface of the planet, enough firearms for every man woman and child to dual would them and 7x the rest of the worlds military.
The US’s people don’t need protection from other nations we need protection from each other.
1. What's up with this obsession to be a "real" power? Plenty of countries in the world do just fine actually avoiding confrontation and minding their business. We should get back at competing at sports, culture, scientific achievements. I can understand the vanity of politicians making up enemies for the sake of it, a bit less what should be an educated crowd here to fall for this narrative.
2. We're talking about the US, the last country on the planet to have to worry about wars. First because it's blessed by geography and separated by two oceans from anything relevant. The US has fought many wars. None of them on their soil since the war with Canada 200 years ago. Second because it is always the aggressor, not the victim. Always. Third, it's the last country on the planet that has to worry about feeding its citizens or having the capabilities to fight a war. Be real and serious. Either in conventional or non conventional wars the US can destroy everything on this planet multiple times over. Drop all of that insecurity.
3. Even more the trade surplus of countries like Germany, Italy. China or Japan isn't good. These countries are working their assess to send stuff abroad, and getting pieces of paper in exchange. Those pieces of paper won't magically materialize tanks, trucks, drones, ships and food in case of a sudden need.
1. This mindset is a result of American hegemony. Before WW2, before the 90s really, no one thought this was a possibility.
2. Right but if it is dependent on a foreign nation for something vital that means it no longer can confidently assert its independence
3. Don’t disagree at all
The world has had interdependencies since trade began centuries ago. If a nation was independent, it usually meant that they had nothing anyone else wanted, and they were almost always poorer for it. And interdependency is good for peace: you don’t generally get into wars with your trading partners.
Independence is a stupid goal that’s promoted by selfish small-minded people who don’t understand how the world is better off when people trade.
I'm not sure food is a concern at all in the US. We have a shit ton of agriculture, and we have some of the highest obesity rates on the planet due to our immense surplus of food.
We also have the biggest military by far, and it's not even close. So that covers your two bases.
Our military is dependent on a manufacturing base that is dependent on China currently
obesity and food-supply are not in a linear relationship, pumping out some high sucrose corn syrup is one thing, having all the nutrients the population needs to stay healthy is another
We most definitely have all the nutrients the population needs to stay healthy. We have basically every vegetable ever, available all year. Ditto for fruits. Meat is in abundance, same with dairy and eggs. I don’t think it’s an issue.
Alienating every allied nation with tariffs that come out of nowhere will surely help you win wars.
Also, America has no advantage in services. Americans aren't any smarter than anyone else. America has a lot of land, highways, and infrastructure - that's actual advantage. So we're just letting that rot or selling it to overseas oligarchs.
We may not be “smarter” than others but our culture, which prioritizes innovation and creativity, makes us comparatively better at inventing goods and services that people want to buy.
Services feed me every day, yet I don’t grow my own food. I trade for it, using currency as an intermediary.
What I can do for myself, nations do every single day.
I don’t know what this “real power” language is about, but it sounds like claptrap to me.
It actually sounds like you live in an era where these things are guaranteed by a hyper power and are frankly out of touch with how international relations really work
Please, professor, teach us how international relations really work. Just let me grab my popcorn first.
(Seriously, knock it off with the attitude. You have no idea who you’re talking to. People with highly varied educational and career backgrounds are represented here.)
Appealing to credentials is irrelevant and bad faith, the fact is your ability to make a good living purely in services is irrelevant to the fact that nations have real national defense to consider and the last 80 years of global trade has been upheld by American military might. Your credentials mean nothing if you can’t appreciate how spoiled we have all been by this very unique system, and your arguments should stand on their own and your current argument is to respond to a discussion about securing vital industries with “I’m able to feed myself with just services” as if that scales to an entire nation that has been the one upholding global trade rather than a benefit of, and downstream, of that nation doing that. And that nation has until recently taken very serious steps at every turn to ensure its military and resource dominance so that people like you and I can feel comfortable with our office jobs.
I don’t have an attitude, it’s just annoying hearing people still pretend history is over and great power conflict is no longer a concern because we’ve reached utopia, and thinking that because they have a certain job that means real, cold and calculating, geopolitics is no longer a requirement.
The thing is, you're not really making a clear and persuasive case as to your position, which sounds like you're arguing against interdependency. Perhaps you mean something else, so if I'm mistaken, some clarity would be appreciated. As far as I can tell, you're only contending, without much support, that alternatives are worse.
> the last 80 years of global trade has been upheld by American military might
Have you considered whether these might be coincidental, not causative, and that the Bretton Woods system is largely responsible for this? Leading by example and through persuasion and making friends tends to be much more effective than building armies and making implied threats, dangling a Sword of Damocles over the world. (Case in point: the U.S. has never been able to bring Afghanistan, North Korea, or Iran into the fold, and keeps holding to the same failing strategies regarding these nations despite their persistent ineffectiveness.)
> I don’t have an attitude
I'm telling you how it's coming across. Calling someone "out of touch" is demeaning.
Yeah the comic seems to imply that tariffs are always always bad. Which maybe what's in mind for free trade absolutists, but is certainly not my opinion. Current administration may wield it very horribly, but it's still a useful tool.
Another analogy that's in my mind is cancer. You certainly don't want to provide more nutrition for those literally parasitic cells.
US investment markets are attractive to foreign investors for much the same reasons that they're attractive to US investors. As a result, much of the money that the US spends on imports gets invested in the US. You make that sound like a bad thing.
An even better analogy for the US using trade deficit as an excuse for tariffs would be a billionaire hedge fund manager complaining about payments made to his janitor. Essentially the janitor just takes money from the hedge fund manager without ever buying any financial services in return. The solution, of course, is to fire the janitor and start cleaning toilets himself.
Put differently, Trump is explicitly attempting to destroy the reason the American stock market generally goes up.
That is not what the user above you said.
They're explicitly pointing out that the US (and most of the western world) has abandoned the manufacturing sector of their economy, outsourcing work that used to employ millions of people to the developing world.
This is a trade-off that can benefit both countries, but, it is wise to consider both WHO benefits from this, and what the LONG-TERM implications of this entails. It's great for an investor class in America that has the capital to create factories in China, and it's great for China to take USD and start to employ their workforce. But, the question is whether or not this is actually a good thing for the American worker.
The rust-belt would certainly have an opinion on this. My father was a factory worker that was able to support a family on a single income, and when that manufacturing plant closed, it absolutely destroyed the finances of my family.
You're conflating the goal with the approach. If the goal is to bring back or grow US manufacturing, the question is whether the current tariffs are an effective way to accomplish that relative to their trade offs. From the evidence so far, the historical research, and most economic analysis, the case doesn't look particularly strong. We haven't seen a meaningful revival in manufacturing employment, and even analyses that project some growth in manufacturing find that it comes with substantial costs elsewhere in the economy, including higher input and consumer prices, weaker growth in other sectors, and lower overall GDP.
This is a false dichotomy.
I personally believe that strategic tariffs should be used to protect our national interests, including providing meaningful employment.
This administration has no interest in strategic tariffs. Instead, they are made overbroad (50% on everything from Canada vs, say, cheap imported steel) and they are made and removed capriciously (tariffs on English whisky dropped after King Charles' visit to the White House).
If Trump really wanted to bring your dad's factory job back, he'd specifically target whatever industry he was working in AND ideally spend the tariff money boosting that industry. This is precisely the strategy countries like Japan used to reach first world status.
Instead Trump uses tariffs like a cudgel -- much closer to what the XKCD comic depicts. There is no chance his tariffs will lead to your father's factory ever being reopened, as that would require, at the bare minimum, a tariff that investors know will stay in place for years, as opposed to one that could be lifted with the visit of a charismatic member of nobility.
[...wanted to bring your dad's factory job back, he'd specifically target whatever industry he was working in AND ideally spend the tariff money boosting that industry.]
Which was more or less the intent of the CHIPS and Science Act for the semiconductors industry.
The chips act used tax dollars and subsidies to incentivize companies to build here. This and tariffs on semis are not much different the only difference is with a tariff you only pay the tax when you buy imported goods
Tariffs are much more regressive than our normal tax policy. Which is probably the reason this administration prefers them.
Subsidies ensure a certain sector has money. CHIPS pays for semiconductor fabs no matter what. Tariffing foreign semiconductors doesn't ensure there will be money for semiconductor fabs here - there could just be no semiconductors at all.
There will not be zero semiconductors. Tariffs incentivize domestic production by raising imported prices allowing our industries to be competitive. There is no world where the military and industry just don’t have processors anymore they will be forced to invest locally that’s THE point of tariffs traditionally (see: the us after its founding)
And the chips act was subsidies
Oh, I agree that the way that the tariffs are currently being levied is embarrassing on a national scale. Also on the fact that meaningful economic change won't happen when these tariffs will disappear/re-appear at the drop of a hat.
It's also worth pointing out that while, yes, there is 50% tariff on Canadian goods, this only effects ~5% of imported goods, meaning 95% of the Canadian imports are unaffected by this nonsense.
It's also worth pointing out that some of these tariffs actually are being used to help build out US industry, like the CHIPS act.
I don't think that we disagree on anything here, haha
Yes, and this is good. The American stock market going up benefits 10% of the US population.
The US has the highest share of revenue going to owners than it ever has in history. We've left behind the Gilded Age.
https://libertystreeteconomics.newyorkfed.org/2026/06/the-po...
Where are you getting this 10% number? 54.3% of US households held a retirement account in 2022. https://www.federalreserve.gov/publications/files/scf23.pdf
The top 10% of wealth holders own 90% of stocks. The other 90% of people not in the top 10% own the remaining 10%.
Yes, but I'm pretty sure he doesn't know that and thinks flapping between protectionism and TACO is a brilliant strategy for achieving the best of both worlds rather than an idiotic strategy guaranteed to result in the worst of both worlds.
"Destroy American affluence so that we can't pay with assets instead of exports" is probably the worst conceivable way to unwind the exorbitant privilege of the American Economy. We could have spent that money helping people, instead we spent it on wars and tax breaks for billionaires. We could have spent that money on targeted industrial policy (the IRA and CHIPS acts under Biden were examples of this done right, just not at the scale we needed) but instead we are doing it the hard way. Sigh.
Yes, by all means, figure out how to reshore American production of potash, aluminum and heavy crude near northern refineries.
The context here is that president Trump has an interesting view of trade deficits / surpluses. Specifically, he frequently cites cases where the US has a trade deficit with another country -- where the US is spending more in that country than that country is in the US -- as if that country is "taking money" from the US.
This is a bit peculiar, because it ignores the whole "the money we are spending is being exchanged for goods that come back to the US" part of the trade. I.e. it's not a problem that I have a "trade deficit" with the grocery store, because I have my groceries.
https://finance.yahoo.com/economy/policy/articles/trump-brag...
Actually you, like most of us, have a trade deficit with the grocery store and the movie theater, and a trade surplus with your employer. Which one is more enjoyable to have?
The experience of the trade deficit with the grocery store and the movie theater is more enjoyable, overall. I get films and ice cream and a good time out of it. From my employer I get a lot of sitting in meetings -- they have to pay me to make me put up with that!
My point is that reducing it entirely to "did I gain or receive cash-money from this?" isn't a particularly useful framing.
Yeah that's the point. If you can get away with having a trade deficit not balanced by a surplus, that's a good thing because you get more movies and ice cream for less meetings. Trade deficits are good, people are just sending you free stuff.
I think it's what can happen when we shift more towards an exchange orientation and away from a communal orientation. Or in other words, as we see the world more win-lose and less win-win.
I dislike this analogy because a nation is not a person grocery shopping and anyway if a single grocery store was the only way to get food that would put me in a very lopsided relationship with them and the power dynamics in such a case are obviously bad for the person.
Nations have interests and there’s a real conversation to be had that a country should ensure it has strategic industries so its existence is never at the whims of another.
> a real conversation to be had that a country should ensure it has strategic industries
Then let that be the reason for tariffs rather than the bullshit argument of trade deficit = taking money.
In academic and think tank circles it is. Too many people treat political theatre and, frankly, entertainment pieces as reflective of the actual policy debates when they are mass media designed to get clicks.
Right but this is actual policy. The Trump Administration does actual policy built off poorly formed fiscal reasoning. That's why we see blanket tariffs. There is no strategy.
Maybe some smart people, somewhere, would hypothetically have a strategy. Those people currently hold no power. It's not "political theater", it's our ACTUAL politics. It's just so ridiculous that it looks like theater. Which just means the situation is worse than you originally thought.
This is one view. Another view is that maintaining economic interdependence between countries — aside from making both countries richer via specialization and comparative advantage — is a great way to incentivize cooperation and prevent them from killing each other.
Examples here: https://www.hoover.org/research/when-trade-wars-become-shoot...
Needs to be two-way though. What if we rely on China, but they don't rely on us? Well then they can destroy us at any moment. It needs to be MAD to be a deterrent.
https://en.wikipedia.org/wiki/The_Great_Illusion
OK, so someone wrote a book and was wrong at the time. Times change. It's like saying in 2003 that nobody should launch a social network because the first one, Six Degrees, failed to take off. (https://en.wikipedia.org/wiki/SixDegrees.com)
Regardless the analogy of grocery shopping falls apart and shows a total lack of understanding the other sides worldview
It’s a silly question, since (short of a major life change or economic system change) you need the grocery store and the job to have decent quality of life.
You need to trade your labor for money, and you need to trade your money for food. I would argue that there isn’t a huge difference in the fundamental nature of those two trades. Framing them in terms of “trade deficits” is pointing out which direction money is moving in each instance, but fundamentally they’re both just trades.
Indeed that is true, which is the point of both OP(or at least my takeaway). Attaching a moral value to trade deficits or surpluses, as the current administration seems to be in favor of doing, is fairly nonsensical.
It also excludes money spent on services, which in most cases favours the US.
Look, my trade deficit with my barber is a real problem in our relationship. I need them to give me $20 for something, damnit.
> which in most cases favours the US
Used to favor the US. Trump's policies and behaviors are ruining the US' reputation as a stable trading partner by demonstrating what damage can be done by an idiot with unchecked power. The rest of the world is going to permanently veer away from US services because it's not impossible (and sadly likely) another feckless imbecile will get put in charge.
He doesn't have a view on trade deficits. To imply he does is giving him far too much credit. The "most powerful person on earth" in charge of the United States fundamentally doesn't understand trade deficits or tariffs.
We do a disservice when we act like he has a strategy or view about these things. He doesn't. He is ignorant of how they work, and to prove it you only have to listen to his own words.
Economically, it's a problem long-term. Dollars only have value if you can buy things with them. Japan, China, Saudi Arabia - countries we've had trade deficits with - have been buying our business, infrastructure, and real estate.
Not defending tariffs, but there's a reason people care about trade deficits.
Also, Trumps argument always ignores the bulk of US economy and exports: services.
Somehow we count shoes and timber but not gazzilions in financial and cloud services.
To make the analogy even more perfect, the character should be holding a saw rather than a hammer.
Or a gun, because America is famous for its gun culture, and it would be more clearly "shooting yourself in the foot".
i'm a little bit confused by the current news. I thought the supreme court said the tariffs are illegal without congressional approval and the government started refunding the money.
now the news is full of all these tarriffs about canada?
What's the factual non-partisan reasoning by which trump has been found not to have the power to create tarriffs, but is still doing it with canada?
Section 338 allows it. Anything Canada does that gives themselves any trade advantage allows retaliation. Essentially inevitable.
whitehouse.gov/fact-sheets/2026/07/fact-sheet-president-donald-j-trump-imposes-additional-tariffs-on-canada
The Trump Administration first used the International Emergency Economic Powers Act to declare a national economic emergency and impose tariffs on countries under the pretence that they were economic threats to America.
The Supreme Court ruled against the tariffs because while it allows the president to regulate foreign imports as a measure against economic threats; it does not specifically grant the president power to impose tariffs, duties or other taxes which is typically a power that belongs to Congress.
The tariffs on Canada are now being imposed under Section 338 of 1930's Tariff Act which allows the president the authority to apply up to 50% tariffs on countries the president finds has "discriminated", directly or indirectly, against the United States.
> I thought the supreme court said the tariffs are illegal without congressional approval
The ruling wasn't as generalised as that. What it said was that the president doesn't have the authority to impose tariffs under the provisions of the International Emergency Economic Powers Act, which Trump had cited as the basis for some tariffs. That made those tariffs effectively illegal, but the ruling said nothing about tariffs which had other legislative provisions as their legal basis. The tariffs that you see today cite some other rule as their basis rather than the IEEPA.
Even if it's illegal, who's stopping him?
Until anyone does, "crime is legal", as coffeezilla says.
If tariffs are so obviously and universally bad, then why do tariffed countries respond with retaliatory tariffs instead of letting the first country shoot themselves in the foot and getting on with their own business?
Maybe reducing trade with a country that is taking bad/strange/stupid decisions might be worth it. If your industry can change some trade partners (and diversify) it might a plus.
In Canada's case the reliance of one trade partner (see https://atlas.hks.harvard.edu/explore/overtime/?exporter=cou... ) is probably a weakness that retaliatory tariffs can influence.
Tariffs (and retaliatory tariffs) can be universally economically negative and still be rationally pursued by individual politicians.
For example: if Donald Trump tariffs the country you are in charge of, you are likely willing to pay the economic cost of a retaliatory tariff to seem like you are standing up to America to your constituents. The politician’s goal is to be re-elected.
The politician may aim to deter getting tariffed in the first place, and promising a retaliatory tariff if another country tariffs you first is also reasonable as a deterrent from a game-theoretical perspective.
All it takes is for one world leader to not understand or care about the clear economic negatives to tariffs to start the chain: everyone else can be a rational actor.
The broader tariffs are the worse they are. Targeted tariffs can have a function but if targeted at a country that function isn't an economic good for either country it's only good as a political tool. You could argue that industries that you are the second cheapest in compared to that country could reap some benefits from supplying local markets (but not if there are other countries cheaper than your own that aren't also tariffed that can supply more of the demand) and then a targeted tariff may make some (long term) economic sense.
Targeted tariffs can have more nuanced effects. You'll notice that Canadian politicians are talking about targeting red states with their tariffs. These tariffs will also economically hurt Canada, but you won't see a retaliatory tariff on things that hurt Canada disproportionately which would be the case with universal tariffs. You can expect them to pick luxury industries (like they did with bourbon) where preferences can be changed or industrial/commercial ones where (preferably) local or other suppliers are near parity with the US rather than say gasoline.
1) (all) tariffs aren't obviously and universally bad, only when applied universally without any coherent long term goal/strategy.
2) retaliatory tariffs are targeting the hostile actor, not widely against all (other) trading partners, thus redirecting trade towards less hostile country.
Political pressure works? The immediate pain from tariffs is quite different from the long-term loss.
Because the other non-isolationist countries have the rest of the world to trade with. Their tariffs on USA don't make all of their imports more expensive, only redirect trade to other countries.
If punching random people on the street is so obviously bad, then why do people fight back when I do it?
During Trump 1.0, retaliatory tariffs were targeted at swing states. E.g., on Harley-Davidsons manufactured in Wisconsin. The goal was to make it politically painful to the president and undermine his reelection chances.
I imagine Carney is picking industries that are assymetricly painful to the USA or, since Trump isn’t up for re-election, congressional Republicans.
Doesn't feel realistic. The comic version at least makes sense at some level; the real-world one doesn't.
The real world version is "they're ripping us off by giving us cheap stuff that our producers can't compete with on price." Which is arguably a problem, yes, but the one thing it's not is a "ripping us off" problem.
The real world version is even funner because it's not about receiving cheap stuff, rather the complaint is about receiving free stuff (trade deficit).
I think a lesson is going to be taught, all right.
Unfortunately the feedback loop in nations is much slower than in bodies.
That’s the whole trick: if the feedback cycle is long enough, the next person gets blamed for it, not the current.
And likewise for the next person trying to take the credit for things that the previous one did when the effects take time to manifest: https://www.theguardian.com/us-news/2026/aug/15/trump-washin...
The most impressive thing about Trump is that he managed to shorten up the feedback loops on an overwhelming number of his policies.
You would expect the US industry to silently absorb his trade policies and only break decades after he leaves. Somehow, they aren't healthy enough for that.
Slack is expensive. At least it has a cost that is not always appreciated.
Everyone has been optimizing to increase profits for decades. A 1950's US economy would have taken a lot longer to collapse.
I think we’re on course to be in really rough shape by 2028. I hope it’s rough enough to spark genuine change in our politics.
I think we’re on course to be in really rough shape by 2028.
Exactly: just in time for somebody else to take the blame.
That depends, Trump certainly wants a fourth term (yes, fourth, he's counting the one that was "stolen").
I think, realistically, the limiting factor won't be the politics, it will be his health. He's 80 years old.
>You legs may have a comparative advantage at running
that's not what comparative advantage means except in a degenerate sense.
if country A is worse than country B in both making clothes and making paper, their comparative advantage is in the product which they are less worse at; they can maximize their GDP making that product.
There's also an earlier xkcd on this theme: https://xkcd.com/3073/
See the explainxkcd explanation: https://www.explainxkcd.com/wiki/index.php/3290:_Trade
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https://en.wikipedia.org/wiki/Plaza_Accord
The United States proposed a deal to France, Germany, Japan, and Britain (the G5): you buy up your own currencies, the dollar falls, and in return we reduce our budget deficit, meaning you no longer have to effectively finance U.S. development.
The United States agreed to reduce its budget deficit and lower interest rates. The other parties to the agreement committed to raising theirs. In addition, West Germany agreed to cut taxes, while Japan agreed to allow the yen to appreciate. As a result, over the following two years the U.S. dollar fell by 46% against the German mark and by 50% against the yen. However, the U.S. government ultimately failed to reduce its budget deficit. Meanwhile, the sharp appreciation of the yen made Japanese exporters less competitive in foreign markets. In the United States, by contrast, the period following the agreement saw substantial economic growth and low inflation.
A classic American move: promise the world — we’re all in this together, we’re marching toward a brighter future — and then screw everyone over.
Economists universally think tariffs are dumb policy.
https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off.
Nobody in politics can say this simple truth because the rust belt states are critical swing states.
Tariffs are bad unless you’re a domestic producer of a good that has just been tariffed, and now you have less competition and can raise your prices.
Or, rather, you must raise your prices because Orange Foolius has tariffed your manufacturing inputs.
That’s what I said - it’s bad for everyone except domestic producers of tariffed stuff. So, bad for consumers, producers of downstream goods, etc.
No, what I'm saying is it's bad for "domestic producers of stuff" too.
Source: domestic producer of stuff (me.) My products require components and materials that we don't currently make here in the US and won't be making anytime soon. I can't do anything about that. So why am I getting hosed?
We’re saying the same thing. Tariffs are dumb.
Here buddy, you dropped this straw.
Please explain why tariffs a "good thing" to protect a French winery but a "Bad thing" when it is used to protect an American worker.
Everyone loves the EU and Canada and their tariffs. In Canada for example American poultry and dairy have as much as 200-500% tariffs. Usually it is seen as a big win to prevent undercutting the working class with cheap foreign labor. But as soon as it has any association with Trump all of a sudden the Progressives forget everything they believe in and turn into laissez faire libertarian capitalists.
> In Canada for example American poultry and dairy have as much as 200-500% tariffs.
In the US the dairy industry is supported through subsidies. In Canada the dairy industry is supported through supply management.
If the US would be willing to stop 'artificially' supporting their farmers (and allowing some to go bankrupt) then perhaps Canada would be willing to stop 'artificially' supporting theirs. Otherwise it's a tom-ay-to/tom-ah-to stand-off.
Who is "Everyone"? EU is trying in various ways to reduce tariffs, like (biggest example I know): Mercosur, to quote "both the EU and Mercosur will gradually reduce import duties on 91–92% of exports" (https://en.wikipedia.org/wiki/EU%E2%80%93Mercosur_Partnershi...).
Of course European farmers complain (they will get competition and potentially lower quality products), so yes, some people like the current tariffs.
Behind every tariff there will be an interest group. If you are producing X in a country and there is an import tariff on X you are happy. If you are buying X you are not happy.
There can be strategic industries that you want to encourage, but the issue is if tariffs are applied with a plan or not. Opinions might differ on this one but history will tell.
I'd love it if chicken breast in Canada was cheaper. I think maybe there need to be some controls or regulation so meat coming from the US isn't lower quality than what we currently have but if the price went down i wouldn't complain
It's breaking EXISTING free trade deals that's angering people. And also using them as geopolitical cudgels against allies. Every country has protectionist measures in various sectors, trade deals are decades-long work to chip away at them in a way that's agreeable to everyone involved.
Liberals and progressives don't agree on most things related to (free) trade, but agree on not "bullying" allies for no reason and little profit.
> but agree on not "bullying" allies for no reason and little profit.
This is what confuses me most about Trumps tactics. These are longtime friends and allies who would’ve gladly worked together to try to improve any perceived imbalances.
I cannot fathom treating a friend this way. It makes no sense to me and is destructive.
It’s not logical. He is a malignant narcissist and a sociopath. A very sick man.
Expert economists working in both the Biden and Trump administration support tariffs.
The difference is the dumb way Trump is doing them and a smarter way of doing them.
Obviously, this comic completely misses that nuance and promotes a pseudoscientific idea that tariffs are somehow bad.
Economists universally think tariffs are dumb policy.
https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off.
Nobody in politics can say this simple truth because the rust belt states are critical swing states.
It depends on the details though. That survey was just on a one sentence "new US tariffs on steel and aluminum will improve Americans’ welfare" question. They can have a place if say you want to maintain manufacturing for military strategic reasons.
The Biden administration kept the Trump tariffs. His own policy-makers, technocrats, said that they were a necessary geopolitical tool, cited China's extensive use of tariffs (amongst other states), and noted that they must be used to protect manufacturing and in tandem with allied states.
https://www.commerce.gov/news/fact-sheets/2024/05/fact-sheet...
https://www.npr.org/2024/05/14/1251096758/biden-china-tariff...
https://www.internationaltradeinsights.com/2024/07/biden-adm...
It is possible for both Trump and Biden to be wrong about something.
I think the 'tariffs' in this comic are related to the current regimes application of them. Not representative of tariffs as a whole.
I think the comic captures that nuance by exaggerating the stupidity of the trump tariffs. If your trade strategy is "we must eliminate all trade deficits" youre gonna have a bad time
The doctor hits my leg with a hammer to test my reflexes. The comic isn't saying hitting legs with hammers is always bad.
Mobile version
https://m.xkcd.com/3290/
this ignores evolution theory: the cells in the leg, arm, brain, etc. share the exact same genome variation, so selection pressure rewards coherent action in the interest of the individual organism.
thats not true for different players in some level-or-not playing field
That’s true and entirely irrelevant to the actual dynamics of the metaphor.
But I’m glad you had a chance to feel like a clever little boy
Second sentence unneeded.
You are repeating a common misconception revolving about the individual organism.
Selection pressure rewards successful genetic reproduction.
What actually happens at the scale of the organism is mostly irrelevant except how it affects reproduction.
A genetic predisposition towards chopping legs off would be selected for, if chopping legs off resulted in more children than otherwise.
Chopping legs off after having no more children (e.g. after menopause or vasectomy) has no direct genetic outcome (instead indirectly via improved/worstened reproduction of children or relatives).
To be clearer: reproduction is the key (survival matters for reproduction and upbringing).
That's a good summary, although the details are sublimely trickier. https://en.wikipedia.org/wiki/Gene-centered_view_of_evolutio...
People are very quick to make kneejerk reactions to tariffs while assuming the other guys have different opinions.
The Biden admin went after Canada repeatedly for unfair trade practices, and issued a blanket 10% tariff on Chinese goods.
The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
The one thing the current admin does have a point on is non-tariff meddling. Numerous countries make it almost impossible to sell goods in their countries while the same is not true in reverse, or they levy a high price in garbage regulatory fees (see the EU's new packaging identification directive that completely destroys small business), or in completely made-up fines for vague behaviors not even they can define (see the EU's DSA which is exclusively used against monopolizing American companies while completely ignoring monopolist and predatory EU ones like Booking.com).
I don't really have any idea if tariffs are good or bad. What I do know is that just announcing that they will go into effect with very little notice and then they won't go into effect and then they do but then they are decalared illegal because they weren't passed through the official methods isn't good.
It was _great_ for the companies that collected billions in tariffs and got refunds when the obviously illegal tariffs were declared illegal while training their customers to accept higher prices... that certainly won't go back to pre-tariff levels.
> I don't really have any idea if tariffs are good or bad.
tariffs are objectively* bad from a "big picture" perspective.
There are some situations where they create winners and losers so that some people in some countries will win, but they always do more damage than good "overall"(or in aggregate across all parties).
A link to the math behind it: https://en.wikipedia.org/wiki/Deadweight_loss
*in almost all cases... For certain goods where you actually want to lower consumption such as cigarettes, then maybe arguably they are good? Same argument as for https://en.wikipedia.org/wiki/Pigouvian_tax
The “big picture” perspective is missing a bunch of reasons beyond just lowering consumption in the short term. For example even if you can buy cheaper food elsewhere it is still important to have a domestic food production industry.
Economists universally think tariffs are dumb policy.
https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off.
Nobody in politics can say this simple truth because the rust belt states are critical swing states.
> Economists universally think tariffs are dumb policy.
There are a few specific cases when one may want to implement them:
* https://www.noahpinion.blog/p/when-are-tariffs-good
One should also be mindful one's manufacturing base:
* https://www.noahpinion.blog/p/manufacturing-is-a-war-now
> The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
Which is a huge difference. Targetted tariffs can induce compliance with desired trade practices and influence purchasing towards more desirable sources.
Global blanket tariffs on products without domestic sources of substitute goods is effective for increasing domestic prices and encouraging foreign producers to enhance their ex-US trade networks.
If you wanted to encouage local manufacturing, you would add tariffs on finished goods, but leave raw materials untariffed. You might consider tariffing raw materials with ample local capacity. You might carefully consider tariffs for machine tools and other finshed goods which are necessary for manufacturing where there's not current local production capacity.
You might consider reciprocal tarrifs that were actually reciprocal tariffs... you tarrif me, I tariff you. Not tarrifs on countries that have an export surplus because they can't afford to import goods from the US.
> The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
You are ignoring a massive difference. Trump wants balanced trade with each individual country. Pretty much everyone else who wants the US to reduce or eliminate its trade deficit just wants that to apply to total trade, not to each individual country.
The main reason money was invented was so you don't have to have balanced trade with each individual trading partner.
What is booking.com doing that violates DSA?
It operates as a monopoly and 10,000 hotels have sued it for anti-trust in Europe.
Despite qualifying for DSA thresholds, the EU pretends it doesn't exist and is not a monopoly. Because it's not American.
Booking.com literally is classified as a VLOP (very large online platform) under DSA: https://digital-strategy.ec.europa.eu/en/policies/list-desig...
It's also not the only European company to be designated as VLOP, as you'll find some EU-based adult content sites on that page as well, but if you really want a European company that is inexplicably missing from this list, I'd go with Spotify.
Cool! Link me to their fine under DSA.
> The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
I mean that's the point, no? Swing the hammer carefully at a nail or with maximum force at your own leg?
Or to drop the metaphor - much of the difference between good and bad policy is a difference in degree. So your counterargument here is valid against "all tariffs are bad" but I believe the point most are making is "the current admin's use of tariffs is bad" which makes your counter appear as a bad-faith mischaracterization.
The other difference is the legality of it. Trump is trying to do all this at his personal order, without Congress. And he's trying to jump through all kinds of shenanigans to do so.
For example, he declared a state of emergency about fentanyl, and used that as cover to create tariffs toward every country on earth. That, obviously, has nothing to do with fentanyl; it's just a smoke screen.
He wants to rule by decree. Biden didn't do that. (OK, didn't do it to anything like the same degree. I'm sure someone can find an example where he did. It still wasn't like this.)
> The Biden admin went after Canada repeatedly for unfair trade practices […]
What were these practices?
Google's AI comes up with softwood, cheese, DSA and "Buy American" https://share.google/aimode/DL4saqlcSNZrngyPH
Those seem kind of minor gripes.
Softwood dumping by Canada has been a huge issue for over 40 years.
https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...
So that's one (in which Canada happened to win multiple rulings at NAFTA and WTO panels).
Any others?
> completely destroys small business
Citation needed, I'm in the EU and there is small business
There was a big discussion of this recently here, which will give you more information, but yes, it is in fact destroying a large number of EU small businesses.
The EU has recognized this and they are scrambling to fix it in legislation due later this year.
So we've gone from "completely" to "partially", and the source is still just handwaved?
Here's the 1000+ comment discussion of this from a few days ago: https://news.ycombinator.com/item?id=49419237
And the evidence is where. Again, when I look out the window, the bodega is still there.
https://www.recyclingtoday.com/news/eu-ppwr-pause-request-us...
This regulation forces very small businesses to pay thousands and thousands of dollars to comply and register in EACH EU country (what the hell's the point of the union, exactly?). Even if they sell only 10 widgets to Belgian buyers, they need to register in Belgium and pay the fee. Insane.
So a small business selling 5-10k of widgets in EU now has to pay 2-5k in business destroying regulatory compliance fees, putting them out of business. Incredible incompetence from the people who brought you ineffective cookie nag screens.
It's not possible to exist as a small business in the EU because they create regulations to destroy you.
Try creating a business in Germany. You need 25,000 euros to create a GmbH! In the US you can walk into the office in New York City and have an LLC for $9 per 2 years.
The EU is a nightmare hellscape of over-regulation. This is why there are essentially zero EU unicorns. EU bureaucrats support ONLY large and entrenched businesses.
Why does the restaurant across the street from my house need to register in Belgium?
Sounds like you've identified an opportunity to make a company that helps EU startups navigate bureaucracy. You could do all the packaging registration on their behalf.
Separately, Germany hates limited liability in general and wants you to be a sole proprietor instead.
This is a pretty reductive take. If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours.
Protecting workers from that kind of competition seems fair. Tariffs aren't bad in itself. They are just a tool.
Unfortunately fools wielding a tool like this can cause a lot of damage, but that's true for any tool.
"If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours." - This is not obviously true to me, can you explain why it is for you?
Although it is not a law of nature, and it is not linear across the hours.. In general if I work M-F more work will be done that if I just work on Monday morning.
It is clear that more work is done if you go from 1 day to 5 or 1 hour to 8, but that still includes plenty of time for rest.
Does the same hold for going from 5 days to 7 days or 8 hours to 16 hours?
A reasonable person should agree at some point adding more time will make people less productive due to lack of breaks, rest, etc.
Is it obvious where the line is? if so, where?
https://en.wikipedia.org/wiki/Four-day_workweek
"As of July 2022, more than 80 UK companies and organisations are recognised as having permanently implemented a four-day working week"
"As 50% of workers claim improved productivity during the period, the Manufacturing Technology Centre (MTC) announced it will permanently provide a four-day workweek to its 820 employees"
So you’re saying if I work at mcdonalds 60 hours a week i’ll make more than an investment banker working 40 hours a week? Awesome, i’m filling out a job application now!
Imagine a factory line where each worker makes 10 items per hour.
In, say, China a worker doing 996 will make 720 items. Te average working hours in the Netherlands are 36 hours or so per week. Making 360 items.
As long as there is free trade the Chinese factory will simply outproduce the Dutch one since they utilise their capex better.
Obviously European workers can't be reasonably asked to compete in an open market when labour laws, salary, health inspection etc... in China are at a 1920 Dutch level.
Are you aware of comparative advantage? What matters is opportunity cost, not raw output. (Also, unit labor cost is wage per hour divided by output per hour, so the number of hours worked is not really relevant. In other words, longer hours make workers richer and not their output cheaper.)
This was worked out by David Ricardo 200 years ago. You still benefit from trade even if (granting the argument) you are worse at producing everything.
So since the math extrapolates linearly and there is apparently no cost, why would anyone settle for anything other than 1680 items per week?
You seem to be assuming that productivity scales linearly with time spent working, which doesn't seem to inherently be true.
If your factory workers spend twice as long working, it's likely that more widgets will get made. I'm not certain you can generalize too far from that, though.
So this is just not correct. First off a factory can run 24/7 regardless of the shift length, which is what will determine the total productivity. Second off it assumes there are no trade offs in terms of more errors or anything else by having longer shifts. Third off it assumes that factories in different countries are going to be equally effective with each other, instead of different nations/areas within nations specializing in certain areas. It also ignores the economic benefits that come with having people in your nation having more leisure time, higher education, more time with children, etc. It's a very simplistic model that is also very incorrect.
It's not a perfect example of course but the gist that tariffs do and should protect workers is true.
Tariffs aren't inherently bad, they're a tool.
Protecting Workers, I'd add a couple more; it's not smart to be fully dependent on a trading partner or partners for critical and essential products, such as food, tariffs can help ensure you maintain domestic industry. Also helping to control dumping by an aggressive trade partner to ensure a domestic industry isn't destroyed.
Eh, I think every industrial society has independently arrived at something like 36-44 hours of factory time per week (plus overtime up to a max of something like 55 hours) , simply because that's the actual optimum[1]. While tariffs might work for other stuff [2], I think you're right that they can be a narrowly applicable scalpel, but plausibly you accidentally picked a bad example.
[1] Caveats apply. For example more advanced machinery with higher stress may necessitate shorter shifts; while highly motivated creative work might permit longer shifts at times.
[2] Adam Smith -for instance- was mostly against tariffs, though he identified certain exceptions such as national defense reasons.
Right at first approximation you'd certainly think so!
At second approximation, the <Dutch> factory in that example might net make a larger number of items per hour because the workers are more alert and concentrated and make less mistakes. So the <dutch> factory and the <chinese> factory might actually be producing the same number of items.
Of course then there's more steps to this, and you need to start actually looking at systems and what you're optimizing for etc etc.
And, not everything is factories. For instance, if your operator (at eg. Smit or Mammoet) is operating a large crane that's lifting a 100 ton oil platform, maybe you'd prefer them to be wide awake and on the ball, regardless.
This is an example of “person pretends to not understand a simple thing thus naming conversation impossible”
The comic satirizes the 2026 US tariff rationale, vs. worker protection tariffs. But I do often think about Noam Chomsky's opposition to NAFTA[0] when talking heads explain why tariffs are bad.
[0]: <https://chomsky.info/secrets03/>
Just as a note: if you work 6x12 shifts, you're actually working less efficiently, because you'll be regularly fatigued, make more mistakes, need more rework, etc etc. You might end up with the same net yield as if you'd done 3x6 hour shifts.
(edit: And only if you don't fall asleep at the controls and destroy the factory first. 12 hour shifts are brutal. At least one place I know bans you the next day if you exceed 11h, for your own protection if nothing else)
(edit2: This was documented in the 1st world war when munitions factories that tried to ramp up by increasing shift durations past a certain point ended up hardly improving productivity, but did increase accident and sickness rates to the point that it was starting to hurt the war effort. )
> This is a pretty reductive take.
Yes, because it's a one-panel comic.
> Protecting workers from that kind of competition seems fair. Tariffs aren't bad in itself. They are just a tool.
At the cost of consumers paying for goods/services?
Your take is as reductive as the take in the comics.
People in a nation working 5 days a week for 8 hours are getting paid less and less over time. Heck lot of people now need double shifts to make ends meet totaling up to 12 hr or even more. They can only afford a Christmas light from the nation mass producing it by working 6 days a week, 12 hr shift.
And lets not pretend this was only about protecting workers. There were multiple agendas:
1. Bring back jobs 2. Remove trade barriers between countries 3. Make US rich by collecting huge amount of tariffs
All three can't be true at the same time. If jobs are brought back then you aren't going to collect huge amount of tariffs because nothing is being produced outside. If trade barriers are removed then that comes at a cost of slashing tariffs so you can't really collect huge amount of tariffs.
The foolish reasoning highlighted in the comics is the reason there is so much trade war.
> If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours.
If a nation has a decades-long technological lead over another nation, then obviously it will outcompete it in many industries and enjoy major advantages in trade. But somehow that advantage doesn't seem to count in your argument. Cherry-picking one side's advantages is not an analysis of international trade; it's just bias.
That is a ... pretty reductive take as well.
I don't think the comic is claiming that all tariffs in any context are bad, that would indeed be a reductive, bad take.
Given the timing and the metaphor of blood being sent to and from a limb, this is almost surely a reference to the tariff threats against Canada.
Oh this is a good point. I was not aware of new developments with US-Canada today, that makes the more-than-normal stingy reactions expected.
Sorry, I'm European and can't keep up with the erratic US Gov. I read a summary at the end of the week.
The US would be better off if more people followed your example.
Unfortunately in our hyper partisan, sound bite, climate you can’t discuss the trade offs of tax policies anymore you either support the party line or you’re the enemy.
I am European... Tariffs are completely normal here we protect our workers all the time.
It seems I've 'stung the wasps nest' on HN by not denouncing them outright it seems.
How many 100% tariffs do you have on every good from an entire country?
A scalpel is one thing.
Dynamite is something else.
Context is important. 100% tariffs on Canada is stupid, 100% tariffs on China because we don’t want any industry dependent on a major military adversary is something worth discussing even if the answer is to not do that in the end
I was not aware this comic was a reation to new developments for US-CAN. I thought it was just a generic take on tarrifs and responded accordingly.
I agree the current US strategy behind tariffs is pretty retarded. Good example of fools trying to use a powerful tool.
Yeah, I think you've got it. Agreeing with you and continuing my thought:
If I had to guess at the comic author's intention...
It's commentary that the logic is flawed. If this is why you're doing tariffs, you're not using them correctly.
Not that tariffs should never be used.
It would certainly help if people wouldn't believe flat-out lies.
Like, "other countries pay the tariffs."
No. They don't.
How can we have nuanced conversation about the trade-offs, if the leader of one political party blatantly lies about a fundamental detail of how tariffs work?
600% reduction in the price of drugs?
We can't even start a discussion with people who believe this. At all. They reject any information, even their own knowledge of how numbers work.
I have never met anyone who thought other countries paid the tariffs. Im sure they exist but this seems more like something retractors say to make themselves feel smarter than people in support of tariffs. People who care at all about tariffs tend to know how they work.
The president says a lot of really stupid things and those stupid things are highlighted, but that’s not indicative of the average and one of the main talking points about tariffs is that they increase costs in order to incentivize local suppliers
I wish we would call them "taxes on imports" instead to reflect what is actually happening.
Merriam-Webster: "The meaning of TARIFF is a schedule of duties imposed by a government on imported or in some countries exported goods."
Apparently the dictionary is "woke."
Wikipedia: "A tariff, or import tax, is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer."
Oxford Economics: "Tariffs are taxes imposed by a government on goods and services imported from other countries."
I know what tariff means, I just think many people don't realize it means "taxing US citizens" and not "sticking it to some country we don't like"
Sorry, I didn't mean to imply you didn't know.
I meant, "Yes, you're so damned right! It's even in the dictionary! I wish people would educate themselves and not believe lies!"
100% agree
My dad worked 12 hour shifts for decades (4 days on, 4 days off). Anyone working 72 hours a week isn't going to last long.
I never realized I've been working this much.
Have you ever heard of comparative advantage?
I totally agree trade should feel fair. If the US sends jobs, money, food or goods to other countries, then we shouldn't get garbage back.
Tariffs are a way of warning other countries "don’t take us for a ride." They help American workers, factories and towns that were hurt when jobs went overseas.
Tariffs shouldn't feel like hurting yourself for no reason. They are an important tool for standing up for yourself when other countries (to say nothing of bad trade deals) want to take advantage of you
Tarrifs are the worst decision a politician can make.
The main reason we have open-ish border for people and goods is to reduce the risk of war. You are not going to wage war with a country that do business with.
This undermines this idea.
Maybe letting other countries rob us blind is worse. The US has hardly any factories left. Is that "peace" or is that just losing, slowly?
Open borders can be GREAT, but they can also be a point of vulnerability if we lose control of them
> Maybe letting other countries rob us blind is worse.
I find this argument interesting because the US economy is the largest in the entire world by a fairly wide margin. That the US is being robbed implies it's operating from a position of weakness, which is an absurd idea.
Are other countries with factories really responsible for US companies outsourcing manufacturing to them? Do you want cheap goods or do you want your fellow Americans paid pennies?
They're not robbing us blind. They're taking care of our manufacturing so that we can invest in things like the financial industry, fossil fuels, and AI.
This is great until you're at war (economic or kinetic) with who does your manufacturing.
But for a beautiful moment in time we created a lot of value for shareholders.
> The US has hardly any factories left.
Feel free to start your own factory in US, nobody is stopping you. Just keep in mind that for commoditized products (most consumer stuff, for example), prices are all that matter. "Buy American" is not a product feature.
Some years ago. I learned about a new -ish technology that fascinated me. I started to research ways to get in on the development of this technology: i.e. what sort of opportunities might there be for a startup or small business in the space.
The answer I found was very sobering and mildly depressing. There was no room for developing the technology itself. That had already been done by large companies with the capital and resources to commoditize things early.
Instead, the real opportunities were found in business/management consulting selling the product and tangential things, like having a construction company to help build out infrastructure needed for the technology.
At this point I think technology no longer interests me because it doesn’t have a place for me.
Trade happens because both sides agree and make an exchange. I don't understand how "other countries rob us blind."
No, we're robbing them blind. We used "free trade" to dump subsidized agricultural goods into countries, destroy their farmers, then buy up their farms. We used it to push wages down both here and overseas so that our poor got poorer, and so in other countries they couldn't take advantage of the work to improve their lives, just inflate the incomes of a bunch of elite middle men.
The international monetary system as envisioned by Keynes was supposed to use a central world bank and settlement currency (the Bancor) to make sure that strong countries couldn't be parasitic on weak countries. This was sabotaged by a US official who was also working as a Soviet spy, Harry Dexter White. Neither pole of the new postwar bipolar order wanted anything that would limit their dominance.
The long-term outcome, however, was that the poverty of the world was much more attractive to exploit than the workers of the US, the consumer base for all of this production was left to deteriorate - to shrink to just the wealthy whose income came from investments, as all production shifted overseas.
Everything would have gone great if it weren't for those dastardly Chinese, who didn't let oligarchs shape their economy, and planned for the well-being of China, not their own personal well-being. Western oligarchs were going for a slave planet controlled by the largest bank accounts; this required no competition because it had (and desired) few real assets. China cultivated a manufacturing powerhouse, perfected its infrastructure, and operated from a base of actual, controlled domestic capital.
The West is now stuck trying to trade paper, and manufacturing whose only value is the poverty surrounding it, for Chinese goods. Now they're going to treat the US like the US treated Mexico. Manufacturing will come back in the US, owned by the Chinese.
Tariffs and the well-being of US workers are the only way out of this. Elite Americans will do anything but this, because they are 1) bad people, and 2) barely American.
Who exactly is robbing you blind? Could it be your own billionaire class?
The idea that trade decreases the risk of war is old. It dates back to pre-WW1.
Think tanks around Europe were celebrating an "end to hostilities". And then WW1 happened. Trade does not prevent war. War is not always a rational consequence or act.
What does prevent war is a good standard of living. Eliminate resentment, and one of the great causes of war is lost.
Whether you need tariffs or not to ensure good standard of living I don't know. But the goal should always be to increase standard of living and uphold justice, tariffs or not.
Then why did Canadian politicians tax milk products at > 200%? https://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2024...
(starting long before the current trade war)
It's a surplus tax, and one that apparently doesn't exist for the majority of dairy imports: https://archive.is/kKsYc
thanks, key quote from the link (for others) "“It is accurate that Canada imposes a tariff of approximately 250% on U.S. exports of certain dairy products into Canada, and even more with Canada’s 25% retaliatory tariffs in place. However, that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement (USMCA). Frustratingly, the U.S. has never gotten close to exceeding our USMCA quotas because Canada has erected various protectionist measures that fly in the face of their trade obligations made under USMCA."
So I think this supports the point that Canadian politicians are bad for protectionist trade policies, right?
There's never been a war the US has chosen not to start.
You act as if it's the countries that are doing the trading; it's not. It is the businesses and other entities within the countries that are doing it. They are doing it because it benefits them. If a company is doing overseas manufacturing it is because they benefit and it isn't the United States that made that decision.
It also seems to ignore the companies and individuals that got rich because they chose to move jobs overseas.
Totally, that is a great and valid add
Economists universally think tariffs are dumb policy.
https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off.
Nobody in politics can say this simple truth because the rust belt states are critical swing states.
You've posted that five times now. Bit excessive?
Unfortunately there are a lot more than 5 people saying the same misinformation in the comments.