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Trade (and Tariffs)

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Re: Trade (and Tariffs)

#221

Post by [deleted] »

smallmancontrov wrote: post #135
dvh wrote: post #112

Alt text: "You legs may have a comparative advantage at running, but we arms have a competitive advantage at swinging hammers, so unless you accept that we're the dominant limbs and stop hogging the oxygen, that running advantage won't be around for long."

Ricardo's comparative advantage result is contingent on the assumption that capital is not mobile across borders. This was a good assumption in 1817. Is it a good assumption today? Furthermore, he's very up front about this in On the Principles , and from this information you can calculate the exact number of people who read the damn thing between the person repeating the talking point and the person originating the…

[deleted]

Re: Trade (and Tariffs)

#222

Post by edgyquant »

inigyou wrote: post #208
edgyquant wrote: post #153

Earlier quoted context omitted.

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

Subsidies ensure a certain sector has money. CHIPS pays for semiconductor fabs no matter what. Tariffing foreign semiconductors doesn't ensure there will be money for semiconductor fabs here - there could just be no semiconductors at all.

There will not be zero semiconductors. Tariffs incentivize domestic production by raising imported prices allowing our industries to be competitive. There is no world where the military and industry just don’t have processors anymore they will be forced to invest locally that’s THE point of tariffs traditionally (see: the us after its founding)

And the chips act was subsidies

Re: Trade (and Tariffs)

#223

Post by edgyquant »

javanissen wrote: post #187
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…

This is one view. Another view is that maintaining economic interdependence between countries — aside from making both countries richer via specialization and comparative advantage — is a great way to incentivize cooperation and prevent them from killing each other. Examples here: https://www.hoover.org/research/when-trade-wars-become-shoot...

Regardless the analogy of grocery shopping falls apart and shows a total lack of understanding the other sides worldview

Re: Trade (and Tariffs)

#224

Post by otterley »

smallmancontrov wrote: post #130
epolanski wrote: post #123

Earlier quoted context omitted.

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.

If it’s such an easy choice, why wasn’t that the outcome?

Re: Trade (and Tariffs)

#225

Post by otterley »

pessimizer wrote: post #180
edgyquant wrote: post #152

Earlier quoted context omitted.

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.

Also, America has no advantage in services. Americans aren't any smarter than anyone else. America has a lot of land, highways, and infrastructure - that's actual advantage. So we're just letting that rot or selling it to overseas oligarchs.

We may not be “smarter” than others but our culture, which prioritizes innovation and creativity, makes us comparatively better at inventing goods and services that people want to buy.

Re: Trade (and Tariffs)

#226

Post by preg_match »

edgyquant wrote: post #152
epolanski wrote: post #111

Earlier quoted context omitted.

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.

I'm not sure food is a concern at all in the US. We have a shit ton of agriculture, and we have some of the highest obesity rates on the planet due to our immense surplus of food.

We also have the biggest military by far, and it's not even close. So that covers your two bases.

Re: Trade (and Tariffs)

#227

Post by otterley »

pessimizer wrote: post #181
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.

Yes, and this is good. The American stock market going up benefits 10% of the US population. The US has the highest share of revenue going to owners than it ever has in history. We've left behind the Gilded Age. https://libertystreeteconomics.newyorkfed.org/2026/06/the-po...

Where are you getting this 10% number? 54.3% of US households held a retirement account in 2022. https://www.federalreserve.gov/publications/files/scf23.pdf

Re: Trade (and Tariffs)

#228

Post by preg_match »

edgyquant wrote: post #160
andruby wrote: post #156

Earlier quoted context omitted.

> 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.

Right but this is actual policy. The Trump Administration does actual policy built off poorly formed fiscal reasoning. That's why we see blanket tariffs. There is no strategy.

Maybe some smart people, somewhere, would hypothetically have a strategy. Those people currently hold no power. It's not "political theater", it's our ACTUAL politics. It's just so ridiculous that it looks like theater. Which just means the situation is worse than you originally thought.

Re: Trade (and Tariffs)

#229

Post by otterley »

smallmancontrov wrote: post #192
epolanski wrote: post #147

Earlier quoted context omitted.

1. For the n-th time: manufacturing jobs are being lost to automation. Globally, not just in America. This is true in Asia as well. Manufacturing is facing the same fate of agriculture: machines and robots will keep displacing people. Nothing is going to stop it. 2. There is no such world where we'll choose to do things less efficiently to artificially save few jobs. And it's not about your TV being 100$ more expensi…

No, Average Joe (Median Joe) is not a shareholder, asset appreciation is not a meaningful fraction of his income so policies which dump labor to pump capital hurt Average Joe on net by a wide margin. Shareholders are 30/30/30 top 0.1%/1%/10%. You and I may be in those categories, but Average Joe is not.

Where are you getting these numbers? 54.3% of US households held a retirement account in 2022. https://www.federalreserve.gov/publications/files/scf23.pdf

Re: Trade (and Tariffs)

#230

Post by xenadu02 »

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…

It isn't just about that. You need industrial policy. And not just stuff like the CHIPS act.

In China a small outfit can get financing and open a factory anywhere.

You can't do that in the USA. You are too small for the lenders or investors who do such things to care yet too risky for traditional financial institutions to risk anything on you.

If I want to buy a couple of CNC machines and start making a product in my garage I have to hope I have enough room on credit cards to do it because I cannot get the money from anyone. Doesn't matter if I have a good idea. Doesn't even matter if I have some initial customers/orders.

If the government is going to piss away money then at least piss it away on that sort of economic activity. If you can present a coherent business plan or product design then lend people the capital secured by the equipment and/or IP with generous repayment terms. Set progressive milestones to unlock additional financing... for example give a gov backed credit account at SendCutSend. When you have an engineer's report on the prototype to turn in you unlock financing to order your first CNC machines. Develop a pipeline. A script to follow. Something a person can follow to get big enough to become a real business.

Grant time to pivot if necessary. If that doesn't work then ultimately the government takes possession of the equipment. Make it clear so long as you return everything in good working order then in X years you're eligible to re-enter the program. Then hand that equipment over to the next person in line.

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