I’m not gonna give him a pass for leaving Russia off the list
(I don’t think Canada is on it either)
But I will point out that
When folks cannot argue against tariffs they segue into “Russia should be on the list.”
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We’re not big trading partners with penguins, either - or numerous other countries on the list. But they got listed. Russia did not.
There is only one argument left against tarrifs. The possibility of a negative long term outcome.
Because as of right now it’s all may be this will happen, may be this company will do more than consider to move their factory, may be the world won’t reciprocate may be.
Possibly.
I can do both those: Russia should absolutely be on the list. And these tariffs will be inflationary with the added benefit of destroying jobs.
What i don’t understand is one of this country’s biggest issues is personal debt. Which means that as prices rise people (at least short term) will continue to buy items and continue to go further into debt. How is this a good thing?
Tariffs (in he short term) mean
- People buy more US goods creating US jobs (lowering personal debt)
- When they opt to buy foreign goods anyway their purchase raises revenue reducing the national debt.
Too soon to know for sure but they seem to be having that effect already.
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.
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The one (and only) valid argument for zero tariffs and against a sound tariff policy is that any tariffs at all a slippery slope into an unsound policy.
Are people in debt primarily because of unemployment or because of overspending?
Because of bad interest rate policy and bad QE policy.
I don’t think that’s accurate. I think it’s more accurate to say “People spend the same amount buying less stuff and people have less money”
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We’re saving the planet from excess worthless junk.
Now I"m getting out of my pay grade here, but if this strengthens American dollar doesn’t that help in buying foreign goods?
We placed a 90% tariff on Madagascar because they export vanilla and nickel to the US and therefore we have a trade deficit.
What product should they buy from us to balance that trade, with their $510 of per capita annual income?
Are we seeing how stupid that sounds? We’ll now pay a lot more for both products because… Madagascar is too poor to buy our goods and services.
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these tariffs are going to raise prices on main street. They are going to keep main street US companies from selling into foreign markets.
That’s not true.
Short term a lot of the items getting tariffed aren’t made in the US. We can’t buy them from a US company if we wanted to.
I’m going to fill you in on little secret…most mainstreet been already cut out of foreign market.
Only the most powerful connected corporations gets to play.
Only to the same degree that they do because of any tax and every tax.
Charge US autoworkers a 7.65% FICA tax and a 7.65% FICA tax on anyone who employs them and what happens to the consumer?
Exactly precisely the same as if a commensurate tax is charge on imported autos.
- Same shift in the supply curve
- Same some percent of new price gets passed along to consumer
- Same reduced consumption
- etc. etc.
The difference?
- These taxes are aimed squarely at so-called friends who have been slapping tariffs and non-tariff barriers on us for years
- Trump wants these taxes.
Now suddenly people who have never opposed a tax before (when they were on American workers and American industry) are suddenly opposed to these.
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Again…needs repeating.
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And the only way we will start making them again is if industry knows these tariffs are going to last and not be turned into a political football.
In the case of a tariff it’s a tax - that we just set at a very high rate. That has the added benefit of being highly regressive.
In the case of FICA it adds 7.65% to labor costs, which are a part - not a whole - of the cost of production. And of course in the case of FICA, it benefits Americans who are on Social Security.
Of course they have.
They have opposed
VAT
Flat tax
Etc
The cost of labor in a car, is a small fraction of the retail price of a car.
The cost of a waffle iron at the harbor is a small fraction of the retail price of a waffle iron. (A lot pf people would be really really mad at Walmart if they knew how much the mark-ups over harbor cost are.)
FICA taxes and tariffs are very similar in that regard.
They are also very similar in the following
- both have distortive impacts on comparative advantage.
- both result in higher consumer prices.
- both result in reduced consumer consumption.
(They are remarkably similar in regard to these as well.)