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If I had to guess, more tariffs and sanctions that increase the competing nation's self-reliance and harm domestic consumers. Perhaps my peabrain just can't co

If I had to guess, more tariffs and sanctions that increase the competing nation's self-reliance and harm domestic consumers. Perhaps my peabrain just can't comprehend the wisdom of policymakers on the sanctions front, but it just seems like all it does is empower the target long-term.

h0l0cube 2y ago
The tarrifs are for the US to build it's own domestic capabilities, but this will ultimately shift the rest of the world's trade away from the US and toward each other. It's a trade-off – no pun intended – between local jobs/national security and downgrading their own economy/geo-political standing/currency. Anyone who's been making financial bets on business as usual for globalization is going to see a bit of a speed bump over the next few years, but in the long term it's the US taking an L to undo decades of undermining their own peoples' prospects from offshoring their entire manufacturing capability. Their trump card - still no pun intended - is their military capability, which the world will have to wean themselves off first.
- whatshisface 2y ago
  Tariffs don't create local jobs, they shut down exporting industries (other countries buy our exports with the dollars we pay them for our imports) and some of those people may over time transition to non-export industries. Here's an analysis indicating how many jobs would be destroyed in total over several scenarios: https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/ https://taxfoundation.org/research/all/federal/trump-tariffs...
  - h0l0cube 2y ago
    They will, out of sheer necessity. Local industries will be incentivized to restart. And of course, there are already carve-outs for the automotive sector that needs steel, overseas components, etc. I expect more carve-outs will be made, esp. for the military. I don't think the tariffs are being managed intelligently, but they will have the intended effect of moving manufacturing back to the US, even if, in the short term, it's going to inflate prices, and yes, put a lot of businesses in peril.
    - whatshisface 2y ago
      You're thinking about the bolt factory that will open, but what about the factories that close? Putting, as you say, businesses in peril, gets rid of jobs. As for the carve-outs, there isn't a single US industry that doesn't rely on imports from lower down the supply chain.
      - h0l0cube 2y ago
        Protectionist policy, if applied consistently, will actually lead to more jobs (and higher wages) eventually, but also higher inflation and job losses in the short term, and a more insular economy. It's foolish to go so hard, and so fast – or this is just a negotiation tactic – so I think the Trump administration is going to compromise by necessity, but in time supply chains will adjust to the new reality, and tariffs can increase.
        whatshisface 2y ago
        That's an assumption, I'm trying to challenge it. Taxes usually take money out of the economy and lead to less activity. Why should a (very high) tax on transportation be different? These are not the sorts of things we can afford to just do without making sure they will work.
        pessimizer 2y ago
        It's a debate that has been had by many people far more informed than anyone who will see this thread, many times over decades or even a few centuries. Rather than challenging it on a very basic level (it's a tax, all taxes are bad, why should this tax be different), just look up the other debates and read them.
        h0l0cube 2y ago
        > Taxes usually take money out of the economy This is an oversimplification, they can change incentives, and sometimes increase investment. > lead to less activity I do agree money will be divested from the US as they become more and more expensive to deal with (leading to "less activity"), and like I said this will rechannel the economy between the rest of the world. The trade-off is that the US becomes a manufacturer and exporter again (leading to "replaced activity"), some manufacturing capability is duplicated (leading to "more activity" though redundant/less productive), and the currency devalues. But I'll admit I'm well out of my depth here, and I'm being booed off the stage. All the same, I don't think I'm wrong here. Protectionism isn't new, and lots of countries do it, it's just novel that the world's largest economy and bastion of free trade is doing it to such an extreme.
- pstuart 2y ago
  The tariffs are seen as "free money" that will allow for cutting taxes on the wealthy. Note that the current messaging is "we spend too much money" and there's nothing about "we need to invest in _foo_"
  - h0l0cube 2y ago
    Advanced chip fabs, and battery manufacturers are the first counterexamples that come to mind. The government doesn't need to invest, they just need to watch the free market realign their manufacturing to maintain access to the US economy. Tariffs have been around since Trumps first term, and were retained by Biden, and they're already doing what they intended.

h0l0cube 2y ago

The tarrifs are for the US to build it's own domestic capabilities, but this will ultimately shift the rest of the world's trade away from the US and toward each other. It's a trade-off – no pun intended – between local jobs/national security and downgrading their own economy/geo-political standing/currency. Anyone who's been making financial bets on business as usual for globalization is going to see a bit of a speed bump over the next few years, but in the long term it's the US taking an L to undo decades of undermining their own peoples' prospects from offshoring their entire manufacturing capability. Their trump card - still no pun intended - is their military capability, which the world will have to wean themselves off first.

whatshisface 2y ago
Tariffs don't create local jobs, they shut down exporting industries (other countries buy our exports with the dollars we pay them for our imports) and some of those people may over time transition to non-export industries. Here's an analysis indicating how many jobs would be destroyed in total over several scenarios: https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/ https://taxfoundation.org/research/all/federal/trump-tariffs...
- h0l0cube 2y ago
  They will, out of sheer necessity. Local industries will be incentivized to restart. And of course, there are already carve-outs for the automotive sector that needs steel, overseas components, etc. I expect more carve-outs will be made, esp. for the military. I don't think the tariffs are being managed intelligently, but they will have the intended effect of moving manufacturing back to the US, even if, in the short term, it's going to inflate prices, and yes, put a lot of businesses in peril.
  - whatshisface 2y ago
    You're thinking about the bolt factory that will open, but what about the factories that close? Putting, as you say, businesses in peril, gets rid of jobs. As for the carve-outs, there isn't a single US industry that doesn't rely on imports from lower down the supply chain.
    - h0l0cube 2y ago
      Protectionist policy, if applied consistently, will actually lead to more jobs (and higher wages) eventually, but also higher inflation and job losses in the short term, and a more insular economy. It's foolish to go so hard, and so fast – or this is just a negotiation tactic – so I think the Trump administration is going to compromise by necessity, but in time supply chains will adjust to the new reality, and tariffs can increase.
      - whatshisface 2y ago
        That's an assumption, I'm trying to challenge it. Taxes usually take money out of the economy and lead to less activity. Why should a (very high) tax on transportation be different? These are not the sorts of things we can afford to just do without making sure they will work.
        pessimizer 2y ago
        It's a debate that has been had by many people far more informed than anyone who will see this thread, many times over decades or even a few centuries. Rather than challenging it on a very basic level (it's a tax, all taxes are bad, why should this tax be different), just look up the other debates and read them.
        h0l0cube 2y ago
        > Taxes usually take money out of the economy This is an oversimplification, they can change incentives, and sometimes increase investment. > lead to less activity I do agree money will be divested from the US as they become more and more expensive to deal with (leading to "less activity"), and like I said this will rechannel the economy between the rest of the world. The trade-off is that the US becomes a manufacturer and exporter again (leading to "replaced activity"), some manufacturing capability is duplicated (leading to "more activity" though redundant/less productive), and the currency devalues. But I'll admit I'm well out of my depth here, and I'm being booed off the stage. All the same, I don't think I'm wrong here. Protectionism isn't new, and lots of countries do it, it's just novel that the world's largest economy and bastion of free trade is doing it to such an extreme.
pstuart 2y ago
The tariffs are seen as "free money" that will allow for cutting taxes on the wealthy. Note that the current messaging is "we spend too much money" and there's nothing about "we need to invest in _foo_"
- h0l0cube 2y ago
  Advanced chip fabs, and battery manufacturers are the first counterexamples that come to mind. The government doesn't need to invest, they just need to watch the free market realign their manufacturing to maintain access to the US economy. Tariffs have been around since Trumps first term, and were retained by Biden, and they're already doing what they intended.