Tariffs, Protectionism, Trade Deficits, and Trade War

[Ph64]

I supported the protectionist policies Trump campaigned on before digging deeper into economics. I mean, on the surface it makes sense, right? If other countries are using cheap labor, child labor, prison labor, slave labor, for pennies on the dollar to compete with us, our workers lose. How do you right that ship?

Seems like charging higher taxes on the imports of these countries to drive the costs of their products higher would make our products more attractive in the marketplace, right? If China can ship shirts over here and sell them for $5 apiece, and American manufactured shirts cost $7, then you hit the Chinese with a $2 per shirt tariff, right?

But that's not right. Once governments get in there and start monkeying around with what is tantamount to national price fixing, things start to go sideways. They go even further sideways when other nations retaliate with their own tariffs - which is stupid, because they're going to suffer the same economic backlash we will by imposing tariffs.

I think Trump should go back to the whole "Let's renegotiate these trade deals" and leave the protectionist game alone.

So we force US customers to pay $7 for a t-shirt... they may buy one made in the US, or they may still buy the one made in China - which is more likely since most of the US companies have gone out of business already after being undercut by China. We if course don't export any t-shirts because everybody else in the world can still buy the $5 Chinese t-shirts. Net effect on imports negligible, effect on exports nil. Effects on the lower/middle class who now have to pay 40% more for a t-shirt, potentially crushing for some. You're not "hitting the Chinese" with a $2 tariff, you're hitting the US consumer with it.

You'd be far better off trying to stoke a "buy American" ethic, but don't expect people to do it unless you can build better quality into it - I might spend $2 more or a thicker better quality US item, but not for the same crap I can get from China cheaper.

[SuburbanFarmer]

Congress about to check the Executive's power for the first time in decades?

https://www.zerohedge.com/news/2018-03- ... ay-respond

according to Reuters, Congressional leaders haven’t ruled out "a potential action down the line" if President Trump follows through with imposing sanctions on imported steel and aluminum, a GOP official said.

[ssu]

I never have time for videos or podcasts that exceed 10 mins.
I listen to Audiobooks as I exercise, that’s about it. Listen to the Martin Hash podcasts too since they’re short enough to get through on the crapper.

Hmmm... I thought you were on the old Dan Carlin site. I assumed that people there at least a few times had gone through his podcasts, which surely weren't short ones.

Besides, Youtube videos work perfectly as a podcast that you only listen to. You don't have to look at the speakers ugly old face, perhaps only glimpse a few times if the speaker is referring to some table you cannot picture just By listening to the speech.

[ssu]

Congress about to check the Executive's power for the first time in decades?

https://www.zerohedge.com/news/2018-03- ... ay-respond

according to Reuters, Congressional leaders haven’t ruled out "a potential action down the line" if President Trump follows through with imposing sanctions on imported steel and aluminum, a GOP official said.

Might be a perfect campaign trick for Trump to woo his base.

a) Trump comes out with a highly populist policy which in reality would lead to a catastrophy, but knows it won't pass in Congress.

b) Congress has to halt it to avoid the catastrophy of trade war.

c) Trump can say to his supporters "Believe me, I tried. And we will get it through if you vote for me!"

And of course Trump voters believe what Trump says, not what he actually does (which do go through)

The ad of what Trump pictures himself to be:


The reality of what Trump in reality is like:

[DBTrek]

So we force US customers to pay $7 for a t-shirt... they may buy one made in the US, or they may still buy the one made in China - which is more likely since most of the US companies have gone out of business already after being undercut by China. We if course don't export any t-shirts because everybody else in the world can still buy the $5 Chinese t-shirts.

That’s the crux of the matter, isn’t it? The tariff makes the domestic good more appealing to the domestic market, but does nothing for its appeal to the global market. In fact, it invites retaliation from the global market, while also leaving a larger supply of the inexpensive goods available for them to consume (the rest of the world can buy up those excess Chinese shirts that used to be sold in America).

Plus, since there’s no reason to believe the $5 T-Shirt buying American public is as large as the $7 T-Shirt buying public (and many reasons to believe its not), domestic T-Shirt sales will decline as well. So the attempt to make the American T-Shirts competitive actually results in fewer sales domestically and abroad.

Now ... an astute reader might observe “If everyone is buying the $5 Chinese shirts regardless, what does it matter what we do to the $7 American T-Shirts? If we impose tariffs or not, the world will go for the cheaper alternative, and domestically we’ll have fewer T-Shirt buyers as all T-Shirts are taxed up to the $7 American price point. But it’s not like we can further hurt the sales of $7 shirts in a $5 shirt global economy.”

This is where that bit about protecting inefficient industries from Fife’s post comes in. It’s true. In my hypothetical example the elephant in the room is that $7 T-shirts just aren’t competitive. Therefore, trying to rig tariffs to make them competitive is already doomed to fail, since all we can really achieve is depriving our citizens of suitable alternatives that are cheaper than American made ones. Who does that hurt? Just us.

[DBTrek]

I never have time for videos or podcasts that exceed 10 mins.
I listen to Audiobooks as I exercise, that’s about it. Listen to the Martin Hash podcasts too since they’re short enough to get through on the crapper.

Hmmm... I thought you were on the old Dan Carlin site. I assumed that people there at least a few times had gone through his podcasts, which surely weren't short ones.

Besides, Youtube videos work perfectly as a podcast that you only listen to. You don't have to look at the speakers ugly old face, perhaps only glimpse a few times if the speaker is referring to some table you cannot picture just By listening to the speech.

I wasn’t wrangling two toddlers when I was on the DCF site. I mean, I was wrangling the dozens of toddlers that regularly posteded on DCF, I guess ... but they didn’t live with me.

[Ph64]

I never have time for videos or podcasts that exceed 10 mins.
I listen to Audiobooks as I exercise, that’s about it. Listen to the Martin Hash podcasts too since they’re short enough to get through on the crapper.

Hmmm... I thought you were on the old Dan Carlin site. I assumed that people there at least a few times had gone through his podcasts, which surely weren't short ones.

Besides, Youtube videos work perfectly as a podcast that you only listen to. You don't have to look at the speakers ugly old face, perhaps only glimpse a few times if the speaker is referring to some table you cannot picture just By listening to the speech.

My problem with YouTube "audio" podcasts is I'm usually using the tablet so I can walk around with it while listening, but the useless video picture keeps the screen active which eats the battery faster. I prefer to find the mp3 audio only version to play if there is one.

[SuburbanFarmer]

I never have time for videos or podcasts that exceed 10 mins.
I listen to Audiobooks as I exercise, that’s about it. Listen to the Martin Hash podcasts too since they’re short enough to get through on the crapper.

Hmmm... I thought you were on the old Dan Carlin site. I assumed that people there at least a few times had gone through his podcasts, which surely weren't short ones.

Besides, Youtube videos work perfectly as a podcast that you only listen to. You don't have to look at the speakers ugly old face, perhaps only glimpse a few times if the speaker is referring to some table you cannot picture just By listening to the speech.

My problem with YouTube "audio" podcasts is I'm usually using the tablet so I can walk around with it while listening, but the useless video picture keeps the screen active which eats the battery faster. I prefer to find the mp3 audio only version to play if there is one.

This. Also, it can't keep playing unless I have that app running in the foreground. I can't look at anything else on the phone, except whatever logo/splash page they put over the video.

Highly irritating.

[Speaker to Animals]

I disagree with this silly notion that protectionism is bad for America (it's bad for most of the world who are net exporters, but not for us). However, that aside, there exist more important reasons to implement such policies. For instance, China is subsidizing its steel industry and illegally dumping steel on our markets because steel is a strategic resource and, if they manage to wipe out our steel industry as they are trying to do, then the United States will find itself at a severe military disadvantage to China.

A world power is an industrial power. A world power is able to make what it needs to defend itself and its interests abroad. Insomuch as you stab your fellow Americans in the back for your personal gain, and you destroy our ability to maintain our base materials and manufacturing industries, you render our nation indefensible in the next world war (which will come).

It's fucking stupid, really. The existence of your nation and the ability to defend yourselves are more important than silly notions about free trade.


The old maxim that, if you want peace, then make war applies today, but today it's more like: if you want world war, then trash the ability of the United States to defend itself in war; if you want peace, then keep American industry strong to preempt aggression.

[SuburbanFarmer]

I disagree with this silly notion that protectionism is bad for America (it's bad for most of the world who are net exporters, but not for us). However, that aside, there exist more important reasons to implement such policies. For instance, China is subsidizing its steel industry and illegally dumping steel on our markets because steel is a strategic resource and, if they manage to wipe out our steel industry as they are trying to do, then the United States will find itself at a severe military disadvantage to China.

A world power is an industrial power. A world power is able to make what it needs to defend itself and its interests abroad. Insomuch as you stab your fellow Americans in the back for your personal gain, and you destroy our ability to maintain our base materials and manufacturing industries, you render our nation indefensible in the next world war (which will come).

It's fucking stupid, really. The existence of your nation and the ability to defend yourselves are more important than silly notions about free trade.


The old maxim that, if you want peace, then make war applies today, but today it's more like: if you want world war, then trash the ability of the United States to defend itself in war; if you want peace, then keep American industry strong to preempt aggression.

How much steel do we need to maintain the nuclear triad?

Please join us in the 21st century, we miss you.