Tariffs done well could be a boon for a sector. But they are tricky to do well, and the current administration doesn't show the slightest hint of being capable of doing it well.
You have to treat tariffs not as a moat to protect an industry for good, but a runway to give a nascent industry enough room to take off. In a mature industry, tariffs are more likely to keep incumbents uncompetitive and disincentivize investments that would make them more competitive, especially if those are capital-heavy.
Also, tariffs aren't going to be effective if other structural issues exist in an industry that prevent or sharply limit expansion. Like key components having a sole worldwide supplier with a full order book. Or if capital investment to set up a new factory are beyond the ability of the financial markets to provide.
I don't think people are opposed to tariffs, at least they weren't before. Bernie Sanders has historically been for tariffs when used properly. Used properly being the important phrase. When you have someone who doesn't understand what a trade deficit is imposing tariffs based on the difference between deficit and surplus, you pretty effectively turn people against tariffs on top of the whole destroying the global economy thing.
Congress delegated tariff power to the president after Smoot-Hawley caused such a disaster.
> The reason the President doesn't have this power is because the economy should not rest on the whims or understanding of any one person.
It's interesting to see that it just takes time for lessons to be un-learned. The reason Smoot-Hawley was such a disaster is that it took hundreds of people to agree that it was good policy in the house, which meant adding tariffs to the bill in favor of the districts they individually represented. The result was an egregiously long list of things being tariffed. They delegated it to the one person specifically because they weren't similarly beholden to so many conflicting pressures.
I don't mean any of this to defend Trump's actions, in fact the opposite: he's essentially managing to do the same thing even without politic pressures to do so. I just mean to say that it is reasonably sane for congress to have delegated tariffs in a limited capacity when this flaw was revealed.
I mean there are several issues at play here. He is being sued for the illegal tariffs since Republicans are spineless and are cool with him just doing anything so I'm focusing on the practical problems.
In this case it's not Trump but Peter Navarro [0] who doesn't understand how tariffs work, because he's apparently never looked into multiparty game theory.
Exhibit A: Navarro being sidelined and Scott Bessent put in charge of running tariff negotiations, after the bond markets spooked.
Tariffs done well could be a boon for a sector. But they are tricky to do well, and the current administration doesn't show the slightest hint of being capable of doing it well.
You have to treat tariffs not as a moat to protect an industry for good, but a runway to give a nascent industry enough room to take off. In a mature industry, tariffs are more likely to keep incumbents uncompetitive and disincentivize investments that would make them more competitive, especially if those are capital-heavy.
Also, tariffs aren't going to be effective if other structural issues exist in an industry that prevent or sharply limit expansion. Like key components having a sole worldwide supplier with a full order book. Or if capital investment to set up a new factory are beyond the ability of the financial markets to provide.
Yes a competent and forward-looking trade and industrial policy would be nice, as a treat.
I don't think people are opposed to tariffs, at least they weren't before. Bernie Sanders has historically been for tariffs when used properly. Used properly being the important phrase. When you have someone who doesn't understand what a trade deficit is imposing tariffs based on the difference between deficit and surplus, you pretty effectively turn people against tariffs on top of the whole destroying the global economy thing.
No, the issue is not that Trump doesn't have the appropriate understanding. The issue is that they are illegal tariffs.
The President does not have the power to create tariffs. Congress does!
The reason the President doesn't have this power is because the economy should not rest on the whims or understanding of any one person.
Don't forget tho part where the tariffs were imposed in violation of trade agreements and treaties the US had already negotiated and agreed to.
Congress delegated tariff power to the president after Smoot-Hawley caused such a disaster.
> The reason the President doesn't have this power is because the economy should not rest on the whims or understanding of any one person.
It's interesting to see that it just takes time for lessons to be un-learned. The reason Smoot-Hawley was such a disaster is that it took hundreds of people to agree that it was good policy in the house, which meant adding tariffs to the bill in favor of the districts they individually represented. The result was an egregiously long list of things being tariffed. They delegated it to the one person specifically because they weren't similarly beholden to so many conflicting pressures.
I don't mean any of this to defend Trump's actions, in fact the opposite: he's essentially managing to do the same thing even without politic pressures to do so. I just mean to say that it is reasonably sane for congress to have delegated tariffs in a limited capacity when this flaw was revealed.
I mean there are several issues at play here. He is being sued for the illegal tariffs since Republicans are spineless and are cool with him just doing anything so I'm focusing on the practical problems.
In this case it's not Trump but Peter Navarro [0] who doesn't understand how tariffs work, because he's apparently never looked into multiparty game theory.
Exhibit A: Navarro being sidelined and Scott Bessent put in charge of running tariff negotiations, after the bond markets spooked.
[0] https://en.m.wikipedia.org/wiki/Peter_Navarro
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This comment is textbook Poe's Law.
[flagged]
There is no need to resort to personal attacks
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