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I understood part of the point of the tariffs as encouraging on-shore production of some items by increasing the price of their imported counterparts. Such pro

I understood part of the point of the tariffs as encouraging on-shore production of some items by increasing the price of their imported counterparts. Such protectionist practices were used by China to bootstrap their own automobile industry, before they became competitive in the global market. Of course, China had surplus capacity of untapped cheap labor, which America does not. Barring an evolution in automated manufacturing, or an overhaul of regulatory policy, I'm pessimistic it's possible to accomplish the same in the US. But, in principle, tariffs have a valid place in supporting an emerging local industry.

tetha 9mo ago
This has been my understanding for e.g. European chips as well: First you subsidize and support the creation of currently not commercially viable chip fabs on-shore. Literally handing companies money under some obligation into the future. Eventually the on-shore chips are produced, but they have higher total cost of ownership for the users: Logistics may be cheaper due to less distance, or more expensive because they are not well-trodden paths yet. Production costs like labor, water, energy could be higher. And the chips could just have higher failure rate, because problems in the new processes need to be kinked out. But to get local consumers to switch to these switches, one applies tariffs to other sources of chips so the on-shore chips become more competitive artificially, until they become actually cheaper and competitive. The way it is threatened here isn't in the use case of tariffs at all from my limited understanding.
carefulfungi 9mo ago
I don’t think the evidence supports this. This was the marketing of tarifs. But the reality is rates have been changed rapidly, added, dropped - this is just leverage Trump is using to exert his will. Whether it is Greenland, defense spending by NATO, whims of narcissism, or kickback deal making (like NVIDIA or Intel). There is little evidence this policy is designed to increase US manufacturing.
- SauntSolaire 9mo ago
  I agree in the case of the US, which I chalk up partially to investors knowing the US tariffs are both arbitrary and transitory. Even if the Trump administration were consistent, there's the possibility that the next president will undo them and corporations need more than a four-year guarantee before making investments. I'm mostly responding to the position that tariffs have no place in economic policy, when we've seen them used successfully in other countries. Should Congress pass a bill legislating tariffs, then I could see them having more of the desired effect, though as I said I'd still be pessimistic without broader changes.

tetha 9mo ago

This has been my understanding for e.g. European chips as well: First you subsidize and support the creation of currently not commercially viable chip fabs on-shore. Literally handing companies money under some obligation into the future. Eventually the on-shore chips are produced, but they have higher total cost of ownership for the users: Logistics may be cheaper due to less distance, or more expensive because they are not well-trodden paths yet. Production costs like labor, water, energy could be higher. And the chips could just have higher failure rate, because problems in the new processes need to be kinked out. But to get local consumers to switch to these switches, one applies tariffs to other sources of chips so the on-shore chips become more competitive artificially, until they become actually cheaper and competitive. The way it is threatened here isn't in the use case of tariffs at all from my limited understanding.

carefulfungi 9mo ago

I don’t think the evidence supports this. This was the marketing of tarifs. But the reality is rates have been changed rapidly, added, dropped - this is just leverage Trump is using to exert his will. Whether it is Greenland, defense spending by NATO, whims of narcissism, or kickback deal making (like NVIDIA or Intel). There is little evidence this policy is designed to increase US manufacturing.

SauntSolaire 9mo ago
I agree in the case of the US, which I chalk up partially to investors knowing the US tariffs are both arbitrary and transitory. Even if the Trump administration were consistent, there's the possibility that the next president will undo them and corporations need more than a four-year guarantee before making investments. I'm mostly responding to the position that tariffs have no place in economic policy, when we've seen them used successfully in other countries. Should Congress pass a bill legislating tariffs, then I could see them having more of the desired effect, though as I said I'd still be pessimistic without broader changes.