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PaperclipPerfector  30d ago (text post)   33444 thread views

Culture War Roundup for the week of March 31, 2025

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This will be a dry post: I'm laying out my thoughts over the tariff discussions of the last few days as succinctly as I can.

Dangers to tariffs:

  • Tariffs that are higher than other countries can incentivize domestic companies to move abroad to gain access to cheaper inputs. It has similar negative incentives to a high corporate income tax (the latter of which was reduced in 45's term to be more in line with the rest of the world).
  • Danger of a trade war loss. If you don't have market power (attractive consumer base or exports) then a trade war is likely to end in a loss. Costs will be passed to citizens. The US is rather unique in having outsized market power.
  • Protectionism can lead to complacency in the citizenry. Lack of competition breeds inefficiency and lethargy. The workforce and economy needs to be sufficiently diverse to maintain competition.
  • Less efficient global distribution of resources.
  • Tariffs are distortionary in a way that (flat) income tax and universal sales tax are not.
  • Less foreign investment (assuming trade deficit shrinks). A trade deficit means US dollars go abroad: those dollars have to come back somehow, usually in the form of investment. Losing this foreign injection of capital is a double edged sword: a benefit is that it will make investments cheaper for domestic savers (cheaper stocks, cheaper housing). This will benefit younger generations who are buying the cheaper stocks and housing at the expense of retirees.

Economic/Political Benefits to tariffs:

  • If you are in a position of strength, it can distort the global economy in your favor. Companies may wish to domicile in your country (especially if you have low corporate income tax rates) in order to access your consumers and/or workforce.
  • Supply chains will become more intra-national, improving national security.
  • If you are in a position of strength, it is a useful foreign policy tool.
  • If everyone else is doing tariffs except you, then the economy is already distorted; and implementing reciprocal tariffs may "un-distort" the global economy.
  • If you want to raise revenue and you don't fear a trade war, tariffs may have less of an impact on GDP as other methods of taxation (eg, income tax).

Ideological benefits to tariffs:

  • Less interconnected global economy leads to less systemic risk (anti-fragile). The revealed fragility of supply chains during Covid shocked me, and made me realize we have traded efficiency for instability. I wrestle with this on a more local level here: https://pyotrverkhovensky.substack.com/p/texas-roadhouse.
  • Destruction of the Bretton-Woods post-war hegemony.
  • Reciprocal tariffs punishes other nations for constantly hitting "defect" in an iterative "trade" game. It could force the world towards a better equilibrium.
  • Tariffs are explicitly allowed in the Constitution, income tax had to have an amendment.

Other thoughts:

If you are going to do protectionism, tariffs are better than subsidies.

Tariffs will change the relative cost of goods, but being a tax they should be net deflationary rather than inflationary.

Sanctions are like extreme "reverse" tariffs; if Russia and Iran are any example energy-rich countries seem to weather sanctions well.

feels a little weird to have my very first post here after a decade or whatever of reading scott, subreddit, and then here be a sort of swipy rant, but here goes:

the main "danger" to this whole affair is that trump has managed to unite the left, right and center in every single country that isn't the US in being all-out "fuck those assholes, we're doing it live".
in theory, the rational response to US tariffs would be to enact no tariffs at all and to ask trump to pretty please be so nice as to remove his tariffs too.
in practice, this would be political suicide everywhere.

the only play is to throw up a huge middle finger to the US to widespread public applause and to double down.
whether or not that hurts the country that does it more than the US is completely irrelevant. any politician that doesn't go down the 'tard road won't be a politician for long.

any supposed analysis that doesn't take this pretty obvious reality into account is worthless.

But this largely makes sense if those other countries didn’t have tariffs on the US to start with. But they do have tariffs and thus it comes across to me as rather hypocritical (ie fuck you for doing the very thing we do).

Doesn't seem to be playing out that way in Canada -- I keep waiting for the egregoire to notice that we are locked in a cage with an 800lb gorilla and are responding to his shitflinging by poking him with a (slim) stick, but even normally levelheaded folks are so wrapped in the flag (the one they were spitting on a couple of years ago when it was being flown by truckers) that I can't see it happening no matter how bad things get.

If you go broke enough you may not become a state, bug I guess the US will accept you as a territory

There is no scenario where Canada becomes part of the US voluntarily. It just isn't politically possible. Canada has a deep-seated anti-Americanism, which doesn't normally manifest as hate towards the US, but it does manifest as a deep conviction to never be part of the US.

Remember, Canada was largely founded by Americans who were loyal to the Crown during the American Revolution and established new settlements in a freezing cold theretofore sparsely populated territory. It is the only country that was founded in explicit opposition to the founding principles of the US. And then followed two hundred and seventy years of selective migration of Canadians who did not care about this out of the country into the more prosperous and warmer US.

Today, the politics are very different, but not being American is still the single core defining feature of our national identity, which we latch onto because we are culturally so similar. Quebec is another story, in that they have a different ethnic origin and a separate national identity, but they only make voluntary annexation more certainly impossible, because a change to the constitution of this kind would require unanimous agreement by all ten provinces. And if English Canada defines itself by not being American, modern Quebec defines itself by its French language and there is no more sacred political principle in Quebec than the belief that the French language must be protected by law. These laws would undoubtedly violate the first amendment. They violate Canada's own constitutionally protected freedom of expression, but Quebec sidesteps that using the notorious notwithstanding clause. Quebec will not join the US and be forced to give them up.

No amount of economic pressure is going to make Canadians want to give up these cherished identities. For most of our country's history, Canadians have been able to increase their incomes substantially by moving to the US. The profesional class in Canada can still do this, and there is still a significant brain drain. As irrational as it may seem, the ones who remain do not care as much about their material well-being as they do about preserving their independence and national identity, even if they associate it with ideas about peacekeeping and free healthcare rather than loyalty to the British Crown.

Annexation is extremely unpopular and there is an absolute determination not to get stuck with what is regarded here as a seriously dysfunctional political culture.

there is no more sacred political principle in Quebec than the belief that the French language must be protected by law. These laws would undoubtedly violate the first amendment.

Minor part of your broader point, but could you sketch out the argument here? I'm not sure whether I'm missing some portion of what these laws do or some portion of 1A precedent.

There are law that forbid the use of languages other than French in many situations. For example, businesses must be able to communicate to employees in French. Employees have the right to demand that all communication be in French. Employment offer letters must be in French. Engineers and doctors must speak French.

Core things like that in Quebec many things must be in French, from store signs to school classes.

I'm not sure what the 1A argument is, though. Moreover, I have a factual question. Do such laws prevent store signs from also having other languages, or do they just mandate that French must be present? If the former, I could perhaps see a 1A challenge that they are restricting speech. If just the latter, it's not so clear to me. There is some compelled nature to the speech, but the standards there are different, especially if it's just commercial regulation or gov't-run schools. So yeah, I'd really appreciate if anyone could put out at least a sketch of the argument.

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