4 ms·

Tariffs are bad if you are the United States and tariffs are good if you are any other nation.

by bnolsen 1y ago

epistasis 1y ago
Can you connect that statement to the pursuit of dignity?
- hiddencost 1y ago
  [flagged]
- Waterluvian 1y ago
  I’ve not seen any truly convincing case for this but I have heard the idea that a lot of all of this is about not wanting to feel shame for being… well… more Morlock than Eloi.
Propelloni 1y ago
Correct, if you are living in the USA. As someone living in Germany I would think tariffs levied by the EU and/or Germany are bad for me, because it is going to raise prices in the EU and Germany. I'd wish that the EU would just shrug at the tariffs and not counter them, at least not on consumer goods, because in the end US tariffs cost the US consumer not the EU consumer. Obviously it is not that easy, because of jobs, refusal to be insulted and bullied, etc.
- snkzxbs 1y ago
  > tariffs levied by the EU and/or Germany are bad for me, because it is going to raise prices in the EU and Germany That’s short term thinking. Signed: a Spaniard who has seen all of the country’s industry dismantled since we joined the EU to be moved to Germany and Eastern Europe and now we’re screwed.
  - Propelloni 1y ago
    Thinking otherwise is no-term thinking, tariffs hurt consumers in the short term, long term, or any other term. Anyway, why would some industry move from a comparatively low-cost country like Spain to a comparatively high-cost country like Germany? Manufacturing goes where total cost of manufacturing is lowest. Transportation has become so cheap since the mid-20th century that it has lost all impact on deciding on manufacturing locations. Thus the consumer prices can also be low, independent of the location of the manufacturer and the consumer. Tariffs raise sales prices again in the flawed idea that this would raise manufacturing costs abroad. But of course they don't, and seriously, how would they? Tariffs just make imports more expensive and thus actually make prices go up for consumers in the levying country. In the best case it creates a situation where an out-competed local manufacturer can start to manufacture again at cost and compete on prices. But obviously this will be higher than the price of pre-tariff goods, otherwise the local manufacturer wouldn't have been out-competed in the first place. I mean, come on, that's basic economics. In the second best case the manufacturer just stops exporting to tariff country because its market vanished. Why would it vanish? Right, because consumers cannot afford the goods anymore. This creates an opportunity for a competitor that could manufacture at higher cost to sell goods at prices that still cover its cost, because otherwise -- you already guessed it -- the competitor could have competed before tariffs. Again, basic economics. Whatever, consumers pay more -- and have less choice. Yay for tariffs! So what about "yeah, think long term", what does that mean? Let's say long term means 5-10 years or more, because that's about the time you need to launch manufacturing again. OK, there comes a new manufacturer along, or an ailing one recovers because higher prices cover higher manufacturing costs. In beautiful tariff world nations effectively closed their borders for trade, so markets have become much smaller. Even ignoring the initial higher costs, smaller markets mean smaller scale. The new small market will be unable to match the scaling effects of the old large market, there are just not enough consumers. Thus manufacturing will stay more expensive. This in turn will make goods more expensive for consumers. That's not quite as basic but still. Of course we could veer off into some kind of post-capitalistic market system, and depending on what exactly that means I would probably be fine with it. However, I don't think that's what is going to happen.
impossiblefork 1y ago
I think this is actually the precise correct thing. If the EU instituted tariffs on let's say, software and certain kinds of services, then we would reduce our unemployment, develop those sectors etc. Whereas the large-scale oil trade and how its conducted in practice mean that non-Americans will be holding dollars and that the US will be able to have lower interest rates than its competitors, this money, which the US thus can sort of print cheaply can then be used to buy goods from abroad, to get high-quality products in a way that is effectively cheap. So tariffs for the US were always something that would shake things up. I don't think they're necessarily terrible in the very long run, but this system is something like 50 years old and the US won't be able to switch to a sensible system where it itself actually builds real things and gets what it needs that way quickly. So switching to a sounder approach to production should probably have been allowed to take more time if disruption was to be avoided, but it wouldn't have been possible for political reasons, and now the US politicians are sort of flip-flopping because they see that this transition will not be smooth at all. If it were almost any country other than the US it would have been a different matter. If the EU wanted to reduce import of finished goods from low-wage countries, that would probably be fine and would probably benefit ordinary people without a long transition, but the US is a different matter. Wages in the US are as high as they are in large part because of these weird trade and investment flows.
JumpCrisscross 1y ago
Targeted tariffs are fine, especially for incubating a nascent industry. (Korea’s car industry, for example.) Across-the-board tariffs are just a tax increase. Same deadweight loss issues, except this one’s regressive.

Tariffs are bad if you are the United States and tariffs are good if you are any other nation.

epistasis 1y ago

Can you connect that statement to the pursuit of dignity?

hiddencost 1y ago
[flagged]
Waterluvian 1y ago
I’ve not seen any truly convincing case for this but I have heard the idea that a lot of all of this is about not wanting to feel shame for being… well… more Morlock than Eloi.

Propelloni 1y ago

Correct, if you are living in the USA. As someone living in Germany I would think tariffs levied by the EU and/or Germany are bad for me, because it is going to raise prices in the EU and Germany. I'd wish that the EU would just shrug at the tariffs and not counter them, at least not on consumer goods, because in the end US tariffs cost the US consumer not the EU consumer. Obviously it is not that easy, because of jobs, refusal to be insulted and bullied, etc.

snkzxbs 1y ago
> tariffs levied by the EU and/or Germany are bad for me, because it is going to raise prices in the EU and Germany That’s short term thinking. Signed: a Spaniard who has seen all of the country’s industry dismantled since we joined the EU to be moved to Germany and Eastern Europe and now we’re screwed.
- Propelloni 1y ago
  Thinking otherwise is no-term thinking, tariffs hurt consumers in the short term, long term, or any other term. Anyway, why would some industry move from a comparatively low-cost country like Spain to a comparatively high-cost country like Germany? Manufacturing goes where total cost of manufacturing is lowest. Transportation has become so cheap since the mid-20th century that it has lost all impact on deciding on manufacturing locations. Thus the consumer prices can also be low, independent of the location of the manufacturer and the consumer. Tariffs raise sales prices again in the flawed idea that this would raise manufacturing costs abroad. But of course they don't, and seriously, how would they? Tariffs just make imports more expensive and thus actually make prices go up for consumers in the levying country. In the best case it creates a situation where an out-competed local manufacturer can start to manufacture again at cost and compete on prices. But obviously this will be higher than the price of pre-tariff goods, otherwise the local manufacturer wouldn't have been out-competed in the first place. I mean, come on, that's basic economics. In the second best case the manufacturer just stops exporting to tariff country because its market vanished. Why would it vanish? Right, because consumers cannot afford the goods anymore. This creates an opportunity for a competitor that could manufacture at higher cost to sell goods at prices that still cover its cost, because otherwise -- you already guessed it -- the competitor could have competed before tariffs. Again, basic economics. Whatever, consumers pay more -- and have less choice. Yay for tariffs! So what about "yeah, think long term", what does that mean? Let's say long term means 5-10 years or more, because that's about the time you need to launch manufacturing again. OK, there comes a new manufacturer along, or an ailing one recovers because higher prices cover higher manufacturing costs. In beautiful tariff world nations effectively closed their borders for trade, so markets have become much smaller. Even ignoring the initial higher costs, smaller markets mean smaller scale. The new small market will be unable to match the scaling effects of the old large market, there are just not enough consumers. Thus manufacturing will stay more expensive. This in turn will make goods more expensive for consumers. That's not quite as basic but still. Of course we could veer off into some kind of post-capitalistic market system, and depending on what exactly that means I would probably be fine with it. However, I don't think that's what is going to happen.

impossiblefork 1y ago

I think this is actually the precise correct thing. If the EU instituted tariffs on let's say, software and certain kinds of services, then we would reduce our unemployment, develop those sectors etc. Whereas the large-scale oil trade and how its conducted in practice mean that non-Americans will be holding dollars and that the US will be able to have lower interest rates than its competitors, this money, which the US thus can sort of print cheaply can then be used to buy goods from abroad, to get high-quality products in a way that is effectively cheap. So tariffs for the US were always something that would shake things up. I don't think they're necessarily terrible in the very long run, but this system is something like 50 years old and the US won't be able to switch to a sensible system where it itself actually builds real things and gets what it needs that way quickly. So switching to a sounder approach to production should probably have been allowed to take more time if disruption was to be avoided, but it wouldn't have been possible for political reasons, and now the US politicians are sort of flip-flopping because they see that this transition will not be smooth at all. If it were almost any country other than the US it would have been a different matter. If the EU wanted to reduce import of finished goods from low-wage countries, that would probably be fine and would probably benefit ordinary people without a long transition, but the US is a different matter. Wages in the US are as high as they are in large part because of these weird trade and investment flows.

JumpCrisscross 1y ago

Targeted tariffs are fine, especially for incubating a nascent industry. (Korea’s car industry, for example.) Across-the-board tariffs are just a tax increase. Same deadweight loss issues, except this one’s regressive.