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US Administration announces 34% tariffs on China, 20% on EU

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Re: US Administration announces 34% tariffs on China, 20% on EU

#701

Aside from everything else one thing what strikes me as particularly insane is how it’s not even defensible as a protective measure. My favorite everyday olive oil comes from Tunisia. They now have a 38% tariff on them. There are no out of work olive farmers in the US. The orange man wanted tariffs, the orange man is going to get tariffs. Now we have to hope the American people aren’t so dumb as to still be convinced…

Maybe we can make British olive oil by getting Tunisian olive oil and putting it in a British bottle? Then it's only 10%.

The whole thing is kind of nuts.

Re: US Administration announces 34% tariffs on China, 20% on EU

#702

I don't see anyone mentioning that the United States needs to manage its massive national debt, currently in the trillions, by issuing Treasury securities. These securities mature at varying intervals and require continuous "rolling" or refinancing to pay off old debt with new borrowing. Significant rollovers are expected from April through September 2025, with additional short-term maturities due by June. Higher int…

The flaw is that it's like setting your house on fire because it's cold outside. It may well achieve your goal in the short term, but it won't last, and it's just going to make things much worse in the longer term.

I don't think it's helpful to reply to a specific, well-phrased question with a general analogy. Why is it like that?

It's like when the media would interview Robert de Niro on Trump, and all he would say is variants of "Well, he's an asshole!"

Re: US Administration announces 34% tariffs on China, 20% on EU

#703

I don't see anyone mentioning that the United States needs to manage its massive national debt, currently in the trillions, by issuing Treasury securities. These securities mature at varying intervals and require continuous "rolling" or refinancing to pay off old debt with new borrowing. Significant rollovers are expected from April through September 2025, with additional short-term maturities due by June. Higher int…

If the Trump admin's goal were to reduce the national debt it would make way more sense to use fiscal policy (increase taxes) rather than some roundabout way to force the Fed's hand on monetary policy. The tariffs do basically function as a massive regressive tax increase in the form of a sales tax, but that comes with truly immense risks on the demand side of the economy. Guess what happens to tax revenue during a r…

Trump is already increasing taxes (tariff is a tax on consumption of imported goods). A recession is inevitable if you need interest rates to go down.

Re: US Administration announces 34% tariffs on China, 20% on EU

#704

Aside from everything else one thing what strikes me as particularly insane is how it’s not even defensible as a protective measure. My favorite everyday olive oil comes from Tunisia. They now have a 38% tariff on them. There are no out of work olive farmers in the US. The orange man wanted tariffs, the orange man is going to get tariffs. Now we have to hope the American people aren’t so dumb as to still be convinced…

The orange man is saying: "Looks like you are sending a lot of $$$ to those olive oil farmers in Tunisia. With my tariffs you now have two choices at your disposal: either you keep buying their Olive oil but then you are going to have to give me $$$ as well to pay for our national debt. You are going to buy less of it; and help your country in the process. Alternatively, you can decide that maybe you don't need olive oil all that much. We have this amazing product called 'corn oil' which is produced locally and is now comparatively less expensive, buy that instead and support your local farmer. Choice is yours".

Maybe you don't like either of these choices; but at the same time; saying "I believe that having cheap access to product produced halfway across the globe is a god given right to American people; how dare you imposing me to make such a choice" is part of the reason why we need 13 earth to sustain the modern US lifestyle.

I am really not a Trump supporter at all. But at the same time the gradual reduction of tariffs has been a key factor of increasing global trade; which in turn is a key component of the increase of CO2 emissions. Finding a way to dampen a bit the international component and making sure that locally sourced products and services are not affected seems not that bad.

Re: US Administration announces 34% tariffs on China, 20% on EU

#705
post #625

Everyone is quick to deride this move as stupid. I don’t disagree that there are downsides to the approach, but there is a set of very real national problems that this might address. For instance, globalization and offshoring of production has made goods cheaper for consumers, but what about the former domestic producers who could not compete, and do not have the skills or capital to find a new job which pays as well…

JD Vance had a nice speech about globalisation lately, he describes how globalisation made the rest of the world advanced and rich: https://x.com/OopsGuess/status/1902396228404674853

So if people were trying to make the world a better place congratulations they succeeded. JD Vance uses a bit different framing(!).

Anyway, back to your question, IMHO the problem in thinking here is that it implies that there must be "They" and "Us". You can't just get prosperous as a humanity, it needs to be a subgroup like "Americans" or "Germans" that do amazing things and they are very unsatisfied that Chinese and Indians got advanced and no longer do the shitty jobs. When they say globalism has failed us, they mean we thought that Vietnamese will keep making our shoes but now they are making cars too.

Essentially the core of the problem(or ideal) is nationalism and borders associated with it, preventing of people move around and pursue happiness.

A group of people like the generations of Americans who pioneered many technologies and sciences built a world, then other group of people(mostly their offsprings or people who caught up thanks to proximity to the ground zero) operated within that world and made some choices and transformed the world into something else. Now, they are unhappy with the current state and propose teaming up around something like religion/attitudes around genders etc. If you subscribe to the idea that people should team around these things and if you think that you won't be suffering that much and you don't care that some people might suffer a lot, then yes the current actions actually makes sense.

Re: US Administration announces 34% tariffs on China, 20% on EU

#706
post #625

Everyone is quick to deride this move as stupid. I don’t disagree that there are downsides to the approach, but there is a set of very real national problems that this might address. For instance, globalization and offshoring of production has made goods cheaper for consumers, but what about the former domestic producers who could not compete, and do not have the skills or capital to find a new job which pays as well…

> So, to anyone who disagrees with these measures, but agrees that these are issues we ought to solve, what would you propose?

Good faith negotiations with our allies and trading partners that creates a balance of trade and reduces wealth inequality in the west. I'm not opposed to the actual ideas being floated, but the people doing are are completely unserious and it's being implemented in a stupid nonsense way.

Re: US Administration announces 34% tariffs on China, 20% on EU

#707
post #625

Everyone is quick to deride this move as stupid. I don’t disagree that there are downsides to the approach, but there is a set of very real national problems that this might address. For instance, globalization and offshoring of production has made goods cheaper for consumers, but what about the former domestic producers who could not compete, and do not have the skills or capital to find a new job which pays as well…

>For instance, globalization and offshoring of production has made goods cheaper for consumers, but what about the former domestic producers who could not compete, and do not have the skills or capital to find a new job which pays as well?

We could instead pay for re-education and training for these folks to find jobs that do align better with the global economy and bolster social safety nets to help with job loss.

Tariffs are no guarantee the jobs will come back either or even if some of the manufacturing does come back to the US, that it will employ people who need it most or in the same number. Manufacturing automation is quite sophisticated nowadays. Even if the manufacturing comes back to the US - which I don't think is going to happen en masse if at all - the employment prospects that you're suggesting in this line of reasoning won't come back with them, is what the evidence suggests.

>There really are structural challenges to onshoring production due to strength of the dollar due to its reserve currency status; our society as such is biased heavily toward importing goods rather than exporting goods. This is a real challenge that needs to be addressed as well.

Why? Why is onshoring production of non critical goods a benefit to the US as a whole over the long term? Why do we want to protect manufacturing interests at the expense of other interests? These questions haven't been addressed. Not to mention the pain tariffs are going to cause isn't being addressed either, we're simply told to 'grin and bear it', and for what are we doing that exactly? Whats the actual nuts and bolts plan here?

Everywhere I look at the argument for tariffs I come up short on legitimate answers to these questions

>Our national debt is not sustainable either. Either we pay it down some, or we inflate it away; these are the two ways it goes away, ignoring the option of a world-shattering default on the debt. Tariffs accomplish both of those, raising money at the same time as raising cost of goods and weakening the dollar.

There's other ways to handle the national debt than put broad tariffs on all our trading partners - including allies who have actually been very generous about their trade terms and investments in the US, like Japan, the UK (really much of western Europe), Canada etc.

If we really want to strength the dollar, we could raise wealth taxes (like capital gains or instituting a land value tax for example) and moderate spending. Why are tariffs superior to this? Tariffs only hurt the poor and middle classes anyway, who can't simply fly out of the country for large purchases to avoid them.

Re: US Administration announces 34% tariffs on China, 20% on EU

#708
post #625

Everyone is quick to deride this move as stupid. I don’t disagree that there are downsides to the approach, but there is a set of very real national problems that this might address. For instance, globalization and offshoring of production has made goods cheaper for consumers, but what about the former domestic producers who could not compete, and do not have the skills or capital to find a new job which pays as well…

I really want to read a good response to this comment. I have the same questions, and I’ll add one more thought. Lots of people talk about how the US should be more like Europe. People say the average European has a better quality of life, etc. Well, Europe has tariffs…

Europe has tariffs pretty much in line with the US. The weighted average tariff for the EU is 2.7% and 2.2% for the US.

There's of course the opportunity to get those in line, but that requires negotiations.

Re: US Administration announces 34% tariffs on China, 20% on EU

#709

I don't see anyone mentioning that the United States needs to manage its massive national debt, currently in the trillions, by issuing Treasury securities. These securities mature at varying intervals and require continuous "rolling" or refinancing to pay off old debt with new borrowing. Significant rollovers are expected from April through September 2025, with additional short-term maturities due by June. Higher int…

> Treasuries are considered safe during such crisis.

No. Not during such crisis. It's already visible in prices of traditional safe havens (those based on US credibility) that this crisis isn't like the others. They are dropping like flies. Only gold remains.

Re: US Administration announces 34% tariffs on China, 20% on EU

#710
post #625

Everyone is quick to deride this move as stupid. I don’t disagree that there are downsides to the approach, but there is a set of very real national problems that this might address. For instance, globalization and offshoring of production has made goods cheaper for consumers, but what about the former domestic producers who could not compete, and do not have the skills or capital to find a new job which pays as well…

> For instance, globalization and offshoring of production has made goods cheaper for consumers, but what about the former domestic producers who could not compete

That misses the point on so many levels. First of all consider that this is a domestic problem too. What about all the businesses abandoning California for Texas because wages are so much lower to achieve an equivalent cost of living?

Cheaper goods produced elsewhere is not necessarily a security concern for the economy. Silicon produced only in Taiwan is a security concern for the US, for example, but rubber production isn't even though the US cannot produce natural rubber.

Finally, and most importantly, price depreciation of goods due to global options frees up American businesses and employees to seek more lucrative ventures as the market demands that would other not exist due to opportunity costs.

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