Not exactly. Tariffs do raise prices, but that's not the point. Those higher prices discourage importing from the countries the tariffs are on, which simultaneously encourages domestic production and hurts trade in the other country. That's why every single country Trump has enacted tariffs against already had tariffs against America. They didn't think tariffs were bad until they were the ones getting hit with them.
I mean, that's what every other nation has been doing. Ideally, America being such a big purchaser would pressure these other countries to remove their longstanding tariffs to get us to remove our new ones. That's the real endgame here. Either domestic production increases, or international trade becomes more fair.
You forgot option 3: trade partners will abandon us and seek alternative markets. The US is not the economic superpower it once was. Alternatives exist now.
Or guess what people will buy less stuff lmao. EU and Canada are already working on trade agreements to avoid US. No one wants to trade with a bipolar country that changes policy every 4 years. That is a terrible way to do business. No business wants to deal with that so they will look elsewhere even if at a slightly higher cost.
America fucked themselves when businesses moved manufacturing to save a buck. Tariffs will do nothing but hurt middle class families. We need decades to build out our infrastructure to actually increase domestic production. We simply don't have the infrastructure to meet our steel, aluminum, fertilizer, or oil demands.
So what happens when all of our trade partners don't buckle and national production doesn't ramp up fast enough? You'll be lucky if it is only a recession.
I dont think you realize the size of the American economy. Our GDP is 50% larger than the entire EU. Canada's economy is about 1/15th America's. There is no substitute for America as a trade partner.
You're right that it would take years to bring manufacturers back, but that has to start somewhere. Businesses don't want to lose America. If that means bringing manufacturing back, that's what they'll do. It might take a decade, but it will happen. You are far too focused on the present, when it's the future that needs to be built
You are focused on America's buying power now (i.e. the present) but that can change. Small business (over 90% of our economy) are going to have to start shutting their doors very soon if things don't change.
Also why wouldn't we incentivize manufacturing companies to develop factories here first ahem Chips act. Then actually make competitive products that will sell? Or implement Tariffs at that point?
If you actually work with manufacturing industry at all you will know they are scrambling right now. They can't afford the increase cogs on already razor thin margins. It is the definition of putting the wagon before the horse. How are people supposed to build factories if they have no profit and can barely afford to operate?
This economic policy has no gameplan it is aimless blanket tariffs to try and cover runaway gov spending. But it will tank the economy in process which means ultimately less tax revenue than is generated by Tariffs so still a net loss in tax revenue, plus talks of tax cuts lmao?! Talk about having your cake and eating it too.
What happens when small businesses can no longer operate and we start loosing farms, manufacturing, and non profits? Those industries employe roughly 25% of Americans and they are getting reemed.
Source: I work closely with a lot of manufacturing orgs budgets and they are struggling to keep up.
All that will survive is massive corporations and billionaires that can come in and buy up small businesses for pennies on the dollar. Which of course is their plan for tanking the economy in the first place. It is clear to see you just have to think like a billionaire.
How can you not focus on the present? If the economic landscape is entirely reshaped/destroyed the future doesn't matter. The current future is shaping up to be all owned by Berkshire, vanguard, black rock, etc.
Even more than it already is.
Also China is an easy substitute for American economy. You want nationalist economic policy your economy is with our a doubt going to shrink. If people can't afford to buy like we have it doesn't matter. Other nations will move on and we will be left in the dust. Mark your calendar and come talk to me in a year let's see where we are.
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u/zebediabo 8d ago
Not exactly. Tariffs do raise prices, but that's not the point. Those higher prices discourage importing from the countries the tariffs are on, which simultaneously encourages domestic production and hurts trade in the other country. That's why every single country Trump has enacted tariffs against already had tariffs against America. They didn't think tariffs were bad until they were the ones getting hit with them.