3 ms·

> but I also have to say... to the surprise of absolutely no-one with even the most basic grasp of how economies function. Exactly: tariffs are taxes in anothe

> but I also have to say... to the surprise of absolutely no-one with even the most basic grasp of how economies function. Exactly: tariffs are taxes in another guise. They only serve to create an (artificial) price advantage of local over imported goods for as long as they're levied. > What were you thinking? What was going through your heads? I'm genuinely curious. I also can't fathom why the crowd (not just a HN subset) that was clamoring for tariffs thought it'd be anyone other than them shouldering the increase. Perhaps their influencers didn't spell it out for them? Now everyone gets to pay more - and not just in the US.

embedding-shape 9mo ago
> I also can't fathom why the crowd (not just a HN subset) that was clamoring for tariffs thought it'd be anyone other than them shouldering the increase. Perhaps their influencers didn't spell it out for them? Now I'm neither in the US, American nor Democrat/Republican, but as far as I understand their argument, is that they know it means higher costs for those products for them, and it'll eventually lead to companies wanting to produce things within the border, and only after that is in place, will things actually get cheaper (and better?). So I think for these people with that perspective, the idea is: everything cheap -> tariffs to make imports expensive > People buy less imports and companies start selling within the border > Eventually things get cheap. Again, this is just me trying to understand their perspective.
- MonkeyClub 9mo ago
  Yep, I came down to a similar conclusion in my thinking, and assumed they wouldn't have thought of the cost of restarting local industry, or of importing foreign (tariffed) materials for the local industry to work with.
- sciencejerk 9mo ago
  Thank you for offering an additional perspective. The article reads like the tariffs were a complete and total failure. You are saying it is too soon to tell, correct?
  - spacedcowboy 9mo ago
    This take depends on the munificence of the local retailers deciding all on their own (because there's no external pressure apart from other retailers in the same position) to lower the price of their goods (and therefore reduce their profit) once the tariffs have forced the foreign goods off the market. I don't believe it for a second. Here's something that has happened before though. During the American War of Treasonous Aggression, the southern states decided to impose tariffs on the export of cotton to the UK. That caused massive hardship in the UK in the short term as it made the goods that the cotton was a raw material for impossible to sell. UK jobs were lost, UK workers starved etc. So the local UK manufacturing companies found markets to supply them elsewhere in the world. They set up the supply lines, they reached agreements, and life went on. UK jobs were gained again, UK workers stopped starving. Life was good. When the American War of Treasonous Aggression was over, the southern states wanted to drop their tariffs and start supplying the UK again. It didn't happen - there was no need to return to an unreliable partner when everything was set up just fine and dandy as it was, and the US cotton was essentially unsellable. US jobs were lost, US workers starved etc. The cotton industry never recovered from that. Tariffs are a "fuck you, make me" slap in the face. Do it to people you don't like, but if you do it to people who are supposed to be "allies" (obviously not allies in the above case, but the consequences here were just as real), the consequences can be ... quite concerning for the tariffers.
    - tsss 9mo ago
      Tariffs/subsidies should be weaned off over time. Their success absolutely does not depend on "local retailers [why are you even talking about retailers when it is all about manufacturers?] deciding all on their own to lower their prices". The external competitors are still there and will just come back when tariffs are lowered, so domestic manufacturers are forced to become cost competitive.
      - pwg 9mo ago
        > Tariffs/subsidies should be weaned off over time. The economic problem is that so long as the production cost imbalance exists, weaning off the tariffs just creates the same market forces that created the trade imbalance (and export of jobs) that created the situation in the first place. I.e., if it inherently costs $5 to make a "widget" in Elbonia [1] and it inherently [2] costs $25 to make the identical (in every way) "widget" here [3] then while a tariff of $20/widget would make both equal in price, any reduction in the tariff will make the Elbonian made widget cheaper, and a purchaser will be incentivized to buy the Elbonian made one over the "made here" version because they, individually, save money by doing so. So to maintain the widget making industry "here" the tariff has to be maintained. Any reduction and the cost incentives of "made in Elbonia" reappear, and the local manufacturer sees a corresponding drop in sales. [1] Chosen only because it is not a real place. [2] Meaning the local manufacturer cannot possibly produce one for less, due to higher costs "here" (e.g., energy costs, raw materials costs, labor costs, insurance costs, etc.) [3] Where ever "here" is for the reader.
- Izkata 9mo ago
  Late jump-in, but I also want to add a small analogy I've seen them use that says basically the same thing: It's like chemotherapy, short term hurt for long term gain.
- DoctorOetker 9mo ago
  What I don't understand about this type of argument: wouldn't it have been more cost-effective policy BEFORE out-sourcing and offshoring jobs, to condition off-shoring etc on full documentation of all the workflows, all the trade secrets, paying for reverse engineering of tools they did not make themselves, ... after spending that cost they are free to offshore jobs, BUT all of this information is available to any citizen and free of charge, through say normal or university libraries. If another national sees how to automate parts of the offshored company they can have at it, they can gang together to figure out how to reimport the jobs profitably.

embedding-shape 9mo ago

> I also can't fathom why the crowd (not just a HN subset) that was clamoring for tariffs thought it'd be anyone other than them shouldering the increase. Perhaps their influencers didn't spell it out for them? Now I'm neither in the US, American nor Democrat/Republican, but as far as I understand their argument, is that they know it means higher costs for those products for them, and it'll eventually lead to companies wanting to produce things within the border, and only after that is in place, will things actually get cheaper (and better?). So I think for these people with that perspective, the idea is: everything cheap -> tariffs to make imports expensive > People buy less imports and companies start selling within the border > Eventually things get cheap. Again, this is just me trying to understand their perspective.

MonkeyClub 9mo ago
Yep, I came down to a similar conclusion in my thinking, and assumed they wouldn't have thought of the cost of restarting local industry, or of importing foreign (tariffed) materials for the local industry to work with.
sciencejerk 9mo ago
Thank you for offering an additional perspective. The article reads like the tariffs were a complete and total failure. You are saying it is too soon to tell, correct?
- spacedcowboy 9mo ago
  This take depends on the munificence of the local retailers deciding all on their own (because there's no external pressure apart from other retailers in the same position) to lower the price of their goods (and therefore reduce their profit) once the tariffs have forced the foreign goods off the market. I don't believe it for a second. Here's something that has happened before though. During the American War of Treasonous Aggression, the southern states decided to impose tariffs on the export of cotton to the UK. That caused massive hardship in the UK in the short term as it made the goods that the cotton was a raw material for impossible to sell. UK jobs were lost, UK workers starved etc. So the local UK manufacturing companies found markets to supply them elsewhere in the world. They set up the supply lines, they reached agreements, and life went on. UK jobs were gained again, UK workers stopped starving. Life was good. When the American War of Treasonous Aggression was over, the southern states wanted to drop their tariffs and start supplying the UK again. It didn't happen - there was no need to return to an unreliable partner when everything was set up just fine and dandy as it was, and the US cotton was essentially unsellable. US jobs were lost, US workers starved etc. The cotton industry never recovered from that. Tariffs are a "fuck you, make me" slap in the face. Do it to people you don't like, but if you do it to people who are supposed to be "allies" (obviously not allies in the above case, but the consequences here were just as real), the consequences can be ... quite concerning for the tariffers.
  - tsss 9mo ago
    Tariffs/subsidies should be weaned off over time. Their success absolutely does not depend on "local retailers [why are you even talking about retailers when it is all about manufacturers?] deciding all on their own to lower their prices". The external competitors are still there and will just come back when tariffs are lowered, so domestic manufacturers are forced to become cost competitive.
    - pwg 9mo ago
      > Tariffs/subsidies should be weaned off over time. The economic problem is that so long as the production cost imbalance exists, weaning off the tariffs just creates the same market forces that created the trade imbalance (and export of jobs) that created the situation in the first place. I.e., if it inherently costs $5 to make a "widget" in Elbonia [1] and it inherently [2] costs $25 to make the identical (in every way) "widget" here [3] then while a tariff of $20/widget would make both equal in price, any reduction in the tariff will make the Elbonian made widget cheaper, and a purchaser will be incentivized to buy the Elbonian made one over the "made here" version because they, individually, save money by doing so. So to maintain the widget making industry "here" the tariff has to be maintained. Any reduction and the cost incentives of "made in Elbonia" reappear, and the local manufacturer sees a corresponding drop in sales. [1] Chosen only because it is not a real place. [2] Meaning the local manufacturer cannot possibly produce one for less, due to higher costs "here" (e.g., energy costs, raw materials costs, labor costs, insurance costs, etc.) [3] Where ever "here" is for the reader.
Izkata 9mo ago
Late jump-in, but I also want to add a small analogy I've seen them use that says basically the same thing: It's like chemotherapy, short term hurt for long term gain.
DoctorOetker 9mo ago
What I don't understand about this type of argument: wouldn't it have been more cost-effective policy BEFORE out-sourcing and offshoring jobs, to condition off-shoring etc on full documentation of all the workflows, all the trade secrets, paying for reverse engineering of tools they did not make themselves, ... after spending that cost they are free to offshore jobs, BUT all of this information is available to any citizen and free of charge, through say normal or university libraries. If another national sees how to automate parts of the offshored company they can have at it, they can gang together to figure out how to reimport the jobs profitably.