5 ms·
Trade (and Tariffs)
- ot 1mo agoReference to Aesop's fable? https://en.wikipedia.org/wiki/The_Belly_and_the_Members https://en.wikipedia.org/wiki/The_Belly_and_the_Members
- cryzinger 1mo ago> The present understanding is that the tale's moral supports team effort and recognition of the vital part that all members play in it. In more authoritarian times, however, the fable was taken to affirm direction from the centre. Oof.
- dredmorbius 1mo agoExactly what I was going to post. Here's a direct link to ... several versions of ... the fable: <https://fablesofaesop.com/the-belly-and-the-members.html https://fablesofaesop.com/the-belly-and-the-members.html>
- AnimalMuppet 1mo agoI think a lesson is going to be taught, all right. Unfortunately the feedback loop in nations is much slower than in bodies.
- derwiki 1mo agoThat’s the whole trick: if the feedback cycle is long enough, the next person gets blamed for it, not the current.
- marcosdumay 1mo agoThe most impressive thing about Trump is that he managed to shorten up the feedback loops on an overwhelming number of his policies. You would expect the US industry to silently absorb his trade policies and only break decades after he leaves. Somehow, they aren't healthy enough for that.
- budman1 1mo agoSlack is expensive. At least it has a cost that is not always appreciated. Everyone has been optimizing to increase profits for decades. A 1950's US economy would have taken a lot longer to collapse.
- nickpeterson 1mo agoI think we’re on course to be in really rough shape by 2028. I hope it’s rough enough to spark genuine change in our politics.
- CamperBob2 1mo agoI think we’re on course to be in really rough shape by 2028. Exactly: just in time for somebody else to take the blame.
- preg_match 1mo agoThat depends, Trump certainly wants a fourth term (yes, fourth, he's counting the one that was "stolen"). I think, realistically, the limiting factor won't be the politics, it will be his health. He's 80 years old.
- saghm 1mo agoAnd likewise for the next person trying to take the credit for things that the previous one did when the effects take time to manifest: https://www.theguardian.com/us-news/2026/aug/15/trump-washington-post-drug-prices https://www.theguardian.com/us-news/2026/aug/15/trump-washin...
- phony-account 1mo agoTo make the analogy even more perfect, the character should be holding a saw rather than a hammer.
- astoor 1mo agoOr a gun, because America is famous for its gun culture, and it would be more clearly "shooting yourself in the foot".
- deleted 1mo ago[deleted]
- apexalpha 1mo agoThis is a pretty reductive take. If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours. Protecting workers from that kind of competition seems fair. Tariffs aren't bad in itself. They are just a tool. Unfortunately fools wielding a tool like this can cause a lot of damage, but that's true for any tool.
- eigenspace 1mo agoI don't think the comic is claiming that all tariffs in any context are bad, that would indeed be a reductive, bad take. Given the timing and the metaphor of blood being sent to and from a limb, this is almost surely a reference to the tariff threats against Canada.
- apexalpha 1mo agoOh this is a good point. I was not aware of new developments with US-Canada today, that makes the more-than-normal stingy reactions expected. Sorry, I'm European and can't keep up with the erratic US Gov. I read a summary at the end of the week.
- AnimalMuppet 1mo agoThe US would be better off if more people followed your example.
- simlevesque 1mo agoI never realized I've been working this much.
- fg137 1mo agoThat is a ... pretty reductive take as well.
- neaden 1mo ago"If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours." - This is not obviously true to me, can you explain why it is for you?
- aliasxneo 1mo ago[flagged]
- piskov 1mo ago1985 https://en.wikipedia.org/wiki/Plaza_Accord https://en.wikipedia.org/wiki/Plaza_Accord The United States proposed a deal to France, Germany, Japan, and Britain (the G5): you buy up your own currencies, the dollar falls, and in return we reduce our budget deficit, meaning you no longer have to effectively finance U.S. development. The United States agreed to reduce its budget deficit and lower interest rates. The other parties to the agreement committed to raising theirs. In addition, West Germany agreed to cut taxes, while Japan agreed to allow the yen to appreciate. As a result, over the following two years the U.S. dollar fell by 46% against the German mark and by 50% against the yen. However, the U.S. government ultimately failed to reduce its budget deficit. Meanwhile, the sharp appreciation of the yen made Japanese exporters less competitive in foreign markets. In the United States, by contrast, the period following the agreement saw substantial economic growth and low inflation. A classic American move: promise the world — we’re all in this together, we’re marching toward a brighter future — and then screw everyone over.
- KPGv2 1mo agoHere buddy, you dropped this straw.
- kennywinker 1mo agoTariffs are bad unless you’re a domestic producer of a good that has just been tariffed, and now you have less competition and can raise your prices.
- CamperBob2 1mo agoOr, rather, you must raise your prices because Orange Foolius has tariffed your manufacturing inputs.
- kennywinker 1mo agoThat’s what I said - it’s bad for everyone except domestic producers of tariffed stuff. So, bad for consumers, producers of downstream goods, etc.
- kemayo 1mo agoThe context here is that president Trump has an interesting view of trade deficits / surpluses. Specifically, he frequently cites cases where the US has a trade deficit with another country -- where the US is spending more in that country than that country is in the US -- as if that country is "taking money" from the US. This is a bit peculiar, because it ignores the whole "the money we are spending is being exchanged for goods that come back to the US" part of the trade. I.e. it's not a problem that I have a "trade deficit" with the grocery store, because I have my groceries. https://finance.yahoo.com/economy/policy/articles/trump-brags-growing-trade-deficit-143446726.html https://finance.yahoo.com/economy/policy/articles/trump-brag...
- poncho_romero 1mo agoIt also excludes money spent on services, which in most cases favours the US.
- kemayo 1mo agoLook, my trade deficit with my barber is a real problem in our relationship. I need them to give me $20 for something, damnit.
- giantrobot 1mo ago> which in most cases favours the US Used to favor the US. Trump's policies and behaviors are ruining the US' reputation as a stable trading partner by demonstrating what damage can be done by an idiot with unchecked power. The rest of the world is going to permanently veer away from US services because it's not impossible (and sadly likely) another feckless imbecile will get put in charge.
- inigyou 1mo agoActually you, like most of us, have a trade deficit with the grocery store and the movie theater, and a trade surplus with your employer. Which one is more enjoyable to have?
- kemayo 1mo ago
- 0xy 1mo agoPeople are very quick to make kneejerk reactions to tariffs while assuming the other guys have different opinions. The Biden admin went after Canada repeatedly for unfair trade practices, and issued a blanket 10% tariff on Chinese goods. The only difference is to what degree they wield the tariff hammer, and in which direction it is swung. The one thing the current admin does have a point on is non-tariff meddling. Numerous countries make it almost impossible to sell goods in their countries while the same is not true in reverse, or they levy a high price in garbage regulatory fees (see the EU's new packaging identification directive that completely destroys small business), or in completely made-up fines for vague behaviors not even they can define (see the EU's DSA which is exclusively used against monopolizing American companies while completely ignoring monopolist and predatory EU ones like Booking.com).
- inigyou 1mo ago> completely destroys small business Citation needed, I'm in the EU and there is small business
- 0xy 1mo agohttps://www.recyclingtoday.com/news/eu-ppwr-pause-request-usa-based-organizatoin-small-business-burden-recycling/ https://www.recyclingtoday.com/news/eu-ppwr-pause-request-us... This regulation forces very small businesses to pay thousands and thousands of dollars to comply and register in EACH EU country (what the hell's the point of the union, exactly?). Even if they sell only 10 widgets to Belgian buyers, they need to register in Belgium and pay the fee. Insane. So a small business selling 5-10k of widgets in EU now has to pay 2-5k in business destroying regulatory compliance fees, putting them out of business. Incredible incompetence from the people who brought you ineffective cookie nag screens. It's not possible to exist as a small business in the EU because they create regulations to destroy you. Try creating a business in Germany. You need 25,000 euros to create a GmbH! In the US you can walk into the office in New York City and have an LLC for $9 per 2 years. The EU is a nightmare hellscape of over-regulation. This is why there are essentially zero EU unicorns. EU bureaucrats support ONLY large and entrenched businesses.
- smallmancontrov 1mo agoA current account deficit is a capital account surplus. Persistent deficits shift the balance between Asset vs Export sectors, dumping the export sector and pumping the asset sector. Put differently, we can pay for imports with shit that we make or shit that we own -- and this has implications for people in our country who make shit vs own shit. A better analogy for the trade deficit would be sitting on the couch slamming potato chips and observing the shift in our body away from muscles and towards fatty tissue. Should we be excited to see this example of specialization in action? Is it wrong to want to fix our diet and push our body composition in the opposite direction? https://yalebooks.yale.edu/book/9780300261448/trade-wars-are-class-wars/ https://yalebooks.yale.edu/book/9780300261448/trade-wars-are...
- inigyou 1mo agoPut differently, Trump is explicitly attempting to destroy the reason the American stock market generally goes up.
- smallmancontrov 1mo agoYes, but I'm pretty sure he doesn't know that and thinks flapping between protectionism and TACO is a brilliant strategy for achieving the best of both worlds rather than an idiotic strategy guaranteed to result in the worst of both worlds. "Destroy American affluence so that we can't pay with assets instead of exports" is probably the worst conceivable way to unwind the exorbitant privilege of the American Economy. We could have spent that money helping people, instead we spent it on wars and tax breaks for billionaires. We could have spent that money on targeted industrial policy (the IRA and CHIPS acts under Biden were examples of this done right, just not at the scale we needed) but instead we are doing it the hard way. Sigh.
- Shiggy_ 1mo agoThat is not what the user above you said. They're explicitly pointing out that the US (and most of the western world) has abandoned the manufacturing sector of their economy, outsourcing work that used to employ millions of people to the developing world. This is a trade-off that can benefit both countries, but, it is wise to consider both WHO benefits from this, and what the LONG-TERM implications of this entails. It's great for an investor class in America that has the capital to create factories in China, and it's great for China to take USD and start to employ their workforce. But, the question is whether or not this is actually a good thing for the American worker. The rust-belt would certainly have an opinion on this. My father was a factory worker that was able to support a family on a single income, and when that manufacturing plant closed, it absolutely destroyed the finances of my family.
- deleted 1mo ago[deleted]
- CGMthrowaway 1mo agoI totally agree trade should feel fair. If the US sends jobs, money, food or goods to other countries, then we shouldn't get garbage back. Tariffs are a way of warning other countries "don’t take us for a ride." They help American workers, factories and towns that were hurt when jobs went overseas. Tariffs shouldn't feel like hurting yourself for no reason. They are an important tool for standing up for yourself when other countries (to say nothing of bad trade deals) want to take advantage of you
- squigz 1mo agoIt also seems to ignore the companies and individuals that got rich because they chose to move jobs overseas.
- CGMthrowaway 1mo agoTotally, that is a great and valid add
- hartator 1mo agoTarrifs are the worst decision a politician can make. The main reason we have open-ish border for people and goods is to reduce the risk of war. You are not going to wage war with a country that do business with. This undermines this idea.
- inigyou 1mo agoThere's never been a war the US has chosen not to start.
- CGMthrowaway 1mo agoMaybe letting other countries rob us blind is worse. The US has hardly any factories left. Is that "peace" or is that just losing, slowly? Open borders can be GREAT, but they can also be a point of vulnerability if we lose control of them
- 1mo ago
- catigula 1mo agoExpert economists working in both the Biden and Trump administration support tariffs. The difference is the dumb way Trump is doing them and a smarter way of doing them. Obviously, this comic completely misses that nuance and promotes a pseudoscientific idea that tariffs are somehow bad.
- drop_star 1mo agoI think the 'tariffs' in this comic are related to the current regimes application of them. Not representative of tariffs as a whole.
- slg 1mo agoThe doctor hits my leg with a hammer to test my reflexes. The comic isn't saying hitting legs with hammers is always bad.
- HDThoreaun 1mo agoI think the comic captures that nuance by exaggerating the stupidity of the trump tariffs. If your trade strategy is "we must eliminate all trade deficits" youre gonna have a bad time
- Hammershaft 1mo agoEconomists universally think tariffs are dumb policy. https://kentclarkcenter.org/surveys/steel-and-aluminum-tariffs/ https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif... Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off. Nobody in politics can say this simple truth because the rust belt states are critical swing states.
- catigula 1mo agoThe Biden administration kept the Trump tariffs. His own policy-makers, technocrats, said that they were a necessary geopolitical tool, cited China's extensive use of tariffs (amongst other states), and noted that they must be used to protect manufacturing and in tandem with allied states. https://www.commerce.gov/news/fact-sheets/2024/05/fact-sheet-president-biden-takes-action-protect-american-workers-and https://www.commerce.gov/news/fact-sheets/2024/05/fact-sheet... https://www.npr.org/2024/05/14/1251096758/biden-china-tariffs-ev-electric-vehicles-5-things https://www.npr.org/2024/05/14/1251096758/biden-china-tariff... https://www.internationaltradeinsights.com/2024/07/biden-administration-increases-tariffs-on-imports-of-aluminum-and-steel/ https://www.internationaltradeinsights.com/2024/07/biden-adm...
- dvh 1mo agoAlt text: "You legs may have a comparative advantage at running, but we arms have a competitive advantage at swinging hammers, so unless you accept that we're the dominant limbs and stop hogging the oxygen, that running advantage won't be around for long."
- smallmancontrov 1mo agoRicardo's comparative advantage result is contingent on the assumption that capital is not mobile across borders. This was a good assumption in 1817. Is it a good assumption today? Furthermore, he's very up front about this in On the Principles, and from this information you can calculate the exact number of people who read the damn thing between the person repeating the talking point and the person originating the talking point.
- nkmnz 1mo agoIn 1817, capital did not cross borders. Borders crossed capital.
- inquirerGeneral 1mo ago[dead]
- tim333 1mo agoI don't know it makes much difference. People could walk from country to country in Europe back then and still can, likewise you could move money and equipment and still can.
- smallmancontrov 1mo agoThe limiting factor on deploying capital abroad was never the ability to move gold or even equipment, it was the ability to have faith that over many years the remote authorities would continue to enforce your remotely held claims on the operation.
- DoctorOetker 1mo agothis ignores evolution theory: the cells in the leg, arm, brain, etc. share the exact same genome variation, so selection pressure rewards coherent action in the interest of the individual organism. thats not true for different players in some level-or-not playing field
- fugigigjfn 1mo agoThat’s true and entirely irrelevant to the actual dynamics of the metaphor. But I’m glad you had a chance to feel like a clever little boy
- sethammons 1mo agoSecond sentence unneeded.
- robocat 1mo agoYou are repeating a common misconception revolving about the individual organism. Selection pressure rewards successful genetic reproduction. What actually happens at the scale of the organism is mostly irrelevant except how it affects reproduction. A genetic predisposition towards chopping legs off would be selected for, if chopping legs off resulted in more children than otherwise. Chopping legs off after having no more children (e.g. after menopause or vasectomy) has no direct genetic outcome (instead indirectly via improved/worstened reproduction of children or relatives). To be clearer: reproduction is the key (survival matters for reproduction and upbringing). That's a good summary, although the details are sublimely trickier. https://en.wikipedia.org/wiki/Gene-centered_view_of_evolution https://en.wikipedia.org/wiki/Gene-centered_view_of_evolutio...
- Velocifyer-Untr 1mo ago[dead]
- Velocifyer-Untr 1mo agoSee the explainxkcd explanation: https://www.explainxkcd.com/wiki/index.php/3290:_Trade https://www.explainxkcd.com/wiki/index.php/3290:_Trade
- thunderbong 1mo agoMobile version https://m.xkcd.com/3290/ https://m.xkcd.com/3290/
- zahlman 1mo agoIf tariffs are so obviously and universally bad, then why do tariffed countries respond with retaliatory tariffs instead of letting the first country shoot themselves in the foot and getting on with their own business?
- javanissen 1mo agoTariffs (and retaliatory tariffs) can be universally economically negative and still be rationally pursued by individual politicians. For example: if Donald Trump tariffs the country you are in charge of, you are likely willing to pay the economic cost of a retaliatory tariff to seem like you are standing up to America to your constituents. The politician’s goal is to be re-elected. The politician may aim to deter getting tariffed in the first place, and promising a retaliatory tariff if another country tariffs you first is also reasonable as a deterrent from a game-theoretical perspective. All it takes is for one world leader to not understand or care about the clear economic negatives to tariffs to start the chain: everyone else can be a rational actor.
- mallets 1mo agoPolitical pressure works? The immediate pain from tariffs is quite different from the long-term loss.
- vladms 1mo agoMaybe reducing trade with a country that is taking bad/strange/stupid decisions might be worth it. If your industry can change some trade partners (and diversify) it might a plus. In Canada's case the reliance of one trade partner (see https://atlas.hks.harvard.edu/explore/overtime/?exporter=country-124&view=markets&locationLevel=country&layout=share&importer=group-1 https://atlas.hks.harvard.edu/explore/overtime/?exporter=cou... ) is probably a weakness that retaliatory tariffs can influence.
- greycol 1mo agoThe broader tariffs are the worse they are. Targeted tariffs can have a function but if targeted at a country that function isn't an economic good for either country it's only good as a political tool. You could argue that industries that you are the second cheapest in compared to that country could reap some benefits from supplying local markets (but not if there are other countries cheaper than your own that aren't also tariffed that can supply more of the demand) and then a targeted tariff may make some (long term) economic sense. Targeted tariffs can have more nuanced effects. You'll notice that Canadian politicians are talking about targeting red states with their tariffs. These tariffs will also economically hurt Canada, but you won't see a retaliatory tariff on things that hurt Canada disproportionately which would be the case with universal tariffs. You can expect them to pick luxury industries (like they did with bourbon) where preferences can be changed or industrial/commercial ones where (preferably) local or other suppliers are near parity with the US rather than say gasoline.
- cma256 1mo agoThis is hilarious and I agree. I think an under-appreciated aspect of all this is the complete schadenfreude from everyone. The story goes tariffs only hurt yourself but then we see retaliatory tariffs in response. "Oh yeah I'm going to cut off my leg to show you whose boss!" Very funny. And then you have people predisposed to higher-taxes who are contorting themselves over the economic cost of this tax while supporting significantly more economically destructive tax policies. Very funny. And, of course, the opposite. Republicans in my state are campaigning on lowering taxes and inflation while also defending tariffs! Very funny.
- diego_moita 1mo ago> but then we see retaliatory tariffs in response. "Oh yeah I'm going to cut off my leg to show you whose boss!" Agree. Much better to lower the tariffs on other countries that compete with the US. If Trump wants to kill Canadian auto industry then we'd better open wide our markets to Chinese or European cars.
- badc0ffee 1mo ago> The story goes tariffs only hurt yourself That's how the story goes with someplace like China. If you impose tariffs on imports you have no cost-effective alternative for, yes, the tariffs will only hurt the importer, because buying habits will not change. (I suppose Chinese cars are a big exception here) But in this case, the math is probably different because none of these tariffs affect products the US must realistically buy from Canada (e.g. oil and potash). So Canadian exporters will feel some pain and American importers will feel some pain. What should Canada do in this case if the two can't come to a trade agreement? Continue to import from the US at the same rate as before?
- mikey2410 1mo agoCanada can apply export taxes on things like oil & gas, and bring americans the pain they would feel if american tariffs were applied, except Canada would keep the taxes.
- getnormality 1mo agoDoesn't feel realistic. The comic version at least makes sense at some level; the real-world one doesn't. The real world version is "they're ripping us off by giving us cheap stuff that our producers can't compete with on price." Which is arguably a problem, yes, but the one thing it's not is a "ripping us off" problem.
- win311fwg 1mo agoThe real world version is even funner because it's not about receiving cheap stuff, rather the complaint is about receiving free stuff (trade deficit).
- daft_pink 1mo agoi'm a little bit confused by the current news. I thought the supreme court said the tariffs are illegal without congressional approval and the government started refunding the money. now the news is full of all these tarriffs about canada? What's the factual non-partisan reasoning by which trump has been found not to have the power to create tarriffs, but is still doing it with canada?
- tencentshill 1mo agoSection 338 allows it. Anything Canada does that gives themselves any trade advantage allows retaliation. Essentially inevitable. whitehouse.gov/fact-sheets/2026/07/fact-sheet-president-donald-j-trump-imposes-additional-tariffs-on-canada
- a_carbon_rod 1mo agoThe Trump Administration first used the International Emergency Economic Powers Act to declare a national economic emergency and impose tariffs on countries under the pretence that they were economic threats to America. The Supreme Court ruled against the tariffs because while it allows the president to regulate foreign imports as a measure against economic threats; it does not specifically grant the president power to impose tariffs, duties or other taxes which is typically a power that belongs to Congress. The tariffs on Canada are now being imposed under Section 338 of 1930's Tariff Act which allows the president the authority to apply up to 50% tariffs on countries the president finds has "discriminated", directly or indirectly, against the United States.
- pnt12 1mo agoEven if it's illegal, who's stopping him? Until anyone does, "crime is legal", as coffeezilla says.
- jbstack 1mo ago> I thought the supreme court said the tariffs are illegal without congressional approval The ruling wasn't as generalised as that. What it said was that the president doesn't have the authority to impose tariffs under the provisions of the International Emergency Economic Powers Act, which Trump had cited as the basis for some tariffs. That made those tariffs effectively illegal, but the ruling said nothing about tariffs which had other legislative provisions as their legal basis. The tariffs that you see today cite some other rule as their basis rather than the IEEPA.
- oceanplexian 1mo agoPlease explain why tariffs a "good thing" to protect a French winery but a "Bad thing" when it is used to protect an American worker. Everyone loves the EU and Canada and their tariffs. In Canada for example American poultry and dairy have as much as 200-500% tariffs. Usually it is seen as a big win to prevent undercutting the working class with cheap foreign labor. But as soon as it has any association with Trump all of a sudden the Progressives forget everything they believe in and turn into laissez faire libertarian capitalists.
- subarctic 1mo agoI'd love it if chicken breast in Canada was cheaper. I think maybe there need to be some controls or regulation so meat coming from the US isn't lower quality than what we currently have but if the price went down i wouldn't complain
- mallets 1mo agoIt's breaking EXISTING free trade deals that's angering people. And also using them as geopolitical cudgels against allies. Every country has protectionist measures in various sectors, trade deals are decades-long work to chip away at them in a way that's agreeable to everyone involved. Liberals and progressives don't agree on most things related to (free) trade, but agree on not "bullying" allies for no reason and little profit.
- villish 1mo ago> but agree on not "bullying" allies for no reason and little profit. This is what confuses me most about Trumps tactics. These are longtime friends and allies who would’ve gladly worked together to try to improve any perceived imbalances. I cannot fathom treating a friend this way. It makes no sense to me and is destructive.
- jamwil 1mo agoIt’s not logical. He is a malignant narcissist and a sociopath. A very sick man.
- fsckboy 1mo ago>You legs may have a comparative advantage at running that's not what comparative advantage means except in a degenerate sense. if country A is worse than country B in both making clothes and making paper, their comparative advantage is in the product which they are less worse at; they can maximize their GDP making that product.
- Gander5739 1mo agoThere's also an earlier xkcd on this theme: https://xkcd.com/3073/ https://xkcd.com/3073/
- urticaria 1mo agoReal estate. That is what those "useless pieces of paper" are good for. They send us goods, tools, food; we give them pieces of paper; true. I guess they could invest in their own people, pay them well, give them better education. Nope, they're doing "business," they're doing the capitalist game, not the patriot one. What to do with that useless money, lots and lots of it? Buy the most stable stuff: land. Businesses. Just look around... Housing crisis? Where do you think that is coming from? One, ever-more-rich carpetbaggers benefiting from government programs that were supposed to benefit the workers, two, India, China, Vietnam, "poor" countries where the wealthy run the game worse than here and have even less respect for people than POTUS ever could. And of course the oil sheiks, about whom we hear when they get some fashionable property, like the top Europe soccer teams, but otherwise are just quietly parking those "useless dollars" to their best interest.