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If the whole Covid situation taught us something it's that we need to be more independent of other countries and encourage local production of many goods. Tarif

If the whole Covid situation taught us something it's that we need to be more independent of other countries and encourage local production of many goods. Tariffs sound like an easy way to do just that. Tax imports, help local producers. I don't see the problem tbh. All those free trade models ignore the scenario of everyone getting dependent on one exporter and then that exporter either going rouge or having problems and not being able to meet the demand anymore. I am very surprised by tariffs = war sentiment. It's just a way to have some protectionism. It works and is needed. Where is the problem?

mywittyname 6y ago
> It works and is needed. Where is the problem? The problem is, tariffs don't really work. Not in the long-term. Tariffs can hurt local producers too. If a company is just so efficient at producing good that they can produce cheaper products inclusive of the tariff, then the local company has no chance. They have no hope of expanding outside of their local markets and they will eventually give up. Most of the time, tariffs merely act as extra profit margin at the expense of the local economy. So the local company has no incentive to improve. So, in the long-term, tariffs on imported goods are are effect way of destroying local industry. It often drives the competition to fiercely optimize their production, making them substantially more competitive on a global market. The only time tariffs are effective at protecting a market, is when that market only exists locally, not globally. Thus, preventing any producers from gaining efficiency on the global market before tackling a domestic one. If you want the government to prop up a local industry, get the government to purchase a large volume of goods from them at a fair, but highly-competitive price. Then the producer has incentive to optimize production because they know exactly how much they can save each year. Decades of small incremental improvements add up.
- bluecalm 6y ago
  Your argument again misses the issue of security. Yes, tariffs hurt efficiency on a global scale and they hurt consumers in your country (as they now will have to spend more to get the same goods they could have get cheaper). Creating or keeping less efficient industry gains in scenarios where foreign actor you depend on for imports stops meeting demands (either on purpose to hurt you or if disaster like a pandemic hits). It's a trade-off between efficiency in a perfect world and security in a real one.

mywittyname 6y ago

> It works and is needed. Where is the problem? The problem is, tariffs don't really work. Not in the long-term. Tariffs can hurt local producers too. If a company is just so efficient at producing good that they can produce cheaper products inclusive of the tariff, then the local company has no chance. They have no hope of expanding outside of their local markets and they will eventually give up. Most of the time, tariffs merely act as extra profit margin at the expense of the local economy. So the local company has no incentive to improve. So, in the long-term, tariffs on imported goods are are effect way of destroying local industry. It often drives the competition to fiercely optimize their production, making them substantially more competitive on a global market. The only time tariffs are effective at protecting a market, is when that market only exists locally, not globally. Thus, preventing any producers from gaining efficiency on the global market before tackling a domestic one. If you want the government to prop up a local industry, get the government to purchase a large volume of goods from them at a fair, but highly-competitive price. Then the producer has incentive to optimize production because they know exactly how much they can save each year. Decades of small incremental improvements add up.

bluecalm 6y ago
Your argument again misses the issue of security. Yes, tariffs hurt efficiency on a global scale and they hurt consumers in your country (as they now will have to spend more to get the same goods they could have get cheaper). Creating or keeping less efficient industry gains in scenarios where foreign actor you depend on for imports stops meeting demands (either on purpose to hurt you or if disaster like a pandemic hits). It's a trade-off between efficiency in a perfect world and security in a real one.