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Everyone hates tariffs because everyone hates taxes. If a government uses protectionism for a specific policy goal, like developing a domestic auto industry, th

Everyone hates tariffs because everyone hates taxes. If a government uses protectionism for a specific policy goal, like developing a domestic auto industry, that can be very effective and we've seen that work lots of times in lots of countries. The US may have recently managed to achieve this with microchip production. But when tariffs are applied broadly we all pay more in taxes. And it's worse than a more familiar increase in sales or income tax because it can absolutely wreck supply chains.

unavoidable 2y ago
If tariffs work at all (which is doubtful), they're supposed to be part of an overarching plan with a long-term strategy in coordination with industry so that they can actually invest in creating new manufacturing. It certainly isn't going to work when tariffs are going on-off-on-off-25%-200%-10%-off-on-sometimes-off-on again. How in the world is _anyone_, American or otherwise, supposed to plan around this?
- Terr_ 2y ago
  Also, they shouldn't be part of 4-front trade war against the country's biggest partners comprising >50% of all trade. "Do something or we'll trade with somebody else" is not a credible threat if they know you've already pissed off everybody else.
  - oceanplexian 2y ago
    The US is the world's largest domestic economy. Trade with all nations around the world is 24% of the USA's GDP. You could shut it all down and the country would probably enter a mild recession while the rest of the world would face complete economic collapse. For example, 67% of Canada's GDP is reliant on the United States in some way. The US has an insane amount of leverage. Leaders in Canada, Europe, etc talk a big game but then ultimately talk to an economist and realize they have to come to the table. That's why these leaders keep announcing things and then walking them back.
    - unavoidable 2y ago
      Removing 24% of GDP is not just a "mild recession", leaving aside all the interconnected parts of the economy that would immediately be destroyed.
    - hollerith 2y ago
      Also, according to Peter Zeihan (I know) a significant part of that trade consists of the US's exporting the light sweet crude oil produced by fracking, which is easy to refine, and importing heavy sour crude oil, which the US has a comparative advantage in refining. Clearly, the US could switch to refining the crude oil produced in the US with very little disruption.
    - baby_souffle 2y ago
      How does this account for the different classes of things that go into a GDP? The US imports a lot of goods because we can't or don't want to make them here. Meanwhile, the bulk of US GDP is services done by knowledge workers... I am certainly not an economist but it seems like it would be a hell of a lot harder for the United States to build a bunch of factories and learn how to run them compared to the effort other countries would have to go through to import knowledge workers to build their own local services.
    - mixermachine 2y ago
      The current situation is the result of decades of free trade and reliability. There will likely be a shift if the market forces pull in a different direction. Not today right away but in the timescale of years.
    - jltsiren 2y ago
      24% of US GDP divided by US GDP is a larger number than 24% of US GDP divided by non-US GDP. Any changes to US foreign trade affect the US more than the rest of the world.
    - AnimalMuppet 2y ago
      GDP fell 29% during the Great Depression. 80% of the way to the Great Depression is not a "mild" recession! I agree that it would be less severe for the US than for other countries. It's essentially saying, economically, "Do what I want or I'll kill you." It's a mafia-style negotiation. I despise it when others do it, and I despise that the US is doing it.
- CPLX 2y ago
  > If tariffs work at all (which is doubtful) Of course they work. China has used them to go from people living in huts to the high tech manufacturing center of the world.
  - hamilyon2 2y ago
    Protectionism only works in combination with other measures. If you indiscriminately shield domestic enterprise from competition, you just get less competition and nothing else. Which is usually not enough.
    - CPLX 2y ago
      Arguable. But yes of course the best lesson to learn is that tariffs are one of the fundamentals tools of an effective industrial policy.
- mixermachine 2y ago
  For me (European) this is an incentive to first check if there is an non-us alternative for the product from another country. Quite sad times. I liked the 2000s and 2010s with rather free trade a lot.
- spacemadness 2y ago
  This administration works on threats and chaos. Trump said Biden’s CHIPS act was “horrible, horrible” and all he had to do was threaten Taiwanese chip companies instead. I can’t imagine anyone with any power in this admin organizing something strategically. It’s all ego and vibes.
pjc50 2y ago
Chip on shoring may lose its subsidy: https://www.reuters.com/technology/trump-wants-kill-527-billion-semiconductor-chips-subsidy-law-2025-03-05/ https://www.reuters.com/technology/trump-wants-kill-527-bill...
orwin 2y ago
Tariffs are little better than VAT/sales taxes as taxes imho (I'd rather have more progressive taxes like LVT, inheritance, wealth or at worse income), but in most countries, VAT is set extremely low on essential products like food. Setting global tariffs is idiotic. At least let the food and AG products free.
GeekyBear 2y ago
Brazil and India have both successfully forced Apple to move production onto their soil using tarrifs in the past. If the object is to bring in local manufacturing jobs, it's hard to claim that tarrifs can not be successful. However, you can naturally expect vocal opposition from companies that want to avoid higher labor costs. In the case of India, it's worked out very well as a proof of concept after Apple decided to reduce their reliance on China. > Apple Aims to Make a Quarter of the World’s iPhones in India https://www.wsj.com/tech/apple-aims-to-make-a-quarter-of-the-worlds-iphones-in-india-ab7f6342 https://www.wsj.com/tech/apple-aims-to-make-a-quarter-of-the...
- piva00 2y ago
  While tariffs have been used as a protectionism measure in Brazil for decades, and before tariffs there was a complete import ban for a lot of manufactured goods during the military dictatorship. It never ever helped local industrialisation, instead the country is stuck paying absurd prices for electronics goods while the local production, research and development, etc. are extremely subpar. It only helped locally produced shoddy products to win a larger market share, quality is underwhelming since they don't have to compete with more better products at the same price.
fnordian 2y ago
Everyone hates tariffs because they are now created by the executive branch of the government at a whim of one person. Undermining democracy and creating economic uncertainty globally.
- krapp 2y ago
  Americans wanted small government, and the smallest possible government is one raging asshole.

unavoidable 2y ago

If tariffs work at all (which is doubtful), they're supposed to be part of an overarching plan with a long-term strategy in coordination with industry so that they can actually invest in creating new manufacturing. It certainly isn't going to work when tariffs are going on-off-on-off-25%-200%-10%-off-on-sometimes-off-on again. How in the world is _anyone_, American or otherwise, supposed to plan around this?

Terr_ 2y ago
Also, they shouldn't be part of 4-front trade war against the country's biggest partners comprising >50% of all trade. "Do something or we'll trade with somebody else" is not a credible threat if they know you've already pissed off everybody else.
- oceanplexian 2y ago
  The US is the world's largest domestic economy. Trade with all nations around the world is 24% of the USA's GDP. You could shut it all down and the country would probably enter a mild recession while the rest of the world would face complete economic collapse. For example, 67% of Canada's GDP is reliant on the United States in some way. The US has an insane amount of leverage. Leaders in Canada, Europe, etc talk a big game but then ultimately talk to an economist and realize they have to come to the table. That's why these leaders keep announcing things and then walking them back.
  - unavoidable 2y ago
    Removing 24% of GDP is not just a "mild recession", leaving aside all the interconnected parts of the economy that would immediately be destroyed.
  - hollerith 2y ago
    Also, according to Peter Zeihan (I know) a significant part of that trade consists of the US's exporting the light sweet crude oil produced by fracking, which is easy to refine, and importing heavy sour crude oil, which the US has a comparative advantage in refining. Clearly, the US could switch to refining the crude oil produced in the US with very little disruption.
  - baby_souffle 2y ago
    How does this account for the different classes of things that go into a GDP? The US imports a lot of goods because we can't or don't want to make them here. Meanwhile, the bulk of US GDP is services done by knowledge workers... I am certainly not an economist but it seems like it would be a hell of a lot harder for the United States to build a bunch of factories and learn how to run them compared to the effort other countries would have to go through to import knowledge workers to build their own local services.
  - mixermachine 2y ago
    The current situation is the result of decades of free trade and reliability. There will likely be a shift if the market forces pull in a different direction. Not today right away but in the timescale of years.
  - jltsiren 2y ago
    24% of US GDP divided by US GDP is a larger number than 24% of US GDP divided by non-US GDP. Any changes to US foreign trade affect the US more than the rest of the world.
  - AnimalMuppet 2y ago
    GDP fell 29% during the Great Depression. 80% of the way to the Great Depression is not a "mild" recession! I agree that it would be less severe for the US than for other countries. It's essentially saying, economically, "Do what I want or I'll kill you." It's a mafia-style negotiation. I despise it when others do it, and I despise that the US is doing it.
CPLX 2y ago
> If tariffs work at all (which is doubtful) Of course they work. China has used them to go from people living in huts to the high tech manufacturing center of the world.
- hamilyon2 2y ago
  Protectionism only works in combination with other measures. If you indiscriminately shield domestic enterprise from competition, you just get less competition and nothing else. Which is usually not enough.
  - CPLX 2y ago
    Arguable. But yes of course the best lesson to learn is that tariffs are one of the fundamentals tools of an effective industrial policy.
mixermachine 2y ago
For me (European) this is an incentive to first check if there is an non-us alternative for the product from another country. Quite sad times. I liked the 2000s and 2010s with rather free trade a lot.
spacemadness 2y ago
This administration works on threats and chaos. Trump said Biden’s CHIPS act was “horrible, horrible” and all he had to do was threaten Taiwanese chip companies instead. I can’t imagine anyone with any power in this admin organizing something strategically. It’s all ego and vibes.

pjc50 2y ago

Chip on shoring may lose its subsidy: https://www.reuters.com/technology/trump-wants-kill-527-billion-semiconductor-chips-subsidy-law-2025-03-05/ https://www.reuters.com/technology/trump-wants-kill-527-bill...

orwin 2y ago

Tariffs are little better than VAT/sales taxes as taxes imho (I'd rather have more progressive taxes like LVT, inheritance, wealth or at worse income), but in most countries, VAT is set extremely low on essential products like food. Setting global tariffs is idiotic. At least let the food and AG products free.

GeekyBear 2y ago

Brazil and India have both successfully forced Apple to move production onto their soil using tarrifs in the past. If the object is to bring in local manufacturing jobs, it's hard to claim that tarrifs can not be successful. However, you can naturally expect vocal opposition from companies that want to avoid higher labor costs. In the case of India, it's worked out very well as a proof of concept after Apple decided to reduce their reliance on China. > Apple Aims to Make a Quarter of the World’s iPhones in India https://www.wsj.com/tech/apple-aims-to-make-a-quarter-of-the-worlds-iphones-in-india-ab7f6342 https://www.wsj.com/tech/apple-aims-to-make-a-quarter-of-the...

piva00 2y ago
While tariffs have been used as a protectionism measure in Brazil for decades, and before tariffs there was a complete import ban for a lot of manufactured goods during the military dictatorship. It never ever helped local industrialisation, instead the country is stuck paying absurd prices for electronics goods while the local production, research and development, etc. are extremely subpar. It only helped locally produced shoddy products to win a larger market share, quality is underwhelming since they don't have to compete with more better products at the same price.

fnordian 2y ago

Everyone hates tariffs because they are now created by the executive branch of the government at a whim of one person. Undermining democracy and creating economic uncertainty globally.

krapp 2y ago
Americans wanted small government, and the smallest possible government is one raging asshole.