Can Someone Please Give Me the Good News About Trump's Tariffs?

Didn't we just get trade concessions from the EU or did nobody read about that because it was buried so fast?
 
1. pull out of TPP which was supposed to contain china and protect our IP
2. start trade war with everyone else and threaten to pull out of NAFTA
3. tariffs on china
4. ???
5. trump base btfo
 
GetTheseHands said:
Didn't we just get trade concessions from the EU or did nobody read about that because it was buried so fast?
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I think people rightly pointed out that those may have been a wolf in sheep's clothing, particularly concerning automobiles. What was the response from the Trump administration on them? I totally missed that because, as you said, it was buried incredibly fast.
 
Not A Theist said:
I've been curious about this as a maxim. Is this universally true? I've been curious because, as a non-American, I've seen my country imposing tariffs on foreign goods across a variety of industries since I was a child. I've seen countries all around the Western world doing the same. Are tariffs just plain bad - no upsides, no appropriate use scenarios? And as such, has the use of tariffs throughout my lifetime simply been a mistake that is repeated, across the Western world, ad nauseam? If so, could some economically savvy individuals ( @Jack V Savage , @Greoric spring to mind) explain the statement "Tariffs are bad" - its degree of truth, why it is violated, etc?

As a bonus question, if you have the inclination and the time, why are Trump's tariffs bad, regardless of your answer to the more general questions in the previous paragraph?

Thanks in advance. I'll be curious to learn a bit on the subject.
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Today tariff's are normally used when a country is subsidizing an industry so they are able to produce a good below cost or other unfair practices.

Another reason would be to protect an industry that is deemed vital to national interests outside of the economy (but there are other ways to prop up these industries.).

Trump is throwing out tariffs because he doesn't understand Trade Deficits.

Nobody wins in a trade war but the US probably has the most diversified economy in the world so we are in the best economic position to win a battle of attrition.

But again since nobody wins in a trade war the US economy will also be hurt by this. China's strength is that they are a totalitarian government and Xi has no fear of being taken out of office politically. HE can sit back as both economies suffer until the Political will of the US falters. For example George HW Bush had very high ratings in the US but unfortunately for him a recession hit and he lost his reelection to Clinton.
 
Not A Theist said:
Ok, thanks for the response.

Your first line - is this statement, putting tariffs against a backdrop of free market principles, a suggestion that Free Market principles as you outline are universally correct, therefore "Tariffs are bad"?

Second line, is the cost to consumers the only factor one should consider when making decisions on imposing tariffs? This leads to the follow up - are there factors which might lead a country to reasonably and correctly say "We should put a tariff on ____ produced in ____"?

In your third line ("It makes more sense if you have...") is there a suggestion that tariffs can be good in a smaller country with certain characteristics, or are you saying that they can be simply less bad in a smaller country?

The fourth line doesn't beg many questions. Is your suggestion simply that "Tariffs are bad" - period - for an economy like America, but might be good elsewhere? If so, are there any circumstances at all that you could justify America putting up a tariff on something and have you think it was a good idea?
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I think free trade has shown obvious superiority to mercantilism/protectionism over the centuries, but that's quite a heavy topic to get into.

I think tariffs will always be bad for America since our economy is focused on consumerism rather than production or manufacturing.

The lower the price of goods and services the better consumers can interact with the economy. The best way to do that is to have open trade relations with low tariffs and duties so products can be pulled from where ever the best price is no matter where it is.

I think a country like Germany for instance tariffs make more sense because of their production expertise and export focus. They don't want foreign manufacturing, they are the foreign manufacturers. Obviously, this has been beneficial for Germany.

Alternatively, countries with smaller economies with no desire to act in the global economy would benefit simply by keeping their economy localized by making foreign competition way too expensive to be worth it. I can't say this is a good long term strategy or not, it certainly depends on the country and economy.
 
PolishHeadlock said:
Today tariff's are normally used when a country is subsidizing an industry so they are able to produce a good below cost or other unfair practices.

Another reason would be to protect an industry that is deemed vital to national interests outside of the economy (but there are other ways to prop up these industries.).

Trump is throwing out tariffs because he doesn't understand Trade Deficits.

Nobody wins in a trade war but the US probably has the most diversified economy in the world so we are in the best economic position to win a battle of attrition.

But again since nobody wins in a trade war the US economy will also be hurt by this. China's strength is that they are a totalitarian government and Xi has no fear of being taken out of office politically. HE can sit back as both economies suffer until the Political will of the US falters. For example George HW Bush had very high ratings in the US but unfortunately for him a recession hit and he lost his reelection to Clinton.
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Interesting! Particularly the last part. Thanks for this!
 
Not A Theist said:
This is the part of it that I understand. Conversely, I understand the reasoning behind certain types of protectionism - say, not losing industries vital to a country's survival, or for a state with a less intrusive government trying to protect industries from competitor nation, where that industry is heavily subsidized, essentially trying to level the playing field.

I'm just looking for a more nuanced understanding of the practice. I understand that, all things being equal, a tariff really is just a monkey wrench in a free market, which tends to generate the maximum wealth/productivity when left unhindered. This gets messed up when national interests and different government practices relative to industry become involved. I've seen claims, like Rational Poster's, that tariffs are just plain bad though, sometimes from people who I realize understand economics far better than I do. So yeah, I'm looking for a bit more of the story - is it a "they're just plain bad, all in, and there is no way around that" or a "Sometimes they are beneficial, but they're generally bad"? And what's the reason for the answer, beyond what my current understanding can explain?
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Just like most anything, it depends on who you ask.

There have been certain levels of success with tariffs achieved by countries in past times. Usually to protect infant industries.

But a difference is that this day and age, we live in a global economy and there are many major players. Certain countries specialize in certain areas of production, and that makes everyone's economies more efficient than if every country had to specialize in everything.

Nobody can predict the outcome for sure, but if we isolate ourselves, the rest of the world will continue to do business with each other and they will likely do it more efficiently than we can on our own.
 
Rational Poster said:
I think free trade has shown obvious superiority to mercantilism/protectionism over the centuries, but that's quite a heavy topic to get into.

I think tariffs will always be bad for America since our economy is focused on consumerism rather than production or manufacturing.

The lower the price of goods and services the better consumers can interact with the economy. The best way to do that is to have open trade relations with low tariffs and duties so products can be pulled from where ever the best price is no matter where it is.

I think a country like Germany for instance tariffs make more sense because of their production expertise and export focus. They don't want foreign manufacturing, they are the foreign manufacturers. Obviously, this has been beneficial for Germany.

Alternatively, countries with smaller economies with no desire to act in the global economy would benefit simply by keeping their economy localized by making foreign competition way too expensive to be worth it. I can't say this is a good long term strategy or not, it certainly depends on the country and economy.
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Interesting, thoughtful, and informative. Good response.

I'm going to ask a question to which an answer could be (unfortunately) red meat for rabid righties, but I think it's one of those tough questions that one has to be clear on the answer to for the good of a country. If one country likely benefits from tariffs (Germany, in this case) slaps a tariff on a good, should a country which would not benefit from tariffs (the U.S., on your framework), is the appropriate response from a country like the U.S. to let tariffs against U.S. goods go completely unopposed by retaliatory tariffs? I understand context could change a lot here, and there are other responses to tariffs and that might factor into your answer, but I'm curious. I know the rabid right's response is "you hit us, we hit you back" but sometimes the appropriate response to a hit is to just take it, and it's better for all involved...
 
GetTheseHands said:
Didn't we just get trade concessions from the EU or did nobody read about that because it was buried so fast?
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Not really.

Trump started threatening tariffs and hinting at withdrawl form the WTO.

Juncker came over and gave him a presentation using big picture cards to try and explain how trade works.

Since there was no one in Trump's administration that actually agrees with his trade policies he had no big picture cards for a rebuttal.

As a result both parties agreed they would go about trading exactly as they had been and working towards the goals they were already working towards.

But since then Trump is threatening sanctions on EU companies that do business in Iran so the story isn't exactly over.
 
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Not A Theist said:
Interesting, thoughtful, and informative. Good response.

I'm going to ask a question to which an answer could be (unfortunately) red meat for rabid righties, but I think it's one of those tough questions that one has to be clear on the answer to for the good of a country. If one country likely benefits from tariffs (Germany, in this case) slaps a tariff on a good, should a country which would not benefit from tariffs (the U.S., on your framework), is the appropriate response from a country like the U.S. to let tariffs against U.S. goods go completely unopposed by retaliatory tariffs? I understand context could change a lot here, and there are other responses to tariffs and that might factor into your answer, but I'm curious. I know the rabid right's response is "you hit us, we hit you back" but sometimes the appropriate response to a hit is to just take it, and it's better for all involved...
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It depends.

If the Germans are producing something the US wants and it's more beneficial for our economy to import it at the lower cost than to produce it ourselves there is no need to fight that tariff.

At the same time this kind of stuff is why we created the WTO. And the US has a very good track record in the WTO.

When Obama bailed out the Auto Industry one of the main reasons he did it in the form of equity where the companies had to pay it back with interest was to avoid fight in the WTO saying that he was subsidizing the industry.
 
Not A Theist said:
Interesting, thoughtful, and informative. Good response.

I'm going to ask a question to which an answer could be (unfortunately) red meat for rabid righties, but I think it's one of those tough questions that one has to be clear on the answer to for the good of a country. If one country likely benefits from tariffs (Germany, in this case) slaps a tariff on a good, should a country which would not benefit from tariffs (the U.S., on your framework), is the appropriate response from a country like the U.S. to let tariffs against U.S. goods go completely unopposed by retaliatory tariffs? I understand context could change a lot here, and there are other responses to tariffs and that might factor into your answer, but I'm curious. I know the rabid right's response is "you hit us, we hit you back" but sometimes the appropriate response to a hit is to just take it, and it's better for all involved...
Click to expand...

I think there is some room for retaliatory tariffs, like @PolishHeadlock noted, but only in very specific instances in which we are certain that government subsidies are creating an unfair advantage.. but this needs to be done very thoughtfully. There are people at the other end too and they will likewise retaliate, as we've seen.

Sort of like a soft sanction without totally cutting off trade... not some political bludgeon to use against the entire world, allies included.

A strong Germany benefits us for instance, so why retaliate against our friends?
 
I also want to point out that Trump was crying not that along ago about all of the other countries devaluing their currency because the USD has gained a lot of strength recently.

Which all economists agreed would happen during a trade war.....

When the Tax Cuts and Jobs Act was first being formulated Congress was contemplating a Border Adjustment Tax for corporations (basically a tariff).

The rationale behind it was that it would strengthen the dollar and companies that had their overseas purchasing contracts in Local Currency would be able to buy more with a strengthened dollar. While doing their due diligence (corporations lobbying them) they discovered that Walmart and most companies had these contracts in USD so they dropped the idea.

Trump wants us to export more which is hard to due when you have a strong currency because your shit costs more.

Prior to Trump the way the US would try to increase exports was be finding countries that had a need for something the US was very efficient at producing and create a trade pact with that country.
 
@Not A Theist

Just to add,

Tariffs made more sense as well when the world was smaller. If the British put tariffs on you, you had no choice but to concede because you had no other options. You were either physically limited by geography or actually limited by British blockades. You could absolutely use tariffs to force political solutions.

The US accounts for an increasingly dwindling amount of Chinese exports than we used to. It's below 20% at this point. Tariffs will only accelerate that.

Ultimately this is bad to me. We want our economies intimately intertwined with China for stability's sake. If they don't depend on us for trade, then they don't have to listen to us on the world stage and can be much more aggressive in their sphere of influence and human rights in China will never improve.
 
Farmers got some nice free taxpayer monies due to Trumps stupidity.
 
Rational Poster said:
@Not A Theist

Just to add,

Tariffs made more sense as well when the world was smaller. If the British put tariffs on you, you had no choice but to concede because you had no other options. You were either physically limited by geography or actually limited by British blockades. You could absolutely use tariffs to force political solutions.

The US accounts for an increasingly dwindling amount of Chinese exports than we used to. It's below 20% at this point. Tariffs will only accelerate that.

Ultimately this is bad to me. We want our economies intimately intertwined with China for stability's sake. If they don't depend on us for trade, then they don't have to listen to us on the world stage and can be much more aggressive in their sphere of influence and human rights in China will never improve.
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These are great responses from you, Polish, and Mike.

What I am finding interesting is that a lot of them are predicated on the strength of a free market, something which one would think would be the bread and butter of right wing posters. Oddly though, it seems - and correct me if I'm wrong, right leaning fellows - that they're in favour of the curtailment of the free market principles being espoused by you, in particular. It's a strange bizarro world.

Would any of the right wing posters like to weigh in on that? Why are we in favour of tariffs ahead of the free market principles being espoused by the more left leaning posters here?
 
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