22 ms·

I'm pro tariff - but 25% tariffs are absurd, at most you need 10%-12% in narrowly targeted categories to ensure re-onshoring of production.

by Aloha 2y ago

emodendroket 2y ago
They're clearly thinking much bigger, like returning to a model where tariffs are the primary mode of funding the government, and nuking whole sectors/devaluing the dollar to make US exports more competitive with a desperate potential workforce. Not a particularly compelling plan in my view but it has its own internal logic.
- chii 2y ago
  why would tariffs make US exports more competitive? It would make other countries under tariff to retaliate, which makes US exports less valuable. Unless, of course, the US has some sort of monopoly on an export that others have no choice but to take. I dont think the US has such a resource.
  - disgruntledphd2 2y ago
    The US does have such a monopoly, in tech. But because that's services rather than goods, it seems to be ignored.
    - toxicunderGroov 2y ago
      I propose ASML raised prices for US customers by 30%, and maybe give China some freebies to thank them for the panda's.
      - emodendroket 2y ago
        Supposing they did, is there somewhere else their customers are going to buy from?
      - chii 2y ago
        Well, you'd be glad to know that ASML is majority owned by institutional investors and a large fraction of that are US based.
  - emodendroket 2y ago
    Import substitution industrialization is a pretty well established method to foster industries and frankly works really well for developing states (or did until the entire international system started conspiring to turn you into a pariah state for trying it). You can't export something you're not making in the first place. But it is quite unusual for a fully developed, post-industrial economy to try and move back down the value chain and manufacture more stuff again so who knows what happens when we try that.
    - Aloha 2y ago
      But a 25% tariff isnt going to do that, its just going to make things much more expensive - its another thing if you're trying to do cost adjustment tariffs - and just price in all the externalities (labor cost, regulatory regime, environmental rules, and human rights costs) that US manufacturing must bear - and make it a level playing field - thats not what this is.
      - emodendroket 2y ago
        > labor cost, regulatory regime, environmental rules, and human rights costs These don't strike you as themes they're interested in? They're kneecapping or eliminating regulators and driving up unemployment. Their deportation drives, it's true, are a bit contradictory here, but those have other motivations.
        Aloha 2y ago
        Not particularly, no. I do think they want to create more manufacturing jobs, which in general are a better quality than service ones however.
        emodendroket 2y ago
        In what sense are they “better”?
        2y ago
- Aloha 2y ago
  The issue with trying to do this is tariffs are both extremely regressive and wont generate enough revenue to move the needle. It'd be one thing if we were combining tariffs with a UBI - that can balance out most of the regressive effects of it, but we're not doing that.
  - emodendroket 2y ago
    I don't think they care about it being regressive. Perhaps they even consider that a benefit.
Marsymars 2y ago
I’m curious - I wouldn’t describe myself as “pro tariff” at all, but I can see a good case for them in a couple circumstances; 1) in cases where production is important for national security - e.g. sufficient production of Calories and 2) in cases where off-shored production isn’t meeting standards around human rights, environmental protection, etc. Do you see a case for tariffs otherwise?
- Aloha 2y ago
  Cost adjustment tariffs is my argument - You use tariffs to equalize actual costs plus a little (environmental/climate rules, labor costs, regulatory environment, human rights, etc) between the US and a foreign country. It doesn't have to be a huge amount of increase either, 5-12% - and probably wouldn't apply to most developed countries, because it is based on that matrix of total cost of doing business. As far as rationale here - I personally want to onshore as much production as I can - but you can't start with finished goods necessarily, you often have to start with the base supportive industries needed - but even I acknowledge that may not be practical for everything. But, to do what I want to do is a decades long process and must be done strategically and carefully - blanket tariffs dont do that, and are just a blowtorch to the delicate interconnections of a modern economy. Like targeting agricultural goods is absurd, for example - and will just raise prices for no tangible good.
  - Marsymars 2y ago
    > I personally want to onshore as much production as I can What's the rationale for this? Like if you're already close to full employment, this isn't even zero-sum, you're throwing away your comparative advantage and spending part of your economy on production rather than higher-value services. I'm willing to spend part of my country's wealth to counteract, say, other countries' lack of environmental protections, but if you're spending that wealth on counteracting lower offshore labour costs... in effect, the net impact is that you're just reducing the value of your own labour to match the offshore labour. (ergo, tariffs are a real clunky way to support local labour that isn't competitive with offshore labour costs... you could achieve the same ends more efficiently via income taxes and UBI.)

I'm pro tariff - but 25% tariffs are absurd, at most you need 10%-12% in narrowly targeted categories to ensure re-onshoring of production.

by Aloha 2y ago

I'm pro tariff - but 25% tariffs are absurd, at most you need 10%-12% in narrowly targeted categories to ensure re-onshoring of production.

emodendroket 2y ago

They're clearly thinking much bigger, like returning to a model where tariffs are the primary mode of funding the government, and nuking whole sectors/devaluing the dollar to make US exports more competitive with a desperate potential workforce. Not a particularly compelling plan in my view but it has its own internal logic.

chii 2y ago
why would tariffs make US exports more competitive? It would make other countries under tariff to retaliate, which makes US exports less valuable. Unless, of course, the US has some sort of monopoly on an export that others have no choice but to take. I dont think the US has such a resource.
- disgruntledphd2 2y ago
  The US does have such a monopoly, in tech. But because that's services rather than goods, it seems to be ignored.
  - toxicunderGroov 2y ago
    I propose ASML raised prices for US customers by 30%, and maybe give China some freebies to thank them for the panda's.
    - emodendroket 2y ago
      Supposing they did, is there somewhere else their customers are going to buy from?
    - chii 2y ago
      Well, you'd be glad to know that ASML is majority owned by institutional investors and a large fraction of that are US based.
- emodendroket 2y ago
  Import substitution industrialization is a pretty well established method to foster industries and frankly works really well for developing states (or did until the entire international system started conspiring to turn you into a pariah state for trying it). You can't export something you're not making in the first place. But it is quite unusual for a fully developed, post-industrial economy to try and move back down the value chain and manufacture more stuff again so who knows what happens when we try that.
  - Aloha 2y ago
    But a 25% tariff isnt going to do that, its just going to make things much more expensive - its another thing if you're trying to do cost adjustment tariffs - and just price in all the externalities (labor cost, regulatory regime, environmental rules, and human rights costs) that US manufacturing must bear - and make it a level playing field - thats not what this is.
    - emodendroket 2y ago
      > labor cost, regulatory regime, environmental rules, and human rights costs These don't strike you as themes they're interested in? They're kneecapping or eliminating regulators and driving up unemployment. Their deportation drives, it's true, are a bit contradictory here, but those have other motivations.
      - Aloha 2y ago
        Not particularly, no. I do think they want to create more manufacturing jobs, which in general are a better quality than service ones however.
        emodendroket 2y ago
        In what sense are they “better”?
        2y ago
Aloha 2y ago
The issue with trying to do this is tariffs are both extremely regressive and wont generate enough revenue to move the needle. It'd be one thing if we were combining tariffs with a UBI - that can balance out most of the regressive effects of it, but we're not doing that.
- emodendroket 2y ago
  I don't think they care about it being regressive. Perhaps they even consider that a benefit.

Marsymars 2y ago

I’m curious - I wouldn’t describe myself as “pro tariff” at all, but I can see a good case for them in a couple circumstances; 1) in cases where production is important for national security - e.g. sufficient production of Calories and 2) in cases where off-shored production isn’t meeting standards around human rights, environmental protection, etc. Do you see a case for tariffs otherwise?

Aloha 2y ago
Cost adjustment tariffs is my argument - You use tariffs to equalize actual costs plus a little (environmental/climate rules, labor costs, regulatory environment, human rights, etc) between the US and a foreign country. It doesn't have to be a huge amount of increase either, 5-12% - and probably wouldn't apply to most developed countries, because it is based on that matrix of total cost of doing business. As far as rationale here - I personally want to onshore as much production as I can - but you can't start with finished goods necessarily, you often have to start with the base supportive industries needed - but even I acknowledge that may not be practical for everything. But, to do what I want to do is a decades long process and must be done strategically and carefully - blanket tariffs dont do that, and are just a blowtorch to the delicate interconnections of a modern economy. Like targeting agricultural goods is absurd, for example - and will just raise prices for no tangible good.
- Marsymars 2y ago
  > I personally want to onshore as much production as I can What's the rationale for this? Like if you're already close to full employment, this isn't even zero-sum, you're throwing away your comparative advantage and spending part of your economy on production rather than higher-value services. I'm willing to spend part of my country's wealth to counteract, say, other countries' lack of environmental protections, but if you're spending that wealth on counteracting lower offshore labour costs... in effect, the net impact is that you're just reducing the value of your own labour to match the offshore labour. (ergo, tariffs are a real clunky way to support local labour that isn't competitive with offshore labour costs... you could achieve the same ends more efficiently via income taxes and UBI.)