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> This will inoculate the economy against external supply chain shocks How so? There's hardly enough unemployment and there's also no incentive towards increas
by bonzini 2y ago
> This will inoculate the economy against external supply chain shocks
How so? There's hardly enough unemployment and there's also no incentive towards increasing the number of immigrant workers.
Either suppliers eat the cost of the tariffs as the US administration says, or they don't and then everything becomes more expensive, but either way you have the exact same supply chain.
- fnordpiglet 2y agoI mean, they generated the tariff schedule using ChatGPT. What could go wrong? https://www.newsweek.com/donald-trump-tariffs-chatgpt-2055203 https://www.newsweek.com/donald-trump-tariffs-chatgpt-205520...
- claiir 2y agoOriginal clip is here [1]. This likely isn't real, though if ChatGPT were used, I suppose it worked out this time :> [1]: https://www.tiktok.com/@destinygnome/video/7489134016524733726 https://www.tiktok.com/@destinygnome/video/74891340165247337...
- claiir 2y agoThanks for the question. Three reasons: (1) Much like a carbon tax, when the economy becomes accountable for an externality (risk in this case, rather than carbon) it is priced in at every level, ending with consumers, whose demand is price-sensitive. Not all consumer goods of the same class will be impacted equally, creating a natural price advantage. (2) Once the economy adjusts to these new risk-adjusted prices, POTUS can always offer clemency for specific goods and industries to respond to global supply shocks, providing a large buffer for the now-adjusted American consumer. (3) Narrowly: it is exceedingly unlikely we won't see production onshoring in any capacity like you suggest. Economic analysis of the first-term Trump tariffs, for example, did indeed find production onshoring.
- bonzini 2y agoSure there will be some onshoring, but does it make more sense to onshore or pay given: 1) the instability of Trump's decisions, see Ukraine or Canada 2) you would have less economy of scale because you wouldn't sell any of your super expensive goods outside the USA 3) if the machines you need aren't produced in America they'd have tariffs too 4) the next president could make the tariffs more favorable. You also haven't touched unemployment (or lack thereof) yet. (And by the way, if tariffs stay, brace for deflation due to waiting until after the election in 2028).