5 ms·

Tariffs, and protectionism, are such an extreme measure. It should only be used against countries that you're going to war with. They should never be used in th

Tariffs, and protectionism, are such an extreme measure. It should only be used against countries that you're going to war with. They should never be used in the course of normal trade. America is like 50 countries with open border & free trade policy between them. Can you imagine what would happen if states decided to impose tariffs on each other?

petermcneeley 8y ago
Canada's dairy industry has had a long history of protection. It is likely that this industry would not exist without this protection.
- aldoushuxley001 8y ago
  It's true, the dairy farmers here in Canada act like an full fledged mafia
  - john00088876 8y ago
    I don’t know enough about them to comment but situations like that is why trade agreements have tribunals and things go through the WTO etc etc. It’s a very complex balance with complex systems. Canada also imports more than four times the dairy than it exports: http://www.cdc-ccl.gc.ca/CDC/index-eng.php?id=3803 http://www.cdc-ccl.gc.ca/CDC/index-eng.php?id=3803 (poutine 2-3 times per day adds up I guess). Trump’s only direct authority for imposing steel tariffs is a narrow national security clause which is absurd and insulting to use against Canada and demonstrates that America can’t be trusted. Even if a future president tries to rebuild international relationships I would be hesitant to waste years of effort working out any international agreement with America when the next TV populist president can easily tear it up. Unfortunately it takes a lot more effort to build things than tear them down.
    - orf 8y ago
      > Unfortunately it takes a lot more effort to build things than tear them down I think it will take many, many years to rebuild the positive reputation that the US had among it's allies. At least from the people I've interacted with there is a universal hate for Trump at a level that I have never seen before, across a wide cross section of society. The man is reprehensible. It takes a while to get over that, and he will forever be there. Also if he is the new normal then God help us all.
  - Amygaz 8y ago
    So does the US. The vast majority of dairy farmers receive subsidies or they would not be "profitable", averaging $280 million per year over the past 20 years (some year it's $10M, while another its $1B). Everyday we dump over 250,000 gallons of milk. There is a reason why milk is cheaper in the US than Canada.
- pscnv 8y ago
  It’s a horrible idea to get rid of your local industry of basic, vital needs. A country could squeeze your balls by cutting off exports to you.
  - AlexCoventry 8y ago
    In what sense is milk a vital need, though? Millions of people live without it.
    - pritambaral 8y ago
      > Millions of people live without it [milk]. Many more depend on dairy.
sonnyblarney 8y ago
Not quite. When 2 nations are each protective, it's bad for both. If they are both open, it's generally good for both. But - if one protects in a sneaky way, and the other is open - the it's amazing for the protectionist country. So nations strive to be 'open' but then to sneak in stuff, or rather, sometimes they are open, but really are not. It's impossible for American companies to sell into Japan for many reasons, arguably quality, but the way Japanese business syndicates work, they'll keep America out, irrespective of what the government says. This was a huge thing in the 1980's and is the 'memory' that gripes Trump. As for China - we don't have open trade with them. America is considerably more open than China. + China has massive state-owned agencies, the subsidized markets + They have a 100% politically controlled currency + They have political capital controls + They require foreign entities to hand over key IP + They have any number of barriers (some on purpose, some not so much) to foreign participation. + China does not pursue those breaking IP rules. China has had these advantages for some time, it's just that when they were poor, nobody really cared, but as they get powerful, it becomes an issue. So the only choice is to play 'hardball' with such nations - because these nations won't react to anything else, and they'll only react to threats that are credible. As for Europe, it's a different bag, but America has some decent beefs with Germany in particular. As for NAFTA - that's a tough one. I don't think America has such a huge advantage, but wages are weaker in Cana/Mex which gives big opportunities in some ways ... but it also keeps Can/Mex standard of living lower in many ways. So the NAFTA gripe is more difficult to understand. Put another way - the US has been having a 'trade war' with China for 30 years, it just wasn't ever a big deal. And there are some issues (cars) that America has a reasonable beef with on Germany, for example. I think Trump is a douche but he's not 'all wrong' on these things.
- simonebrunozzi 8y ago
  And the US Dollar is NOT a 100% politically controlled currency, in your view?
  - sonnyblarney 8y ago
    It would be wild to claim that USD is a politically controlled currency, to the point of conspiratorial, and the onus would be on you to provide proof that Trump et. al. are controlling interest rates or Fed programs. He most definitely is not. There is no direct link between the executive/legislative and the Fed. The Fed does what's roughly best for American economy, which disproportionately favours those with assets, banks etc. - but they are fairly independent in normal times. In times of crises, you could start to point to some things like all those homes right now sitting on the Fed balance sheet, surely. But regular operations are not politically controlled. But in China, the currency is literally worth whatever the government wants it to be at any time. They can literally press a button and 'poof'. Because of the amazing control and power of the Chinese government, the RMB might be the most tightly politically controlled currency in all of history: at least all of the fiat money that failed in the past ... leaders had to water it down or print money behind the scenes over time. Not to say that's entirely bad - one could make the claim that 'it's better for China' to have this, there'd be some good points there. But in terms of 'free trade' it's not good. In any event, the US does not have open trade with China really, so there's constant trade tensions, there probably always will be. I don't thin anything I'm saying is controversial or new, it just might be new data for the folks here on HN who I find are generally more tech than finance oriented.
akhatri_aus 8y ago
I think you mean sanctions, not tariffs or quotas. There is not a single country that does not apply tariffs or quotas.
- Karishma1234 8y ago
  You call them sanctions when you talk about your enemies, you call them tariffs when you do it to your friends. The difference is nearly 0.
  - akhatri_aus 8y ago
    Sanctions involve a total ban on trade. tariffs involve a tax on imports, quota impose a limit on imports. If only 0 was an asymptote it would fit your description.
    - Karishma1234 8y ago
      Think of ban as a variable between 0 - 1. Sanctions = 1.0 and Tarrifs < 1.0. Tarrifs are sanctions. (Increasing taxes on something is a partial ban).
- toomanybeersies 8y ago
  Singapore doesn't. Not in the trade protectionist sense anyway.
  - akhatri_aus 8y ago
    Not really, even Singapore has its duties. It's only 0% for everything if you're going for re-export. https://www.customs.gov.sg/businesses/valuation-duties-taxes--fees/duties-and-dutiable-goods https://www.customs.gov.sg/businesses/valuation-duties-taxes...
    - toomanybeersies 8y ago
      Excise is a bit different to tariffs though. Even if you produced those items in Singapore you pay the same excise. The 20% on cars isn't to protect the (non-existent) car manufacturing industry of Singapore, but to reduce demand for cars.

petermcneeley 8y ago

Canada's dairy industry has had a long history of protection. It is likely that this industry would not exist without this protection.

aldoushuxley001 8y ago
It's true, the dairy farmers here in Canada act like an full fledged mafia
- john00088876 8y ago
  I don’t know enough about them to comment but situations like that is why trade agreements have tribunals and things go through the WTO etc etc. It’s a very complex balance with complex systems. Canada also imports more than four times the dairy than it exports: http://www.cdc-ccl.gc.ca/CDC/index-eng.php?id=3803 http://www.cdc-ccl.gc.ca/CDC/index-eng.php?id=3803 (poutine 2-3 times per day adds up I guess). Trump’s only direct authority for imposing steel tariffs is a narrow national security clause which is absurd and insulting to use against Canada and demonstrates that America can’t be trusted. Even if a future president tries to rebuild international relationships I would be hesitant to waste years of effort working out any international agreement with America when the next TV populist president can easily tear it up. Unfortunately it takes a lot more effort to build things than tear them down.
  - orf 8y ago
    > Unfortunately it takes a lot more effort to build things than tear them down I think it will take many, many years to rebuild the positive reputation that the US had among it's allies. At least from the people I've interacted with there is a universal hate for Trump at a level that I have never seen before, across a wide cross section of society. The man is reprehensible. It takes a while to get over that, and he will forever be there. Also if he is the new normal then God help us all.
- Amygaz 8y ago
  So does the US. The vast majority of dairy farmers receive subsidies or they would not be "profitable", averaging $280 million per year over the past 20 years (some year it's $10M, while another its $1B). Everyday we dump over 250,000 gallons of milk. There is a reason why milk is cheaper in the US than Canada.
pscnv 8y ago
It’s a horrible idea to get rid of your local industry of basic, vital needs. A country could squeeze your balls by cutting off exports to you.
- AlexCoventry 8y ago
  In what sense is milk a vital need, though? Millions of people live without it.
  - pritambaral 8y ago
    > Millions of people live without it [milk]. Many more depend on dairy.

sonnyblarney 8y ago

Not quite. When 2 nations are each protective, it's bad for both. If they are both open, it's generally good for both. But - if one protects in a sneaky way, and the other is open - the it's amazing for the protectionist country. So nations strive to be 'open' but then to sneak in stuff, or rather, sometimes they are open, but really are not. It's impossible for American companies to sell into Japan for many reasons, arguably quality, but the way Japanese business syndicates work, they'll keep America out, irrespective of what the government says. This was a huge thing in the 1980's and is the 'memory' that gripes Trump. As for China - we don't have open trade with them. America is considerably more open than China. + China has massive state-owned agencies, the subsidized markets + They have a 100% politically controlled currency + They have political capital controls + They require foreign entities to hand over key IP + They have any number of barriers (some on purpose, some not so much) to foreign participation. + China does not pursue those breaking IP rules. China has had these advantages for some time, it's just that when they were poor, nobody really cared, but as they get powerful, it becomes an issue. So the only choice is to play 'hardball' with such nations - because these nations won't react to anything else, and they'll only react to threats that are credible. As for Europe, it's a different bag, but America has some decent beefs with Germany in particular. As for NAFTA - that's a tough one. I don't think America has such a huge advantage, but wages are weaker in Cana/Mex which gives big opportunities in some ways ... but it also keeps Can/Mex standard of living lower in many ways. So the NAFTA gripe is more difficult to understand. Put another way - the US has been having a 'trade war' with China for 30 years, it just wasn't ever a big deal. And there are some issues (cars) that America has a reasonable beef with on Germany, for example. I think Trump is a douche but he's not 'all wrong' on these things.

simonebrunozzi 8y ago
And the US Dollar is NOT a 100% politically controlled currency, in your view?
- sonnyblarney 8y ago
  It would be wild to claim that USD is a politically controlled currency, to the point of conspiratorial, and the onus would be on you to provide proof that Trump et. al. are controlling interest rates or Fed programs. He most definitely is not. There is no direct link between the executive/legislative and the Fed. The Fed does what's roughly best for American economy, which disproportionately favours those with assets, banks etc. - but they are fairly independent in normal times. In times of crises, you could start to point to some things like all those homes right now sitting on the Fed balance sheet, surely. But regular operations are not politically controlled. But in China, the currency is literally worth whatever the government wants it to be at any time. They can literally press a button and 'poof'. Because of the amazing control and power of the Chinese government, the RMB might be the most tightly politically controlled currency in all of history: at least all of the fiat money that failed in the past ... leaders had to water it down or print money behind the scenes over time. Not to say that's entirely bad - one could make the claim that 'it's better for China' to have this, there'd be some good points there. But in terms of 'free trade' it's not good. In any event, the US does not have open trade with China really, so there's constant trade tensions, there probably always will be. I don't thin anything I'm saying is controversial or new, it just might be new data for the folks here on HN who I find are generally more tech than finance oriented.

akhatri_aus 8y ago

I think you mean sanctions, not tariffs or quotas. There is not a single country that does not apply tariffs or quotas.

Karishma1234 8y ago
You call them sanctions when you talk about your enemies, you call them tariffs when you do it to your friends. The difference is nearly 0.
- akhatri_aus 8y ago
  Sanctions involve a total ban on trade. tariffs involve a tax on imports, quota impose a limit on imports. If only 0 was an asymptote it would fit your description.
  - Karishma1234 8y ago
    Think of ban as a variable between 0 - 1. Sanctions = 1.0 and Tarrifs < 1.0. Tarrifs are sanctions. (Increasing taxes on something is a partial ban).
toomanybeersies 8y ago
Singapore doesn't. Not in the trade protectionist sense anyway.
- akhatri_aus 8y ago
  Not really, even Singapore has its duties. It's only 0% for everything if you're going for re-export. https://www.customs.gov.sg/businesses/valuation-duties-taxes--fees/duties-and-dutiable-goods https://www.customs.gov.sg/businesses/valuation-duties-taxes...
  - toomanybeersies 8y ago
    Excise is a bit different to tariffs though. Even if you produced those items in Singapore you pay the same excise. The 20% on cars isn't to protect the (non-existent) car manufacturing industry of Singapore, but to reduce demand for cars.