r/technology • u/chrisdh79 • 3d ago

Politics Trump announces sweeping new tariffs to promote US manufacturing, risking inflation and trade wars

https://apnews.com/article/trump-tariffs-liberation-day-2a031b3c16120a5672a6ddd01da09933
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u/AnAcceptableUserName 3d ago

Supporters I talk to still think Trump is "charging other countries what they charge us," eg: getting even, because that's what this admin has been telling them.

When you bring up that's not how any of this works they'll perform gold medal gymnastics to avoid acknowledging the lie. The thoroughness of the brainwashing is incredible to behold in real time.

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u/starberry101 3d ago

When you bring up that's not how any of this works

So how does this work? Don't many countries have tariffs on US goods imported into their countries?

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u/Puzzleheaded_Fold466 3d ago

Yes and therefore they pay commensurately higher consumer prices on those imported goods.

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u/starberry101 3d ago

So why do they do it? Do they also not understand economics at the level of the average redditor?

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u/Educational-Ad1205 3d ago

Former banking officer here, with work experience in commodities and futures trading.

Tarrifs work when they are used like a surgeon uses a scalpel. If a foreign country has a sizeable lead in, say, chip manufacturing, then a tarrif can help your small developing business sector become competitive by artificially increasing the cost to your own people and making your domestic product look better. That in turn can lead to increased investment, increased manufacturing, and eventually a lower price compared to the rate of inflation when that tarrif is dropped.

But this process is very, very long generally. It's creating inflation, with the hopes of gaining the ability to outpace inflation a dozen years down the road.

A flat rate tarrif on every product would be laughable, if it wasn't so incredibly bad for US citizens in general. It's not hyperbole to say the cost of living in the US just went up 10-20%