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Trade (and Tariffs)

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Re: Trade (and Tariffs)

#121

Post by smallmancontrov »

kennywinker wrote: post #77
smallmancontrov wrote: post #34

A current account deficit is a capital account surplus. Persistent deficits shift the balance between Asset vs Export sectors, dumping the export sector and pumping the asset sector. Put differently, we can pay for imports with shit that we make or shit that we own -- and this has implications for people in our country who make shit vs own shit. A better analogy for the trade deficit would be sitting on the couch sla…

It’s reasonable to want to bring back american manufacturing. But the random, temper-tantrum, market-manipulation tariffs are not going to do that. America isn’t going to all of a sudden produce tonnes and tonnes of xmas decorations every year just because of a 50% tariff on all chinese goods that may or may not be around in 6 months. All that’s going to happen is xmas decorations are going to be more expensive. An a…

An actual plan would look like the IIJA, IRA, CHIPS Act -- what Biden was doing, but act larger scale. The problem with globalization is not that free trade failed to create a surplus, it's that 150% of the surplus went to capital and -50% went to labor, which can and should be fixed with tax and spend. Instead, of course, we didn't tax capital and we spent the money on stupid wars. That said, good industrial policy includes tariffs too, but Democrats knew this! Biden wasn't allergic to tariffs! The 100% EV tariff (and EV subsidies and battery subsidies) happened during his administration. Aside from the fact that giving Elon everything he wanted was a massive political miscalculation, it was good industrial policy, we just needed more of it in order to affect the macro.

That's the tragedy of it -- Democrats in office understood the macro picture and worked diligently and intelligently to fix it, the spurned labor interests in the MAGA movement understood what had hurt them and correctly rejected it, but the former didn't know how to message to the latter so a demagogue swooped in and here we are.

The gonzo free-trade rhetoric of the Clinton era should never have happened, second best time to get rid of it was 10 years ago before Trump I, third best time was a few years ago before Trump II, but the fourth best time is now.

Re: Trade (and Tariffs)

#123

Post by epolanski »

close04 wrote: post #120
epolanski wrote: post #113

Earlier quoted context omitted.

> It’s reasonable to want to bring back american manufacturing. Capitalism produces where it is convenient to do so. And no politician can change it. You can try to protect very few critical sectors, but not whole "manufacturing" which by the way keeps rising in US since ever. What politicians want to sell is the "good old times of well paying manufacturing jobs". Robots have long come for those.

Capitalism is great as long as it works just for you. When others learn to play the game and even outrun you, it’s time to put the finger on the scales. Essence of the free market.

There isn't much you can do about it, you can't have the cake and eat it too.

If you want to protect your whole "manufacturing", you also need to make peace with the idea that consumer and industrial prices will balloon.

You can only compete, choose your battles, but you can't live in a world that does not exist.

Re: Trade (and Tariffs)

#125

Post by HDThoreaun »

catigula wrote: post #103

Expert economists working in both the Biden and Trump administration support tariffs. The difference is the dumb way Trump is doing them and a smarter way of doing them. Obviously, this comic completely misses that nuance and promotes a pseudoscientific idea that tariffs are somehow bad.

I think the comic captures that nuance by exaggerating the stupidity of the trump tariffs. If your trade strategy is "we must eliminate all trade deficits" youre gonna have a bad time

Re: Trade (and Tariffs)

#126

Post by jpadkins »

bigyabai wrote: post #101
jpadkins wrote: post #78

Earlier quoted context omitted.

Then why did Canadian politicians tax milk products at > 200%? https://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2024... (starting long before the current trade war)

It's a surplus tax, and one that apparently doesn't exist for the majority of dairy imports: https://archive.is/kKsYc that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement (USMCA). [...] the U.S. has never gotten close to exceeding our USMCA quotas

thanks, key quote from the link (for others) "“It is accurate that Canada imposes a tariff of approximately 250% on U.S. exports of certain dairy products into Canada, and even more with Canada’s 25% retaliatory tariffs in place. However, that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement (USMCA). Frustratingly, the U.S. has never gotten close to exceeding our USMCA quotas because Canada has erected various protectionist measures that fly in the face of their trade obligations made under USMCA."

So I think this supports the point that Canadian politicians are bad for protectionist trade policies, right?

Re: Trade (and Tariffs)

#127

Post by AnimalMuppet »

0xy wrote: post #33

People are very quick to make kneejerk reactions to tariffs while assuming the other guys have different opinions. The Biden admin went after Canada repeatedly for unfair trade practices, and issued a blanket 10% tariff on Chinese goods. The only difference is to what degree they wield the tariff hammer, and in which direction it is swung. The one thing the current admin does have a point on is non-tariff meddling. N…

The other difference is the legality of it. Trump is trying to do all this at his personal order, without Congress. And he's trying to jump through all kinds of shenanigans to do so.

For example, he declared a state of emergency about fentanyl, and used that as cover to create tariffs toward every country on earth. That, obviously, has nothing to do with fentanyl; it's just a smoke screen.

He wants to rule by decree. Biden didn't do that. (OK, didn't do it to anything like the same degree. I'm sure someone can find an example where he did. It still wasn't like this.)

Re: Trade (and Tariffs)

#128

Post by didibus »

Shiggy_ wrote: post #64
inigyou wrote: post #46

Earlier quoted context omitted.

Put differently, Trump is explicitly attempting to destroy the reason the American stock market generally goes up.

That is not what the user above you said. They're explicitly pointing out that the US (and most of the western world) has abandoned the manufacturing sector of their economy, outsourcing work that used to employ millions of people to the developing world. This is a trade-off that can benefit both countries, but, it is wise to consider both WHO benefits from this, and what the LONG-TERM implications of this entails. I…

You're conflating the goal with the approach. If the goal is to bring back or grow US manufacturing, the question is whether the current tariffs are an effective way to accomplish that relative to their trade offs. From the evidence so far, the historical research, and most economic analysis, the case doesn't look particularly strong. We haven't seen a meaningful revival in manufacturing employment, and even analyses that project some growth in manufacturing find that it comes with substantial costs elsewhere in the economy, including higher input and consumer prices, weaker growth in other sectors, and lower overall GDP.

Re: Trade (and Tariffs)

#129

Post by AnimalMuppet »

apexalpha wrote: post #30
eigenspace wrote: post #8

Earlier quoted context omitted.

I don't think the comic is claiming that all tariffs in any context are bad, that would indeed be a reductive, bad take. Given the timing and the metaphor of blood being sent to and from a limb, this is almost surely a reference to the tariff threats against Canada.

Oh this is a good point. I was not aware of new developments with US-Canada today, that makes the more-than-normal stingy reactions expected. Sorry, I'm European and can't keep up with the erratic US Gov. I read a summary at the end of the week.

The US would be better off if more people followed your example.

Re: Trade (and Tariffs)

#130

Post by smallmancontrov »

epolanski wrote: post #123
close04 wrote: post #120

Earlier quoted context omitted.

Capitalism is great as long as it works just for you. When others learn to play the game and even outrun you, it’s time to put the finger on the scales. Essence of the free market.

There isn't much you can do about it, you can't have the cake and eat it too. If you want to protect your whole "manufacturing", you also need to make peace with the idea that consumer and industrial prices will balloon. You can only compete, choose your battles, but you can't live in a world that does not exist.

No, bringing the price of 50" 4k TVs down to $300 does not make up for lost jobs. That's an easy choice, which is why it was never presented to the American worker but rather foisted upon us by shareholders in pursuit of profit and a government content to look the other way.
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