Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?
This is your opportunity to ask questions. No question too simple or too silly.
Culture war topics are accepted, and proposals for a better intro post are appreciated.
Jump in the discussion.
No email address required.
Notes -
If you really did want to use tariffs, even punishing tariffs, to return domestic manufacturing of physical goods to within your borders, how would you go about it?
It seems to me that you would want to start at the top of the value chain and slowly work your way downwards. I.E., you start with XX% (or XXX%) tariffs on completed automobiles, then some time later, you apply some degree of tariff on whatever products are used in the step before completion, and so on down the chain until you reach the degree of autarkic internal production that you desire.
Is this correct, or headed in the direction of correctness, or what?
Relatedly, it’s possible that laying out a roadmap of your plans and clearly communicating it and sticking by it might even accelerate your plan, if business views it as credible and starts on-shoring faster. I am also open to the idea that publicizing your roadmap might allow a trading partner to pursue a strategy of increasing domestic subsidies until you give up, in that “They have the watches, we have the time” kind of way. Which direction would you go in that regard, or what alternative approach seems best to you?
Please consider a “Should we have a 1% or 2% war tax” kind of response, not culture war. Thank you.
"Manufacturing of physical goods" or "manufacturing jobs"? Counted how? If you believe the Real Value Added folks, the former hasn't left, and the latter is a significantly different type of problem that tariffs may just be orthogonal to.
I’m inclined to think that “jobs” is just, in democracies, the politically optimal phrasing to accomplish what nations really want, which is adversary-proof production of food and materiel.
My question is about the physical goods manufacturing, and is to do with, for example, how many steps of the process of car manufacturing can you, hypothetical power of a country, get within your borders and how should you go about it if tariffs are in your tool chest? Lights-out factories are totally fine.
As many as you want? Forget tariffs; you can just ban stuff from foreign. The biggest constraint would be if you're not a large enough country to be able to develop all of the specialization required (while also accomplishing all the other things a country needs to accomplish).
One needs a metric for "should". Sure, North Korea now "produces" its own airplanes. Which I guess is cool if you want to make sure that you have whatever metric of "adversary-proof" (I'm not convinced it actually is, but it depends highly on the metric you use) and if you're okay with only being able to produce what are essentially copies of extremely old Cessnas. Maybe in 50 years, they'll be able to produce their own WWII-era fighter jets, which I guess is "adversary-proof" to one metric, but probably not all that "adversary-proof" according to other metrics.
I kind of joke, but only kind of. Market size is a significant factor in the diversity of goods that are going to be available and how 'advanced' they can be, because diversity and 'advancedness' requires significant specialization. Thus, if we're shutting off large chunks of the market because we don't trust them, we're necessarily going to take hits elsewhere. Where you "should" be on this tradeoff curve is extremely dependent on how you've defined "should" in the first place.
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link