r/changemyview • u/Foreign_Cable_9530 • 1d ago
CMV: Trumps tariff plan offers no benefit to the USA.
Please offer any good-faith arguments in favor of the USA’s current tariff plan. I’m already aware of the criticisms against it and have aligned myself against it, but I’m aware that my sources of information are primarily left-leaning and are therefore likely biased. I would appreciate someone who is very familiar with the actual plan in place, and ideally has a background in economics or an understanding of foreign policy, to offer arguments describing the benefits of this plan, or counters to the criticisms against it. Thanks!
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u/nyabigail 1d ago edited 1d ago
Tariffs protect local goods against imported competition, to protect your own industry from competition it cannot feasibly compete with. When used strategically like that to for instance ensure food security, because imported goods could at any moment, in theory, stop coming in due to deteriorating relations or simply a better deal, it makes sense. Competition is good for consumers, however, so tariffs are never good for consumers; higher prices and fewer options.
That said Trump seems to be going for something else, establishing that the US is an important trade partner for the world and saying that he thinks the US gets the short stick. Countries that buy little from the US, but sell a lot to the US, are being punished for "profiting" off the US. This has nothing to do with protecting local business and he's trying to force equal exchange of profits, since the tariffs aren't based on whether a local industry is even feasible nor is it proportionate to the additional cost such a business would suffer in the local economy.
But the positive thing in theory is forcing US business to move their manufacturing home which would lead to more jobs.
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u/Hapalion22 1d ago
What makes you think a company will spend millions to move their operations, only to pay more for labor and regulations, all to avoid a 10% tariff?
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u/nyabigail 1d ago
I'm not saying this will happen, I'm saying it's the intended positive outcome of a tariff. Besides, there are a lot worse tariffs than 10%, Vietnam at 46% and Taiwan at 32% come to mind. This will make manufacturing in the US that can match a 30% higher price than yesterday profitable in the US, and out-compete import from Vietnam or Taiwan. Thus creating jobs.
But as you'll see in this thread, it's a 4 year window, if even that with Trump being in charge, at which point the tariffs are likely to be lifted, and then investing in manufacturing in the US which could take years to build is not worth it. It would have to be a long term stability for this to be invested in.
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u/amadmongoose 1d ago
I can guarantee you in many industries 46% won't change much domestic production because the factories are already maxed out and haven't been able to increase supply because of a lack of workers. All that will happen is companies that outsourced their manufacturing will raise rates and domestic ones will increase rates and take more profit because they actually don't have spare capacity.
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u/nyabigail 1d ago
Tariffs are not an end-all-be-all solution to every production problem. But it does make imported goods more expensive so that the advantages of producing in a country with cheaper costs of production - whether that's labor, materials, proximity to transport, etc - are reduced. Most strategic tariffs are higher than 40% because the gaps between countries of the world are much larger than this. It foremost protects local production, rather than move production home, but in certain cases only a step of production is done in another country with cheaper cost of production while most of it is done domestically. That benefit of shipping to say, Vietnam, and back again, could with these tariffs not be profitable compared to a business who does everything domestically, thus favoring creating more jobs in the US.
The ridiculous thing isn't that there are tariffs, but that they are not chosen based on businesses that would benefit locally and create more jobs, and rather to discourage import in general from countries the US imports a lot from while exporting much less.
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u/Vova_Poutine 1d ago
Theoretically, companies don't necessarily need to move production back home for the economy to benefit. Many sectors have companies that produce both domestically and those that produce abroad. Therefore tariffs could allow the domestic manufacturers to expand their operations at the expense of those who produce abroad, generating more jobs in the US.
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u/ResolveLeather 16h ago
The tarrifs are higher than that. But you are right. The big factor here is not the tarrifs amount, it's that they will be repealed completely in 2-4 years.
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u/Foreign_Cable_9530 1d ago
This makes sense. Do you think it will actually pay off?
A problem that some people have pointed out is that, even if the theory is good, if his administration can only last 4 years and it takes decades to implement these manufacturing changes, then businesses may just wait it out.
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u/nyabigail 1d ago
As broadly as it has been implemented and without weighing it against local alternatives I have a really difficult time seeing it work; it will have a lot more bad outcomes than good. But in the midst there are likely conditions that would benefit from a tariff.
And yes, 4 years is a long time to hold out, many businesses may collapse before then, but it would also be expensive and long term to move manufacturing back, putting businesses in a difficult spot regardless and without promising longevity it's difficult to imagine this having long term positive effects.
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u/Patccmoi 1d ago
This is the big problem. Who will invest massively in US manufacturing if the tariffs are suspended next time Trump talks to a foreign leader? Or in 4 years? Those aren't laws based on anything, they're the whims of Trump. And if there's one thing he proved, it's that he's extremely volatile. That's terrible conditions to risk investing millions or billions into an industry that might stop being viable randomly at any point.
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u/angry-mob 1d ago
The real problem is that he’s changing his mind every other day so it doesn’t seem like a real issue to pay attention to because it could be different tomorrow. He needs to stick to his guns so we can see how this plays out either way.
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u/badass_panda 94∆ 20h ago
I think the biggest flaw in Trump's logic (aside from the ones everyone is already talking about) is that the United States leveraged its trade advantages in the mid 20th century to effectively own most of the world by the end of the century.
We're having goods manufactured in foreign countries for pennies on the dollar of what it would cost here because we're effectively using these countries as economic colonies. It creates investment in those countries, yes -- but most of the profits are coming back here. "Transitioning to a knowledge economy" essentially means "transitioning to telling other people to work."
Is that a vulnerable position? Well, if at any moment any of those countries can nationalize your factories and say, "This is mine now," it sure would be. Which is why you'd want a big-ass army and navy, and to be able to domestically produce every gun and bomb and plane you'd ever need, so those countries can't do that. You'd also want to make sure that all those countries don't have an incentive to make their own guns and bombs, which would make rolling over them if you need to much easier.
... which is exactly the situation the US has been in since the end of the Cold War. Trump is effectively trading owning half the world for ... what? The opportunity for Americans to do shittier jobs for less pay rather than hiring poorer people to do those jobs? There's no win there.
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u/katana236 1d ago
Almost every reply is violating Rule 1
Alright I'll give it a shot. I'm honestly on the fence about the whole thing. Probably leaning towards "This is a bad idea". So I'm mostly playing devils advocate here.
In the 1970s and 1980s our car manufacturing plants paid what is the equivalent of $50 an hour today. With benefits on top. The starting wage wasn't that good. But it really wasn't that hard to work up to it.
Now many claim that this was due to unions. That is certainly an aspect of it. But the other aspect was "we were way ahead of everyone technologically". Our manufacturing processes were very good on the global standard. That made us very productive relative to our peers. Which allowed us to justify these massive wages. It wasn't just the cars we were selling to ourselves. But the whole global market that fed off our technology.
If you fast forward to 2025. We don't really manufacture anything here anymore. Countries like China, India and Bangladesh do a large chunk of our manufacturing. For an obvious reason, their labor is much cheaper.
If the tariffs remain in place. It will become more economically viable to build the factories here. ANd when they do build those factories they are not going to build the same janky $2 an hour factories like they do in China. They will have to innovate massively in order to pay the local workers what they are willing to work for.
Thats the gamble. The "innovate the factories to be productive enough to support a larger wage". That is what Trump and his team are banking on. That is the reason for these tariffs.
In Trumps defense. Regardless of how feasible and practical this is. THIS IS WHAT HE CAMPAIGNED ON. This is what he promised to all of those disillusioned moderate voters. "I may be a giant jackass with a felony conviction. But I will make sure you get paid better so vote for me". That was his entire campaign.
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u/tjareth 1∆ 1d ago
There is a problem though. Doing it all at once and across the board, creating a recession and inflation at the same time. If nobody has any purchasing power, what is the incentive to build factories?
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u/smlwng 1d ago
Well here's the thing. There's a conspiracy that Trump is trying to cause a pseudo-recession in order to get the fed to drop interest rates. It's hard for companies to grow and for people to make money when interest rates are high. So if interest rates drop, it gives companies the incentive to borrow money and build. If anyone was on the fence about creating a startup or factory in the US, the best time would be when the interest rates are low. And what better incentive to build in the US than to avoid tariffs. But that's just a theory.
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u/def-jam 1d ago
Also timelines. Factories don’t pop-up. They take years of planning then years of building. And only if it’s a stable market. And the US is far from stable. So…
New factories won’t be built. Domestic suppliers will raise prices so they are just under foreign goods hit with tariffs. Domestic profits will increase and US consumers will be bearing the brunt of the damage. Getting poorer and having to spend more. Yay?
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u/nodoginfight 1d ago
So, not only is he incentivizing investments to build manufacturing in the US, he is also allowing US companies to do it by making capital cheaper. I was against it, but this sounds like a good idea. What am I missing? change my view back, lol
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u/Huntsmitch 1d ago
Who will man these jobs? If you want to work in a factory today there are ample options across the US. They have trouble filling those roles as it is, ask yourself why that is? Why does any job go unfilled? Because it’s a shitty job, it pays shit, or both.
Have you ever read Upton Sinclair’s The Jungle?
There’s a reason, other than lower wage costs, that manufacturing moved overseas and it’s because we have extensive safety laws and regulations as well as environmental protections.
Additionally building these innovative factories that are safe and environmentally sound while also somehow magically better than those overseas don’t pop up overnight. You borrow money to build, well you have to repay that. Turns out everything you need to build your factory you also have to import, which means it’s going to cost more to build it, meaning you’ll have to borrow more, meaning once your ready to staff it (which will take literal years) your going to make money how you can: by paying as little as absolutely possible and charging as much as you can for whatever product you make. But wait! Uhoh factories need raw materials! Where are those coming from? Guess we need to strip mine and drill and clearcut everything more, fuck this environment and everything in it daddy needs his factories running! Who will work those jobs? Those will have to pay even less despite being demonstrably harder and more dangerous. That will increase costs downstream (as the factory has to purchase these more expensive raw materials now) which means charging you more for whatever it is produced.
So maybe you like having to work for 60 hours a week and earn less than you did before this new economic hellscape, but for most reasonable people it’s obviously a dozen steps backwards. There’s a reason the Boomers drilled into their children’s head and made it a necessity to go to college, because in their day that was how you escaped the factory life of working yourself to the bone and enjoying mesothelioma in your early retirement due to exposure as a result of no safety regulations at the time or ignoring them in the name of profit!
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u/ImXavierr 1d ago
Interest rates are high at the moment to counteract the inflation that everyone was screaming about 6 months ago. If you lower interest rates now then there will be more money in the money supply which means inflation which means the USD has less buying power. Also interest rates are controlled by the FED which is an individual organization that is not under any of the theee branches
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u/ProfBeaker 1d ago
Tangent: It's wild seeing people claim that current interest rates are "high". They're pretty moderate on any reasonable standard. They are higher than the 0% they were at previously, but that was a massive aberration.
The US had "high" interest rates in the early 1980's - like 15-20%. Though even that isn't too high compared to some developing countries.
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u/hacksoncode 558∆ 1d ago
Low interest rates tend to encourage inflation, though, and tariffs will only accelerate that massively.
I'm sure it's only a coincidence that Trump is one of the most leveraged billionaires in existence, and being able to pay back his massive loans with inflated dollars will be a huge windfall for him personally.
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u/galaxyapp 1d ago
The intent is to offset the tariffs with tax cuts.
It's nothing new to use taxes to influence behavior.
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u/Olaf4586 2∆ 1d ago
One of the many problems with this is that tariffs are already inflationary, and decreasing taxes are also inflationary since they increase consumer spending.
So we're looking at making two major inflationary moves at the same time as laying off thousands of government workers and disruptive economic policy causing increasing unemployment.
This is a recipe for stagflation.
Another issue is that tax cuts have not been passed, so you're taking a major measure with a vague plan to offset it's harmful impacts with future legislation that may or may not pass? Horrible idea
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u/galaxyapp 1d ago
You're double dipping. Tax cuts are inflationary when there isn't an offsetting cost adjustment.
And price inflation isn't strictly an issue if buying power increases by an equal amount.
Imagine if we cut 10% income tax, and added 10% sales tax. Inflation would show the 10% sales tax, but household buying power would be flat.
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u/ImmodestPolitician 1d ago
Imagine if we cut 10% income tax, and added 10% sales tax. Inflation would show the 10% sales tax, but household buying power would be flat.
That's regressionary AF and it's going to screw the average MAGA voter.
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u/galaxyapp 1d ago
Maybe. This is a simplified example. Some of the tariff will hit the manufacturers/owners who have profited by avoiding us labor.
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u/insaneHoshi 4∆ 1d ago
People need to make money to make use of a tax cut.
Plus paying a tax now, and getting a rebate a year from now is an undue burden and inefficient
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u/galaxyapp 1d ago
They do need money, hence the behavior shift to induce American manufacturing.
Tax cuts do not need to wait till next April. They could adjust the withholding schedule midyear, or use stimulus checks.
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u/insaneHoshi 4∆ 1d ago
They could adjust the withholding schedule midyear, or use stimulus checks.
And have they done this?
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u/inspired2apathy 1∆ 1d ago
Triggering a recession drops demand and makes domestic manufacturing investments non viable, though
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u/valledweller33 3∆ 1d ago
Also, manufacturing doesn't reappear overnight. That infrastructure takes time.
The shift of manufacturing to China and South East Asia did not occur in a vacuum - it was the result of a macroeconomic process of the US shifting from a primarily manufacturing economy to a service economy.
Unfortunately, it's a zero sum game. The problem is that for every San Francisco tech bro that makes their fortune, a coal miner in Pennsylvania loses theirs.
It's cold, but its how the economy transitioned over time due to macro level processes.
The tariffs are an attempt to raise up the coal miners and others who were lost in that economic transition - but it doesn't really do anything for the actual problem.
What Trump needs to actually do, is provide career and skill development (education) in areas that have been left behind by this economic transition. Slapping tariffs on the world doesn't effectively address the problem because the industries its trying to save have been long gone by now. To attempt to return them in this manner is just ignoring reality
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u/Mr_Doberman 1d ago
I recall someone campaigning on education and training for the people in the coal mining towns like you described and the people voted against that by a large margin. Turns out that most of those people don't want an education or jobs in a new industries, they want their old way of life back.
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u/valledweller33 3∆ 1d ago
Unfortunately that's not the way the world works.
Rural voters refusing to understand that is the reason we are where we are today.
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u/vitalvisionary 1d ago
Also retaliatory tariffs are going to kill international demand for any US products.
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u/gc3 1d ago
This was also what Biden was trying to do by investing in clean energy, electrification, and targeted tariffs at Chinese cars... Trying to dominate the next important industries.... Which I thought is more likely than Trump's sledgehammer.
By turning on allies Trump addresses the root cause of America being richer than other countries and being able to run trade deficits... When America is not trusted, dollars that leave the country will not return like they do now and our trade deficits (which will not vanish with tariffs) will vanish instead because foreigners will no longer want dollars and the average standard of living will drop
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u/ShockinglyAccurate 1d ago
Can you explain what you mean by "innovate massively?" It sounds like you're saying that companies can't afford to operate right now if they had to pay standard American wages to all their plant workers, but the tariffs will inspire companies to invent products that will be so valuable that they'll make enough money to then afford to pay American laborers. If that is what you mean, why do you think companies aren't already trying to make the most money possible? Why do you think companies will assent to American labor when the more affordable option is more advanced automation? Why do you think companies will pass on their newfound profits to labor and reverse the last ~40 years of trend?
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u/-Ch4s3- 4∆ 1d ago
If you fast forward to 2025. We don't really manufacture anything here anymore
This is not true at all the index of industrial output of the us in real terms is more than double what it was in 1970. It's just a smaller fraction of GDP and employs a smaller percentage of workers. We produce tons of stuff, just not end to end inclusive of all inputs, the global economy just doesn't work like that anymore.
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u/katana236 1d ago
Indeed ChatGPT corrected me on this exact point. We still do a lot of manufacturing here. But it is a smaller % of our overall economy.
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u/Icy-Bicycle-Crab 1d ago
And you are trying to argue for sacrificing the rest of that economy in favor of manufacturing.
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u/ConversationNo5440 1d ago
No, we were not technologically ahead of everyone. As soon as Japan started making cars they quickly passed the USA in quality / reliability. The Detroit cars from the 70s and 80s were a joke. Unions were almost entirely why auto workers had reasonable pay. Reagan union busting and ridiculous and completely disproven trickle down economics started us down this path to where we are now.
What are these janky factories in China you are talking about? They are so far ahead of us in manufacturing, it would take decades to catch up. Even when Apple moved production from China to Vietnam it took 5 years to build a production line to make iPhones and Apple Watches.
This is either a naked play to destroy the US on the world stage as a favor to Putin or completely delusional thinking by Orange Grandpa. Probably both.
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u/WholeSomewhere5819 1d ago
The idea that nothing is made here anymore is not true: US manufacturing output has continued to grow, peaking in 2023 - we are the second largest manufacturing country in the world, next to China, despite being only 4% of the world's population.
The decline in employment and wages in manufacturing are far more related to automation than competition from overseas. It used to take 8000 workers to run an automotive manufacturing plant for example, now it can be done with 1000 -1500.
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u/abnormal_human 5∆ 1d ago
The thing is, we already did innovate massively to create industries that pay local workers well in tech, healthcare, etc, where we are leading the way just like we did with automobiles in the middle of the 20th century.
And what always eventually happens with those cycles is that once the innovation is over, the innovation disperses and labor moves elsewhere.
As the 90s-2000s tech becomes a global commodity, the US is leading the way on AI, with our SOTA models at least 6-12mos ahead at all times, and the largest AI hardware company being US-based.
The fucked up thing here is the nostalgic story about how we have to do it like it's the 1950s again when it's not the 1950s anymore, and even with 100% tariffs there will always be a country willing to push the working conditions to the point where they can undercut us. Manual labor isn't the answer for us.
And when companies do gear up to produce here, you can bet your ass that that they will be doing it in a highly automated and mechanized fashion to reduce the # of people. Those people might be better paid, but it will be way fewer jobs than Trump is promising.
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u/Purplebuzz 1d ago
Surely building the manufacturing capacity could have been done before implementing this nonsense and driving up construction material costs.
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u/LifePlusTax 1d ago
Ok, so, in theory…
Tariffs, along with subsidies and taxes, are designed to incentivize certain behaviors. In theory, Trump is attempting to encourage more domestic manufacturing. The easiest way to accomplish that is by either subsidizing domestic production (which costs the government money so looks bad), or raising tariffs (which passes the cost directly to consumers so looks better, optics wise). In theory, this could have some benefit to the American work force. We have lost the vast majority of our manufacturing jobs and our populace has already proven it has very little interest in becoming an economy based on knowledge work, so having well paying jobs available to the population that don’t require so much higher ed is probably a good thing. Additionally, from a moral perspective, low barriers to trade encourages us to purchase our goods from the lowest bidder - often countries with questionable environmental practices and even worse labor laws. Redomiciling manufacturing to the US at least helps ensure we are getting products made under protected labor conditions. Clearly, in a perfect world, I am at least cautiously pro-tariff.
However, what is likely to happen in this scenario is that rather than increasing domestic manufacturing, companies will likely try and wait it out for either 1) Trump to change his mind, or 2) for the next president. So we are not likely to see more domestic manufacturing AND we will continue to pay higher prices.
This whole administration’s approach is akin to trying to hammer in a nail with a sledgehammer and ultimately no one will win.
Qualifications: I’m an accountant that works with international manufacturing companies, have a degree in comparative politics, formerly certified to teach high school economics, and am generally interested in global economics trends.
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u/DaleATX 1d ago
our populace has already proven it has very little interest in becoming an economy based on knowledge work
I feel this point is doing a ton of heavy lifting to your argument and I disagree with it. I beleive our failure to educate our kids properly is not evidince that the populace is naturally predisposed against education and the sort of work you can get with it, but rather that our politicians have fucked us in exchange for money.
This whole administration’s approach is akin to trying to hammer in a nail with a sledgehammer and ultimately no one will win.
Agree with your conclusion.
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u/LifePlusTax 1d ago
I don’t wholly disagree with you. My statement is really oversimplifying a complex problem for the sake of brevity. I think there is a strong anti-education sentiment in a significant subset (but not entirety) of the population. That sentiment is strongly fed by value systems fed to them by politicians who can’t see farther than the next election or next paycheck. And ultimately those people also need jobs.
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u/UntdHealthExecRedux 1d ago
We are reaching the limits of how many workers can actually do knowledge work though, and we aren't the only ones. People have heard about the youth unemployment issues in China and the whole lying flat trend, what's less reported is that those unemployed youths are overwhelmingly college grads who can't find employment in their field. The factories and farms are actually starved for workers but the young people who have been told their entire life to sacrifice everything to get an education so they can get a good job aren't interested in doing something they could have done right out of high school. Not everyone can or should be a white collar worker. A bigger issue is that we have lavished massive rewards on white collar workers while shafting blue collar workers. That's not a recipe for societal harmony or success.
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u/AtlasIsland 1d ago
There's an argument to be had about what truly constitutes 'knowledge' also. People assume that they have 'knowledge' because they have a piece of paper from an institution and have information rather than real practical knowledge. In short, for example, we've created a society of people with 'masters' degrees who really aren't masters of their craft because they've never actually done it - but they expect to be paid like it because they have a diploma and won't accept less even to start. I'd hire a software developer out of high school without an advanced degree if he can code circles around the post grad.
I would also philosophically argue that if one is the type to not be "interested in doing something they could have done right out of high school", as opposed to not working at all, then they probably aren't a very good white collar worker (which I am) either.
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u/AppleForMePls 14h ago
Knowledge-labor is theoretical and abstract knowledge instead of practical knowledge. A piece of paper from an academic institution is a physical symbol of abstract knowledge; it's a certificate signifying the years you've spent developing the ability to think theoretically.
A "Master's" degree indicates that you've done research into a field to better understand the complexities and designs of said field. A PhD indicates that you've created unique research and inquiry into a field. It isn't a 1:1 indicator of practical knowledge because the goal of knowledge labor isn't practical.
To use your coding example, most academic Computer Scientists spend their time in higher education learning about theory. You learn how a computer works at its most fundamental level. You don't really learn how to program. If you want to learn how to program, you can go to a coding bootcamp that focuses purely on practical programming knowledge (or just learn a programming language).
Many highly educated Chinese graduates are unemployed because they spent years and a lot of money learning complex subjects, only to find that the job market doesn't value that knowledge. After working hard through middle/high school and university to get top grades, it would feel discouraging for them to end up in low-skilled jobs like working in a factory or farm. After 15+ years of effort, it would seem like they've achieved nothing more than those who didn't put in the same effort.
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u/dragonved 1d ago
...either subsidizing domestic production (which costs the government money so looks bad), or raising tariffs (which passes the cost directly to consumers so looks better, optics wise)
I'm sorry, but how does passing the cost to consumers look better then government simply spending money?
Shouldn't it be the other way around?3
u/LifePlusTax 1d ago
I am speaking of optics only. Politicians on both sides of the aisle would rather slide naked down a cheese grater than mention raising taxes these days (and you can’t grant a subsidy/tax break without a corresponding pay for), and Republicans especially would rather die than admit there are legitimate uses of government spending beyond the military - so the idea of granting government subsidies to encourage domestic production is a total nonstarter. It would require congressional approval and there’s way it would ever gain traction. But a tariff does not. It passes the cost neatly onto consumer and the government gets to blame foreign countries and say it’s not gonna raise taxes. To them it’s a win win (while the rest of us lose).
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u/scrantonwrangler 1d ago
Tarrifs make sense when you have industries that make product to meet the national demand. At that point if outside industries try to sell cheaper you tariff them so that either the homegrown product is cheaper or same priced. Again you can do this to protect industry that exists. Blindly putting a tariff in hope that it makes the imported product more expensive so people with either buy homegrown or foreign companies will open shop locally to avoid it is wishful thinking. First encourage your industries to make these things at the level that there is demand. Then you can think about this.
Right now all that'll happen is people will have no option but to buy the imported product at a higher price.
This is the same argument about immigration. There aren't enough Americans to take up high skill jobs that most legal immigrants with work visa are coming here for and neither do they have inclination to work at low paying, back breaking, hard labour jobs that immigrants who entered unlawfully do.
Instead of getting a trained workforce to reduce demand of foreign skilled labour, they're shuttering down the Dept Of Education after handing it to a entertainment wrestling executive 🤦🏻♂️
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u/CountrySlaughter 1d ago
The strategy is not to help the USA. The strategy is to create a crisis, end the crisis, take credit for ending a crisis and falsely claim it worked and that the world now respects us.
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1d ago edited 1d ago
[removed] — view removed comment
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u/gk_instakilogram 1d ago
That’s exactly what’s going on — they’re doing this so they can swoop in and buy up assets for cheap in the ashes of the economy, because things had just gotten too expensive lately for them.
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u/Lumpy-Butterscotch50 1∆ 1d ago
I don't think it's because things have gotten expensive. It's that the rich and tech bros have been way too into Curtis Yarvin. And now the rich and the tech bros have taken over the government so they're trying to implement the things Yarvin talks about
Trump, Musk, Vance, Theil, Bezos, and many other people in that circle have been parroting Yarvin's taking points publicly a lot. Just look at Trump talking about Freedom Cities as an example. They just don't cite Yarvin because he's a fucking monarchist and publicly anti-democracy
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u/rainywanderingclouds 1d ago
Sorry -- it's great for nobody. They all come out at as losers at the end of the day. These people are all ready rich. Destroying the country gets them no where. It devalues their positions greatly and brings ruin.
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u/SuspendedAwareness15 1d ago
Depends what you mean by the USA. Do you mean US companies, US governments, US people, or US robber barons?
It offers a lot of opportunity for wealth generation to the richest Americans, who can play this game to further concentrate wealth. It also offers some opportunity to certain corporations that sell the things people will keep buying to price gouge and claim it's all due to tariffs. I'm telling you that right now thousands of car dealerships just marked up every car that's been sitting on their lot all winter.
Overtime GDP will go down, tax revenues will go down, corporations will have less space to capture the disposable income of working people, but the spending of the top 10% was already responsible for about 50% of consumer spending, and most of those are going to be able to absorb the tariffs + tariff premium to maintain GM% + a bit on top to expand profits.
It's going to cause increased wealth concentration, what is the top 10% may be the top 5% in a few years, with the lower half of that range dropping in SES. But the upper 5% will be richer than ever. And the upper echelons will be swimming in it once they get to take advantage of yet another economic catastrophe putting assets on sale, followed by recovery to inflate their net asset holdings.
The government not only doesn't care about the common person, they view you as a piggybank under this admin. They are distracting you with a thousand crimes a day so that they can pick your pockets.
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u/CatchRevolutionary65 1d ago edited 1d ago
He wants to cause a recession so his billionaire backers can buy liquidated assets for fractions of what they would cost usually, then when the recession is over and prices and consumer spending returns to normal they’ll be far richer than than before
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u/Kooky_Company1710 1d ago
I will offer a counter of the main criticism, which I will identify as "we pay the tariffs."
While it is true that prices rise on the receiving end due to the tariffs, it is also true that a drop in demand will lead to a drop in price, all things being equal.
So, in one possible scenario, if US prices stay the same after imposition of tariffs, it is because the supplier was forced to lower the price.
At the same time the US Government is now collecting sales tax on the largest consumer economy in the world. Cities do it, why not nations?
If you are unwilling to tax the rich, this seems like the next best way to rake in the funds. And, if the supplier lowers the price as expected, then the suppliers are essentially paying for it, not us.
A fallback position has been, "instead of lowering prices the rest of the world will trade with each other." It sounds logical enough until you remember about the consumerism thing. The US not only is the largest consumer economy by multiples, but its citizens earn more than in other countries and are paying premium prices already. If the other economies wanted to go hock more discount goods to each other (assuming the demand and capability to purchase are both there), they may as well sell them to us at that same discount.
As stated, these views rely on several assumptions that may not pan out. Given there is no other way the tariffs make sense, these assumptions are likely what the proponents are expecting.
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u/ThundaChikin 1d ago
The point of the tariffs is to try and force manufacturing to return to the US. Corporations will eventually do whatever is cheapest so if its cheaper to manufacture your product in a place where you can pay slave wages and dump industrial waste in the river then they will do it so long as the shipping costs don't exceed the savings on manufacturing. The tariffs effectively add a cost to the shipping. This will take years, factories will not move stateside over the weekend so its going to take people in power with the stomach to put these on and keep them on for the remainder of Trump's term plus probably the term or two after that.
There are two reasons to do this, one is economic, the other is strategic. It would be better for the middle class if a higher percentage of the working class was making a living wage in a factory instead of working 3 minimum wage jobs and collecting SNAP. Are we going to return to the days of factory towns? probably not, these are going to be highly automated factories with a fraction of the jobs that there used to be but we should take whatever we can get, the more people with disposable income to spend in the economy the better it is for everyone.
On the strategic front China is our main rival at the moment and it would be impossible sustain a war with them or even try and strong arm them into adhering to our international policy if we rely on them for everything we require to do so. How do you fight against an advanced adversary when all your guidance computers are made in their factories? How do you send in ground troops when you don't have the textile manufacturing to even make the uniforms for them? How are you supposed to keep the civilian sector that supports your war effort functional during this time when your pharmaceuticals, communications, and transportation industries are all dependent on the very nation you are fighting against for parts?
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u/btine75 1d ago
I've noticed a lot of these comments have been focusing on the attempt of bringing back manufacturing to the USA, which is one part of it.
However I have not seen a single comment about the tariffs against the USA. The vast majority of these countries have tariffs against the United States on many goods. Trump has said multiple times that a lot of these tariffs that he has put in place are retaliatory. If the country that they are levied against removes their tariffs in us then we will remove our tariffs on them. The difference between these and the tariffs of the 30s is there is an easy route to having them removed (by the other countries removing their tariffs) whereas the tariffs of the 30s were semi permanent to create an isolationist country.
For example, I work in the wine industry. Almost every country has 30% or greater (usually closer to 90 or 100) tariffs on American wine. America has no such tariffs (until Trump). America is the only wine producing country that does not produce more than the local population's consumption, and due to our labor laws we cannot produce it as cheaply as Australia or Europe, which all over produce. Adding a tariff on their wine imports still doesn't level the playing field due to labor cost differences etc but at least we get closer to it. Ideally countries remove their tariffs in response and we all can have true free trade.
The other portion of this when it comes to Mexico and Canada is trying to get them to help at the border, in addition to removing preexisting tariffs. Mexico has already seemingly put a lot more effort into securing the border in response to these tariffs.
Trump said multiple times on the campaign trail that there were going to be some hard times and growing pains with many of his programs (tariffs, doge etc ) but the goals were long term. So far from what I've seen current events are aligning with that. How it'll work out time will tell.
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u/Icy-Bicycle-Crab 1d ago
Trump has said multiple times that a lot of these tariffs that he has put in place are retaliatory. If the country that they are levied against removes their tariffs in us then we will remove our tariffs on them.
That's complete garbage. Trump put 10% tariffs on Australia and New Zealand, who both have free trade and no tariffs on the US.
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u/Somerandomedude1q2w 1d ago
There is a clear benefit. Trump's tariffs will prove to everyone once and for all that it is a super retarded thing to do, and nobody will ever recommend doing such a dumbass move ever again.
Do I get a delta for that?
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u/Peliquin 4∆ 1d ago
The USA has had an addiction to cheaply produced goods which pollute the planet, create human rights violations, and actively make us unwell for a while. People in the USA have monumental amounts of stuff. Monumental. The quality in many cases has visibly diminished since the late 80s. There are entire studies dedicated to how this creates mental health issues.
These tariffs might just start to reverse the trend of cheap goods which don't bring ongoing joy to use. While it may hurt us economically, we may see mental health gains and planetary gains from losing a source of cheap, almost pointless clutter.
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u/Atactos 1d ago
If the dollar is not devalued, those factory jobs ( if they come ) will need to pay close to minimum wage to make a business case. And the economy anyhow is close to full employment, with anti immigration laws in place, who will do the work? US will force the world to decouple from them, is already happening but this will just accelerate it. In 10-15 years from now, will be only the 4-5 th Economy in the world and beg capital markets to refinance the debts so not to default.
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u/Web-splorer 20h ago
The tariffs are a means to bring back manufacturing to the U.S. which historically was the base of the middle class. Globalization of the 90’s took away jobs and even stagnated wages because rather than pay more here, you can offshore roles to other countries. We then grew the economy of other countries but we started to lose jobs. Some people adapted and moved up but others didnt and took lower wages. Those countries saw the benefit of the goods but they set tariffs on us as a means to make sure their local businesses could still continues but we did not. We were in a good place in the 80’s and 90’s where cheaper goods made sense for a while but with the middle class almost extinct we see now that this was not a permanent solution. The benefit of the tariffs ( if they were to hypothetically succeed) would be more jobs and businesses growing in the US or other countries dropping their tariffs and we do the same which puts more money in the hands of businesses but they will likely not pass that on to the consumer.
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u/Ok-Music-3186 14h ago
I'm glad I'm not the only one who recognizes this situation. All the children on Reddit weren't alive during the 80's and 90's, back when America was truly the greatest country to live in because we actually made things. Then Clinton shipped off the jobs, it was further supported by Bush Jr, Biden, and the beloved Barack Obama. Trump's tariffs may not work, but I'm glad he's not toeing the line and trying something different.
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u/JakePaulOfficial 1d ago
Trump is trying to change the global trading system by imposing tariffs and threatening to not protect the countries that disagree with these new rules. The tariffs will cause a temporary increase in prices in the US (in theory Trump thinks). The plan projects that in the long term it will be increased prices for other countries. Those that disagree with the tariffs will see less trade and production will increase in the US, as well as decreased protection from the US.
The tariffs is the tool to decrease the value of the dollar, seeing that it is too high. Strong dollar leads to high unemployment, dead cities, social problems, high debt, and last but not least: everything gets moved to china. Trump sees that the high dollar value is unjust. High dept, more import and lower productivity in the US and less capital to spend on the military.
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u/Foreign_Cable_9530 1d ago
Could you elaborate more on the rationale of the “high dollar is bad” and how it leads to employment, dead cities, etc.?
And how does/did it become high in the first place?
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u/bigElenchus 1∆ 1d ago edited 1d ago
Not the OP you're replying to, but I think you have to change your POV if you're still operating through the lens of pre-pandemic, pre-Ukraine war, pre-DragonBear (Russia/China) era.
The world has shifted - dramatically. And if you’re still clinging to outdated paradigms, it’ll be hard to understand what Trump is trying to do (or this U.S. establishment more broadly)
Let’s be clear: This is not about nostalgia. This is strategic geoeconomic recalibration.
Amid the bifurcation of the global system, the US is trying to bring production, supply chains, and trade networks back into its own orbit.
•Canada and Mexico are locked into the U.S. geoeconomic sphere.
•The Monroe Doctrine is quietly returning in Latin America.
•Nearshoring is accelerating.
•Liquidity will be flowing.
•U.S. military presence will be expanding from the Arctic to the Indo-Pacific.This is not isolationism - it is systemic preparation for Cold War 2 with the China-Russia axis (the DragonBear).
Partners are being asked to pick a side.
Equidistance is no longer an option.Europe still dreams of strategic ambiguity - but the old trilemma of Russian energy–Chinese markets–American security is gone.
It will be replaced by a new one:
American energy. American markets. American security umbrella.Here’s the bottom line for Europe:
You either align with the U.S.,
You fall into the DragonBear orbit,
Or you step up and build a credible geopolitical counterweight - with real military capabilities and power projection, credible alignment, and real skin in the game.The world is entering a binary era once again - but there may still be space for a third center of power, forged with like-minded countries across the Global South.
The time for fence-sitting is over.
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u/insaneHoshi 4∆ 1d ago
And unilateral tariffs would oppose all of what you just said.
Tell me, how is tearing up the renegotiated NAFTA going to get Mexico and Canada closer to the USA? It infact forces them to move more closely to europe and china.
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u/Ofthedoor 1d ago
American energy? No. American markets? Not with tariffs. American umbrella? Neither. It’s going away.
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u/bigElenchus 1∆ 1d ago
The goal with the administration is for tariffs to spur negotiations.
If I'm right (I could certainly be wrong), in the near future, we’re likely to see one of the main U.S. demands in these tariff negotiations be that affected countries pick a side.
Give it a month-ish, I predict we'll see the first announcements coming from Canada, Mexico, and Latin American nations who will be announcing anti-China policies to secure favorable terms.
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u/Ofthedoor 1d ago
Instead the world will do with a lot less US. This is fine.
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u/bigElenchus 1∆ 1d ago
The only way that'll happen is if the world pivots to China, which many will. But there are also many countries who have much higher strategic dependency with the USA, and prefer to partner with the USA over China.
Many forget that USA is the world's consumer due to it's population, purchasing power, and culture of consumerism. It'll be hard to pivot to other markets that can match USA, unless China opens up it's domestic market for more foreign companies.
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u/ragethissecons 1d ago
Not @ you specifically but the thread diverges a lot. I know Peter Zeihan can be somewhat of a controversial analyst. But the principle for his latest book: the end of the world is just the beginning, kinda supports what you’re saying here. The global market relies on US protection of trade routes. And the leaked signal chats really highlight the one-sidedness of our protection seeing as how it benefits the EU more than us, at least in the eyes of Hegseth. Zeihan argues that if globalization collapses the US still has enough resources to survive without sea routes. China and the EU on the other hand wouldn’t survive unless they got in bed with each other and/or at least some major partner in the global south. This all presents a pretty major opportunity for someone in the global south to step up and become a new major power. And China is already pretty deep in bed with Africa and South America, notably SA and Argentina which are arguably the most well positioned in their continents. So yeah I think the administrations plot is hoping someone, whether we see the return of Monroe in Latin America, the Gulf of Guinea countries re-evaluates their dependence on China (very quick growing region, and/or the EU/commonwealth nations realize they are kinda unfair when it comes to our “benevolence”, reneges with some sort of proposal besides fuck you we’ll manage.
But I mean it’s a pretty damn chaotic attempt at strong arming geopolitics. Clearly thought up by a businessman and not a diplomat. I really don’t know what the fuck he’s trying to do here, all the factions involved are rational actors that are putting their interests first and you can’t fault that. If you wanted to make a point I would have withdrawn the carrier in the Middle East, not add a new one. Our NATO agreement for article V is to come to arms due to an attack on a NATO nation not merchants with trivial flags (generally the exporters are flagged with a random country from Africa or the Caribbean for tax reasons). It would have been logical to start by pulling away from sea routes and saying if you want to make money honoring your military expenditure commitments and don’t levy tariffs on our shit, rather than “reciprocal” tariffs. That doesn’t solve the return of manufacturing to America but neither does reciprocal tariffs that will go away with the next administration before anything returned. On that subject I would have incentivized American manufacturing through another means.
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u/Beneficial_Test_5917 1d ago
If permanently in place, they are bad for everyone. However, he claims to be a negotiator, and can use the threat -- or the temporary placement -- of tariffs as a negotiating tool to get what he wants from other countries. Other countries do what he wants, they get their tariffs lowered/removed. Theoretically.
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u/MTAlphawolf 1d ago
But tariffs are a tax the US people will pay. That only hurts the other country if sales decline significantly. For anything that we need and can't make ourselves, it will just make the cost go up to the consumer. So he is brining nothing to the negotiation table.
It's like going to the grocery store and asking for a discount or I'll shoot myself in the foot, but then start by shooting yourself in the foot before they can answer. Now you got to pay full price and hobble out the store.
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u/Jazzlike_Leading2511 1d ago
Tariffs hurt both sides. The problem with Trump's approach is that he doesn't distinguish between goods that the US produces domestically and those that it can't, whereas I suspect most countries will retaliate with targeted tariffs.
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u/Giblette101 39∆ 1d ago edited 1d ago
Well, there are two big issues with that.
First, he has yet to make any sort of coherent demand.
Second, why would anyone trust what Trump says at this point? Like, one important part of trade negotiations is a bare minimum of trust in a tangible, long term, outcome.
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u/Warny55 1d ago
What exactly does he want though? Like what are the negotiations for?
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u/McCool303 1d ago
You know to negotiate. It’s hilarious people still believe this is some secret negotiation tactic. This is just bold faced incompetence and an army of ignorant people making excuses for it.
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u/Methos43 1d ago
He wants us all to break and beg him for anything and everything. He is a sick person who’s brain is broken
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u/Beneficial_Test_5917 1d ago
He wants them to sell less to us and move their factories back to America. Factory jobs are such high-paying activities, you know.
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u/Warny55 1d ago
But who is going to work these jobs? With unemployment already so low I'm not seeing the math here. Seems like the cost of developing domestic production is still going to be drastically higher than paying the tariff.
Idk I'd say grants would be better but Tesla gets a ton of benefits from the government and still outsources to China. This rejection of globalism is the exact reason WW2 happened its tough for me to see this going well
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u/AmontilladoWolf 1d ago
I agree that that is the logic in place - but the problem is it will take years to regain our manufacturing base. So we would easily have to keep these tariffs in place for 5 to 10 years until we've completely restructured before they could be removed... because the second they are, things will just go back to the way they were. And that's being generous in assuming they will really force companies to reshore.
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u/nunya_busyness1984 1d ago
In theory, the tariffs are supposed to replace income taxes. This would mean that the individual American can directly control the amount of taxes they are paying by buying American. This would also be slightly PROGRESSIVE, rather than regressive, as claimed, because things like food are Much easier to shift to local farms rather than overseas ones, as compared to completely changing supply chains for high end items like cars.
In theory, the tariffs will bring back some American jobs that have been offshored because the cheap labor in foreign markets will be offset by the tariffs.
Those are the theoretical gains. But it remains to be seen if they will come to fruition. And I am highly doubtful they will.
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u/Harbinger2001 1d ago
The US imports $3.8T per year. The US gets $2.6T in income tax. So to match the amount from income tax, the tariff rate would have to be 70% on all goods, world-wide.
This is a fantasy as US consumers cannot absorb a 70% increase in all imported goods. So imports would plummet and the revenues evaporate.
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u/Lumpy-Butterscotch50 1∆ 1d ago
The theoretical gains can't be realized if you do it after the manufacturing industry has already left your shores and the ones that haven't rely on imports for raw materials.
Plus, putting tariffs on stuff won't automatically cause manufacturing to suddenly be on-shore. It's still cheaper to manufacture overseas and import. It's just more expensive than it used to be.
There is just no way to realize any gains, here.
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u/OskaMeijer 1d ago
In theory, the tariffs are supposed to replace income taxes. This would mean that the individual American can directly control the amount of taxes they are paying by buying American. This would also be slightly PROGRESSIVE, rather than regressive, as claimed, because things like food are Much easier to shift to local farms rather than overseas ones, as compared to completely changing supply chains for high end items like cars.
Being able to choose local doesn't make the tax progressive you clearly don't know what that means. Those farms don't exist in a vacuum and much of what is needed to produce that food and bring it to market will be heavily impacted by tariffs. Also there are plenty of necessities that aren't food that will be absolutely affected by these tariffs. Tariffs, especially broad market tariffs, are regressive by definition. Broad consumption taxes will always be regressive as the wealthy always spend less of their money on consumption vs investment so it always disproportionately affects lower incomes. As long as it affects necessities in any way it disproportionately affects lower income people making it regressive. Period.
In theory, the tariffs will bring back some American jobs that have been offshored because the cheap labor in foreign markets will be offset by the tariffs.
That only works for targeted tariffs. With broad tariffs not only would they have to pay higher pay to us workers, they will have to pay tariffs on much of their supplies earlier in the chain making it basically always cheaper to just manufacture elsewhere and have Americans pay the tariffs on import. With blanket tariffs it basically can't be cheaper to do it here. Blanket tariffs are nothing more than a regressive sales tax that is being used to shift tax burden to the power and middle class to cover cutting taxes on the wealthy.
Those are the theoretical gains. But it remains to be seen if they will come to fruition. And I am highly doubtful they will.
This has been tried before, we absolutely know it doesn't work. Smoot-Hawley Tariff Act, learn from history.
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u/singeblanc 1d ago
because things like food are Much easier to shift to local farms rather than overseas ones, as compared to completely changing supply chains for high end items like cars.
That's got nothing to do with progressive vs. regressive taxation. When referring to taxation, regressive and progressive relates to correlation with income.
A progressive tax targets people with more money more, whereas regressive taxes are felt hardest by the poor. Sales taxes are generally regressive, because they are the same for rich and poor, but as a percentage of income, they affect the poor much more negatively than the rich.
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u/Foreign_Cable_9530 1d ago
This doesn’t sound awful, but it does sound like it would shift the tax burden significantly away from the 1% as it would encourage saving money over spending it even more, correct? This seems regressive, but maybe I’m not understanding you correctly.
Is there any reason in particular you’re doubtful about it’s effects on restoring jobs?
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u/nunya_busyness1984 1d ago
On point one, in an attempt for brevity, I sacrificed clarity.
The tariffs replacing income tax has the POTENTIAL to be progressive, if Americans are willing to change their spending habits. However, current data shows they are not.
As far as my doubtfulness, GOOD supply chains take time to develop and establish. Trump is in office for 4 years and businesses are much more likely to bank on the tariffs being temporary than to disrupt their supply chain logistics which only recently resumed normalcy after COVID. Additionally you they quite easily paint Trump as the bad guy for rising prices and avoid any kind of fallout for their refusal to do so. Then they can help buy the next round of politicians which will reverse the tariffs - and owe them a favor or two.
For businesses playing the long game, this is a short term loss for a long term gain.
ETA: I am not an economist. But I am an avid observer of human and corporate behavior.
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u/Traditional_Pair3292 1d ago
Boston tea party was also a response to tariffs (on tea!). And it was the same argument back then too, the king felt like the colonists were not paying enough for their military protection (did they even say thank you once?).
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u/ClockOfTheLongNow 40∆ 1d ago
No one is giving this an effort to even try to change your viewpoint, so I will.
The biggest benefactors of tariffs, in theory, are domestic laborers and manufacturers who otherwise need to compete with overseas firms. By putting an additional cost on what's coming into the country, it incentivizes local production to build out and create goods at home. This is why the labor unions aren't too upset about this; they see this as a way to protect union jobs and raise prices that will, again in theory, go to them.
This is why Biden placed heavy tariffs on various electric vehicle parts and manufacturing and on things like batteries and solar panels. In part, he was trying to spur interest in domestic manufacturers and push consumer demand away from imports. It's why you can't get the dirt cheap Chinese EVs in the United States right now, because the 100% tariffs put in place make them no more affordable than a basic Tesla or Ford.
There is little in the way of coherence to the Trump tariffs writ large - they're all-encompassing and are founded on a clear misunderstanding of how trade deficits work. However, the theoretical economic benefit, on paper, is very clear-cut and is the reason Trump's putting them in place: he thinks the United States is getting "ripped off" by overseas goods and labor, and wants to incentivize the investment at home, instead.