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Germany is the prime exporter of the EU. It has the benefit of the Euro in the internal market for buying power due to its size and it has the benefit of the Eu

by rswail 8y ago

Germany is the prime exporter of the EU. It has the benefit of the Euro in the internal market for buying power due to its size and it has the benefit of the Euro in the external market because German bonds denominated in Euros are cheaper for it than the other EU states. I'm a democratic socialist, but tariffs are not the way to control trade and standards of living. That is a mercantilist attitude from the 19th Century. Tariffs are paid by the consumers in the country that has the tariffs (ie Tariffs on China by US is paid by people in the US). It primarily hits those that spend most of their income on consumption, which is those that are poorer. What is needed is the power of Labor (ie unions etc) to be applied in the foreign country, by having restrictions on goods and services that are not provided by Labor with fair conditions. That's not the same as pay or money, there are comparitive advantages in things like the supply and demand on local food production etc.

mateo1 8y ago
>What is needed is the power of Labor (ie unions etc) to be applied in the foreign country, by having restrictions on goods and services that are not provided by Labor with fair conditions. Although this would generally negate the need for tariffs, there are serious issues: -You can't enforce this. It's a very different country on the other side of the globe. -You can't properly observe working conditions for the entire supply chain (and conversation on what constitutes "fair conditions" can enter the realm of philosophy very quickly) -Even if labor was in control of production, they could still act maliciously as a group -Small transient fluctuations in efficiency are magnified without a hard cutoff to stop them from using the extra capital to become too big and undercut competition And on top of that, rich countries have to face a sharp recession while the poor countries catch up. That's not a small amount of time. In much of Europe we already have 1-2 generations that faced very harsh economic conditions because of this. Generosity has limits. Yes, free trade (generally, not always) allows poor countries to develop faster, but they grow asymmetrically and the working/middle class of rich countries suffers too.
brmgb 8y ago
> Tariffs are paid by the consumers in the country that has the tariffs (ie Tariffs on China by US is paid by people in the US). It primarily hits those that spend most of their income on consumption, which is those that are poorer. But consumers are already paying for the current situation in Germany. Instead of tariff, Germany decided to put downward pressure on salaries via the Hartz reforms. The effects are not far from tariff in that it shifts money from consumption towards savings/investments. That's why Germany has such a large trade surplus. And like tariff, it's a losing solution. In the end, your currency should reevaluate. Germany is just lucky to have the euro. For a long time, I was really puzzled by why the German European partners stuck with Germany in the currency union were so tolerant of pretty much being spoiled. But after Macron, I think it's pretty clear: the richest are far too happy to be able to present lowering salaries and degrading work conditions as an inescapable part of modern economic competition. They are after all on the right side of the rising inequality.

by rswail 8y ago

mateo1 8y ago

>What is needed is the power of Labor (ie unions etc) to be applied in the foreign country, by having restrictions on goods and services that are not provided by Labor with fair conditions. Although this would generally negate the need for tariffs, there are serious issues: -You can't enforce this. It's a very different country on the other side of the globe. -You can't properly observe working conditions for the entire supply chain (and conversation on what constitutes "fair conditions" can enter the realm of philosophy very quickly) -Even if labor was in control of production, they could still act maliciously as a group -Small transient fluctuations in efficiency are magnified without a hard cutoff to stop them from using the extra capital to become too big and undercut competition And on top of that, rich countries have to face a sharp recession while the poor countries catch up. That's not a small amount of time. In much of Europe we already have 1-2 generations that faced very harsh economic conditions because of this. Generosity has limits. Yes, free trade (generally, not always) allows poor countries to develop faster, but they grow asymmetrically and the working/middle class of rich countries suffers too.

brmgb 8y ago

> Tariffs are paid by the consumers in the country that has the tariffs (ie Tariffs on China by US is paid by people in the US). It primarily hits those that spend most of their income on consumption, which is those that are poorer. But consumers are already paying for the current situation in Germany. Instead of tariff, Germany decided to put downward pressure on salaries via the Hartz reforms. The effects are not far from tariff in that it shifts money from consumption towards savings/investments. That's why Germany has such a large trade surplus. And like tariff, it's a losing solution. In the end, your currency should reevaluate. Germany is just lucky to have the euro. For a long time, I was really puzzled by why the German European partners stuck with Germany in the currency union were so tolerant of pretty much being spoiled. But after Macron, I think it's pretty clear: the richest are far too happy to be able to present lowering salaries and degrading work conditions as an inescapable part of modern economic competition. They are after all on the right side of the rising inequality.