Posted on 12/02/2024 3:14:04 AM PST by RoosterRedux
What President Trump and the MAGA movement are doing with tariffs is not entirely original. In fact, it’s in line with tariff policy throughout history. President Trump and the MAGA movement recognize that the United States (and, frankly, the entire developed world) purchase too many imports from Mainland (Red) China, at the expense of their own domestic production. Tariffs are being used carefully and pointedly, to raise the cost of imported products so that people will buy less of them, and will instead buy from other sources — either manufacturers in countries other than China or domestic suppliers right here at home.
Through this careful application of tariffs, President Trump and the MAGA movement are not only recognizing the truth of the Laffer Curve, but are using that “point of diminishing returns” for the common good.
Every time a higher tariff rate causes a domestic importer to reject the Chinese product and choose either the other non-Chinese foreign supplier or a domestic supplier, it’s a gift to the entire world, because not just the United States, but the entire world needs to be freed from dependence on that corrupt, abusive, saber-rattling enemy nation.
Remember: by unrelenting national policy, China uses currency manipulation, public-private partnerships, export subsidies, intellectual property theft, and slave labor to ensure that its products look so cheap that nobody else can compete with them. Only through such anti-dumping tactics as an aggressive punitive tariff policy have we been able to slowly wrest some of that activity away from China in the years since President Trump’s first waves of punitive tariffs were introduced in 2018.
(Excerpt) Read more at americanthinker.com ...
Biden kept all of Trump's tariffs.
Agree with this AT article. Also, like Trump said in the past, China has had tariffs and import restrictions on us for many years. The only chance we have of getting them to lower their tariffs is to fight fire with fire. Otherwise, those of us who say we like free market across national borders are lying if we’re never fuss about the other side’s tariffs.
One problem with tariffs as a solution, as opposed to something like a law, is tariffs are a political tool. The issue with that is the sunk cost of building a factory. If the tariff may be lifted as part of a larger political maneuver someone who built a factory to replace imported goods will be well and truly screwed. One way around this is for the US to declare it will not allow goods made by a country that uses slave labor. That takes China out of the picture permanently as they are never going to release the Uyghurs.
But there are a lot of moving pieces on the table. The fact the West buy from China gives the West some power over what the Chinese do.
The issue is a whole lot more complicated than people realize.
Yes they will, but if it means Americans will get higher paying jobs, and that Americans will be paying for our infrastructure and military instead of China's, then count me in.
I don't think they will have the negative market effects people think they will. At all.
Here is the deal. There are middlemen in the chain of supply. Brokers, Importers, and wholesale distributors. They are getting fat in the middle with very inflated mark ups before products even get to the retailer. Sometimes 200% to 300% depending on the product.
Tariffs put pressure on these middlemen to lower their mark up to absorb the tariff or risk their customers cutting them out of the chain of supply completely. So the cost increase to end buyers will be minimal. In fact the extra cost to the wholesale distributors will even be minimal.
It is a do or die for the middlemen.
In addition, by spurring domestic manufacturing, employment is raised for Americans, with the attractiveness of investment overseas reduced. In effect, America's blue collar workforce and Main Street benefit while Wall Street does marginally less well.
“I don’t think they will have the negative market effects people think they will. At all.”
Nope, sure won’t.
“...Americans will be paying for our infrastructure...”
If you mean that we’ll be less reliant on China, etc., for critical goods, that’s definitely a plus. Now, I believe that China — and probably other countries — make and supply most of our drugs. If I let myself think about it, I worry; they could cut us off at any time.
Move that operation to the USA. But don’t let Fauci anywhere near it!
Milton Friedman was one of my heroes, but I don't think his trade theories took into account the actions of a powerful—and evil—country like China, who basically uses trade like a weapon to destroy the economies of other countries.
China's strategic approach to trade—using subsidies, intellectual property theft, and other non-market practices—introduces challenges that Friedman's free-market ideals might not fully address.
It's a very complicated situation.
Tariffs PROTECT, and therefore DIVERSIFY, American manufacturing. This prevents DEPENDENCE on potentially hostile trading partners. They lead to strengthening American manufacturing jobs and unions that protect and advocate for American workers. This leads to support industries and services that support workers.
We, as a nation, need this for defense. In every scenario, because we lost manufacturing, we lose to the new superpower. I will pay taxes on foreign products to protect America and American interests.
Tariffs increase the price of china manufactured goods, yes.
Consumers will have a ceiling to how much they pay.
China has rebuilt their Country with the riches extracted from the USA.
The correct answer: China will lower their prices to maintain market share. China will sell the same cr@p at a lower price. The tariff is layered on. The Retail selling price remains the same or is lower
He said that half of every peso that went to the poor was taken by intermediaries in the government.
One of the first things he did upon entering office was remove them. The result was profound.
“That comment about trade middlemen reminds me of what Javier Milei has done in Argentina by cutting out middlemen between the government and the very poor.
He said that half of every peso that went to the poor was taken by intermediaries in the government.
One of the first things he did upon entering office was remove them. The result was profound.”
Yep, absolutely. And as you know we have the exact same problem in this country with our government also.
When I was in business I cut out the importers and domestic distributors completely. I made deals directly with the overseas brokers and purchased product by the multiple shipping container lots and transported them myself from the port to sell wholesale and retail. I reduced my costs by 40%-50% by doing this. The middleman fat can be absolutely huge. And if they don’t absorb the tariffs wholesale distributors will do exactly what I did.
Even a law can be changed. Tariffs will likely result in short-term changes in buying and sourcing decisions by U.S. companies, but I can say with almost 100% certainty that nobody is going to build a new plant in the U.S. just because a tariff has been imposed on imported products. It is simply costs too much to make that kind of investment with little certainty about the long-term prospects of price stability.
I’ve been consuming low-quality, low-priced tech devices from China for years; throw away items.
After tariffs are levied, the price for American made tech devices of high-quality will be near the same.
It will end the ‘disposable’ consumer market.
I don’t see a down side.
“but I can say with almost 100% certainty that nobody is going to build a new plant in the U.S. just because a tariff has been imposed on imported products. It simply costs too much to make that kind of investment with little certainty about the long-term prospects of price stability.”
Unfortunately I have to agree with you here. Labor costs alone after this initial investment will prevent it. Especially if they have to deal with any unions or risks a union will be formed after.
They are indeed taxes but only a simpleton without any knowledge of what a tariff is claims they will hurt an economy.
A tariff is not a tax on domestic made goods so a tariff incentivizes domestic production which is far better for the economy than foreign produced goods.
I can say with almost 100% certainty you are FOS.
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