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Which "smart" person advised him to calculate tariffs based on trade imbalance for each country, including uninhabited islands? It's an utterly stupid idea that

by zmmmmm 1y ago

Which "smart" person advised him to calculate tariffs based on trade imbalance for each country, including uninhabited islands? It's an utterly stupid idea that makes no sense at all.

CountSessine 1y ago
If you read Miran's paper, the point of the tariffs is to bring US trade partners to the table to negotiate the alliance, so really they could be anything at all. It could have been 420% or 31.4159% or whatever, right across the board. But the amounts are actually kind of clever and it reflects the fact that there's a more mature understand of trade barriers now vs when the WTO was negotiated. How much do you know about trade barriers? Beyond tariffs, they're extraordinarily complicated and rely on regulations, trip-wires, and unequal application of rules. Canada has "free trade" with dairy, but only on dairy imports up to a point, and after that heavy tariffs apply. But no one ever imports enough to incur those tariffs, so, that's free-trade, right? But actually, no one considers the Canadian dairy market worth the trouble without being able to import large amounts of dairy. So Canada can legitimately say that the trip-wire isn't applied, but it's a long ways from "free trade" because large importers are kept out. China requires that foreign companies must partner with local companies to sell into the Chinese market. This effectively leads to a lot of technology transfers. It's not a tariff, but it's pretty clearly a "trade barrier" because companies that want to protect their IP are denied access. In the 80's when US trade reps were negotiating with Japanese trade reps, the Americans would try to convince the Japanese that free trade was best for Japanese consumers. The Japanese reps would just respond, "how much do you want us to buy?" The Japanese really didn't believe in free trade, and they were actively manipulating the value of the Yen at that point (it would be a few years still before the Plaza Accord), so they knew that just lowering tariffs wasn't going to make US goods sufficiently more competitive in Japan. What's changed in 35 years is that the US doesn't really believe in "free trade" anymore either - not after all of the grief the WTO brought. The simple formulas are a no-bullshit approach to trade - the same ones that motivated those Japanese trade reps. "I don't care how your trade barriers work - currency manipulation, tariffs, excess regulation, unequal rules - just fix your sh*t to reduce the trade imbalance."
- LPisGood 1y ago
  The thought that there should be bilateral trade balance is ridiculous on the face of it. Vietnam and the USA _should_ have a trade imbalance. That’s why all this talk of “forcing them to the negotiating table” is absurd.
  - CountSessine 1y ago
    Give up your whole notion of “should”. There is no “should”. The formula is for aligning incentives. It’s no longer enough for other govts to claim compliance with abstract requirements while clandestinely working against them - they need to be committed to helping importers succeed.
    - LPisGood 1y ago
      There is absolutely a “should.” The only world where USA has a trade balance with Vietnam is one where USA isn’t importing as much as they “should” from Vietnam.
- triceratops 1y ago
  > just fix your sh*t to reduce the trade imbalance But why does each individual country's trade need to be perfectly balanced with the US? What are the odds of that happening for every single country? What are the odds of it working for every possible pair of countries?
  - alfiedotwtf 1y ago
    There is a surplus trade between the US and Australia and, yet our beef industry was called out as being imbalanced towards US beef. … it was never about imbalances but protectionism and racketeering
    - CountSessine 1y ago
      Read the Miran paper. It’s not about imbalances. It’s about negotiating leverage. Australia in particular is going to be the most interesting case in the world. Strategically, Australia is more sympathetic to the US, but your trade with China is many multiples of your trade with the US. If you join the US you’ll have to raise tariffs against China and if you don’t you’ll naturally fall into China's orbit. Interesting times!

by zmmmmm 1y ago

Which "smart" person advised him to calculate tariffs based on trade imbalance for each country, including uninhabited islands? It's an utterly stupid idea that makes no sense at all.

CountSessine 1y ago

If you read Miran's paper, the point of the tariffs is to bring US trade partners to the table to negotiate the alliance, so really they could be anything at all. It could have been 420% or 31.4159% or whatever, right across the board. But the amounts are actually kind of clever and it reflects the fact that there's a more mature understand of trade barriers now vs when the WTO was negotiated. How much do you know about trade barriers? Beyond tariffs, they're extraordinarily complicated and rely on regulations, trip-wires, and unequal application of rules. Canada has "free trade" with dairy, but only on dairy imports up to a point, and after that heavy tariffs apply. But no one ever imports enough to incur those tariffs, so, that's free-trade, right? But actually, no one considers the Canadian dairy market worth the trouble without being able to import large amounts of dairy. So Canada can legitimately say that the trip-wire isn't applied, but it's a long ways from "free trade" because large importers are kept out. China requires that foreign companies must partner with local companies to sell into the Chinese market. This effectively leads to a lot of technology transfers. It's not a tariff, but it's pretty clearly a "trade barrier" because companies that want to protect their IP are denied access. In the 80's when US trade reps were negotiating with Japanese trade reps, the Americans would try to convince the Japanese that free trade was best for Japanese consumers. The Japanese reps would just respond, "how much do you want us to buy?" The Japanese really didn't believe in free trade, and they were actively manipulating the value of the Yen at that point (it would be a few years still before the Plaza Accord), so they knew that just lowering tariffs wasn't going to make US goods sufficiently more competitive in Japan. What's changed in 35 years is that the US doesn't really believe in "free trade" anymore either - not after all of the grief the WTO brought. The simple formulas are a no-bullshit approach to trade - the same ones that motivated those Japanese trade reps. "I don't care how your trade barriers work - currency manipulation, tariffs, excess regulation, unequal rules - just fix your sh*t to reduce the trade imbalance."

LPisGood 1y ago
The thought that there should be bilateral trade balance is ridiculous on the face of it. Vietnam and the USA _should_ have a trade imbalance. That’s why all this talk of “forcing them to the negotiating table” is absurd.
- CountSessine 1y ago
  Give up your whole notion of “should”. There is no “should”. The formula is for aligning incentives. It’s no longer enough for other govts to claim compliance with abstract requirements while clandestinely working against them - they need to be committed to helping importers succeed.
  - LPisGood 1y ago
    There is absolutely a “should.” The only world where USA has a trade balance with Vietnam is one where USA isn’t importing as much as they “should” from Vietnam.
triceratops 1y ago
> just fix your sh*t to reduce the trade imbalance But why does each individual country's trade need to be perfectly balanced with the US? What are the odds of that happening for every single country? What are the odds of it working for every possible pair of countries?
- alfiedotwtf 1y ago
  There is a surplus trade between the US and Australia and, yet our beef industry was called out as being imbalanced towards US beef. … it was never about imbalances but protectionism and racketeering
  - CountSessine 1y ago
    Read the Miran paper. It’s not about imbalances. It’s about negotiating leverage. Australia in particular is going to be the most interesting case in the world. Strategically, Australia is more sympathetic to the US, but your trade with China is many multiples of your trade with the US. If you join the US you’ll have to raise tariffs against China and if you don’t you’ll naturally fall into China's orbit. Interesting times!