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Trade (and Tariffs)

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Re: Trade (and Tariffs)

#151

Post by edgyquant »

mindslight wrote: post #138
arwhatever wrote: post #133

Earlier quoted context omitted.

Maybe even use the tariff proceeds to provide incentives to those very same domestic industries? (I am not an economist.)

If that were seriously on the table, we could have just used the proceeds from having the world reserve currency to do that. Instead, their open plan for that national asset is to squander it. In general, stop trying to steelman the looters. Sometimes a con artist is really just a con artist.

From what I understand having the dollar be our main export is a reason why we haven’t had real industrial policy. We export dollars so we have to buy from overseas.

Re: Trade (and Tariffs)

#152

Post by edgyquant »

epolanski wrote: post #111
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…

I think the whole trade deficit argument to be beyond stupid. 1. Sending machinery, food, equipment in exchange of pieces of paper with national heroes printed on them should make you think who's benefitting really from the deficit 2. This is the 21st century, you can't ignore services. How many Office and Adobe licenses, credit card transactions, Netflix subscriptions, Hollywood movies and shows, advertisement space…

Services can’t fight a war or feed you. A nation that wishes to be a real power must be able to guarantee it can feed and protect its people.

Re: Trade (and Tariffs)

#153

Post by edgyquant »

peezd wrote: post #98
teachrdan wrote: post #73

Earlier quoted context omitted.

This is a false dichotomy. I personally believe that strategic tariffs should be used to protect our national interests, including providing meaningful employment. This administration has no interest in strategic tariffs. Instead, they are made overbroad (50% on everything from Canada vs, say, cheap imported steel) and they are made and removed capriciously (tariffs on English whisky dropped after King Charles' visit…

[...wanted to bring your dad's factory job back, he'd specifically target whatever industry he was working in AND ideally spend the tariff money boosting that industry.] Which was more or less the intent of the CHIPS and Science Act for the semiconductors industry.

The chips act used tax dollars and subsidies to incentivize companies to build here. This and tariffs on semis are not much different the only difference is with a tariff you only pay the tax when you buy imported goods

Re: Trade (and Tariffs)

#154

Post by edgyquant »

inigyou wrote: post #42
kemayo wrote: post #25

The context here is that president Trump has an interesting view of trade deficits / surpluses. Specifically, he frequently cites cases where the US has a trade deficit with another country -- where the US is spending more in that country than that country is in the US -- as if that country is "taking money" from the US. This is a bit peculiar, because it ignores the whole "the money we are spending is being exchange…

Actually you, like most of us, have a trade deficit with the grocery store and the movie theater, and a trade surplus with your employer. Which one is more enjoyable to have?

I dislike this analogy because a nation is not a person grocery shopping and anyway if a single grocery store was the only way to get food that would put me in a very lopsided relationship with them and the power dynamics in such a case are obviously bad for the person.

Nations have interests and there’s a real conversation to be had that a country should ensure it has strategic industries so its existence is never at the whims of another.

Re: Trade (and Tariffs)

#155

Post by mindslight »

edgyquant wrote: post #151
mindslight wrote: post #138

Earlier quoted context omitted.

If that were seriously on the table, we could have just used the proceeds from having the world reserve currency to do that. Instead, their open plan for that national asset is to squander it. In general, stop trying to steelman the looters. Sometimes a con artist is really just a con artist.

From what I understand having the dollar be our main export is a reason why we haven’t had real industrial policy. We export dollars so we have to buy from overseas.

You're missing the other choices that link those two things. Being able to export dollars lets the government create new dollars out of thin air, which can be traded for real goods and services - a great deal by any measure. But the political mantra of the last thirty years has been a fake "fiscal responsibility" where the government has been stopped from spending that new money for most deliberate purposes, especially on a large scale (eg subsidizing domestic manufacturing in strategic industries). Yet instead of the natural price deflation that true fiscal responsibility would have brought, economists have declared that our currency still needs to inflate. And so the Fed still creates just as many new dollars, but instead gives them away to banks in the form of low interest loans (fueling the ever growing asset bubble, essentially a handout to asset holders). The combination of all of these are what has decimated our industrial base.

Re: Trade (and Tariffs)

#156

Post by andruby »

edgyquant wrote: post #154
inigyou wrote: post #42

Earlier quoted context omitted.

Actually you, like most of us, have a trade deficit with the grocery store and the movie theater, and a trade surplus with your employer. Which one is more enjoyable to have?

I dislike this analogy because a nation is not a person grocery shopping and anyway if a single grocery store was the only way to get food that would put me in a very lopsided relationship with them and the power dynamics in such a case are obviously bad for the person. Nations have interests and there’s a real conversation to be had that a country should ensure it has strategic industries so its existence is never a…

> a real conversation to be had that a country should ensure it has strategic industries

Then let that be the reason for tariffs rather than the bullshit argument of trade deficit = taking money.

Re: Trade (and Tariffs)

#157

Post by javanissen »

zahlman wrote: post #149

If tariffs are so obviously and universally bad, then why do tariffed countries respond with retaliatory tariffs instead of letting the first country shoot themselves in the foot and getting on with their own business?

Tariffs (and retaliatory tariffs) can be universally economically negative and still be rationally pursued by individual politicians.

For example: if Donald Trump tariffs the country you are in charge of, you are likely willing to pay the economic cost of a retaliatory tariff to seem like you are standing up to America to your constituents. The politician’s goal is to be re-elected.

The politician may aim to deter getting tariffed in the first place, and promising a retaliatory tariff if another country tariffs you first is also reasonable as a deterrent from a game-theoretical perspective.

All it takes is for one world leader to not understand or care about the clear economic negatives to tariffs to start the chain: everyone else can be a rational actor.

Re: Trade (and Tariffs)

#158

Post by throw0101d »

Hammershaft wrote: post #139
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…

Economists universally think tariffs are dumb policy. https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif... Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off. Nobody in politics can say this simple truth because the rust belt states are critical swing states.

> Economists universally think tariffs are dumb policy.

There are a few specific cases when one may want to implement them:

* https://www.noahpinion.blog/p/when-are-tariffs-good

One should also be mindful one's manufacturing base:

* https://www.noahpinion.blog/p/manufacturing-is-a-war-now

Re: Trade (and Tariffs)

#159

Post by throw0101d »

FuriouslyAdrift wrote: post #86
throw0101d wrote: post #51

Earlier quoted context omitted.

> The Biden admin went after Canada repeatedly for unfair trade practices […] What were these practices?

Softwood dumping by Canada has been a huge issue for over 40 years. https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...

So that's one (in which Canada happened to win multiple rulings at NAFTA and WTO panels).

Any others?

Re: Trade (and Tariffs)

#160

Post by edgyquant »

andruby wrote: post #156
edgyquant wrote: post #154

Earlier quoted context omitted.

I dislike this analogy because a nation is not a person grocery shopping and anyway if a single grocery store was the only way to get food that would put me in a very lopsided relationship with them and the power dynamics in such a case are obviously bad for the person. Nations have interests and there’s a real conversation to be had that a country should ensure it has strategic industries so its existence is never a…

> a real conversation to be had that a country should ensure it has strategic industries Then let that be the reason for tariffs rather than the bullshit argument of trade deficit = taking money.

In academic and think tank circles it is. Too many people treat political theatre and, frankly, entertainment pieces as reflective of the actual policy debates when they are mass media designed to get clicks.
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