Comment by Freedom2
8 days ago
As someone interested in "curious discussion", what are some of the positives we can take away from this? Is this a new standard for economic policy?
8 days ago
As someone interested in "curious discussion", what are some of the positives we can take away from this? Is this a new standard for economic policy?
Autarky is just bad economic policy because comparative advantage is too powerful. Nobody benefits from this. The US loses and everyone else loses. The US loses the most however, both economically and in soft power.
This isn't even the China model. Slapping tariffs on raw inputs guarantees that US industry cannot compete internationally. This is more like the North Korean model.
While there are positives to targeted industrial policy, there are no positives to autarky.
> The US loses the most however, both economically and in soft power.
Yes. It loses most because 10-20% of world trade is for value added in the USA. The one exception is the USA of course, because their percentage is 100%. So USA is 100% effected, the rest of the world is 10-20% effected as they continue to happily trade with each other without tariffs.
I dunno about everywhere else, but in Australia the effects are already noticeable. Trade with the USA is dropping, and trade with Canada is growing.
> This isn't even the China model
It's 1400-1840 China model
https://en.wikipedia.org/wiki/Isolationism#China
Buying American stocks and companies is about to be a lot cheaper.
It may reduce consumerism in the US and therefore be beneficial to the environment.
Well it's positive for various countries that benefit from an end to US dominance over the world. :p
So for the US itself? The theory would be that the tariffs will increase US manufacturing sector. But the cold hard truth is that it isn't the 1830s anymore and last time tariffs were tried happened to line up exactly with the Great Depression.
Even an competent administration would have great difficulty making tariffs to restore manufacturing work in the US, if that is even at all possible. It fails because other countries just put the same tariffs back on the US.
So with the Trump's administration some kinda of serious economy meltdown is almost certainly the result.
It is possible for things to simply be foolish. Insisting on balance is not the same thing as curious discussion.
I can't think of any positives.
Trump is saying the positives are the it will force companies to build stuff in the US, thus increasing our domestic manufacturing and increasing jobs. I don't see that happening in a significant way, but who knows?
But if that does happen, then the huge amount of revenue that Trump thinks is going to come to the government's coffers won't happen, and that revenue is meant to offset some of the tax breaks for the wealthy, so we're kinda screwed either way.