Comment by dsco
15 days ago
I've seen this comment a couple of times. What would be a better way of doing it? Also consider that if they would've had a more complex formula, what would be the cost of needing to explain it publicly? Would they then need to start defending the fairness of each tariff vs doing it the simple way and having a single formula across the board?
How about “not doing it at all”?
How do you propose to fix deindustrialization?
US industrial output is the highest it has ever been. Where did you get the idea that we "deindustrialized"?
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Um, by picking and choosing what goods need protection in the long term?
Like, we can't make more fish. Avocados take a few years to grow new trees. Steel mills don't just appear in Ohio.
The worst part is that, even if you believe Donny, he's so mercurial with these tariffs that no one is going to give you a loan to do anything about any of this. This Katy Perry doctrine [0] he's established is just poison to any sort of capital investment. You've got no idea if any of these tariffs will make it to Monday, let alone to the time it takes the mortgage on your t-shirt factory to be paid off. And then you've got a new administration in four years and no idea if they will keep that protection for you either. How are you going to plant a whole vineyard and get it profitable in 4 years when grape vines take 7 years to mature to fruit bearing?
There's no point to any of this, even if you believe him.
[0] 'Cause you're hot, then you're cold You're yes, then you're no You're in, then you're out You're up, then you're down You're wrong when it's right It's black, and it's white We fight, we break up We kiss, we make up
Overall I agree, but I'm not sure there's literally no point. American primary producers will likely benefit - people who own mines, oil wells, farms, etc., and some American manufacturers too as long as they source enough of their raw materials from within the US that the price hikes on resources from overseas don't bite them too much. Still an overall loss that will be borne by American consumers, but a small section of the population who are already wealthy will greatly benefit...
The point is, as this Senator explains, not economic, but to gain leverage over companies and countries:
https://bsky.app/profile/chrismurphyct.bsky.social/post/3llu...
"Do _____ and maybe we can cut you some slack on the tariffs"
If there is a point and it's not just absolute stupidity.
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> people who own mines, oil wells, farms, etc.
Huge swaths of midwestern farmers will go bankrupt if tariffs are imposed. Subsidies and exemptions are being specifically added to prevent the complete collapse of multiple red state economies due to the harm from the tariffs.
Even things like oil and mines aren't guaranteed safe, because of complexities around where refineries are, loss of export market, or weakness of dollar offsetting any nominal gains when looking at actual purchasing power.
Exactly, tariffs may be a wise way to protect parts of your industry that need protection and investment. The Chinese for example have been using this tactic for decades. But you need to choose which sectors to invest in. The way Trump is doing is nothing more than an instant devaluation of the dollar purchasing power.
The problem is it's economically illiterate. Trade deficits aren't bad in themselves - they can be a sign that you're getting a good deal. Consider the case where a country with low wages exports raw materials to the US, and doesn't buy back as much from the US. This is the situation for lots of poorer countries who are exporting cheap raw materials to the US, and the US gains from these situations. Trump's policy simply makes all these raw materials more expensive.
Another way of reducing trade deficits would be to make Americans so poor that they can't afford to buy things from overseas. Eliminating trade deficits in itself isn't a rational economic goal.
Having said that, American manufacurers on average will likely benefit (though maybe not if their raw materials are too much more expensive), but this benefit will only come at the cost of American consumers, who are denied cheaper options from overseas by the tariffs
You’re calling Trump “economically illiterate,” but what you’re saying will happen is exactly the motivation of Trump’s policy. He just thinks it’s a good thing rather than a bad thing.
Trump’s bet is that the upsides will be borne disproportionately by his base, while the downsides will be borne disproportionately by Democrats’ laptop-class base. It’s not irrational to think that will be the result.
How will adding a tax to every single consumer good benefit his base?
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I don't think it's his base that will benefit. More the owners of factories, mines, oil wells, etc.
Trump also thinks imports subtract from GDP.
> You’re calling Trump “economically illiterate,”
I mean he's gone bankrupt 6 times including managing to bankrupt a casino a business where on average people give you money to get less money in return... He also confuses simple economic terms like equating trade deficits with tariffs.
I was just talking last night about how ironically the things Trump is doing fall not to far from what Bernie bros have dreamed of. Heavy tariffs and no income tax is pretty much the conservative version of liberal hand outs.
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Consider actual tariffs? A trade deficit isn't a tariff or trade barrier it's just the natural flow of commerce from them selling more stuff than they buy. They're dressing it up like these countries are charging US imports these crazy tariffs but they're not at all, especially not across the board.
That's imminently doable but would require more work than plugging in 2 numbers from the US trade delegation website so we get this complete lie instead. Trump has had it in his head for ages that trade deficit == tariff (or is lying about that to make his supporters swallow this as the US just fighting back) and it's a completely broken understanding of trade.
> Consider actual tariffs? A trade deficit isn't a tariff or trade barrier it's just the natural flow of commerce from them selling more stuff than they buy
That’s just defining what a trade deficit is, it doesn’t explain why trade deficits arise. For example, other countries have cheaper labor and laxer environmental regulations. Simply looking at the country’s tariff rates on U.S. goods doesn’t account for the whole picture.
Other countries also have different population numbers. To take a random example, why would e.g. Uruguay (population 3.5M) buy as much from the US (population 100x) as the US is able to buy from them?
Besides, if the trade volume is what determines the tariff, why would any country want to have a trade surplus with the US? The best solution for other countries is to artificially limit their exports, or find more reliable trading partners.
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Yeah sure, Europe is absolutely known for their lax environmental regulations…
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> cheaper labor and laxer environmental regulations
So we've exported our worst paying, most environmentally damaging industries? I mean the rivers catching fire was probably exciting but I'm not exactly pining to bring that back...
Tariffs can only set those industries up for internal markets, other countries will just continue to buy from the cheaper source so the protected industry has to continue to be protected.
Additionally who's going to work these labor intensive industries? We're already at 4.1% unemployment, there's not vast masses of people waiting for low paying work as seamstresses and one of the other major prongs of the Trump ideology is reducing immigration drastically so we're going to squeezed on that end too.
Finally we've done mass tariffs before and it always ends badly. Remember Smoot-Hawley? it deepened the Great Depression because people thought they could turn to protectionism to prop up and bring industry to the US. It just doesn't work when broadly applied.