The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa • Hacker News Board

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#31

Post by HillaryBriss » Wed, Aug 08, 2018, 3:17 PM UTC

DenisM wrote: post #26

Tariffs are backdoor wealth redistributon in some sense. Hear me out. US export industries are more high tech with higher wages, imports are comparatively low tech. When US imposes tariffs it creates low-tech jobs in the US. When the trade partners impose tariffs they destroy high tech jobs in the US. The net result is high tech jobs lost, low tech jobs gained. Overall economic efficiency goes down due to loss of hig…

> When US imposes tariffs it creates low-tech jobs in the US.

I can kind of follow your argument. I can see how it might be true for, say, the recent US steel tariffs (although I don't know enough to say that steel production is 'low tech' these days).

But, in general, doesn't your argument depend upon which mix of goods the US includes in the tariff?

I mean, I wouldn't call car engines, cell phones, memory chips, television sets, game consoles, etc 'low tech' but the US imports a good deal of them.

I also wonder how countries like Germany and Japan manage the blend of tariffs. They certainly produce a lot of high tech goods.

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#32

Post by [deleted] » Wed, Aug 08, 2018, 3:20 PM UTC

asah wrote: post #13

aceon48 wrote: post #9

Earlier quoted context omitted.

Thats your theory at least. At some point, you don't need any more cheap shit from Amazon, but you need a decent job. As a top 5%er or whatever, surely cheaper is better for you... But prob not your lower middle class neighbor who has to compete more globally in the low skill labor market, where other countries are protecting their people in that regard

Please remember Boeing airlines, John Deere tractors, Caterpillar construction and earth moving equipment, Cisco routers, military gear -- and any number of parts and components that are made here and assembled elsewhere into finished products (and in some cases, imported back to the US).

[deleted]

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#33

Post by resters » Wed, Aug 08, 2018, 3:21 PM UTC

For the benefit of HN readers, no serious economist supports tariffs in any form. Tariffs appeal to the naive idea that trade imbalances between two nations are a bad thing. They simply are not a bad thing.

But due to the political history of tariffs it becomes possible for politicians to claim (falsely) that tariffs will benefit the economy, when in fact they are (at best) a handout to specific industries.

What really boggles my mind about the groundswell of support for tariffs is that much of it is coming from people who would traditionally have frowned upon receiving welfare. Yet they are happy to receive it when it's called tariffs and also happy to receive bailout money when their industry is harmed by the tariffs.

Put another way, tariffs are simply a way of introducing the government into economic transactions. If a foreign government foolishly decides to tax its citizens via a tariff on US goods, this harms the foreign citizens. When the US then plays tit-for-tat and adds its own tariff, this punishes American consumers in an attempt to harm foreign exporters.

But I repeat, no serious economist (someone who studies the economy scientifically) supports tariffs. They are a political phenomenon and the rhetoric used to support them has no basis in reality. There have been countless blog posts and articles from economists since the president began talking about tariffs that have pointed out the many ways in which the president confuses the meaning of some of the big numbers he presents as justification, etc.

The understanding that tariffs are foolish is a universal among economists and is not remotely a partisan issue.

It's one thing to want to grant welfare to a specific industry for some political reason, but completely another to introduce a distorting factor like a tariff.

I have a trade deficit with my grocer, for example. Why? Because I chose to exchange money for groceries. How is this bad? The same applies to nations.

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#34

Post by seanmcdirmid » Wed, Aug 08, 2018, 3:22 PM UTC

assblaster wrote: post #20

asah wrote: post #13

Earlier quoted context omitted.

Please remember Boeing airlines, John Deere tractors, Caterpillar construction and earth moving equipment, Cisco routers, military gear -- and any number of parts and components that are made here and assembled elsewhere into finished products (and in some cases, imported back to the US).

Why aren't these things assembled in the United States as well? Cost to transport from one facility to outside the United States then back surely adds cost to the finished product, unless there are savings gained from cheaper labor or less regulation.

Because a lot of those products are using American parts in addition to parts from other countries. It isn’t simply sending all of the parts to China to be assembled.

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#35

Post by seanmcdirmid » Wed, Aug 08, 2018, 3:25 PM UTC

coliveira wrote: post #23

The US is not a serious country. During decades they spent millions trying to convince smaller countries to open up their economies, because this was supposedly good. Now that they're starting to slip back in the competition against other countries (particularly China), they do a sudden 180 degree change and introduce tariffs. Only the uninformed can take this seriously.

The USA is a democracy, and therefore can have a president like Obama sometimes or one like Trump sometimes. Even then, the USA is hardly homogenous, many people in the country take many sides of different positions.

I suppose many other countries are like that as well. Fickle because you know...people.

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#36

Post by HillaryBriss » Wed, Aug 08, 2018, 3:31 PM UTC

wpietri wrote: post #11

aceon48 wrote: post #9

Earlier quoted context omitted.

Thats your theory at least. At some point, you don't need any more cheap shit from Amazon, but you need a decent job. As a top 5%er or whatever, surely cheaper is better for you... But prob not your lower middle class neighbor who has to compete more globally in the low skill labor market, where other countries are protecting their people in that regard

In which case, I'd much rather we increased taxes on income and/or wealth to a) help workers move up the value chain, and b) provide a safety net for people who lose out on trade. A tariff on "cheap shit from Amazon" is a heavily regressive tax, and acts to reduce total delivered value. Whereas taxing the well-off to pay for education and encourage investment increases total delivered value.

I agree with the increasing taxes on the wealth, but as a long time resident of California I've become skeptical of the government's skill and ability to provide a safety net.

In some governments somewhere in the world, these programs are effective. But there's no guarantee they will be well run and well administered.

If a government justifies taxing more heavily to fulfill those functions, it's critically important that the government actually deliver the services effectively. The government's efforts must actually succeed. Otherwise, a lot of voters become skeptical and stop believing the promises.

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#37

Post by mrguyorama » Wed, Aug 08, 2018, 3:35 PM UTC

zip1234 wrote: post #30

wpietri wrote: post #11

Earlier quoted context omitted.

In which case, I'd much rather we increased taxes on income and/or wealth to a) help workers move up the value chain, and b) provide a safety net for people who lose out on trade. A tariff on "cheap shit from Amazon" is a heavily regressive tax, and acts to reduce total delivered value. Whereas taxing the well-off to pay for education and encourage investment increases total delivered value.

How does taxing the well-off to pay for education encourage investment?

Publicly paying for education is one of the most fundamental kinds of investment in society

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#38

Post by cletus » Wed, Aug 08, 2018, 3:39 PM UTC

Retric wrote: post #25

cletus wrote: post #5

Ok, so this is complicated. Tariffs are only part of the story. First I agree that some countries will protect industries they consider to be of national interest or are just politically important, like the Canadian dairy industry. I actually think this is OK. Second I think it is true that there is some hypocrisy here on both sides. It's fair to say US trading partners impose tariffs on US goods and ask why the US s…

Buying subsidized products from another country means you benefit from the subsidy. Having native producers to cover basic food needs via plants is reasonable, but importing subsidized beef is a net economic benefit.

So here's the problem: doing so can decimate a local industry, which is fine until the subsidies stop or, now having eliminated the competition, the exporters jack up the price or otherwise hold the importer hostage in some way.

Australian dairy exporters have been suffering from this because a traditional export market (SE Asia) has been flooded with cheap (subsidized) dairy products from the EU (particularly Italy IIRC). This typically gets labelled "dumping".

Now market forces (and since subsidies are in play it's not really market forces) will otherwise kill the local industry. When those producers are gone and a change of government ends the dumping those producers don't magically reappear. It takes time.

This sort of thing is why so often self-sufficiency and key industries are touted as being in the national interest.

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#39

Post by Nokinside » Wed, Aug 08, 2018, 3:40 PM UTC

resters wrote: post #33

For the benefit of HN readers, no serious economist supports tariffs in any form. Tariffs appeal to the naive idea that trade imbalances between two nations are a bad thing. They simply are not a bad thing. But due to the political history of tariffs it becomes possible for politicians to claim (falsely) that tariffs will benefit the economy, when in fact they are (at best) a handout to specific industries. What real…

The real weakness of democratic societies is that the general understanding of the world don't transfer into politics.

Mercantilism as a zero sum game where you export more than you import and then you get rich reasonable first theory if you start to think trade from the scratch, but it's wrong.

It was already debunked by Adam Smith in "The Wealth of Nations" 1776. Then came Ricard's comparative advantage (1817), the emergence of Classical Theory Of International Trade, then New Trade theory then New New trade theory.

Every area of politics that touches issues like medicine, chemistry, genetics, climate science, macro economics, trade economics, urban economics, etc. is always facing arguments that were outdated hundreds or thousands of years ago.

Re: The Largest US Trading Partners All Put Higher Tariffs on the US Than Vice Versa

#40

Post by commandlinefan » Wed, Aug 08, 2018, 3:53 PM UTC

resters wrote: post #33

For the benefit of HN readers, no serious economist supports tariffs in any form. Tariffs appeal to the naive idea that trade imbalances between two nations are a bad thing. They simply are not a bad thing. But due to the political history of tariffs it becomes possible for politicians to claim (falsely) that tariffs will benefit the economy, when in fact they are (at best) a handout to specific industries. What real…

> traditionally have frowned upon receiving welfare

You weaken your (otherwise solid) argument when you do that. Tariffs and welfare are two different things, and you know that, and everybody reading this knows that, but you try to sneak in a conflation anyway. They're both bad, but they're bad for different reasons: accepting that taxation is a necessary evil (I'm not sure I do, but set that aside), welfare involves paying out of tax revenues into individuals pockets. Tariffs are exactly the opposite - tariffs involve increasing tax revenue by collecting taxes on imports, and then using that tax revenue for whatever you use all the other tax revenue for. Trying to imply that they're the same just looks like you're trying to score cheap points with people who have poor critical thinking skills.