4 ms·

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, c

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.
Sharlin 9mo ago
For many if not most of the affected imports, it would never ever make economical sense to try to rebuild a local industry from scratch, at least not without major subsidies. And as for local alternatives that already exist, they carry a premium higher than any tariff (because a local workforce likes to be paid living wages), even if magically scaled up to achieve some degree of economies of scale. Western economies are truly and irreversibly post-industrial.

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.

Sharlin 9mo ago

For many if not most of the affected imports, it would never ever make economical sense to try to rebuild a local industry from scratch, at least not without major subsidies. And as for local alternatives that already exist, they carry a premium higher than any tariff (because a local workforce likes to be paid living wages), even if magically scaled up to achieve some degree of economies of scale. Western economies are truly and irreversibly post-industrial.