The tariffs were NOT inflationary during Trump’s 1st term.
Left office with a 1.4 percent inflation level.
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Because of subsidies.
But yes they were not and neither were Obama’s but here we are
and when consumers don’t buy their product?
Sorry, not buying your gloom
In foreign trade, absolutely.
That’s extremely short sighted. What cheaper labor in foreign countries does is hurt the GNP for the entire US when manufacturing here is forced out business. That is bad for everyone including consumers. After all, what good are cheaper items when the company you once worked for closes shop.
It’s either that or we bomb them.
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Well . . .
Which one would cost less?
(Has anyone done the study?)
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War is exponentially more expensive. No study to back that up … just a gut feeling based on 70+ years of experience.
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Income taxes > sales taxes.
No they were not but this time trump is talking about insane tarrifs of 25%, 50%, 100% etc.
Tariffs can work if they are applied surgically and part of a larger strategy. It seems Trump will use them as a blunt force instrument.
It’s been said before. There will be no 25%, 50%, and certainly no 100% tariffs, at least not in the long term. They are threats to make it clear change needs to occur and set the table for bargaining a compromise. As has been noted, just the threat of 25% has already netted promises of change from both Canada and Mexico almost two months before Trump takes office.
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Well, that’s true in Luxembourg.
(Where they don’t make anything.)
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They can also work where there is no level playing field to begin with.
They lesson(s) you have been taught about tariffs are true, (presumably) but they assume as a precondition that free trade exists between to relatively similar economies each with m/l free markets esp free markets for labor.
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Picture this:
One farmer pays for is farm. It costs him $1m. His break-even price for tomatoes is $5/bushel. His break-even price for beef is $2.00/lb.
For the other farmer, the gov’t says “I’ll shoot the landowner and give you the farm for free. Now your break-even price is half that of the other farmer.”
Is that a free market? No.
Are they competing on equal terms? No.
In fact in such a case a tariff on farmer #2 works because it restores equilibirum, free markets etc… The hypothetical case you were taught (Ricado and comparative advantage) works, and tariffs don’t work when the two farmers compete on equal footing.
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.
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But that hypothetical is often not reality.
Crappy assumptions produce crappy results.
Economic models built on crappy unrealistic assumptions produce crappy urealistic results.
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that would be exactly what he did the first time
My claim was a value-judgment.
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So we agree that the increased cost will lead to lower quantity demanded of (tariffed items and items built with tariffed items>.
I’ll accept the argument that tariff’s might not be inflationary. In fact, in the end they are likely to be deflationary as other countries respond in kind.
I’m just not sure that’s the outcome anyone wants.
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Them F-35s are a hundred million a pop. Got to get some use out of them.
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Lest they rust…
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Yes. I was holding that point (they might very well be deflationary) for later . . . if the discussion led to it.
We don’t have to many examples to use as a basis for comparison.
1.) Smoot-Hawley (but the Great Depression was coming anyway.)
2.) Trump Tariffs 1.0 - - - - and whatever you do, do not look up what happened to per capita real GDP just before COVID hit in early 2020. Do not look up what happened in 2019.
