3 ms·

Many countries have blanket global tariffs to make their own industries more competitive We ignored them Now we are doing it and yes it upsets the world order

Many countries have blanket global tariffs to make their own industries more competitive We ignored them Now we are doing it and yes it upsets the world order There is no precedent where this has been beneficial for the US, but we can try again. The last time it was tried was 1930, and our fortunes vastly changed since then The incentive is for entrepreneurially minded people to try to provide services in the US and fix the supply chain here. This theoretically means more people employed and more people able to afford the prices of things produced here. Keeps velocity of money in the economy high. We will learn how resilient a coalition of other countries are, as they try to only trade with each other A smarter version of this policy would be country by country and industry by industry negotiations. But, given that some countries are dropping their own blanket tariffs, and others like Vietnam already coming to the negotiating table, time will tell.

roland35 2y ago
Seems like the way things have been going up to 3 days ago has been pretty great for the US, our economy has been growing faster and doing well!
darksaints 2y ago
There are people (notably, Ha-Joon Chang) that have claimed that those protectionist policies have made South Korea more competitive, but I think you'd find a lot of economists disagree with that, and that South Korea become competitive in spite of those restrictions. Keep in mind North Korea has had even stricter trade restrictions, and they don't have any functioning modern industry at all. Trade restrictions reduce export market size, insulate companies from competitive pressures, and those problems only serve to reduce capability, not increase it. Maybe there is some sort of happy medium of protectionist policies, but I've never seen any sort of framework for understanding how you could derive where that happy medium lies. If trade restrictions only ever made countries more competitive, we wouldn't use them as a punishment.
parodysbird 2y ago
> Vietnam already coming to the negotiating table, time will tell. Oh wow you got a developing country to agree to lower their tariffs on their fairly minor import capacity from the US.
- yieldcrv 2y ago
  the game is to predict and trade equities based off of this no matter how big or small so Nike and fast fashion companies with exposure have been the best plays, up and down
rsynnott 2y ago
> Many countries have blanket global tariffs to make their own industries more competitive Which countries are these? In general, if you look at the list of countries with >5% effective tariff rate, it’s all developing world. Vietnam, FWIW, has an effective tariff rate of a little over 1%, in a similar range to the EU and to the US pre-Trump II. Some countries _do_ have high blanket tariff rates, but you’re generally talking about very poor countries with limited secondary industry; these are, as a general rule, not big exporters to the US. None of the US’s biggest trading partners have high tariffs.

roland35 2y ago

Seems like the way things have been going up to 3 days ago has been pretty great for the US, our economy has been growing faster and doing well!

darksaints 2y ago

There are people (notably, Ha-Joon Chang) that have claimed that those protectionist policies have made South Korea more competitive, but I think you'd find a lot of economists disagree with that, and that South Korea become competitive in spite of those restrictions. Keep in mind North Korea has had even stricter trade restrictions, and they don't have any functioning modern industry at all. Trade restrictions reduce export market size, insulate companies from competitive pressures, and those problems only serve to reduce capability, not increase it. Maybe there is some sort of happy medium of protectionist policies, but I've never seen any sort of framework for understanding how you could derive where that happy medium lies. If trade restrictions only ever made countries more competitive, we wouldn't use them as a punishment.

parodysbird 2y ago

> Vietnam already coming to the negotiating table, time will tell. Oh wow you got a developing country to agree to lower their tariffs on their fairly minor import capacity from the US.

yieldcrv 2y ago
the game is to predict and trade equities based off of this no matter how big or small so Nike and fast fashion companies with exposure have been the best plays, up and down

rsynnott 2y ago

> Many countries have blanket global tariffs to make their own industries more competitive Which countries are these? In general, if you look at the list of countries with >5% effective tariff rate, it’s all developing world. Vietnam, FWIW, has an effective tariff rate of a little over 1%, in a similar range to the EU and to the US pre-Trump II. Some countries _do_ have high blanket tariff rates, but you’re generally talking about very poor countries with limited secondary industry; these are, as a general rule, not big exporters to the US. None of the US’s biggest trading partners have high tariffs.