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PaperclipPerfector  3mo ago (text post)   37391 thread views

Culture War Roundup for the week of January 27, 2025

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AP reporting this hour, 10% duties on all imports from China, 25% from Mexico and Canada, with 10% on Canadian energy imports

Trump’s order also includes a mechanism to escalate the rates if the countries retaliate against the U.S., as they are possibly prepared to do.

Targeted goods:

For decades, auto companies have built supply chains that cross the borders of the United States, Mexico and Canada. More than one in five of the cars and light trucks sold in the United States were built in Canada or Mexico, according to S&P Global Mobility. In 2023, the United States imported $69 billion worth of cars and light trucks from Mexico – more than any other country -- and $37 billion from Canada. Another $78 billion in auto parts came from Mexico and $20 billion from Canada. The engines in Ford F-series pickups and the iconic Mustang sports coupe, for instance, come from Canada.

“You have engines and car seats and other things that cross the border multiple times before going into a finished vehicle,’’ said Cato’s Lincicome. “You have American parts going to Mexico to be put into vehicles that are then shipped back to the United States.

“You throw 25% tariffs into all that, and it’s just a grenade.’’

In a report Tuesday, S&P Global Mobility reckoned that “importers are likely to pass most, if not all, of this (cost) increase to consumers.’’ TD Economics notes that average U.S. car prices could rise by around $3,000 – this at a time when the average new car already goes for $50,000 and the average used car for $26,000, according to Kelley Blue Book.

Over the last several years I've come to believe economics is a more fraudulent field of study than social science. As I'm not an economist, I asked GPT for what economics has contributed to mankind and the best I saw in its list was game theory. Meanwhile car manufacturers are shipping car seats "multiple times" across the border before they're actually put in a vehicle. It all feels so incredibly fake.

Over the last several years I've come to believe economics is a more fraudulent field of study than social science. As I'm not an economist, I asked GPT for what economics has contributed to mankind and the best I saw in its list was game theory. Meanwhile car manufacturers are shipping car seats "multiple times" across the border before they're actually put in a vehicle. It all feels so incredibly fake.

Are you saying that the economists who advised politicians to implement NAFTA and USMCA are frauds, and in reality there are no economic benefits to free trade?

Yes to clause one, half-yes to clause two.

If free trade does not produce as necessity holistic benefits, it is not an economic benefit. Policies based on "in benefiting a narrow percent of the population this may incentivize behavior that will yield wide benefits" are not holistic; policies based on "this will yield wide benefits" are holistic. Where FTAs yield the former, yes, where they yield the latter, no.

FTAs do benefit most people. They harm people in industries that are not internationally competitive, but most people don't work in those industries and benefit from e.g. cheaper car prices.

Industries that are not internationally competitive

International competitiveness has only rarely been about a country that can deliver a superior product. In all other cases it has meant corporations can spend less and make more by outsourcing labor. Had, for example, it never been legal for Chinese-made products to be sold in this country, or not without tariffs tailored to make it prohibitive for companies to outsource their labor to China, they would have never been competitive. What was the benefit, Walmart? Some benefit.

If your position is that cheaper goods don't benefit Americans, you should just go ahead and lay your cards on the table.

As it is, I pointed out an industry in which imports were so much better than domestic production that they practically killed the domestic industry (cars) and you're bringing up walmart (who mostly makes money from groceries anyway) as a retort. It's a complete non-sequitur.

Cheaper goods are only a benefit if employment/real wages either remain consistent or rise. Cheaper goods don't do anyone any good if it comes at the cost of income.

Fortunately, real median wages have been going up for the past 28 years.

https://fred.stlouisfed.org/series/LES1252881600Q

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