491–500 of 777 posts
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100% agree with this perspective. It’s surprising how few others seem to note this. Thanks for posting it.
Why would shareholders want to tank the value of their shares?
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Napkin math cannot apply to Mexico and Canada tariffs, because the USMCA (and preceding NAFTA) have long intertwined North American manufacturing supply chains, with components moving back and forth across borders. Even the emergency border security tariffs and counter-tariffs announced earlier this year by US and Canada have since been carefully tailored for specific products and exceptions, as cooler heads prevaile…
The entire new tariff scheme is napkin math. Although it could also be napkin math done by some LLM. If it was real math, it wouldn’t assume that there is some magical trade elasticity that is completely linear in the tariff rate. And real math might notice that the prices of goods that are subject to tariffs are an utterly absurd measure of value, cost, movement of money, or anything else. Consider: A US company doe…
See the 2024 paper (40 pages) by Stephen Miran, current chair of the Council of Economic Advisers, which has influenced tariff policy, https://news.ycombinator.com/item?id=43589350
https://financialpost.com/news/stephen-miran-economist-trump...
> Miran.. points to Trump’s application of tariffs on China in 2018-2019, which he argues “passed with little discernible macroeconomic consequence.” He adds that during that time the U.S. dollar rose to offset the macroeconomic impact of the tariffs and resulted in significant revenue for the U.S. Treasury.. “The effective tariff rate on Chinese imports increased by 17.9 percentage points from the start of the trade war in 2018 to the maximum tariff rate in 2019,” the report said. “As the financial markets digested the news, the Chinese renminbi depreciated against the dollar over this period by 13.7 per cent, so that the after-tariff USD import price rose by 4.1 per cent.”
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America is the richest country in the world. That is the payback. Yet somehow the working class is screwed. People don't want to admit wealth distribution is the problem because that would make them "communists". It's an emotional response. I'm scared how far they take it.
"People don't want to admit wealth distribution is the problem because that would make them "communists"." If you are referring to taking wealth by force from people that earned it and giving to people that didn't earn it, yes it's 'communist'. There's nothing emotional about a methodology that has failed over and over again.
High inequalities is proven to be bad for development, so clearly there is a point where people have too much and it's harmful to society.
Ergo it would be immoral to allow some to hoard wealth infinitely, just because they can.
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Right, and I think that’s largely true. Whether or not the “right wing working class” are right in their root cause analysis, the domestic situation in the US is catastrophic enough to demand explanation: “If we are the richest country on earth, why can’t I afford a house and healthcare?” Answer 1: You are being taken advantage of by wealthy elites within your country! Answer 2: The whole world has made Americans fro…
I know. There is no reason to believe in #2. Its an emotional response. And so you cant change it. Just like you cant use logic with a flat earther. And that's scary for the rest of the world. I just hope no wars happen.
Dona nobis pacem!
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> It's because no one in the US would work gruelling hours for such little pay! There are entire towns in the US where nearly everyone is unemployed since the manufacturing dried up. I would happily pay a few more dollars more per sneaker if it meant those people could have a job, and it meant my purchase went toward making someone's life here better. > levelling' will mean the US getting poorer It was never about be…
I find it hard to sympathize, given how much work there is in this country. People cross the southern border illegally without knowing the local language and with close to no skills and still get jobs, build families and give a chance to prosper to their offspring. I'm not saying there's no hardship anywhere in the US, but rather that the US has so much richness as a whole that these towns you talk about should be go…
Those people work jobs with illegally bad working conditions and illegally low salaries.
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You're disagreeing with statements by the President of Mexico, describing the result of ongoing negotiations? Canada and Mexico share a physical border with USA, which has already resulted in unique (i.e. unrelated to the math of 180+ other countries which don't physically border USA) tariffs tailored to border security goals, under national security emergency directives which overrode USMCA. USMCA has been historica…
> As stated by the leadership of both Mexico and Canada, USMCA will need to be renegotiated to address issues identified by all three parties On the canada side, i think the issue identified that needs to be addressed is the US president being a dick. (I'm not being sarcastic here, that is my genuine impression. If you disagree can you cite a source for what issues canada wants addressed? Obviously times are a bit we…
> Some Members of Parliament have also advocated for increasing trade barriers on Chinese imports alongside the United States, which the Canadian government has recently begun doing unilaterally. Suggesting Canada could be interested in coordinating those China-related trade policy measures across all three USMCA members, Deputy Prime Minister Chrystia Freeland recently said she sympathizes with US concerns that “Mexico is not acting the way that Canada and the US are when it comes to its economic relationship with China.”
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I was bringing this up with a guy yesterday who was genuinely supporting the policies and somebody chimed in that they were not worried at all, because everyone wants to trade with the big boy in town. Trust is not important if they are afraid of you (I'm paraphrasing). Quite a different perspective, but it is consistent with an observation I made about a lot of US comments, people are quite happy for their country/g…
Which is why China doesn’t need to do anything but reliably trade right now and take the US market share.
China does not WANT to do this. They have tons of protectionism. They give tons of preference to their own firms and protect their domestic market from foreign companies. This enables their firms to grow strong. This is a strategy which has been practiced by many many developing nations. They can't live without it and don't want to.
Why does gmerc think that China is going to rewrite its entire economic policy in order to take "market share?" We usually use that term to mean, you are selling stuff and want to sell to more customers because you make more money. In this context however we are talking about BUYING more stuff - why would it be sane for China to dominate the act of buying everything it can on the planet? (At the inevitable erosion of its manufacturing base - just like what happened to the USA when it opened up its markets.)
I mean you can think whatever you want about Trump and his actions, but it just makes zero sense to think that China will step in and fill the old role of the US here, when doing so is a polar opposite from their current trade strategy and would probably collapse their economy. And that gets to the real elephant in the room, which is that no one wants to do America's "old job" anymore. No one else wants to be the ubiquitous buyer of everything with big trade deficits all over the place, the vast majority of countries on earth defend their domestic markets and preference their local firms more than pre-Trump America did - exactly what are these new alliances that are going to arise, when everyone wants to sell to other countries, and no one wants to buy?
I happen to live in a country whose #1 export market was the USA and is being slapped with some of the largest tariffs. Time will tell of course but at the moment they pretty much just seem to be fucked and all they are saying is they are ready to come to the table and negotiate with the US as soon as possible. There just doesn't seem to be a ton of demand for their exports elsewhere - it's not like every country on earth isn't out there pimping its exports to anyone who will listen, pretty much all the time. If China or the EU had a burning need for a couple hundred billion dollars more of shellfish or textiles or what have you, they'd already be buying it.
You know the craziest thing about watching this as an outsider in Canada is that we as a nation are losing one reliable trading partner (and obviously losing an ally but that's another conversation). Germany - losing a trade partner. Japan? And so on. But the US has lost 180 reliable trading partners. You're already seeing in the first week burgeoning trade alliances between nations who wouldn't have cooperated befor…
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And what is the solution?
Repeal citizens united, curb campaign and lobbying spending, breaking down of these chaebol-like conglomerates, make healthcare public and tax the rich massively. Something no body seems to want.
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> Industrial policy will always fail if it’s driven by a chimeric political system I think you're begging the question here that a chimeric political system can craft an effective, long-term tariff policy if it can't craft a long-term industrial policy. In both cases, the operative phrase is long-term . IF they're to be effective, either set of policies needs to look a decade ahead, and an industrial policy still win…
The Miran paper envisions long-term investment in US industry, e.g. see recent TSMC-Intel partnership and $100B investment in US manufacturing, brokered by the current administration.