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> Today, a tariff is quite literally the same thing as taxing Americans […] Not just a tax, but a subsidy as well: > Executives from U.S. steel companies were

> Today, a tariff is quite literally the same thing as taxing Americans […] Not just a tax, but a subsidy as well: > Executives from U.S. steel companies were enthusiastic backers of the 2018 tariffs and have urged Trump to deploy them again in his second term. They have called for the elimination of tariff exemptions and duty-free import quotas, saying those carve-outs allow unfairly low-price steel to enter the U.S. and undermine the steel market. […] > Higher prices for imported steel are often followed by domestic suppliers raising their own prices, which then get passed through supply chains, manufacturing executives said. For consumers already reeling from rising retail prices and inflation, pricier steel and aluminum could further lift costs for durable goods like appliances and automobiles, as well as consumer products with aluminum packaging, such as canned beverages. > “The issue with tariffs is everybody raises their prices, even the domestics,” said Ralph Hardt, owner of Belleville International, a Pennsylvania-based manufacturer of valves and components used in the energy and defense industries. Steel and aluminum are Belleville’s largest expenses. * https://www.wsj.com/economy/trade/trump-tariffs-mexico-canada-us-steel-market-a36c3b99 https://www.wsj.com/economy/trade/trump-tariffs-mexico-canad... Why not just go directly to the subsidy and skip taxing the public?

A_D_E_P_T 2y ago
Ultimately, you get what you subsidize. Tariffs are very weak subsidies; they're more of a penalty for domestic end-users. Going directly to the subsidy would get the government what it wants -- more steel, aluminum, or whatever -- and spare end-users the pain. Direct investment in small and nascent business is also a powerful lever. At trade shows, I've personally spoken with more than a few Chinese factory owners, and many of them mentioned that they got their start with an $_M investment by the government, and that the government is a minority shareholder in their business. This is how you get lots of factories in sectors you want to see, and you can force them into competition to keep end-user prices low. Just imagine the US doing this for drones, AI, mining and metals production, etc. It would be like mega-YC.

A_D_E_P_T 2y ago

Ultimately, you get what you subsidize. Tariffs are very weak subsidies; they're more of a penalty for domestic end-users. Going directly to the subsidy would get the government what it wants -- more steel, aluminum, or whatever -- and spare end-users the pain. Direct investment in small and nascent business is also a powerful lever. At trade shows, I've personally spoken with more than a few Chinese factory owners, and many of them mentioned that they got their start with an $_M investment by the government, and that the government is a minority shareholder in their business. This is how you get lots of factories in sectors you want to see, and you can force them into competition to keep end-user prices low. Just imagine the US doing this for drones, AI, mining and metals production, etc. It would be like mega-YC.