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Notes -
Trump tariffs McDonald's:
BBC article for a more detailed overview.
Highlights or lowlights include:
I'm not an economist, but I don't think it's a good idea to throw out tariffs with such clear absence of rigor. The only saving grace is that Trump is fickle, so if enough people yell at him from his in-group, he might pivot in a week. If not, bloody hell.
I'm sure posters here could provide a reasonable steelman for Trump's position if asked, but forget about providing arguments for a second: are there any Trump supporters here who genuinely believe this is a good set of policies, or even a not-disastrous set of policies?
I can't imagine this will be the final thing to break support for Maga types, but I would give strong odds that this goes down as a major black mark on Trump's eventual record, and a potential torpedo for any future Maga candidates
There are plenty of benefits.
Makes domestic manufacturing more competitive. The US economy can't be based on finance and a tech. Wall street and silicon valley simply don't employee anywhere near enough workers to satisfy a country with 340 million people. Having a few people make vast fortunes in the medical industry and insurance while a hundred million people sell services won't be sustainable. The US has rising income inequality and the fracture between wall street and average Joe has become way too large. If pollution happened in the same area as the consumers live we would have a far greener world.
Outsourcing increased the distance between owners and workers. American oligarchs have no connection to their workers in Vietnam. If they lived in the same city the connection would be a lot stronger. Boeing workers working at the same complex as the bosses in Seattle will be treated better than workers in Mexico.
Sovereignty: Being dependent on long international supply chains is a major risk. The world risks a bronze age style collapse if global supply chains break down. Imagine a war in Taiwan, a serious pandemic, a tactical nuclear war or a meteor shutting down a few key factories. It could upend our entire civilization. We could quickly find out that farms are dependent on some supply chain for some component we never have heard of but keeps us all fed and this factory has been knocked out. The number of suppliers that supply key components to medical care, the electrical grid, oil and similar is shockingly small. Many companies are dependent on numerous supply chains and if one of them broke down it could cause cascading effects. It may be more efficient to have 1-4 global suppliers of key components than to have dozens. However, it is far more anti fragile.
You can't tax your way to prosperity. If you want to make domestic manufacturing more competitive, you need to stop burdening it, not protect it -- protecting it just makes the manufacturing companies and unions rich at the expense of the customers. And if you tariff raw materials too, you don't even get that; you just have what amounts to a massive tax increase.
These tariffs are the biggest risk of such a collapse. The rest of it... well, lots of it has happened. We had a serious pandemic (and a disastrous government response) and the system survived. We've had major factories shut down due to natural disasters (e.g. floods in Thailand) and the system survived. Breaking down global trade makes the system less resilient, not more.
US companies are forced to comply with EPA, OSHA, ACA, ADA, Civil rights act, unions and minimum wage.
Tariffs could be used to make the playing field equal to account for those costs. And probably we don't want more pollution and work accidents. If US company has to buy filters for their chimney - make sure that all the factories that want to import goods into US also have filters. And if they don't tax them the cost of the filter. And that they pay their labor at least as what US do.
And if they do and make a better product - well it is US problem then.
I’m skeptical of this because heavily unionized euro countries with strict environmental protection and safety laws have been able to be manufacturing powerhouses.
The top producers in Europe look to be Germany, Italy, France, the UK, and Ireland. Per capita their output compared to the US is about +38%, -18%, -41%, -43%, ... and +379%??!?!?!
Okay, I was looking up numbers to make a joke about how Germany is carrying the EU, but forget what I was intending to say. What the heck is going on in Ireland? They barely made the European top 5 since they've got such a low population, but they're still outproducing Spain with like a tenth of the population. They're even outdoing Switzerland, which I would have thought would be the world leader in the low-population high-value-manufacture combo. Is this just on paper somehow, some remaining accounting artifact of how they used to be incredibly popular for multinational corporate tax avoidance? I suppose their stats office does say their output is 40% "basic pharmaceuticals", plus around 20% "food products" and 10% "chemicals", but there's still ~20% composed of metal/rubber/plastic/wood/silicon stuff that we might call "stereotypical" manufacturing, and it's not like US output is all steel burnished with blood and sweat either.
It's tax dodging. You want to arrange your EU supply chain and associated transfer pricing so that most of the value added shows up in Ireland and is taxed at Irish rates. So imports of intermediate goods into Ireland are underdeclared and exports of finished goods are overdeclared.
Ireland has the highest ratio of GDP to Actual Individual Consumption of any medium or large country in the world - the Irish people are not seeing this money.
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