International What is the real reason for Trump's tariffs?

[N13]

@avenue94

You got me thinking, thanks. This is a bigger deal then
I initially thought.

The corporate tax rate in the US is going to be reduced to 15%.
That tells me that Trump will want tariffs to be at least 15%.
He doesn't want US businesses to be at a disadvantage.

This is going to be very disruptive for business as usual initially. How are the "scales" going to balance out?

 

[Andy Capp]

Elaborate. What's the plan.

Sigh. You shouldn't need me to tell you. When Trump/Musk/Vance does something, just ask yourself, does this help The People, or does it help Putin?

Attack America's allies? Check.
Speak positively of America's enemies? Check.
I'm sure you can think of other examples without my help.

 

[Rational Poster]

@avenue94

You got me thinking, thanks. This is a bigger deal then
I initially thought.

The corporate tax rate in the US is going to be reduced to 15%.
That tells me that Trump will want tariffs to be at least 15%.
He doesn't want US businesses to be at a disadvantage.

This makes no sense at all, lowering corporate taxes would be just flat out giving US companies a trade advantage on their own. Tariffs could potentially offset some revenue loss, but not all of them. Other countries aren't tariffing each other like this, they will just alter trade to get around tariffs and develop new supply and logistics networks.

It's also just stupid. If you agree we need more revenue, why not just use taxes instead of tariffs? Tariffs unfairly impact corporations and businesses that rely on importing and exporting. Tariffs only generate revenue if people don't avoid them by not trading with countries under tariff. Taxes are much harder to avoid if you actually want to do business here.

 

[Siver!]

Nobody in Europe wants shitty US cars though

My Dad always wanted a Buick V8.

He was obsessed with V8 cars at one point.

 

[N13]

This makes no sense at all, lowering corporate taxes would be just flat out giving US companies a trade advantage on their own. Tariffs could potentially offset some revenue loss, but not all of them. Other countries aren't tariffing each other like this, they will just alter trade to get around tariffs and develop new supply and logistics networks.

It's also just stupid. If you agree we need more revenue, why not just use taxes instead of tariffs? Tariffs unfairly impact corporations and businesses that rely on importing and exporting. Tariffs only generate revenue if people don't avoid them by not trading with countries under tariff. Taxes are much harder to avoid if you actually want to do business here.

Hey mang. Good points. I was speculating on Trump's plans, which is hard to fathom.

Giving US companies an advantage sounds like a good thing for US citizens. When taxes are reduced tax revenue goes up. Fact.

I think personal taxes should be illegal. Maybe you are right here and corporate taxes should be higher than15%.

 

[MeatheadMike]

Why doesn't it make sense to make blanket tariffs if he wants all of manufacturing to come back?

Well for one thing, you wouldn't put tariffs on the raw materials needed for the manufacturing.

 

[N13]

Well for one thing, you wouldn't put tariffs on the raw materials needed for the manufacturing.

Unless your nation is already producing those substances, especially if other nations are "dumping" those goods into the nation.

China did it with steel. Fucked up our steel producers.

 

[Versez]

A new American emancipation. I see it as deeply ideological and not that much numbers based. t could be great for America long term. Don't listen to these neurotic losers that measure any indicator daily and always fail to see the bigger picture.

Number 5 is retarded. come on with this mickey mouse reddit shit.

Exactly … people need to stop to look short term and see long term …

 

[oldshadow]

He wants to make the US strong and independent. I'm not sure if the way he is going he is going to get that. I guess we will see.

What I do believe in and support is reciprocal tariffs.

 

[N13]

He wants to make the US strong and independent. I'm not sure if the way he is going he is going to get that. I guess we will see.

What I do believe in and support is reciprocal tariffs.

I've been thinking that the tariffs will lead to free trade. Now I'm not so sure.

Instead of free trade I'm now going with FAIR trade.

That's good enough for me.

 

[MeatheadMike]

The real reason is #1 - #4. This is a man who sees tariffs as the hammer and every international problem as a nail.

It's appeal, to him, is its simplicity.

Make things more expensive for the other guy until he caves on what you want. I've pointed out before this is how he handled disputes with his contractors. There he used the economic hammer of litigation to force concessions out of them. He thinks tariffs work the same way on the international stage. The problem is that the hammer isn't big enough.

In real estate, you own the parcel. The work has been done. There is no recourse for the contractor except to mitigate the cost of litigation by conceding. On the international stage, we don't own the parcel. The work to be done is in the future. So the target of the tariffs can mitigate the damage by striking new deals, imposing retaliatory costs on us, etc.

Trump thinks they can't mitigate. We'll find out but I think we're nearing an emperor with no clothes situation where the US is the emperor and Trump is about to make the rest of the world realize just how well they can do without us.

It wouldn't be possible to achieve 1 - 4 at the same time for reasons mentioned in the OP.... but I didn't consider the possibility that maybe Trump himself thinks they can all happen because of the perceived simplicity (although I'm pretty sure even he knows #1 is bs).

This would seem in line with how he operates... but even still, other people in his party must have realized this makes no sense, so why not advise him against it. I guess my main hang up is I don't think Trump is making these decisions unilaterally. I think he was convinced by someone that this is a good plan for some specific reason.

 

[N13]

It wouldn't be possible to achieve 1 - 4 at the same time for reasons mentioned in the OP.... but I didn't consider the possibility that maybe Trump himself thinks they can all happen because of the perceived simplicity (although I'm pretty sure even he knows #1 is bs).

This would seem in line with how he operates... but even still, other people in his party must have realized this makes no sense, so why not advise him against it. I guess my main hang up is I don't think Trump is making these decisions unilaterally. I think he was convinced by someone that this is a good plan for some specific reason.

 

[Rational Poster]

Hey mang. Good points. I was speculating on Trump's plans, which is hard to fathom.

Giving US companies an advantage sounds like a good thing for US citizens. When taxes are reduced tax revenue goes up. Fact.

I think personal taxes should be illegal. Maybe you are right here and corporate taxes should be higher than15%.

I mean, it's obviously way more complicated than lower taxes = more revenue. There's way more factors that impact revenue generation than just the tax rate. Like, exponential growth from technological breakthroughs for example. Increase in population, and of course inflation. More inflation = more revenue.

In the 1950s the progressive tax rate scaled up to 91% on the highest earners, and the corporate tax rate up to 70%. We also had the longest period of sustained growth over 4% for the entire decade. In the 70s and 80s, taxes decreased and so did growth to 3% or less. Now for the last 30 years with taxes at the lowest in our history, growth has been 2% or less the entire time.

It's just a lot more complicated.

 

[Satsui Ryu]

Nobody in Europe wants shitty US cars though

Last time I went to Italy I swear I saw a lot of Fords on the road. They seem to do decent there.

He wants to make the US strong and independent. I'm not sure if the way he is going he is going to get that. I guess we will see.

What I do believe in and support is reciprocal tariffs.

Except we are strong and independent. Being a bully != strong and being isolated != independent. We are flexing muscle for no apparent reason and are shooting ourselves in the foot. We are acting like the drunk dude who feels tough by getting into a bar fight. It is stupid and accomplishes nothing.

 

[N13]

I mean, it's obviously way more complicated than lower taxes = more revenue. There's way more factors that impact revenue generation than just the tax rate. Like, exponential growth from technological breakthroughs for example. Increase in population, and of course inflation. More inflation = more revenue.

In the 1950s the progressive tax rate scaled up to 91% on the highest earners, and the corporate tax rate up to 70%. We also had the longest period of sustained growth over 4% for the entire decade. In the 70s and 80s, taxes decreased and so did growth to 3% or less. Now for the last 30 years with taxes at the lowest in our history, growth has been 2% or less the entire time.

It's just a lot more complicated.

It is. Any analysis that excludes the Federal Reserve's impact is misguided. You may be the best poster. ?

Inflation is never good though, especially for the poor and middle class.

 

[ermac88]

I think the long term goal is to use tariffs to force the other nations to eliminate their tariffs on us.

The result: Free Trade.

Example: When Germany realizes that they cannot sell their cars in the US market, they will lower their tariffs on us. Then US automakers can finally sell US cars and trucks in Germany.

thats totally contrary to auto makers and masters of industry suggest will happen

Ford CEO says tariffs would devastate U.S. auto industry and benefit international rivals​

Ford CEO says tariffs would devastate U.S. auto industry and benefit international rivals

James Farley weighed in on U.S. President Trump’s proposed tariffs at an investor conference in New York on Tuesday, saying the levies ‘would blow a hole in the U.S. industry that we have never seen’

www.theglobeandmail.com

 

[oldshadow]

Last time I went to Italy I swear I saw a lot of Fords on the road. They seem to do decent there.

Except we are strong and independent. Being a bully != strong and being isolated != independent. We are flexing muscle for no apparent reason and are shooting ourselves in the foot. We are acting like the drunk dude who feels tough by getting into a bar fight. It is stupid and accomplishes nothing.

By independent I mean not relying on other countries for our needs.

Reciprocal tariffs should be our standard policy.

 

[ermac88]

The real reason is #1 - #4. This is a man who sees tariffs as the hammer and every international problem as a nail.

Whats his stated; international problem, with Canada and Mexico?

 

[N13]

thats totally contrary to auto makers and masters of industry suggest will happen

Ford CEO says tariffs would devastate U.S. auto industry and benefit international rivals​

Ford CEO says tariffs would devastate U.S. auto industry and benefit international rivals

James Farley weighed in on U.S. President Trump’s proposed tariffs at an investor conference in New York on Tuesday, saying the levies ‘would blow a hole in the U.S. industry that we have never seen’

www.theglobeandmail.com

That's because Ford makes a lot of their vehicles in foreign nations like Canada and Mexico.

List of Ford factories - Wikipedia

en.m.wikipedia.org

 

[N13]

That's because Ford makes a lot of their vehicles in foreign nations like Canada and Mexico.

And China, to my surprise.