4 ms·

The explicit goal of tarrifs is yo raise prices. This is not a bug, it's the whole reason for tarrifs to exist. The argument is that if the going rate for some

The explicit goal of tarrifs is yo raise prices. This is not a bug, it's the whole reason for tarrifs to exist. The argument is that if the going rate for something is high enough, it makes sense to manufacture it locally. And of course local manufacturing has major knock-on benefits. This logic falls down though when you bring the capital cost, and life-span of a factory into account. I'm only building a factory if I expect prices to -remain high-. And tarifs are set (unilaterally) by the president without congress (which I why Trump likes them) but they can be removed just as quickly. Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions. It also assumes that countries don't respond with tit-for-tat tarifs which harm factories already in the US. That certainly happened last time he used tarifs as a weapon. This is not rocket science. It's not even economics. Its what anyone who has ever imported anything can figure out for themselves.

elmerfud 2y ago
I agree, they are a powerful tool if used correctly. There are some benefits to the "make it locally" but it's also dependent on the specific goods. There are some tariff that have been in place for decades to simply prop up industries that should have died of years ago in favor of imports.
- jquery 2y ago
  I'm convinced the entire reason Trump is so obsessed with tariffs is he doesn't need congressional support. It's just a power grab. Hopefully someone knocks some sense into him before he follows through, but if not, I'll enjoy seeing leopards eating people's faces at least.
  - elmerfud 2y ago
    Of course, people always like to turn the knob they have the most control over. It's also the easiest way to pass yourself off as being a protectionist. Right now I think everyone is in speculation mode. I think everyone has forgotten 2016-2020 Trump speaks in massive exaggerations and hyperbole. The reality of what happens is likely to be much different than all this anticipation. The fact is the only one making a profit off of all of this talk is the news outlets that everyone is consuming incessantly.
aninteger 2y ago
> Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions. With NAFTA/NAFTA 2, it doesn't make sense to manufacture in the USA anyway when they have cheaper labor in Mexico. China knows this too.
AnthonyMouse 2y ago
> I'm only building a factory if I expect prices to -remain high-. And tarifs are set (unilaterally) by the president without congress (which I why Trump likes them) but they can be removed just as quickly. But they're often not, e.g. Biden kept many of the tariffs Trump imposed and even increased some of them. > Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions. This is obviously going to depend on the nature of the industry, but even when it moves to other countries, this can still be of benefit to the US because then those countries develop an industry instead of US consumers relying on a single supplier country as a monopolist and single point of failure. That could even long-term reduce prices as those other countries then compete with each other once the tariffs allow them to develop their manufacturing base. > It also assumes that countries don't respond with tit-for-tat tarifs which harm factories already in the US. Tit-for-tat would require the country on the wrong end of the tariffs to be importing as much from the US as the US does from them. It would also require that country to actually avoid buying US products. Maybe it's easier to move sneaker manufacturing to Vietnam than to replace high tech products from US companies. It would also require that country to not already be disfavoring US imports, as might be implied from an imbalance of trade to begin with.
- bruce511 2y ago
  Soya bean farmers in the last round of tarifs got hit very hard by retaliatory tarifs. Most of the high-tech stuff isn't really subject to tarifs, mostly because none of it is manufactured in the US. Yes Biden kept the tarifs, but didn't go on the news to announce it. He doesn't make it such a political football that others feel the need to politically respond. The point is not that Biden did or did not. The point is that he (or any president in the next 20 years) could simply as a political win (ie reducing prices). Whether that is good or bad policy is irrelevant. Yhe point is whether I want to risk substantial capital on that. Mexico is likely the big winner here. It has cheap labor and can't (easily) be tarrifed and likely would not be reverse tariffed.
  - AnthonyMouse 2y ago
    > Soya bean farmers in the last round of tarifs got hit very hard by retaliatory tarifs. The premise of a trade war is that you're negotiating with the other country. It's not that it has zero impact, it's that the impact on them is larger than the impact on you, so you have more leverage. > Most of the high-tech stuff isn't really subject to tarifs, mostly because none of it is manufactured in the US. Still implying that the other country can't use those things to retaliate even though the money is going to US companies. > Yes Biden kept the tarifs, but didn't go on the news to announce it. The premise was supposed to be that the tariffs would be unstable and companies wouldn't act, but companies looking at the past for guidance would now say that once the tariffs are there they stay for a while. > The point is that he (or any president in the next 20 years) could simply as a political win (ie reducing prices). Whether that is good or bad policy is irrelevant. Yhe point is whether I want to risk substantial capital on that. The alternative is that someone else does and you don't and then they can undercut you in the market because you're paying the tariffs and they don't. Also, what's the alternative supposed to be? Even if the tariffs were put in place by Congress, every two years you have a new Congress and they could do something different, and the same with any other rules or regulations or taxes. > Mexico is likely the big winner here. It has cheap labor and can't (easily) be tarrifed and likely would not be reverse tariffed. Which is also good for the US, because it gains a second supplier for things currently only made in China, and Mexico is geographically closer to the US which saves on shipping forever once that manufacturing base is self-sustainable, and likewise provides geographically closer production of lower tech products which are the inputs to higher tech products and facilitate production of higher tech products in the US.
throw0101c 2y ago
> The explicit goal of tarrifs is yo raise prices. This is not a bug, it's the whole reason for tarrifs to exist. There was an interview (in the Washington Post?) with a cattle rancher who wanted higher tariffs. This is because international competition forced him to sell at lower prices. The tariffs would increase international beef so he could then raise his prices (selling to his fellow Americans). Of course in the interview the same rancher wanted Trump to lower inflation and reduce the prices on his inputs. So inflation should be lower for him, but higher for his customers.

elmerfud 2y ago

I agree, they are a powerful tool if used correctly. There are some benefits to the "make it locally" but it's also dependent on the specific goods. There are some tariff that have been in place for decades to simply prop up industries that should have died of years ago in favor of imports.

jquery 2y ago
I'm convinced the entire reason Trump is so obsessed with tariffs is he doesn't need congressional support. It's just a power grab. Hopefully someone knocks some sense into him before he follows through, but if not, I'll enjoy seeing leopards eating people's faces at least.
- elmerfud 2y ago
  Of course, people always like to turn the knob they have the most control over. It's also the easiest way to pass yourself off as being a protectionist. Right now I think everyone is in speculation mode. I think everyone has forgotten 2016-2020 Trump speaks in massive exaggerations and hyperbole. The reality of what happens is likely to be much different than all this anticipation. The fact is the only one making a profit off of all of this talk is the news outlets that everyone is consuming incessantly.

aninteger 2y ago

> Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions. With NAFTA/NAFTA 2, it doesn't make sense to manufacture in the USA anyway when they have cheaper labor in Mexico. China knows this too.

AnthonyMouse 2y ago

> I'm only building a factory if I expect prices to -remain high-. And tarifs are set (unilaterally) by the president without congress (which I why Trump likes them) but they can be removed just as quickly. But they're often not, e.g. Biden kept many of the tariffs Trump imposed and even increased some of them. > Interestingly the importer in the article was looking at alternate chains of supply, but "manufacturing in the US" wasn't one of his proposed solutions. This is obviously going to depend on the nature of the industry, but even when it moves to other countries, this can still be of benefit to the US because then those countries develop an industry instead of US consumers relying on a single supplier country as a monopolist and single point of failure. That could even long-term reduce prices as those other countries then compete with each other once the tariffs allow them to develop their manufacturing base. > It also assumes that countries don't respond with tit-for-tat tarifs which harm factories already in the US. Tit-for-tat would require the country on the wrong end of the tariffs to be importing as much from the US as the US does from them. It would also require that country to actually avoid buying US products. Maybe it's easier to move sneaker manufacturing to Vietnam than to replace high tech products from US companies. It would also require that country to not already be disfavoring US imports, as might be implied from an imbalance of trade to begin with.

bruce511 2y ago
Soya bean farmers in the last round of tarifs got hit very hard by retaliatory tarifs. Most of the high-tech stuff isn't really subject to tarifs, mostly because none of it is manufactured in the US. Yes Biden kept the tarifs, but didn't go on the news to announce it. He doesn't make it such a political football that others feel the need to politically respond. The point is not that Biden did or did not. The point is that he (or any president in the next 20 years) could simply as a political win (ie reducing prices). Whether that is good or bad policy is irrelevant. Yhe point is whether I want to risk substantial capital on that. Mexico is likely the big winner here. It has cheap labor and can't (easily) be tarrifed and likely would not be reverse tariffed.
- AnthonyMouse 2y ago
  > Soya bean farmers in the last round of tarifs got hit very hard by retaliatory tarifs. The premise of a trade war is that you're negotiating with the other country. It's not that it has zero impact, it's that the impact on them is larger than the impact on you, so you have more leverage. > Most of the high-tech stuff isn't really subject to tarifs, mostly because none of it is manufactured in the US. Still implying that the other country can't use those things to retaliate even though the money is going to US companies. > Yes Biden kept the tarifs, but didn't go on the news to announce it. The premise was supposed to be that the tariffs would be unstable and companies wouldn't act, but companies looking at the past for guidance would now say that once the tariffs are there they stay for a while. > The point is that he (or any president in the next 20 years) could simply as a political win (ie reducing prices). Whether that is good or bad policy is irrelevant. Yhe point is whether I want to risk substantial capital on that. The alternative is that someone else does and you don't and then they can undercut you in the market because you're paying the tariffs and they don't. Also, what's the alternative supposed to be? Even if the tariffs were put in place by Congress, every two years you have a new Congress and they could do something different, and the same with any other rules or regulations or taxes. > Mexico is likely the big winner here. It has cheap labor and can't (easily) be tarrifed and likely would not be reverse tariffed. Which is also good for the US, because it gains a second supplier for things currently only made in China, and Mexico is geographically closer to the US which saves on shipping forever once that manufacturing base is self-sustainable, and likewise provides geographically closer production of lower tech products which are the inputs to higher tech products and facilitate production of higher tech products in the US.

throw0101c 2y ago

> The explicit goal of tarrifs is yo raise prices. This is not a bug, it's the whole reason for tarrifs to exist. There was an interview (in the Washington Post?) with a cattle rancher who wanted higher tariffs. This is because international competition forced him to sell at lower prices. The tariffs would increase international beef so he could then raise his prices (selling to his fellow Americans). Of course in the interview the same rancher wanted Trump to lower inflation and reduce the prices on his inputs. So inflation should be lower for him, but higher for his customers.