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Other => Off Topic => Topic started by: Bateaux on July 02, 2018, 06:05:04 AM

Title: Why I'm not against tariffs.
Post by: Bateaux on July 02, 2018, 06:05:04 AM
Tariffs imposed by Trump have been rattling Wall Street lately.   The international companies are warning of huge price increases for imported and domestic goods.  While I believe price increases and inflation will follow that doesn't really scare me.  I think we may all get to be a bit more Mustacian along the way.  The tariffs could be just the trigger that breaks the hyper consumption economy cycle.  Cheap foreign goods take a lot of the pain out of unneeded purchases.  A lot of this is cheap junk that costs less to purchase initially but, lacking true quality breaks down and ends up in the trash heap.  If prices increase 10 or 20 percent then consumption may decrease by 10 or 20 percent as well.   Maybe instead of paying more the consumer decides just to go without.  This would make for a much nicer world.  It could mean 10 to 20 percent less polution.  Maybe 10 to 20 percent less cars on the road.  Maybe instead of working harder to buy more stuff we spend 10 to 20 percent more of our time with friends and family.  Maybe we spend 10 to 20 percent more time reading a book, hiking a trail or riding our bikes.  Just some thoughts on the positives of a trade war.
Title: Re: Why I'm not against tariffs.
Post by: jlcnuke on July 02, 2018, 06:14:56 AM
I think you're naive if you think prices going up is going to result in the changes you mention. People aren't going to drive less because cars cost more new, there will just be more people buying used, older, less fuel efficient and higher emission vehicles instead. People aren't going to work less, they'll actually probably try to work more so they can continue to keep up with the Jones' (who will be working more to keep up their appearances too).

The people on fixed lower incomes, and those with just low incomes to begin with, will be hit hardest as they're the ones most likely to have already cut out everything they thought they could afford to do without from their budget, and their money won't even go that far anymore.

There are some winners in a trade war (notably the few rich people who own companies that lose competition or have their competition severely ham-stringed by the trade war), but it's not "the little people"...
Title: Re: Why I'm not against tariffs.
Post by: Bateaux on July 02, 2018, 06:33:00 AM
I think you're naive if you think prices going up is going to result in the changes you mention. People aren't going to drive less because cars cost more new, there will just be more people buying used, older, less fuel efficient and higher emission vehicles instead. People aren't going to work less, they'll actually probably try to work more so they can continue to keep up with the Jones' (who will be working more to keep up their appearances too).

The people on fixed lower incomes, and those with just low incomes to begin with, will be hit hardest as they're the ones most likely to have already cut out everything they thought they could afford to do without from their budget, and their money won't even go that far anymore.

There are some winners in a trade war (notably the few rich people who own companies that lose competition or have their competition severely ham-stringed by the trade war), but it's not "the little people"...

I'm sure some will work themselves even harder to afford what they don't actually need.   What I forsee is greater efficiency gains.  If sales numbers drop producers must innovative and provide better products or lower their prices to encourage the consumer. 
Title: Re: Why I'm not against tariffs.
Post by: Bateaux on July 02, 2018, 06:37:03 AM
Tariffs are a consumption tax.  The less you consume goods and services the lesser the impact of the tax on you personally.   I would much prefer higher consumption taxes rather than income taxes.
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 07:31:42 AM
I'm anti tariff but if countries are reducing US good imports to favor their own then f them, we do the same. Can't have the best of both worlds. China has always pissed me off in that regard but no politician has ever wanted to address it.
Title: Re: Why I'm not against tariffs.
Post by: PDXTabs on July 02, 2018, 07:36:16 AM
Why you should be against steel and aluminum tariffs: because finished products don't have the tariff. That is, if you offshore your manufacturing operations you can still bring in your steel and aluminum widgets without these new tariffs. That's insane. Steel is a commodity, finished products are not (necessarily). There is more value in making the finished product, you do not want to discourage that.
Title: Re: Why I'm not against tariffs.
Post by: TwoWorlds on July 02, 2018, 07:41:09 AM
A no Tariff world sounds good to me!
Title: Re: Why I'm not against tariffs.
Post by: TheWifeHalf on July 02, 2018, 09:05:26 AM
There was an interview on tv yesterday with a guy, probably in his 60's, who owns the only company in the US that makes nails.  He said cheaper nails from China will put him out of business.  I do not doubt this will happen to many businesses because like he said, people will just buy the cheaper Chinese nails.

He said the Chinese nails are not of the quality his nails are. I say, if you're building a house, do it before Friday. I personally would not want a house built with inferior nails.
Title: Re: Why I'm not against tariffs.
Post by: BTDretire on July 02, 2018, 09:43:10 AM
My thoughts,
  We have been in a trade war for many years.
The problem is, we forgot to fight, just put up the white flag.
 I think Trump is just in a negotiation to get the tarrifs against us reduced.
 It may cause temporary disruption of the norm, but we are still the big dog
and may be able to fix this.
The economy is good, there is never a better time to attack the unfair tarriffs against us.
Title: Re: Why I'm not against tariffs.
Post by: BookLoverL on July 02, 2018, 10:40:20 AM
I'm not in the US, but (generally speaking) I actually like the idea of tariffs. The problem with complete freedom of capital to move around the world is that there is not the same freedom of movement for labour - and what's more, there never will be, because it isn't only laws that keep people in place, but also emotional ties to their homes and families. Some people are just less willing to move than others.

Freedom of capital without freedom of labour results in most of the capital moving gradually towards places that are friendlier to large business, leaving less jobs for the people still in the old place, who mostly don't want to move to the place where the new factory will be. And this results in a race to the bottom for labour regulations as places try to attract big business back to their area.

A sensible, non-extreme implementation of tariffs or some other kind of barrier to foreign trade means that certain home industries can be protected, and that the jobs needed for providing that industry to country X will mostly be located in country X. The best industries to put the tariffs in place for would be ones for which the country has high demand for, and is capable of meeting that demand itself resource-wise. That ensures the country stays relatively self-sufficient at meeting its high demand, which helps if there's a war or something that interferes with global trade routes. The best industries to have no tariffs for would be relatively exotic goods that wouldn't be commonly available in country X, and country X can then provide in return things which are commonly available there but not in country Y.

And if the tariff causes price increases which reduce demand, well, then, maybe it was consumerism causing people to buy that much of it in the first place. There will still be more jobs in the country than there was, because all the suppliers who were able to supply it more cheaply were taking advantage of cheaper foreign labour, so if there's any demand at all, there will need to be at least 1 place making it in the country if demand is going to be met. If it turns out demand drops to zero because of price increases, then the item was probably completely unnecessary to start with.

The alternative to putting up trade barriers to protect home industries (which will also become necessary in the case of overwhelming automation reducing the number of jobs, if no laws are put in place to encourage employing people instead of robots) is to provide some kind of basic citizen's income, because otherwise you end up with a disgruntled working class who can't find the jobs they need, and that's how you end up with political unrest.
Title: Re: Why I'm not against tariffs.
Post by: jim555 on July 02, 2018, 11:02:43 AM
No one wins with tarrifs, period.  The Senate needs to step in and block the baffoon before he ruins world trade.
Title: Re: Why I'm not against tariffs.
Post by: ayaparis on July 02, 2018, 11:27:25 AM
Tariffs are a consumption tax.  The less you consume goods and services the lesser the impact of the tax on you personally.   I would much prefer higher consumption taxes rather than income taxes.

I agree with this. Increases one's power on where to allocate their taxes.

Found this article interesting and some perspective: http://www.foxnews.com/opinion/2018/07/02/trumps-trade-critics-are-wrong-his-tariffs-could-bring-major-benefits-to-america.html (http://www.foxnews.com/opinion/2018/07/02/trumps-trade-critics-are-wrong-his-tariffs-could-bring-major-benefits-to-america.html)
Title: Re: Why I'm not against tariffs.
Post by: nwhiker on July 02, 2018, 11:47:22 AM
I am anti-tariff because I don't believe that the government should have any role in determining who people voluntary engage in commerce with. While I can think of arguments for tariffs this is a terrible idea. I have always been somewhat of a minimalist so the idea of people owning and buying less is appealing your argument basically is the about making people worse off in the long run.

To give you an example my Mom is on the cusp of retirement and has made some poor financial decisions but also has never had a good paying job. So she is looking at retirement in 2 years and has no savings and is expecting about $1,200/month before Medicare withholdings. An increase in cost of goods is going to make it very difficult for her to make ends meet.

Less stuff is a good think but needs to come from a change in values versus pricing poor people out of consumer purchases.
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 12:16:20 PM
I am anti-tariff because I don't believe that the government should have any role in determining who people voluntary engage in commerce with. While I can think of arguments for tariffs this is a terrible idea. I have always been somewhat of a minimalist so the idea of people owning and buying less is appealing your argument basically is the about making people worse off in the long run.

To give you an example my Mom is on the cusp of retirement and has made some poor financial decisions but also has never had a good paying job. So she is looking at retirement in 2 years and has no savings and is expecting about $1,200/month before Medicare withholdings. An increase in cost of goods is going to make it very difficult for her to make ends meet.

Less stuff is a good think but needs to come from a change in values versus pricing poor people out of consumer purchases.

That's a sad story and likely will be repeated throughout the country however unfortunately other countries do not share your values and the US has been locked out of several large markets which has led to jobs leaving the US.

The US can have zero tariffs but many other countries do, so what to do then? That's totally BS.
Title: Re: Why I'm not against tariffs.
Post by: FIRE@50 on July 02, 2018, 12:24:27 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.
Title: Re: Why I'm not against tariffs.
Post by: Telecaster on July 02, 2018, 12:41:26 PM
What I forsee is greater efficiency gains.  If sales numbers drop producers must innovative and provide better products or lower their prices to encourage the consumer.

Actually tariffs encourage the opposite.  If industries are protected from cheaper foreign competition, they have less incentive to become more efficient. 
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 12:48:36 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.
Title: Re: Why I'm not against tariffs.
Post by: BookLoverL on July 02, 2018, 12:50:04 PM
What I forsee is greater efficiency gains.  If sales numbers drop producers must innovative and provide better products or lower their prices to encourage the consumer.

Actually tariffs encourage the opposite.  If industries are protected from cheaper foreign competition, they have less incentive to become more efficient. 

The problem with this is that under typical corporate business practices, "cheaper" and "efficient" often means "lower minimum wage" and "less worker rights", which encourages working conditions to be gradually worse in general, and the working class to be poorer compared to the CEO and salary classes. Efficiency is only good to a certain point. I for one wouldn't want to be working in the conditions from, say, the Victorian age.
Title: Re: Why I'm not against tariffs.
Post by: Cookie78 on July 02, 2018, 12:54:14 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.

Hi. Canada here. Feeling much the same way.

The news I'm getting is that US started this tariff situation and that Canada is reacting with their own. Not the other way around as you are implying. Are you hearing something different?
Title: Re: Why I'm not against tariffs.
Post by: FIRE@50 on July 02, 2018, 12:55:07 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.
Ford wasn't forced to do anything. They do not have to sell cars in China. Many other companies have chosen to not do business in that country.

Are you really taking Trump's statements at face value?
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 01:06:54 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.

Hi. Canada here. Feeling much the same way.

The news I'm getting is that US started this tariff situation and that Canada is reacting with their own. Not the other way around as you are implying. Are you hearing something different?

Canada had existing tariffs on US goods. Trump wanted them gone, Canada politely said no and so retaliated with tariffs of our own. That's the cliff notes.
Title: Re: Why I'm not against tariffs.
Post by: FIRE@50 on July 02, 2018, 01:08:32 PM
Don't forget that Trump declared Canada a national security threat to justify it.
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 01:09:07 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.
Ford wasn't forced to do anything. They do not have to sell cars in China. Many other companies have chosen to not do business in that country.

Are you really taking Trump's statements at face value?

Fine. Then no Chinese company can do business here without technology transfer (that they stole) and must build everything they sell here.

What's good for the goose is good for the gander, right?

Why are you guys so fine with rolling over? You call Trump supporters ignorant, see how ignorant you are when your job goes away because of an unfair playing field.
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 01:09:37 PM
Don't forget that Trump declared Canada a national security threat to justify it.

I think he had to in order to implement them. Per US law.

But, your sound bite makes him look stupid so it will of course be the headline on CNN.
Title: Re: Why I'm not against tariffs.
Post by: BTDretire on July 02, 2018, 01:22:05 PM
No one wins with tarrifs, period.  The Senate needs to step in and block the baffoon before he ruins world trade.

  Not true, the countries that have tariffs on our products have won.
And if you can't give any credit to President Trump. you give some to other
leaders around the world that might decide to lower their tariffs so world trade is not ruined.
Trump does not want tariffs, he wants other countries to be fair with their tariffs and allow our products
to be able compete with their products.


Title: Re: Why I'm not against tariffs.
Post by: jim555 on July 02, 2018, 01:29:02 PM
No one wins with tarrifs, period.  The Senate needs to step in and block the baffoon before he ruins world trade.

  Not true, the countries that have tariffs on our products have won.
And if you can't give any credit to President Trump. you give some to other
leaders around the world that might decide to lower their tariffs so world trade is not ruined.
Trump does not want tariffs, he wants other countries to be fair with their tariffs and allow our products
to be able compete with their products.
If you listen to him he is NOT about totally free world trade.  He wants protected industries.  He doesn't understand economics or trade.  He has just begun and these are not going away.  The markets are beginning to realize this now, that is why they are under pressure.
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 01:40:24 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.
Title: Re: Why I'm not against tariffs.
Post by: PDXTabs on July 02, 2018, 01:53:47 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?
Title: Re: Why I'm not against tariffs.
Post by: FIRE@50 on July 02, 2018, 02:07:02 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.
Ford wasn't forced to do anything. They do not have to sell cars in China. Many other companies have chosen to not do business in that country.

Are you really taking Trump's statements at face value?

Fine. Then no Chinese company can do business here without technology transfer (that they stole) and must build everything they sell here.

What's good for the goose is good for the gander, right?

Why are you guys so fine with rolling over? You call Trump supporters ignorant, see how ignorant you are when your job goes away because of an unfair playing field.

While I have no doubt that you have been campaigning against Canada's brutally unfair milk tariffs for many years, I can assure you that they are no threat to my job or my security.
Title: Re: Why I'm not against tariffs.
Post by: BookLoverL on July 02, 2018, 02:10:26 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

Exactly, China have been following protectionist policies of various sorts for years. And they seem to be doing well out of it.

Free trade is one of those things that sounds nice in principle, but I don't think it works the way it's intended to unless a) the whole world has completely free trade, b) the different areas are starting from relatively equal conditions in terms of the size of the pool of resources they can offer, c) movement is actually completely free with almost the entire population willing to uproot their lives for work, d) worker's rights and minimum wage laws are identical everywhere. Without those things, some areas will develop subtle advantages and, since under the definition of free trade the disadvantaged areas aren't doing anything to prevent entirely foreign companies from selling their foreign-manufactured goods there, the disadvantaged areas will gradually lose jobs to the advantaged areas, and become more dependent on them. Meanwhile, the money will flow to whichever country the person who owns the companies lives in/usually buys stuff from/pays tax in, which might be a third completely different area.

I don't think anybody ought to go full protectionist/isolationist and ban foreign imports altogether or anything like that. I just think that some combination of sensibly-set non-zero tariffs, subsidies for certain desirable industries, and other protectionist measures, are necessary to maintain the independence of a country and the health of its job market.

(As to why tariffs might be preferable to subsidies, if you subsidise something too much you can end up with far more than you actually want. Back when the EU was the EEA, subsidies for farms led to Butter Mountains and Milk Lakes because the EU bought all the overproduced goods. If you have a tariff instead, you're not going to end up with that problem. So I think subsidies are better for things which you actually WANT there to be more of than the general public might demand (or be able to demand) on the open market, like green energy or public transport.)
Title: Re: Why I'm not against tariffs.
Post by: Johnez on July 02, 2018, 02:11:39 PM
The thing about Trump is he seems to be addressing actual issues with trade. What I'm worried about though is he seems to be turning the entire world against us. I don't know if there's a way to win a trade war, but I'm afraid of what happens when all these countries he's calling out decide they don't want to play nice with us anymore and they all single us out. China, Canada, Mexico, Europe, with their tariff cannons turned toward us seems like a way to go down in flames.
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 02:16:35 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.
Ford wasn't forced to do anything. They do not have to sell cars in China. Many other companies have chosen to not do business in that country.

Are you really taking Trump's statements at face value?

Fine. Then no Chinese company can do business here without technology transfer (that they stole) and must build everything they sell here.

What's good for the goose is good for the gander, right?

Why are you guys so fine with rolling over? You call Trump supporters ignorant, see how ignorant you are when your job goes away because of an unfair playing field.

While I have no doubt that you have been campaigning against Canada's brutally unfair milk tariffs for many years, I can assure you that they are no threat to my job or my security.
Well you made this about you. It's not. It's about all the ignorant Trump voters like my buddy who is a dairy farmer in WI.
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 02:24:35 PM
The thing about Trump is he seems to be addressing actual issues with trade. What I'm worried about though is he seems to be turning the entire world against us. I don't know if there's a way to win a trade war, but I'm afraid of what happens when all these countries he's calling out decide they don't want to play nice with us anymore and they all single us out. China, Canada, Mexico, Europe, with their tariff cannons turned toward us seems like a way to go down in flames.

I totally agreee. The main culprit right now is China. What he should've done is rally the world against them and cut them off at their knees. No more Chinese imports until they become an open and free society. Establish a supply chain and manufacturing in various places such as the Midwest, using planned communities like China does. Cheap land and labor.

The wealth that is contained in China is insane. The crazy thing is they are using it to buy up land and property here in the states, in places like CA, WA, TX, etc.

The whole thing is messed up, we need to rip the bandaid off and start anew.
Title: Re: Why I'm not against tariffs.
Post by: inline five on July 02, 2018, 02:31:05 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

In a free trade environment the US would produce what it was good at and Canada would do the same. Instead, they've choose protect certain industries. We can't impose a dairy tariff on Canada because it would be stupid because we are a net exporter, so instead he went after something else. How he came to that conclusion I don't care as long as it gets Canada to drop their tariffs.

Ever bought Cheese in Canada? It's crazy expensive. 2.5x-3x as much as the US. Maybe their citizens want cheap cheese?
Title: Re: Why I'm not against tariffs.
Post by: jlcnuke on July 02, 2018, 03:14:17 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

In a free trade environment the US would produce what it was good at and Canada would do the same. Instead, they've choose protect certain industries. We can't impose a dairy tariff on Canada because it would be stupid because we are a net exporter, so instead he went after something else. How he came to that conclusion I don't care as long as it gets Canada to drop their tariffs.

Ever bought Cheese in Canada? It's crazy expensive. 2.5x-3x as much as the US. Maybe their citizens want cheap cheese?

Yep, Canada has, over the years, used tariffs to protect certain industries. Guess what? EVERY COUNTRY does (the US included, which you seem to be forgetting everytime you mention that some other country has tariffs on US stuff without bothering to consider the massive amounts of tariffs we have on stuff from all those countries). The difference is that the rest of the world didn't have a leader recently decide that they're idea of what's fair or not is the only thing that matters and thus try to bully the rest of the world into giving up the current equilibrium in world trade in favor of a policy that's bad for everyone but the U.S.

We haven't been tariff free in the lifetime of anyone living. We have, however, had small, moderate changes in tariff policies done after careful negotiations and with consideration of the potential downsides... like the rest of the world... until our current administration decided that "trade wars are easy to win" (contrary to the massive amount of evidence showing that no one has ever won a trade war) and blew all that up.
Title: Re: Why I'm not against tariffs.
Post by: PDXTabs on July 02, 2018, 03:23:06 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

Which we agreed to when we signed NAFTA.
Title: Re: Why I'm not against tariffs.
Post by: MasterStache on July 02, 2018, 03:55:53 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

In a free trade environment the US would produce what it was good at and Canada would do the same. Instead, they've choose protect certain industries. We can't impose a dairy tariff on Canada because it would be stupid because we are a net exporter, so instead he went after something else. How he came to that conclusion I don't care as long as it gets Canada to drop their tariffs.

Ever bought Cheese in Canada? It's crazy expensive. 2.5x-3x as much as the US. Maybe their citizens want cheap cheese?

Well, Trump balked at a golden opportunity to allow US dairy farmers to increase exports to Canada with zero tariffs for the next 20 years when he pulled out of the TPP. Shame as 10 other countries jumped at the chance. One might wonder how dairy farmers could still support him.

But no worries, high tariffs in agriculture are quite common. The US has a 350% tariff on some tobacco products and a 132% tariff on a peanut variety.
Title: Re: Why I'm not against tariffs.
Post by: MasterStache on July 02, 2018, 05:35:57 PM
Tariffs imposed by Trump have been rattling Wall Street lately.   The international companies are warning of huge price increases for imported and domestic goods.  While I believe price increases and inflation will follow that doesn't really scare me.  I think we may all get to be a bit more Mustacian along the way.  The tariffs could be just the trigger that breaks the hyper consumption economy cycle.  Cheap foreign goods take a lot of the pain out of unneeded purchases.  A lot of this is cheap junk that costs less to purchase initially but, lacking true quality breaks down and ends up in the trash heap.  If prices increase 10 or 20 percent then consumption may decrease by 10 or 20 percent as well.   Maybe instead of paying more the consumer decides just to go without.  This would make for a much nicer world.  It could mean 10 to 20 percent less polution.  Maybe 10 to 20 percent less cars on the road.  Maybe instead of working harder to buy more stuff we spend 10 to 20 percent more of our time with friends and family.  Maybe we spend 10 to 20 percent more time reading a book, hiking a trail or riding our bikes.  Just some thoughts on the positives of a trade war.

Man in a perfect world I would right there with you. But we don't live in a perfect world. And our country in particular has an outrageous spending problem. It's not going to simply go away nor would we even chip away at it by raising the price of goods and service. People will lose jobs, money, houses, the market will suffer etc. etc. Almost like saying a housing bubble is good because it will get folks to stop buying uber expensive gigantic homes. Except it doesn't.
Title: Re: Why I'm not against tariffs.
Post by: bwall on July 02, 2018, 06:01:22 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

Which we agreed to when we signed NAFTA.

Really? NAFTA has been in force now for 25 years, but Canadian dairy tariffs are still in place.

https://www.theatlantic.com/international/archive/2018/06/trump-canada-dairy/562508/

Don't get me wrong: T.rump doesn't know s*** from shinola, but it doesn't mean he's wrong here.

Canadian consumers would benefit from a change.
Title: Re: Why I'm not against tariffs.
Post by: RetiredAt63 on July 02, 2018, 06:06:23 PM
The US has lots of tariffs  on imported goods.   A tariff on Canadian softwood lumber has been in place for a long time.  Just the first that comes to mind.

NAFTA is the agreement that regulates all this between the three partners. Including tariffs.   It's not like they appeared out of the blue.

The US has a net trade surplus with Canada, so you are not going broke because of trade with us.  Although trade with you is not doing us as much good, since we have a net deficit.  Although if your president keeps on imposing tariffs, we won't be buying as much from you because we won't have the money.

I read someplace (feel free to search) that part of what made the Depression so bad was that countries started doing all sorts of protectionist things, so trade plummeted.  The easiest way to stop the inflow of cheap stuff from low-cost labour countries is to let the price of transportation go up - which means stop trying to maintain cheap oil.
Title: Re: Why I'm not against tariffs.
Post by: PDXTabs on July 02, 2018, 06:14:59 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

Which we agreed to when we signed NAFTA.

Really? NAFTA has been in force now for 25 years, but Canadian dairy tariffs are still in place.

Yes, it's a carve out in the original language. I'm not a lawyer but I'm pretty sure it must be this part:


7) b) with respect to such dairy, poultry and egg goods that are qualifying goods,
either Party may adopt or maintain a prohibition or restriction or a customs
duty on the importation of such good consistent with its rights and
obligations under the GATT.

North American Free Trade Agreement (https://www.italaw.com/sites/default/files/laws/italaw6187%286%29.pdf)
Title: Re: Why I'm not against tariffs.
Post by: Shinplaster on July 02, 2018, 06:51:06 PM

Canadian consumers would benefit from a change.

Growth hormones (BST, rBGH) in dairy products (allowed in the US, not allowed in Canada) is a change we can do without thanks.





Title: Re: Why I'm not against tariffs.
Post by: meghan88 on July 02, 2018, 07:49:00 PM
A few random thoughts:

Countries don't have principles:  They have interests.

The wealthier countries will always be importing stuff from the less-wealthy countries.

An advanced knowledge-based economy still needs raw materials, food, cheap stuff, etc., all produced and processed by people who generally make less $ in less-wealthy countries.

Countries like Canada, with a lot of natural resources and sparse population, have been a good producer of raw materials, water and electricity for the U.S.

The next few decades will be interesting.
Title: Re: Why I'm not against tariffs.
Post by: Davnasty on July 02, 2018, 07:55:44 PM

Canadian consumers would benefit from a change.

Growth hormones (BST, rBGH) in dairy products (allowed in the US, not allowed in Canada) is a change we can do without thanks.

Growth Hormone does have a serious downside of reducing animal well being, something that could be potentially improved with better technology. But there's little evidence that milk produced with hormones is harmful to human health. There's also significant environmental benefit to using it. The number of cows needed to produce the same amount of milk is reduced by 15.7%*

Unfortunately, the increased production is likely to lead as much to increased consumption as it does to decreased environmental impact.

https://en.wikipedia.org/wiki/Bovine_somatotropin

If you're against the use of hormones for the sake of animal welfare, I can't argue with that. But the impacts of raising 18.6% more cattle will also effect human welfare in the near future, or in some cases, currently.


*15.7% is based on a single study - https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2442129/ but increased yield should be relatively easy to measure.
Title: Re: Why I'm not against tariffs.
Post by: PDXTabs on July 02, 2018, 10:07:22 PM
I quickly scanned through the years and I saw a negative balance for every year between now and 1985.

If you don't count services, that is true.


U.S.-Canada Trade Facts

U.S. goods and services trade with Canada totaled an estimated $673.9 billion in 2017. Exports were $341.2 billion; imports were $332.8 billion. The U.S. goods and services trade surplus with Canada was $8.4 billion in 2017.


ustr.gov (https://ustr.gov/countries-regions/americas/canada)
Title: Re: Why I'm not against tariffs.
Post by: bwall on July 03, 2018, 04:33:16 AM
The US has lots of tariffs  on imported goods.   A tariff on Canadian softwood lumber has been in place for a long time.  Just the first that comes to mind.

"The heart of the dispute is the claim that the Canadian lumber industry is unfairly subsidized by federal and provincial governments, as most timber in Canada is owned by the provincial governments."

https://en.wikipedia.org/wiki/Canada–United_States_softwood_lumber_dispute

As an American consumer, I'm thankful that the Canadian government is willing to dump its softwood lumber in our market.

If I were a Canadian taxpayer, I would be livid that instead of having money go to my government, it is instead going to the American government in the form of price-corrective tariffs.  In other words, if the Canadian provinces raise their fees, they collect more money as well as eliminating the American argument for tariffs on lumber.
Title: Re: Why I'm not against tariffs.
Post by: scottish on July 03, 2018, 03:17:54 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

Which we agreed to when we signed NAFTA.

Really? NAFTA has been in force now for 25 years, but Canadian dairy tariffs are still in place.

https://www.theatlantic.com/international/archive/2018/06/trump-canada-dairy/562508/

Don't get me wrong: T.rump doesn't know s*** from shinola, but it doesn't mean he's wrong here.

Canadian consumers would benefit from a change.

We want good cheese, not that American velveeta stuff.   Eh.

Better prices would be good though.
Title: Re: Why I'm not against tariffs.
Post by: RetiredAt63 on July 03, 2018, 03:59:08 PM

We want good cheese, not that American velveeta stuff.   Eh.

Better prices would be good though.

I doubt they would send us their good stuff*.  Save it for the home market.  And just around here we have Oka, St. Albert, Balderson, and a new one near Lancaster . . .

* I was not surprised Target tanked here.  The quality was terrible.  They made Walmart look good.
Title: Re: Why I'm not against tariffs.
Post by: ChpBstrd on July 03, 2018, 04:19:00 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.

1) So who owns the technology? Ford or the U.S. government or some collective "us" or "our"? If I invent a better mousetrap, should my government prohibit me from selling it overseas or claim my invention belongs to the collective?

2) Was Ford "forced" to sell their products in China? If so, is it wrong for governments to interfere with trade?

3) Is there a way to manufacture components in a country without revealing to anyone in that country how the components are made or what they do?
Title: Re: Why I'm not against tariffs.
Post by: TempusFugit on July 03, 2018, 04:44:48 PM
Free trade is good. 
Trade should benefit all parties when conducted in an open and 'fair' manner.
Trade prevents wars.

That all being granted, there may come a point in a broken trading relationship where a 'do over' is required.  Have we reached that point with China?  I'm not educated or smart enough to know, but I grant that it is possible.

I don't think for a minute that Trump himself really has much of a coherent plan here, but I do recognize that China has abused the trading relationship by pervasive government sponsored theft of IP from companies that they force to 'partner' with domestic entities as the price for having any opportunity to market in China.  Once they have stolen the IP, they kick out the foreign company and just make the product themselves.     

Trade is such a complex welter of rules and interconnected relationships with manufacturing chains and raw materials vs manufactured products that I don't know who can really claim to understand how to fix big parts without disrupting the whole, at least for a time.  Perhaps a hard reset will help, I don't know.   But by playing bad cop, perhaps in a year or two, the next person can benefit by making deals that are better on the whole than the status quo. One step back for two steps forward and whatnot. 

It is very possible that China has more to fear from a disrupted trade relationship than do we.  For all of their vaunted economic might, they are facing some very serious issues with their economy, and that could lead to serious social upheaval. That may motivate them to move toward a more equitable trade relationship. 





Title: Re: Why I'm not against tariffs.
Post by: better late on July 03, 2018, 05:38:52 PM
I've been pondering what happens if tariffs reduce the amount of cash that flows into China and that reduction in turn reduces Chinese investments in US real estate, debt and equities. Any prohibitive taxes or the like imposed by their govt could further deter money that would typically be directed to US. Wondering if that's enough to really screw us.
Title: Re: Why I'm not against tariffs.
Post by: scottish on July 03, 2018, 07:06:09 PM
Free trade is good. 
Trade should benefit all parties when conducted in an open and 'fair' manner.
Trade prevents wars.

That all being granted, there may come a point in a broken trading relationship where a 'do over' is required.  Have we reached that point with China?  I'm not educated or smart enough to know, but I grant that it is possible.

I don't think for a minute that Trump himself really has much of a coherent plan here, but I do recognize that China has abused the trading relationship by pervasive government sponsored theft of IP from companies that they force to 'partner' with domestic entities as the price for having any opportunity to market in China.  Once they have stolen the IP, they kick out the foreign company and just make the product themselves.     

Trade is such a complex welter of rules and interconnected relationships with manufacturing chains and raw materials vs manufactured products that I don't know who can really claim to understand how to fix big parts without disrupting the whole, at least for a time.  Perhaps a hard reset will help, I don't know.   But by playing bad cop, perhaps in a year or two, the next person can benefit by making deals that are better on the whole than the status quo. One step back for two steps forward and whatnot. 

It is very possible that China has more to fear from a disrupted trade relationship than do we.  For all of their vaunted economic might, they are facing some very serious issues with their economy, and that could lead to serious social upheaval. That may motivate them to move toward a more equitable trade relationship.

I don't buy this argument at all.

As an analogy, in software development there's a tendency for a software team to want to rewrite the product from scratch and 'do it right this time.'
But this approach is doomed.   The delivery is late, you have to go through the whole initial set of quality problems again, and then you have to try and convince your customers they should pay to upgrade to a product with less maturity, less features and more bugs.

Trade is even worse.   Destroying all the existing trade agreements and hoping to come up with something better is a colossal waste of time and effort that could be better spent on other things, like fixing health care, fixing the country's finances, improving competitiveness, ...
Title: Re: Why I'm not against tariffs.
Post by: gentmach on July 04, 2018, 08:35:06 AM
My hours at work have been cut in half due to the Tariff business. I've been negatively affected but understand that things weren't so great for everyone.

If the big trade deals are 20 yaers old or so, we have something similar to what Thomas Jefferson called "The Tyranny of the Dead." Essentially we need to adapt to changing circumstances with new deals and discuss what was working and what wasn't working.

Yes, we have sacrificed the stable platform for choas for the time being. Stability can lead to stagnation though.

How many of us would even be discussing trade policies if Trump hadn't flipped the board over?
Title: Re: Why I'm not against tariffs.
Post by: PDXTabs on July 04, 2018, 08:41:33 AM
If the big trade deals are 20 yaers old or so, we have something similar to what Thomas Jefferson called "The Tyranny of the Dead." Essentially we need to adapt to changing circumstances with new deals and discuss what was working and what wasn't working.

That's a great idea, but it certainly isn't what Trump is doing. We could be taking a long, hard look at our trading relationship with China without destroying NAFTA, which will destroy the North American automobile manufacturing supply chain which has benefited everyone involved.
Title: Re: Why I'm not against tariffs.
Post by: BookLoverL on July 05, 2018, 12:52:37 AM
I do wonder if part of the issue isn't just that these big multi-lateral trade deals are popular now. If you make bilateral trade deals between pairs of countries, surely it'd be much easier to find a deal that genuinely benefits both sides, rather than having to balance the interests of multiple countries, even though there'd be more separate negotiations to do to get deals with the same number of countries.

I still think tariffs are useful in certain circumstances, and the outright dismissal of them by the mainstream neoliberal globalist view is unfair.
Title: Re: Why I'm not against tariffs.
Post by: GuitarStv on July 05, 2018, 08:06:33 AM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

Which we agreed to when we signed NAFTA.

Really? NAFTA has been in force now for 25 years, but Canadian dairy tariffs are still in place.

https://www.theatlantic.com/international/archive/2018/06/trump-canada-dairy/562508/

Don't get me wrong: T.rump doesn't know s*** from shinola, but it doesn't mean he's wrong here.

Canadian consumers would benefit from a change.

We want good cheese, not that American velveeta stuff.   Eh.

Better prices would be good though.

I'm not entirely sure that the US would make much money selling dairy to Canada even without the tariffs to be honest.

It was mentioned earlier, but in Canada you're not allowed to sell dairy products pumped full of growth hormones as is typical of US dairy.  There are different standards in different provinces, but antibiotic usage in Canada is much more strictly measured and tested than in the US.  Because of this, most of the milk currently made in the US wouldn't be eligible for sale across the border anyway . . . so I don't believe that there would be significant benefit to Canadian consumers.
Title: Re: Why I'm not against tariffs.
Post by: Malloy on July 05, 2018, 09:14:09 AM
My hours at work have been cut in half due to the Tariff business. I've been negatively affected but understand that things weren't so great for everyone.

If the big trade deals are 20 yaers old or so, we have something similar to what Thomas Jefferson called "The Tyranny of the Dead." Essentially we need to adapt to changing circumstances with new deals and discuss what was working and what wasn't working.

Yes, we have sacrificed the stable platform for choas for the time being. Stability can lead to stagnation though.

How many of us would even be discussing trade policies if Trump hadn't flipped the board over?

Gentmach-did you vote for Trump?  If so, I think you could at least make up some of your lost income in the form of paid meals with New York Times reporters.  They have an insatiable thirst for articles in the Trumpenfreude genre, or "Look At How Trump Has Screwed Over His Supporters But They Still Think He's Their Savior For Reasons That Are Definitely About Economic Anxiety."  I think those meals have to take place in diners in the heartland, though, so that the reporter can condescendingly point out the downward mobility of the fellow Trump supporters surrounding them.


Title: Re: Why I'm not against tariffs.
Post by: Cromacster on July 05, 2018, 09:45:34 AM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

Which we agreed to when we signed NAFTA.

Really? NAFTA has been in force now for 25 years, but Canadian dairy tariffs are still in place.

https://www.theatlantic.com/international/archive/2018/06/trump-canada-dairy/562508/

Don't get me wrong: T.rump doesn't know s*** from shinola, but it doesn't mean he's wrong here.

Canadian consumers would benefit from a change.

We want good cheese, not that American velveeta stuff.   Eh.

Better prices would be good though.

Talk to the Manitoban's, they buy the stuff (velveeta) by the pallet.
Title: Re: Why I'm not against tariffs.
Post by: ChpBstrd on July 05, 2018, 10:01:23 AM
Tariffs are a consumption tax.  The less you consume goods and services the lesser the impact of the tax on you personally.   I would much prefer higher consumption taxes rather than income taxes.

Tariffs are less like a sales tax or VAT and more like a subsidy paid by consumers to producers on one side of a line. Producers on the other side of the line are penalized, even if they are more efficient. So if it costs $500 to manufacture an item in the U.S. and $400 overseas, the price of the item goes up for consumers and the domestic producer (if they exist) pockets the money. The net result is consumers buying fewer items, as desired, but only because the price of everything has gone up and they now have less to spend. This is how the Great Depression occurred: rising tariffs plus rising interest rates equals a slowdown.
Title: Re: Why I'm not against tariffs.
Post by: bwall on July 05, 2018, 10:59:12 AM

I'm not entirely sure that the US would make much money selling dairy to Canada even without the tariffs to be honest.

It was mentioned earlier, but in Canada you're not allowed to sell dairy products pumped full of growth hormones as is typical of US dairy.  There are different standards in different provinces, but antibiotic usage in Canada is much more strictly measured and tested than in the US.  Because of this, most of the milk currently made in the US wouldn't be eligible for sale across the border anyway . . . so I don't believe that there would be significant benefit to Canadian consumers.

Which is all the more reason to remove the tariffs! Very few mass producers in the USA are interested in producing to those standards, but some do already. Why not let them in? The Canadian consumer would benefit through lower prices and greater selection.

The way that the tariffs on dairy in Canada is implemented, it is just a government enforced wealth transfer from the consumer to the producer.
Title: Re: Why I'm not against tariffs.
Post by: GuitarStv on July 05, 2018, 11:32:42 AM

I'm not entirely sure that the US would make much money selling dairy to Canada even without the tariffs to be honest.

It was mentioned earlier, but in Canada you're not allowed to sell dairy products pumped full of growth hormones as is typical of US dairy.  There are different standards in different provinces, but antibiotic usage in Canada is much more strictly measured and tested than in the US.  Because of this, most of the milk currently made in the US wouldn't be eligible for sale across the border anyway . . . so I don't believe that there would be significant benefit to Canadian consumers.

Which is all the more reason to remove the tariffs! Very few mass producers in the USA are interested in producing to those standards, but some do already. Why not let them in? The Canadian consumer would benefit through lower prices and greater selection.

The way that the tariffs on dairy in Canada is implemented, it is just a government enforced wealth transfer from the consumer to the producer.

My dad's a farmer, and I've had a long time to think about Canada's rather odd milk quota system.  It has quite a history, starting back in the 50s I believe as a supply management idea.  There are arguments for and against it, but generally the one given for it is thus:

If the US was given full, unfettered access to Canadian dairy markets, there would no longer be any Canadian dairy farmers.  I bet that within a year they would entirely be wiped out.  This becomes a pretty serious problem if several years down the road there's a shortage in milk products in the US.  You can't just create a new dairy farm in a couple months to meet that demand.  That's why we have supply management on several food items (dairy, eggs, chicken).

It's also important to note that the US has always had tariffs on dairy going into the country from Canada (in the range of 17 - 20% if I remember correctly).  It's weird that Trump is demanding an end to Canadian tariffs but staying quiet about the US ones.
Title: Re: Why I'm not against tariffs.
Post by: toganet on July 05, 2018, 12:20:03 PM
Free trade is good. 
Trade should benefit all parties when conducted in an open and 'fair' manner.
Trade prevents wars.

That all being granted, there may come a point in a broken trading relationship where a 'do over' is required.  Have we reached that point with China?  I'm not educated or smart enough to know, but I grant that it is possible.

I don't think for a minute that Trump himself really has much of a coherent plan here, but I do recognize that China has abused the trading relationship by pervasive government sponsored theft of IP from companies that they force to 'partner' with domestic entities as the price for having any opportunity to market in China.  Once they have stolen the IP, they kick out the foreign company and just make the product themselves.     

Trade is such a complex welter of rules and interconnected relationships with manufacturing chains and raw materials vs manufactured products that I don't know who can really claim to understand how to fix big parts without disrupting the whole, at least for a time.  Perhaps a hard reset will help, I don't know.   But by playing bad cop, perhaps in a year or two, the next person can benefit by making deals that are better on the whole than the status quo. One step back for two steps forward and whatnot. 

It is very possible that China has more to fear from a disrupted trade relationship than do we.  For all of their vaunted economic might, they are facing some very serious issues with their economy, and that could lead to serious social upheaval. That may motivate them to move toward a more equitable trade relationship.

I don't buy this argument at all.

As an analogy, in software development there's a tendency for a software team to want to rewrite the product from scratch and 'do it right this time.'
But this approach is doomed.   The delivery is late, you have to go through the whole initial set of quality problems again, and then you have to try and convince your customers they should pay to upgrade to a product with less maturity, less features and more bugs.

Trade is even worse.   Destroying all the existing trade agreements and hoping to come up with something better is a colossal waste of time and effort that could be better spent on other things, like fixing health care, fixing the country's finances, improving competitiveness, ...

Excellent point.  This is another example of the Perfect being the enemy of the Good.  It's not really feasible to throw away everything and start with some "perfect" set of trade agreements.  For one thing, you'd never get everyone to agree on what's "perfect" so the deal would never happen.  Meanwhile, you'd be suffering along with the existing, now-outdated system.

Keep in mind, also, that we didn't start from a blank slate at some point in the past -- these deals have lineages going back hundreds of years.

So that's why we tend to see small, targeted changes over time vs. big deals.  Things like NAFTA and the TPP take a long time to negotiate, and are riddled with compromises and inefficiencies. 

Also, WRT China, think about where they were 30 years ago vs. where they are today.  Much of what the US (and the world) has tolerated from them is due to a desire to provide a safer path to modern economics and government than the scary visions that arose following Tiananmen Square.  That's not to say that was the right choice, or that everything has succeeded -- I don't think anyone is saying it's OK for China to steal IP or abuse its citizenry.  The question is what to do about it now.
Title: Re: Why I'm not against tariffs.
Post by: BookLoverL on July 05, 2018, 12:51:49 PM
YMMV, but I found this old article by John Michael Greer on the problems with free trade (written in 2016). I don't generally agree with him on everything, but I find his writing to be generally sound.

https://thearchdruidreport-archive.200605.xyz/2016/11/the-free-trade-fallacy.html

The link is to a mirror site because his original blog closed when he got fed up with the host site and he moved to a different blog with a new name.
Title: Re: Why I'm not against tariffs.
Post by: bwall on July 05, 2018, 01:25:03 PM
My dad's a farmer, and I've had a long time to think about Canada's rather odd milk quota system.  It has quite a history, starting back in the 50s I believe as a supply management idea.  There are arguments for and against it, but generally the one given for it is thus:

If the US was given full, unfettered access to Canadian dairy markets, there would no longer be any Canadian dairy farmers.  I bet that within a year they would entirely be wiped out.  This becomes a pretty serious problem if several years down the road there's a shortage in milk products in the US.  You can't just create a new dairy farm in a couple months to meet that demand.  That's why we have supply management on several food items (dairy, eggs, chicken).

It's also important to note that the US has always had tariffs on dairy going into the country from Canada (in the range of 17 - 20% if I remember correctly).  It's weird that Trump is demanding an end to Canadian tariffs but staying quiet about the US ones.

I understand that a country wants to keep food production in-house, so to speak. Nothing wrong with that, unless you go overboard, which to me it sounds like is the case with Canada and dairy (and, the same for coddled US sugar producers). Most dairy does well in cool climates, like are found along the US-Canadian border, rather than in warm southern US climates. So, I believe that Canada can produce dairy efficiently when placed on equal footing. And, a 20% tariff is high, but nowhere near 200%.

But, vested interests want to protect themselves and are willing to use any means available to do this, the most common of which is peddling half-truths and fear to the masses. As long as the people accept the propaganda that they are fed, then there is not much that can be done about it.
Title: Re: Why I'm not against tariffs.
Post by: GuitarStv on July 05, 2018, 01:50:47 PM
My dad's a farmer, and I've had a long time to think about Canada's rather odd milk quota system.  It has quite a history, starting back in the 50s I believe as a supply management idea.  There are arguments for and against it, but generally the one given for it is thus:

If the US was given full, unfettered access to Canadian dairy markets, there would no longer be any Canadian dairy farmers.  I bet that within a year they would entirely be wiped out.  This becomes a pretty serious problem if several years down the road there's a shortage in milk products in the US.  You can't just create a new dairy farm in a couple months to meet that demand.  That's why we have supply management on several food items (dairy, eggs, chicken).

It's also important to note that the US has always had tariffs on dairy going into the country from Canada (in the range of 17 - 20% if I remember correctly).  It's weird that Trump is demanding an end to Canadian tariffs but staying quiet about the US ones.

I understand that a country wants to keep food production in-house, so to speak. Nothing wrong with that, unless you go overboard, which to me it sounds like is the case with Canada and dairy (and, the same for coddled US sugar producers). Most dairy does well in cool climates, like are found along the US-Canadian border, rather than in warm southern US climates. So, I believe that Canada can produce dairy efficiently when placed on equal footing. And, a 20% tariff is high, but nowhere near 200%.

But, vested interests want to protect themselves and are willing to use any means available to do this, the most common of which is peddling half-truths and fear to the masses. As long as the people accept the propaganda that they are fed, then there is not much that can be done about it.

The 270% tariffs being bandied around are numbers charged on dairy over quota.  Below quota milk for example is tarriffed about 7%.  Remember when Trump quit the Transpacific Partnership?  The TPP give the US a chunk of dairy quota in that agreement.

Quote
Do U.S. dairy farmers sell to Canada?

Yes, bigly.

U.S. producers, who also benefit from subsidies and tariffs, exported about C$296 million ($227 million) in dairy goods to Canada last year, Statistics Canada data show. Canadian producers sold C$148.1 million in milk products in the opposite direction, a 2-to-1 U.S. trade surplus.

http://www.wisconsinagriculturist.com/dairy/does-canada-really-charge-270-tariff-milk (http://www.wisconsinagriculturist.com/dairy/does-canada-really-charge-270-tariff-milk)



Does that still sound overboard . . . or is it beginning to sound more reasonable?
Title: Re: Why I'm not against tariffs.
Post by: bwall on July 05, 2018, 02:48:15 PM

U.S. producers, who also benefit from subsidies and tariffs, exported about C$296 million ($227 million) in dairy goods to Canada last year, Statistics Canada data show. Canadian producers sold C$148.1 million in milk products in the opposite direction, a 2-to-1 U.S. trade surplus.

http://www.wisconsinagriculturist.com/dairy/does-canada-really-charge-270-tariff-milk (http://www.wisconsinagriculturist.com/dairy/does-canada-really-charge-270-tariff-milk)

Does that still sound overboard . . . or is it beginning to sound more reasonable?

Still sounds unreasonable to me. Here's why, quoting the link above:

"Economists tend to loathe Canada’s system, saying that it means people pay more for staple foods. . . . . The existing dairy quota has become so valuable, worth billions of dollars, that killing it could ripple through the financial system and other sectors."

I find it unreasonable that a tax on the general population is worth billions of dollars to the recipients. Other people might find that acceptable and reasonable, though, for reasons of national pride or self interest. As Warren Buffett once said "It's difficult to convince a man of something if his salary depends on him not understanding it." YMMV. 
Title: Re: Why I'm not against tariffs.
Post by: Kris on July 05, 2018, 05:07:52 PM
Amusing and relevant:
Title: Re: Why I'm not against tariffs.
Post by: gentmach on July 06, 2018, 03:17:26 PM
My hours at work have been cut in half due to the Tariff business. I've been negatively affected but understand that things weren't so great for everyone.

If the big trade deals are 20 yaers old or so, we have something similar to what Thomas Jefferson called "The Tyranny of the Dead." Essentially we need to adapt to changing circumstances with new deals and discuss what was working and what wasn't working.

Yes, we have sacrificed the stable platform for choas for the time being. Stability can lead to stagnation though.

How many of us would even be discussing trade policies if Trump hadn't flipped the board over?

Gentmach-did you vote for Trump?  If so, I think you could at least make up some of your lost income in the form of paid meals with New York Times reporters.  They have an insatiable thirst for articles in the Trumpenfreude genre, or "Look At How Trump Has Screwed Over His Supporters But They Still Think He's Their Savior For Reasons That Are Definitely About Economic Anxiety."  I think those meals have to take place in diners in the heartland, though, so that the reporter can condescendingly point out the downward mobility of the fellow Trump supporters surrounding them.

Actually I voted Libertarian. I voted for Bernie Sanders in the primary but then realized my friends would hang me out to dry after they got universal health Care.
Title: Re: Why I'm not against tariffs.
Post by: RangerOne on July 06, 2018, 05:28:04 PM
Tariffs are a consumption tax.  The less you consume goods and services the lesser the impact of the tax on you personally.   I would much prefer higher consumption taxes rather than income taxes.

The value of consumption taxes over income tax is a long debate. The problem with price hikes on goods due to a trade war is they are not design to avoid being regressive, like a well thought out consumption tax might be.

In fact the opposing country will likely target vulnerable industries and items that will directly impact impact middle class people in an effort to make the trade war unpopular.
Title: Re: Why I'm not against tariffs.
Post by: RangerOne on July 06, 2018, 06:01:48 PM
Free trade is good. 
Trade should benefit all parties when conducted in an open and 'fair' manner.
Trade prevents wars.

That all being granted, there may come a point in a broken trading relationship where a 'do over' is required.  Have we reached that point with China?  I'm not educated or smart enough to know, but I grant that it is possible.

I don't think for a minute that Trump himself really has much of a coherent plan here, but I do recognize that China has abused the trading relationship by pervasive government sponsored theft of IP from companies that they force to 'partner' with domestic entities as the price for having any opportunity to market in China.  Once they have stolen the IP, they kick out the foreign company and just make the product themselves.     

Trade is such a complex welter of rules and interconnected relationships with manufacturing chains and raw materials vs manufactured products that I don't know who can really claim to understand how to fix big parts without disrupting the whole, at least for a time.  Perhaps a hard reset will help, I don't know.   But by playing bad cop, perhaps in a year or two, the next person can benefit by making deals that are better on the whole than the status quo. One step back for two steps forward and whatnot. 

It is very possible that China has more to fear from a disrupted trade relationship than do we.  For all of their vaunted economic might, they are facing some very serious issues with their economy, and that could lead to serious social upheaval. That may motivate them to move toward a more equitable trade relationship.

I don't buy this argument at all.

As an analogy, in software development there's a tendency for a software team to want to rewrite the product from scratch and 'do it right this time.'
But this approach is doomed.   The delivery is late, you have to go through the whole initial set of quality problems again, and then you have to try and convince your customers they should pay to upgrade to a product with less maturity, less features and more bugs.

Trade is even worse.   Destroying all the existing trade agreements and hoping to come up with something better is a colossal waste of time and effort that could be better spent on other things, like fixing health care, fixing the country's finances, improving competitiveness, ...

I have to agree with scottish here. Its not even clear a hard reset is possible. And if it is it would require a very orderly and competent administration to renegotiated a better set of trade deals than we currently have in say the case of NAFTA, the one we bowed out of the TPP or an large trade relationship like we have with China. The Trump administration is a joke in this regard. Have they even made any progress on renegotiating NAFTA? Before they decided to start picking fights with other countries over trade?

There is a clear lack of focus with an emphasis on action for the sake of action. The reality is picking a fight with China on a few big trade issues, would be enough work for probably at least a full two term presidency. Yet this admin is trying to do everything and probably non of it very well.

High turn over and a lack of staffing are almost a guarantee that every effort made on this front will ultimately fail and be every bit as half ass as the initial North Korea "summit" where we gave up military demonstrations with an ally for a pinky swear that NK would denuclearize. A promise which is verifiably not had any effect on NK's nuclear program which continues to grow. He bowed out of an international agreement with Iran which was infinitely more complex simply because his base likes to shit on anything Obama did. No plan there.

Its pure hubris for any administration to come in and think they can fix a major problem, especially in the realm of international politics, even with 2 full terms.

What we are witnessing now is the easy part. Trump throwing shit into a fan. There is no way in hell he will give anyone in the administration enough time or tools to clean up the mess properly if it gets out of hand.

The best we can hope for is that at some point this all ratchets down and things go back to basically the way they were. Trump and China can both individually declare victory. And Trump and Xi will both remain rich and pompous.
Title: Re: Why I'm not against tariffs.
Post by: Adam Zapple on July 08, 2018, 06:03:45 AM

We want good cheese, not that American velveeta stuff.   Eh.

Better prices would be good though.

I doubt they would send us their good stuff*.  Save it for the home market.  And just around here we have Oka, St. Albert, Balderson, and a new one near Lancaster . . .

* I was not surprised Target tanked here.  The quality was terrible.  They made Walmart look good.

Target is just Walmart painted red. 
Title: Re: Why I'm not against tariffs.
Post by: Adam Zapple on July 08, 2018, 06:33:16 AM
Dave Chappelle has the best argument against Trump's plan that I've seen.  Warning:  Foul language.

https://www.youtube.com/watch?v=inlDT62oGy8 (https://www.youtube.com/watch?v=inlDT62oGy8)
Title: Re: Why I'm not against tariffs.
Post by: MasterStache on July 08, 2018, 12:32:52 PM

We want good cheese, not that American velveeta stuff.   Eh.

Better prices would be good though.

I doubt they would send us their good stuff*.  Save it for the home market.  And just around here we have Oka, St. Albert, Balderson, and a new one near Lancaster . . .

* I was not surprised Target tanked here.  The quality was terrible.  They made Walmart look good.

Target is just Walmart painted red.

In terms of prices and goods, eh I might agree. But in terms of service, our Target is light years ahead of Wal-Mart. But, Target also pays their employees more. Precisely why I thought it was funny when Trumpsters lauded the tax cuts while pointing to Wal-Mart employees seeing a slight bump in pay. They went from earning jack shit to just shit. 
Title: Re: Why I'm not against tariffs.
Post by: Johnez on July 08, 2018, 04:16:28 PM
As I recall, it was enough for a Costco membership. Egads! So much winning there lol.
Title: Re: Why I'm not against tariffs.
Post by: Bateaux on July 17, 2018, 12:07:53 AM
I started this thread just to stir up stuff.   I believe in free trade and I'm against tariffs.   
Title: Re: Why I'm not against tariffs.
Post by: Raymond Reddington on July 17, 2018, 01:05:57 AM
As an American, I am for tariffs on China. China is not an ally, and uses currency manipulation and other highly questionable if not outright immoral practices to spur growth for Chinese companies only. The forced sharing of secrets with Chinese firms by foreign companies doing business in China is prohibitive as well, and is designed to create an unfair advantage for Chinese companies. I also believe that running an excessively large trade deficit is extremely detrimental, as it sends wealth out of the country. There is a coming crisis with automation, and serious issues about how we will provide a decent standard of living for those willing to work who may not possess advanced degrees, yet do this in a way that incentivizes positive contributions to society rather than mere laziness. There need to be more good paying jobs in this country for the underemployed and the chronically unemployed who do not count against the unemployment rate (and I'm not talking about FIREd people, since that's all of our goal someday!). China, by manipulating its currency, and providing many subhuman working conditions, is effectively undoing decades of progress by the developed world in the name of developing the market share that they have obtained to this point.

I believe that tariffs on NATO allies are downright stupid, however. Rather, these countries should be banding together to support good paying jobs, as they all face the same coming crisis which could lead to mass discontent and political and social turmoil if not settled suitably. Instead, by raising tariffs with Canada, fighting with EU countries, and trying to blame everything on Mexico, we are isolating ourselves in the world, and making joint collective action against the substandard working conditions and disruptive business environment of China impossible.
Title: Re: Why I'm not against tariffs.
Post by: Kris on July 17, 2018, 05:32:57 AM
I started this thread just to stir up stuff.   I believe in free trade and I'm against tariffs.

Sigh. I really dislike this kind of trolling behavior.
Title: Re: Why I'm not against tariffs.
Post by: toganet on July 17, 2018, 09:09:51 AM
I started this thread just to stir up stuff.   I believe in free trade and I'm against tariffs.

Sigh. I really dislike this kind of trolling behavior.

Agreed.  One trolls in jest, but the reactions are serious.  Or as Bion of Borysthenes (https://en.wikiquote.org/wiki/Bion_of_Borysthenes) put it:

Boys throw stones at frogs in fun, but the frogs do not die in fun, but in earnest.

https://www.theverge.com/2018/7/12/17561768/dont-feed-the-trolls-online-harassment-abuse (https://www.theverge.com/2018/7/12/17561768/dont-feed-the-trolls-online-harassment-abuse)
Title: Re: Why I'm not against tariffs.
Post by: anisotropy on July 17, 2018, 05:57:04 PM
Tariffs imposed by Trump have been rattling Wall Street lately.   The international companies are warning of huge price increases for imported and domestic goods.  While I believe price increases and inflation will follow that doesn't really scare me.  I think we may all get to be a bit more Mustacian along the way.  The tariffs could be just the trigger that breaks the hyper consumption economy cycle.  Cheap foreign goods take a lot of the pain out of unneeded purchases.  A lot of this is cheap junk that costs less to purchase initially but, lacking true quality breaks down and ends up in the trash heap.  If prices increase 10 or 20 percent then consumption may decrease by 10 or 20 percent as well.   Maybe instead of paying more the consumer decides just to go without.  This would make for a much nicer world.  It could mean 10 to 20 percent less polution.  Maybe 10 to 20 percent less cars on the road.  Maybe instead of working harder to buy more stuff we spend 10 to 20 percent more of our time with friends and family.  Maybe we spend 10 to 20 percent more time reading a book, hiking a trail or riding our bikes.  Just some thoughts on the positives of a trade war.

The "last" time a global tariff war among the leading nations occurred, depression and large scale war followed. Oh same story with the second last global tariff war too.
Title: Re: Why I'm not against tariffs.
Post by: pecunia on July 17, 2018, 07:14:13 PM
I grew up in an iron mining town.  I heard about the steel tariffs and thought, "Bully!  At last a president who is doing something to help American industry."

Then I read some of these posts.  I remembered that much of the ore went to the Canadian steel mill at the Soo.  Is that then Canadian steel or US steel?  Is that tariff against Canada hurting my home town across the lake?

I think he ought to be going after these countries with cheap slave labor, not Canada.
Title: Re: Why I'm not against tariffs.
Post by: Sorinth on July 17, 2018, 08:16:27 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

In a free trade environment the US would produce what it was good at and Canada would do the same. Instead, they've choose protect certain industries. We can't impose a dairy tariff on Canada because it would be stupid because we are a net exporter, so instead he went after something else. How he came to that conclusion I don't care as long as it gets Canada to drop their tariffs.

Ever bought Cheese in Canada? It's crazy expensive. 2.5x-3x as much as the US. Maybe their citizens want cheap cheese?

On the flip side the US spent over 22B on subsidies to dairy farmers in 2015. In fact 73% of a US dairy farmer's revenue is due to subsidies.
https://www.realagriculture.com/2018/02/u-s-dairy-subsidies-equal-73-percent-of-producer-returns-says-new-report/

It's hardly free trade if one side has a massive amount of subsidies is it.
Title: Re: Why I'm not against tariffs.
Post by: ChpBstrd on July 17, 2018, 09:04:38 PM
The general economic consensus is that tariffs produce deadweight losses that reduce overall economic output, and that subsidies produce economic waste that reduces overall economic output.

The argument in favor of reducing economic output/efficiency this way is always some theoretical "well it'll benefit me" narrative. These narratives usually involve oneself being protected from competition, while no significant impacts occur in terms of input costs, inflation, demand reduction, or competitors' behavior.

For a beautiful example of the shortsightedness...
https://www.wsj.com/articles/whirlpool-wanted-washing-machine-tariffs-it-didnt-plan-for-a-trade-war-1531757621 (https://www.wsj.com/articles/whirlpool-wanted-washing-machine-tariffs-it-didnt-plan-for-a-trade-war-1531757621)
Title: Re: Why I'm not against tariffs.
Post by: Radagast on July 17, 2018, 11:34:56 PM
The general economic consensus is that tariffs produce deadweight losses that reduce overall economic output, and that subsidies produce economic waste that reduces overall economic output.

The argument in favor of reducing economic output/efficiency this way is always some theoretical "well it'll benefit me" narrative. These narratives usually involve oneself being protected from competition, while no significant impacts occur in terms of input costs, inflation, demand reduction, or competitors' behavior.

For a beautiful example of the shortsightedness...
https://www.wsj.com/articles/whirlpool-wanted-washing-machine-tariffs-it-didnt-plan-for-a-trade-war-1531757621 (https://www.wsj.com/articles/whirlpool-wanted-washing-machine-tariffs-it-didnt-plan-for-a-trade-war-1531757621)
I am curious though. It seems like many of the actions of the Chinese government are similar to what the old time monopolists did: run a huge glut at a loss, until all your competition closes. Then profit from the monopoly. It is bad in theory, but if you win by doing it then you win. I don't know what the best way to counter this is, but it seems like some action is appropriate.
Title: Re: Why I'm not against tariffs.
Post by: Malloy on July 18, 2018, 10:23:11 AM
My hours at work have been cut in half due to the Tariff business. I've been negatively affected but understand that things weren't so great for everyone.

If the big trade deals are 20 yaers old or so, we have something similar to what Thomas Jefferson called "The Tyranny of the Dead." Essentially we need to adapt to changing circumstances with new deals and discuss what was working and what wasn't working.

Yes, we have sacrificed the stable platform for choas for the time being. Stability can lead to stagnation though.

How many of us would even be discussing trade policies if Trump hadn't flipped the board over?

Gentmach-did you vote for Trump?  If so, I think you could at least make up some of your lost income in the form of paid meals with New York Times reporters.  They have an insatiable thirst for articles in the Trumpenfreude genre, or "Look At How Trump Has Screwed Over His Supporters But They Still Think He's Their Savior For Reasons That Are Definitely About Economic Anxiety."  I think those meals have to take place in diners in the heartland, though, so that the reporter can condescendingly point out the downward mobility of the fellow Trump supporters surrounding them.

Actually I voted Libertarian. I voted for Bernie Sanders in the primary but then realized my friends would hang me out to dry after they got universal health Care.

Too bad.  There's been a fresh round of these articles this week after Helsinki, and you could have been gorging on diner hashbrowns.  This one is a particularly fine example:

"I pray for him every day. I really do. Him and his family," says Tom, clutching a bag filled with Marlboro Blacks and a handful of random-pick Powerball tickets at the Hob's gas station.


https://www.cbc.ca/news/world/trump-putin-us-maryland-essex-dundalk-edgemere-1.4751215

Clutching a bag of cigarettes and lottery tickets!  It's so mean I almost feel sorry for him, but then I remember he helped elect a traitor to the U.S. to the White House and my sympathy dries up.

Title: Re: Why I'm not against tariffs.
Post by: ChpBstrd on July 18, 2018, 10:39:25 AM
The general economic consensus is that tariffs produce deadweight losses that reduce overall economic output, and that subsidies produce economic waste that reduces overall economic output.

The argument in favor of reducing economic output/efficiency this way is always some theoretical "well it'll benefit me" narrative. These narratives usually involve oneself being protected from competition, while no significant impacts occur in terms of input costs, inflation, demand reduction, or competitors' behavior.

For a beautiful example of the shortsightedness...
https://www.wsj.com/articles/whirlpool-wanted-washing-machine-tariffs-it-didnt-plan-for-a-trade-war-1531757621 (https://www.wsj.com/articles/whirlpool-wanted-washing-machine-tariffs-it-didnt-plan-for-a-trade-war-1531757621)
I am curious though. It seems like many of the actions of the Chinese government are similar to what the old time monopolists did: run a huge glut at a loss, until all your competition closes. Then profit from the monopoly. It is bad in theory, but if you win by doing it then you win. I don't know what the best way to counter this is, but it seems like some action is appropriate.
How do we define a glut, and whose fault is it? What is the correct price for a thing?

If Chinese steel mills are closer to massive and cheap Australian ore deposits than U.S. steel mills, operate at a fraction of the cost, and produce adequate quality, who is to say they shouldn't sell more than X tons (so that less efficient producers can produce those tons?).

If anything, the U.S. tech industry could be said to produce a glut of software, with most firms running at a loss and kept afloat by cash infusions from investors.

People once accused WalMart of running their competitors out of business and setting itself up to be a monopoly. This was a big anxiety point for people in the 90's. In hindsight, the criticism and worry were misplaced. They were profitable the whole time, and their competitors (Sears, K-Mart, Five-and-Dime) were simply less efficient and failed to use technology effectively. Now an even more efficient competitor is doing the same to WalMart. Even if WalMart operated at a loss, burning through seemingly unlimited investor cash as Amazon did for over a decade, it doesn't mean their actions are unfair, or their prices too low.

If we learned Chinese steel mills were wildly profitable, would that change our opinion about whether their prices are too low?
Title: Re: Why I'm not against tariffs.
Post by: pecunia on July 18, 2018, 10:45:59 AM
Quote
If we learned Chinese steel mills were wildly profitable, would that change our opinion about whether their prices are too low?

I just wonder how clean and how safe are Chinese steel mills.  Simplistic looks at economics often ignore extraneous factors.  It almost always ignores the effects on people being displaced.  The world is not apples to apples.  We must learn to take care of our own.
Title: Re: Why I'm not against tariffs.
Post by: TexasRunner on July 18, 2018, 12:02:41 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

Exactly, China have been following protectionist policies of various sorts for years. And they seem to be doing well out of it.

Free trade is one of those things that sounds nice in principle, but I don't think it works the way it's intended to unless a) the whole world has completely free trade, b) the different areas are starting from relatively equal conditions in terms of the size of the pool of resources they can offer, c) movement is actually completely free with almost the entire population willing to uproot their lives for work, d) worker's rights and minimum wage laws are identical everywhere. Without those things, some areas will develop subtle advantages and, since under the definition of free trade the disadvantaged areas aren't doing anything to prevent entirely foreign companies from selling their foreign-manufactured goods there, the disadvantaged areas will gradually lose jobs to the advantaged areas, and become more dependent on them. Meanwhile, the money will flow to whichever country the person who owns the companies lives in/usually buys stuff from/pays tax in, which might be a third completely different area.

I don't think anybody ought to go full protectionist/isolationist and ban foreign imports altogether or anything like that. I just think that some combination of sensibly-set non-zero tariffs, subsidies for certain desirable industries, and other protectionist measures, are necessary to maintain the independence of a country and the health of its job market.

(As to why tariffs might be preferable to subsidies, if you subsidise something too much you can end up with far more than you actually want. Back when the EU was the EEA, subsidies for farms led to Butter Mountains and Milk Lakes because the EU bought all the overproduced goods. If you have a tariff instead, you're not going to end up with that problem. So I think subsidies are better for things which you actually WANT there to be more of than the general public might demand (or be able to demand) on the open market, like green energy or public transport.)

Oh man, soo much this comment.  lol

I would also add environmental concerns / conditions, EPA and job benefits to the item d above.

A quote from Obama's most recent speech: 
Quote
Economic opportunity, for all the magnificence of the global economy, all the shining skyscrapers that have transformed the landscape around the world, entire neighborhoods, entire cities, entire regions, entire nations have been bypassed.

In other words, for far too many people, the more things have changed, the more things stayed the same. (Applause.)

And while globalization and technology have opened up new opportunities, have driven remarkable economic growth in previously struggling parts of the world, globalization has also upended the agricultural and manufacturing sectors in many countries.

...

In many middle-income and developing countries, new wealth has just tracked the old bad deal that people got because it reinforced or even compounded existing patterns of inequality, the only difference is it created even greater opportunities for corruption on an epic scale. And for once solidly middle-class families in advanced economies like the United States, these trends have meant greater economic insecurity, especially for those who don't have specialized skills, people who were in manufacturing, people working in factories, people working on farms.

...

But what's nevertheless true is that in their business dealings, many titans of industry and finance are increasingly detached from any single locale or nation-state, and they live lives more and more insulated from the struggles of ordinary people in their countries of origin. (Applause.) And their decisions – their decisions to shut down a manufacturing plant, or to try to minimize their tax bill by shifting profits to a tax haven with the help of high-priced accountants or lawyers, or their decision to take advantage of lower-cost immigrant labor, or their decision to pay a bribe – are often done without malice; it's just a rational response, they consider, to the demands of their balance sheets and their shareholders and competitive pressures.

But too often, these decisions are also made without reference to notions of human solidarity – or a ground-level understanding of the consequences that will be felt by particular people in particular communities by the decisions that are made. And from their board rooms or retreats, global decision-makers don't get a chance to see sometimes the pain in the faces of laid-off workers. Their kids don't suffer when cuts in public education and health care result as a consequence of a reduced tax base because of tax avoidance. They can't hear the resentment of an older tradesman when he complains that a newcomer doesn't speak his language on a job site where he once worked. They're less subject to the discomfort and the displacement that some of their countrymen may feel as globalization scrambles not only existing economic arrangements, but traditional social and religious mores.

...



Maybe he is starting to get it.  Sad that he isn't willing to discuss such things within his own country and towards his own party.

He does go on to say that we shouldn't turn back to authoritarianism (to which I agree) but I really don't see how he can reconcile his own speech with the open trade that has destroyed (and I do mean destroyed) American manufacturing.
Title: Re: Why I'm not against tariffs.
Post by: TexasRunner on July 18, 2018, 12:13:33 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

In a free trade environment the US would produce what it was good at and Canada would do the same. Instead, they've choose protect certain industries. We can't impose a dairy tariff on Canada because it would be stupid because we are a net exporter, so instead he went after something else. How he came to that conclusion I don't care as long as it gets Canada to drop their tariffs.

Ever bought Cheese in Canada? It's crazy expensive. 2.5x-3x as much as the US. Maybe their citizens want cheap cheese?

On the flip side the US spent over 22B on subsidies to dairy farmers in 2015. In fact 73% of a US dairy farmer's revenue is due to subsidies.
https://www.realagriculture.com/2018/02/u-s-dairy-subsidies-equal-73-percent-of-producer-returns-says-new-report/

It's hardly free trade if one side has a massive amount of subsidies is it.

Funny you say this when China does the exact same thing with steel and steel-products....

But you are right, it isn't fair and it isn't free trade.
Title: Re: Why I'm not against tariffs.
Post by: RangerOne on July 18, 2018, 12:42:36 PM
China has had some horrendous trade practices from what little I have heard. They regularly utilize government subsidies to out compete others. Its usually a race to identify such over subsidized products and tax accordingly to protect business that may be harmed.

My opinion on this topic is constantly changing. But we are probably overdue for a trade ware with China. My distrust of Trumps ability to lead such an endeavor is another issue.

I also don't think there is any reason to sweep in the EU into this mess or our North American trade partners. Take on one beast at a time to mitigate fallout.

Title: Re: Why I'm not against tariffs.
Post by: Just Joe on July 18, 2018, 02:38:18 PM
What I forsee is greater efficiency gains.  If sales numbers drop producers must innovative and provide better products or lower their prices to encourage the consumer.

Actually tariffs encourage the opposite.  If industries are protected from cheaper foreign competition, they have less incentive to become more efficient.

Kind of a duplicate of the 1970s cars when the Japanese imports began to make inroads on Detroit. Same with personal electronics. It wasn't an American company that marketed the "Walkman" it was the Japanese. And Kodak wasn't marketing the kinds of SLR films cameras that Minolta or Nikon was.

For all the things that the tariffs might lead to - I don't want to repeat that era where our choices were fewer and mediocre companies were protected from foreign competition. American companies were able to be mediocre for a long time before they were shoved off the international stage by more motivated competition.

We have collectively ridiculued the Chinese for a long time now but American business has taught them everything American companies know. While the chinese make alot of more or less single use terrible quality gadgets, they also make all the best stuff that American brands sell as their own. Want a Trek bike?  Not all of them are made in Wisconsin. Many, many of them are made in China. Want an iPhone? Made in China. Want a digital camera - Made in China.

I want all of us to prosper here but I don't want our current batch of politicians to put blinders on our economy so we can act like we make the best stuff again 'cause we don't and haven't for a long, long time. We make SOME good stuff but not all of it. Try buying an ebike made 100% in America.

I can't believe Amazon, Target and WalMart aren't losing their collective minds right about now. What will they sell? ;)
Title: Re: Why I'm not against tariffs.
Post by: Sorinth on July 18, 2018, 05:24:57 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

In a free trade environment the US would produce what it was good at and Canada would do the same. Instead, they've choose protect certain industries. We can't impose a dairy tariff on Canada because it would be stupid because we are a net exporter, so instead he went after something else. How he came to that conclusion I don't care as long as it gets Canada to drop their tariffs.

Ever bought Cheese in Canada? It's crazy expensive. 2.5x-3x as much as the US. Maybe their citizens want cheap cheese?

On the flip side the US spent over 22B on subsidies to dairy farmers in 2015. In fact 73% of a US dairy farmer's revenue is due to subsidies.
https://www.realagriculture.com/2018/02/u-s-dairy-subsidies-equal-73-percent-of-producer-returns-says-new-report/

It's hardly free trade if one side has a massive amount of subsidies is it.

Funny you say this when China does the exact same thing with steel and steel-products....

But you are right, it isn't fair and it isn't free trade.

Never said China didn't do that. And yes it makes sense to have tariffs to counteract those subsidies. It's the part where those tariffs are placed on Canada and the EU where things start making less sense.

But talk of fair is irrelevant anyways, Trump doesn't want fair trade he wants trade in the US's favour.
Title: Re: Why I'm not against tariffs.
Post by: GuitarStv on July 18, 2018, 06:13:17 PM
China has dumped steel for many years. They have subsidized it immensely with significant oversupply, and waived any sort of environmental concerns making US steel non-competitive. Prior to that the US government subsidized the industry overseas in Asia and Europe to "help them" rebuild. We are idiots, we try to be nice but just end up getting kicked in the stomach. Seriously WTF.

I am completely 100% okay going after countries that are dumping. How much dumping has Canada and Iceland been up to lately?

Canada caps imports of US dairy products using a 270% tariff over a cap in order to protect their own farmers.

In a free trade environment the US would produce what it was good at and Canada would do the same. Instead, they've choose protect certain industries. We can't impose a dairy tariff on Canada because it would be stupid because we are a net exporter, so instead he went after something else. How he came to that conclusion I don't care as long as it gets Canada to drop their tariffs.

Ever bought Cheese in Canada? It's crazy expensive. 2.5x-3x as much as the US. Maybe their citizens want cheap cheese?

On the flip side the US spent over 22B on subsidies to dairy farmers in 2015. In fact 73% of a US dairy farmer's revenue is due to subsidies.
https://www.realagriculture.com/2018/02/u-s-dairy-subsidies-equal-73-percent-of-producer-returns-says-new-report/

It's hardly free trade if one side has a massive amount of subsidies is it.

Funny you say this when China does the exact same thing with steel and steel-products....

But you are right, it isn't fair and it isn't free trade.

Never said China didn't do that. And yes it makes sense to have tariffs to counteract those subsidies. It's the part where those tariffs are placed on Canada and the EU where things start making less sense.

But talk of fair is irrelevant anyways, Trump doesn't want fair trade he wants trade in the US's favour.

Trump tends to use outrageous foreign policy decisions to distract people from personal scandals when the heat is on.  I suspect that his jumping into multiple trade wars had more to do with this than anything to do with a coherent plan for America.
Title: Re: Why I'm not against tariffs.
Post by: Radagast on July 18, 2018, 10:22:31 PM
How do we define a glut, and whose fault is it? What is the correct price for a thing?

If Chinese steel mills are closer to massive and cheap Australian ore deposits than U.S. steel mills, operate at a fraction of the cost, and produce adequate quality, who is to say they shouldn't sell more than X tons (so that less efficient producers can produce those tons?).

If anything, the U.S. tech industry could be said to produce a glut of software, with most firms running at a loss and kept afloat by cash infusions from investors.

People once accused WalMart of running their competitors out of business and setting itself up to be a monopoly. This was a big anxiety point for people in the 90's. In hindsight, the criticism and worry were misplaced. They were profitable the whole time, and their competitors (Sears, K-Mart, Five-and-Dime) were simply less efficient and failed to use technology effectively. Now an even more efficient competitor is doing the same to WalMart. Even if WalMart operated at a loss, burning through seemingly unlimited investor cash as Amazon did for over a decade, it doesn't mean their actions are unfair, or their prices too low.

If we learned Chinese steel mills were wildly profitable, would that change our opinion about whether their prices are too low?
Well, if a product must be subsidized by taxes on other areas or government debt to make its price low or is sold below its cost of production for a long time that would be a glut. Similarly, if 5 of the 6 most common websites around the world are blocked in a certain country but that is not reciprocated, perhaps "the system" is being manipulated to advantage one party at the cost of the others and lower efficiency overall. I was/am willing to subsidize China a little bit out of the deep poverty it was in, but as the inequality decreases it will have to increasingly accept equality in trade policy as well, ideally starting ten years ago, and complete trade equality within the next ten years or so.

Investor cash has limits in its patience. Ultimately, monopolies are intended to be highly profitable in the medium term. My issue in this case is not with companies with limited resources so much as a government.

Even then I am not totally on board with completely free markets (not necessarily speaking of tariffs or the current situation here). It is my observation that in human affairs ideals and purity are universally bad. Free speech, democracy, free trade, and so far every thing I have thought of falls apart at the extreme. Having thought it through, (based on a write up about coconuts and fish someone posted, I thought it was earlier in this thread but didn't see it) free trade increases risk, decreases diversification at local and regional levels, and increases unequal economic outcomes. Now obviously free trade must be the backbone of any system that does not plan to let its population starve in time of surplus, but there are limits to it.
Title: Re: Why I'm not against tariffs.
Post by: ChpBstrd on July 19, 2018, 07:59:21 PM
Economist: "Tariffs cause a drop in demand that increases unemployment in the long run."

Tariffist: "Yea but those other countries are being unfair."

Economist: "How fair is it to the people who lose their jobs when the economy gets smaller?"

Tariffist: "Yea but they'll get jobs in all these revitalized industries previously dominated by imports."

Economist: "Are you factoring in the time and costs of constructing new industries from the ground up? For example, the cost to build an entire factory to build shoes, train workers, establish supply chains, etc? How many years would thousands of such projects take, and who would invest the money in a recessionary environment with falling demand?"

Tariffist: "High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people."

Economist: "[gasps] you're a ghost!"
Title: Re: Why I'm not against tariffs.
Post by: rocketpj on July 20, 2018, 07:46:22 PM
Tariffs are bad for the long term health of the entire economy. Almost the entire world came around to agreeing with that decades ago. Trump wants to move the US back to the 1950's and his ignorant supporters think that was a better time.

So what is your solution when other countries place tariffs on us and demand technology transfers in order to "do business" in their country?

Ford was forced to "partner" with a Chinese automaker and give them their hybrid technology in order to sell cars, that they must make there, in their market.

Trump stated in an ideal world he wants no tariffs.

Ignorant? Hmm.

Hi. Canada here. Feeling much the same way.

The news I'm getting is that US started this tariff situation and that Canada is reacting with their own. Not the other way around as you are implying. Are you hearing something different?

Canada had existing tariffs on US goods. Trump wanted them gone, Canada politely said no and so retaliated with tariffs of our own. That's the cliff notes.

Canada did not have 'existing tariffs'.  Canada negotiated some protections for some of our industries when we made a Free Trade deal with the US - as did the US with some of their industries.  There are plenty of examples of tariffs or subsidies on both sides (e.g. US farmers are heavily subsidized, Canadians are not), all of which were negotiated in a careful balancing act. 

All of that is in the past since Trump has decided the US are the biggest game in the room and has flipped over the table to make everyone negotiate from a weakened position.  Of course, thousands of people will lose their jobs all over the place, but Trump will strut and feel tough, so that counts as a win for some people.

Title: Re: Why I'm not against tariffs.
Post by: pecunia on July 21, 2018, 01:15:56 PM
Maybe if we had a good trade war, we would get smarter.

When I was a kid and stuff broke, do you know what we did?  We fixed the broken thing.  I think there were a lot more hardware stores.

Today, you just buy new.  More junk for the landfill.  More energy used to assemble it, ship it, display it and sell it.

We used to be proud when we could fix stuff.  Today, it is looked down upon.
Title: Re: Why I'm not against tariffs.
Post by: ChpBstrd on July 21, 2018, 01:32:16 PM
Maybe if we had a good trade war, we would get smarter.

When I was a kid and stuff broke, do you know what we did?  We fixed the broken thing.  I think there were a lot more hardware stores.

Today, you just buy new.  More junk for the landfill.  More energy used to assemble it, ship it, display it and sell it.

We used to be proud when we could fix stuff.  Today, it is looked down upon.

It's all fun and games until we're talking about pharmaceuticals, medical supplies, or toiletries.

It's also nice to be so prosperous we Mustachians get the option to fix our things and save more money, instead of having to fix things and still not having money. There are not so many people around who lived through the depression, but they tell stories of a very unpleasant time. They'd put cardboard in their shoes when the soles wore through, and made their kids' clothes from burlap flour sacks.
Title: Re: Why I'm not against tariffs.
Post by: pecunia on July 21, 2018, 01:47:44 PM
Quote
It's all fun and games until we're talking about pharmaceuticals,

Seems like importing drugs to save the consumer money isn't such a big thing with those who trade.  I think they've been trying to import drugs from Canada and have had problems.  No fun there at all.  People die.
Title: Re: Why I'm not against tariffs.
Post by: bognish on August 10, 2018, 02:33:17 PM
Here's my take. I run the accounting department for a factory in a Trump state. 30% of our costs are steel that comes from Europe. The steel costs have increased 20-30% since election day. There is not enough domestic capacity to by US steel instead. Many of our other components come from China. We are seeing those costs go up too. On top of that local unemployment rate is very low. Lots of illegal immigrants are leaving my state since we have a pretty hostile attitude to them. We don't knowingly hire undocumented workers, but it makes it harder and more expensive to hire and retain factory workers. So all across the board the cost of running our factory in the US is going up significantly. Over half of our sales are exported out of the US. Why would we keep losing money making parts in the US when we could just move the factory out of the country? Our finished parts could then be imported without tariff. The rich business owners would make a lot more money doing this and there would be a few hundred unemployed blue collar Trump voters. I would guess our Board of Directors will seriously consider doing this if these tarrif or worse are still in place in 12 months. If we don't do this then there will be no way for us to compete with foreign competitors that don't have tarrifs on sales outside of the US. Somehow this strategy will Make America great again and help our factories, but I cannot see how yet.
Title: Re: Why I'm not against tariffs.
Post by: gentmach on August 12, 2018, 11:15:21 AM
If the big trade deals are 20 yaers old or so, we have something similar to what Thomas Jefferson called "The Tyranny of the Dead." Essentially we need to adapt to changing circumstances with new deals and discuss what was working and what wasn't working.

That's a great idea, but it certainly isn't what Trump is doing. We could be taking a long, hard look at our trading relationship with China without destroying NAFTA, which will destroy the North American automobile manufacturing supply chain which has benefited everyone involved.

The way I figure it, forces such as Uber, New Urbanism and the oil situation (both declining supplies and climate change) were going to result in the Auto industry shrinking.

Our entire economic system requires retooling. The engines of the past won't power the future.
Title: Re: Why I'm not against tariffs.
Post by: Just Joe on August 13, 2018, 07:39:37 AM
Uber/Lyft: Yeah but who wants to pay $40 for a ride to the grocery store? These ride services may make sense in HCOL urban areas but anywhere else the trip to the grocery store will cost a few dollars in gas and wear/tear in a car a person already owns.

There are many moustachian ways to decrease the cost of transportation if gas prices were to spike in the USA. Choosing to live near your work place though that may be unobtainable due to property values. Meanwhile owning moustachian used vehicles where the purchase price was tiny, cost of fuel is what it is but a person isn't paying $500 a month payments. Even at $10 per gallon that's 50 gallons of fuel and 1500 miles of driving. Then there is carpooling - go shopping with a friend and share the cost of fuel. EBikes. Walking. Maybe we'd step away from the near-lux SUV and return to plain jane economy cars as seen in the rest of the world. The kind of cars that cost $8K new.

Title: Re: Why I'm not against tariffs.
Post by: gentmach on August 13, 2018, 08:38:10 AM
Uber/Lyft: Yeah but who wants to pay $40 for a ride to the grocery store? These ride services may make sense in HCOL urban areas but anywhere else the trip to the grocery store will cost a few dollars in gas and wear/tear in a car a person already owns.

There are many moustachian ways to decrease the cost of transportation if gas prices were to spike in the USA. Choosing to live near your work place though that may be unobtainable due to property values. Meanwhile owning moustachian used vehicles where the purchase price was tiny, cost of fuel is what it is but a person isn't paying $500 a month payments. Even at $10 per gallon that's 50 gallons of fuel and 1500 miles of driving. Then there is carpooling - go shopping with a friend and share the cost of fuel. EBikes. Walking. Maybe we'd step away from the near-lux SUV and return to plain jane economy cars as seen in the rest of the world. The kind of cars that cost $8K new.

I thought I covered that with "New Urbanism." You reinforced my point though that the Auto industry will shrink though. Thank you for that.
Title: Re: Why I'm not against tariffs.
Post by: radram on August 13, 2018, 10:10:06 AM
Here's my take. I run the accounting department for a factory in a Trump state. 30% of our costs are steel that comes from Europe. The steel costs have increased 20-30% since election day. There is not enough domestic capacity to by US steel instead. Many of our other components come from China. We are seeing those costs go up too. On top of that local unemployment rate is very low. Lots of illegal immigrants are leaving my state since we have a pretty hostile attitude to them. We don't knowingly hire undocumented workers, but it makes it harder and more expensive to hire and retain factory workers. So all across the board the cost of running our factory in the US is going up significantly. Over half of our sales are exported out of the US. Why would we keep losing money making parts in the US when we could just move the factory out of the country? Our finished parts could then be imported without tariff. The rich business owners would make a lot more money doing this and there would be a few hundred unemployed blue collar Trump voters. I would guess our Board of Directors will seriously consider doing this if these tarrif or worse are still in place in 12 months. If we don't do this then there will be no way for us to compete with foreign competitors that don't have tarrifs on sales outside of the US. Somehow this strategy will Make America great again and help our factories, but I cannot see how yet.

Looks like we can rule out Harley Davidson as your employer, as they didn't even wait 12 months:

https://www.msn.com/en-us/money/companies/trump-backs-boycott-of-harley-davidson-in-steel-tariff-dispute/ar-BBLPiSW?li=BBnbfcN
Title: Re: Why I'm not against tariffs.
Post by: Cache_Stash on August 22, 2018, 11:29:49 AM
Here's my take. I run the accounting department for a factory in a Trump state. 30% of our costs are steel that comes from Europe. The steel costs have increased 20-30% since election day. There is not enough domestic capacity to by US steel instead. Many of our other components come from China. We are seeing those costs go up too. On top of that local unemployment rate is very low. Lots of illegal immigrants are leaving my state since we have a pretty hostile attitude to them. We don't knowingly hire undocumented workers, but it makes it harder and more expensive to hire and retain factory workers. So all across the board the cost of running our factory in the US is going up significantly. Over half of our sales are exported out of the US. Why would we keep losing money making parts in the US when we could just move the factory out of the country? Our finished parts could then be imported without tariff. The rich business owners would make a lot more money doing this and there would be a few hundred unemployed blue collar Trump voters. I would guess our Board of Directors will seriously consider doing this if these tarrif or worse are still in place in 12 months. If we don't do this then there will be no way for us to compete with foreign competitors that don't have tarrifs on sales outside of the US. Somehow this strategy will Make America great again and help our factories, but I cannot see how yet.

Looks like we can rule out Harley Davidson as your employer, as they didn't even wait 12 months:

https://www.msn.com/en-us/money/companies/trump-backs-boycott-of-harley-davidson-in-steel-tariff-dispute/ar-BBLPiSW?li=BBnbfcN

They were acting on plans way before tariffs.

https://www.nytimes.com/2017/05/23/business/harley-davidson-thailand-factory-manufacturing.html
Title: Re: Why I'm not against tariffs.
Post by: radram on August 22, 2018, 07:53:23 PM
Here's my take. I run the accounting department for a factory in a Trump state. 30% of our costs are steel that comes from Europe. The steel costs have increased 20-30% since election day. There is not enough domestic capacity to by US steel instead. Many of our other components come from China. We are seeing those costs go up too. On top of that local unemployment rate is very low. Lots of illegal immigrants are leaving my state since we have a pretty hostile attitude to them. We don't knowingly hire undocumented workers, but it makes it harder and more expensive to hire and retain factory workers. So all across the board the cost of running our factory in the US is going up significantly. Over half of our sales are exported out of the US. Why would we keep losing money making parts in the US when we could just move the factory out of the country? Our finished parts could then be imported without tariff. The rich business owners would make a lot more money doing this and there would be a few hundred unemployed blue collar Trump voters. I would guess our Board of Directors will seriously consider doing this if these tarrif or worse are still in place in 12 months. If we don't do this then there will be no way for us to compete with foreign competitors that don't have tarrifs on sales outside of the US. Somehow this strategy will Make America great again and help our factories, but I cannot see how yet.

Looks like we can rule out Harley Davidson as your employer, as they didn't even wait 12 months:

https://www.msn.com/en-us/money/companies/trump-backs-boycott-of-harley-davidson-in-steel-tariff-dispute/ar-BBLPiSW?li=BBnbfcN

They were acting on plans way before tariffs.

https://www.nytimes.com/2017/05/23/business/harley-davidson-thailand-factory-manufacturing.html

This story leads to a great example of the complexities of tariffs. Thank you for adding to the conversation.

Your article is only addressing motorcycle sales in Asia, not the European Union. Oddly enough, the article states that if the US had remained in the TPP, some of the tariffs for american made Harley motorcycles would have gone to 0%( from as much as 100% as it remains now). Since Harley was already planning an Asian plant, that might not have made a big difference to them. Had that agreement been struck 10 years ago, maybe the Asian plant would never been planned at all? Maybe it would have happened sooner? Who knows.

The newest development is that Harley stands to save up to 145 million in new steel tariffs through the 2019 calendar year by building bikes in Europe for sale in Europe instead of building them in the US and shipping them to Europe. The new steel Tariffs in the US do not effect sales to Asia very much, since those bikes currently come from mainly from India.

These are completely different topics, and I see no evidence that this new move is anything other than a cost saving measure of the new tariffs imposed by Trump. 

Title: Re: Why I'm not against tariffs.
Post by: ChpBstrd on August 25, 2018, 10:55:13 AM
Here's my take. I run the accounting department for a factory in a Trump state. 30% of our costs are steel that comes from Europe. The steel costs have increased 20-30% since election day. There is not enough domestic capacity to by US steel instead. Many of our other components come from China. We are seeing those costs go up too. On top of that local unemployment rate is very low. Lots of illegal immigrants are leaving my state since we have a pretty hostile attitude to them. We don't knowingly hire undocumented workers, but it makes it harder and more expensive to hire and retain factory workers. So all across the board the cost of running our factory in the US is going up significantly. Over half of our sales are exported out of the US. Why would we keep losing money making parts in the US when we could just move the factory out of the country? Our finished parts could then be imported without tariff. The rich business owners would make a lot more money doing this and there would be a few hundred unemployed blue collar Trump voters. I would guess our Board of Directors will seriously consider doing this if these tarrif or worse are still in place in 12 months. If we don't do this then there will be no way for us to compete with foreign competitors that don't have tarrifs on sales outside of the US. Somehow this strategy will Make America great again and help our factories, but I cannot see how yet.

Looks like we can rule out Harley Davidson as your employer, as they didn't even wait 12 months:

https://www.msn.com/en-us/money/companies/trump-backs-boycott-of-harley-davidson-in-steel-tariff-dispute/ar-BBLPiSW?li=BBnbfcN

They were acting on plans way before tariffs.

https://www.nytimes.com/2017/05/23/business/harley-davidson-thailand-factory-manufacturing.html

This story leads to a great example of the complexities of tariffs. Thank you for adding to the conversation.

Your article is only addressing motorcycle sales in Asia, not the European Union. Oddly enough, the article states that if the US had remained in the TPP, some of the tariffs for american made Harley motorcycles would have gone to 0%( from as much as 100% as it remains now). Since Harley was already planning an Asian plant, that might not have made a big difference to them. Had that agreement been struck 10 years ago, maybe the Asian plant would never been planned at all? Maybe it would have happened sooner? Who knows.

The newest development is that Harley stands to save up to 145 million in new steel tariffs through the 2019 calendar year by building bikes in Europe for sale in Europe instead of building them in the US and shipping them to Europe. The new steel Tariffs in the US do not effect sales to Asia very much, since those bikes currently come from mainly from India.

These are completely different topics, and I see no evidence that this new move is anything other than a cost saving measure of the new tariffs imposed by Trump.

Look at it this way - if the rest of the world continues to reduce trade barriers between themselves, and the U.S. continues down the path of being a market where it costs extra to ship anything in or out, where should I build my next factory integrated supply chain? Should I build in a location where I can sell to the world (e.g. Mexico, China, E.U, Thailand) or in the U.S. where I will *guaranteed* never produce a competitive export because of the combination of high costs and high tariffs?

The answer is, I build the factory outside the U.S. because all other producers are facing the same dilemma. American consumers will just have to pay the tariff. They'll be a shrinking market anyway.
Title: Re: Why I'm not against tariffs.
Post by: radram on August 25, 2018, 12:17:04 PM

Look at it this way - if the rest of the world continues to reduce trade barriers between themselves, and the U.S. continues down the path of being a market where it costs extra to ship anything in or out, where should I build my next factory integrated supply chain? Should I build in a location where I can sell to the world (e.g. Mexico, China, E.U, Thailand) or in the U.S. where I will *guaranteed* never produce a competitive export because of the combination of high costs and high tariffs?

The answer is, I build the factory outside the U.S. because all other producers are facing the same dilemma. American consumers will just have to pay the tariff. They'll be a shrinking market anyway.

My comment was simply that not all companies will wait to move manufacture outside of the US to avoid the new steel tariff's as long as the one bognish works for, as referenced by my article regarding Harley Davidson. Cashe_stache referenced an article that he/she believed provided evidence Harley was just going to do that anyway, and it was in fact their long range plan. I disagree with that assessment based on his/her article because it was referencing a separate part of the world and separate tariffs entirely.

I believe tariffs imposed on our goods by foreign countries, like the Harley in Asia situation cause manufacture to leave the US.

I also believe tariffs imposed by the US on foreign raw materials used my US manufacturers also causes manufacture to leave the US, like the Harley situation in the EU. I, like bognish, can not yet see how this will ever benefit the US worker.

I also do not see how imposing one tariff can possibly help to eliminate the other, especially while at the same time you threaten to tear up other agreements your nation has done in the past. It looks to me that Trump is well within his right to do so as president. I just do not agree with the decision to do so. In the long term, I believe it destroys goodwill build up for decades, across multiple administrations, Republican and Democrat alike.

It seems like the only point is to "shake things up". If we really are the greatest nation to ever live, then why on earth do we want to shake things up? Do we want things to be better-ER? I still do not see how all this helps.


Title: Re: Why I'm not against tariffs.
Post by: accolay on August 26, 2018, 11:03:51 AM
Amusing and relevant:

I think John Oliver should be required watching:
https://www.youtube.com/watch?v=etkd57lPfPU (https://www.youtube.com/watch?v=etkd57lPfPU)
Title: Re: Why I'm not against tariffs.
Post by: bognish on August 28, 2018, 04:07:20 PM
Trumps Nafta comment today about putting a tariff on Canada's cars "we take in a lot of money the next day" drives me crazy. Where does he think he is making this profit from? Its a tax Americans are paying and getting nothing in return but higher prices. He is then talking about taking this extra money and giving it to soybean farmers who have been hurt by counter tariffs from China. Subsidize South Dakota farmers with higher prices on every American consumer. Sounds like a logical plan to me...
Title: Re: Why I'm not against tariffs.
Post by: Fireball on August 29, 2018, 11:14:09 AM
Amusing and relevant:

I think John Oliver should be required watching:
https://www.youtube.com/watch?v=etkd57lPfPU (https://www.youtube.com/watch?v=etkd57lPfPU)

"That's not how trade negotiations work ya dumb #$&@+)&(+@."

LOL. Love his monologues.
Title: Re: Why I'm not against tariffs.
Post by: gentmach on August 29, 2018, 09:49:10 PM

Look at it this way - if the rest of the world continues to reduce trade barriers between themselves, and the U.S. continues down the path of being a market where it costs extra to ship anything in or out, where should I build my next factory integrated supply chain? Should I build in a location where I can sell to the world (e.g. Mexico, China, E.U, Thailand) or in the U.S. where I will *guaranteed* never produce a competitive export because of the combination of high costs and high tariffs?

The answer is, I build the factory outside the U.S. because all other producers are facing the same dilemma. American consumers will just have to pay the tariff. They'll be a shrinking market anyway.

It seems like the only point is to "shake things up". If we really are the greatest nation to ever live, then why on earth do we want to shake things up? Do we want things to be better-ER? I still do not see how all this helps.

Just because we are king of the hill now doesn't mean we always will be. We also have to be willing to adapt to changing circumstances.

I took a renewable energy course in college where my teacher claimed that we would be out of oil by 2030. I have also heard that we have hundreds of years worth of oil left.

Either way we will run out of oil at some point. Without oil we no longer have cheap energy to sustain our lifestyle. So our quality of life is going to be lowered accordingly.

Since ecological arguments hit a wall with people, you simulate the effects through tariffs. You start forcing companies to rebuild America's manufacturing base to cut shipping costs. Then when the real crisis is upon us everyone is ready.

This is just a perspective. It is some lateral thinking on the subject.
Title: Re: Why I'm not against tariffs.
Post by: toganet on August 30, 2018, 07:27:24 AM

Look at it this way - if the rest of the world continues to reduce trade barriers between themselves, and the U.S. continues down the path of being a market where it costs extra to ship anything in or out, where should I build my next factory integrated supply chain? Should I build in a location where I can sell to the world (e.g. Mexico, China, E.U, Thailand) or in the U.S. where I will *guaranteed* never produce a competitive export because of the combination of high costs and high tariffs?

The answer is, I build the factory outside the U.S. because all other producers are facing the same dilemma. American consumers will just have to pay the tariff. They'll be a shrinking market anyway.

It seems like the only point is to "shake things up". If we really are the greatest nation to ever live, then why on earth do we want to shake things up? Do we want things to be better-ER? I still do not see how all this helps.

Just because we are king of the hill now doesn't mean we always will be. We also have to be willing to adapt to changing circumstances.

I took a renewable energy course in college where my teacher claimed that we would be out of oil by 2030. I have also heard that we have hundreds of years worth of oil left.

Either way we will run out of oil at some point. Without oil we no longer have cheap energy to sustain our lifestyle. So our quality of life is going to be lowered accordingly.

Since ecological arguments hit a wall with people, you simulate the effects through tariffs. You start forcing companies to rebuild America's manufacturing base to cut shipping costs. Then when the real crisis is upon us everyone is ready.

This is just a perspective. It is some lateral thinking on the subject.

I've been thinking about this as well, as in how there is a triangulated solution to the problem of reduced manufacturing employment combined with the impact of fossil fuel consumption and eventual depletion.  This solution sits in a blindspot of sorts, due to the coalition that would need to form to achieve it.

In short, picture a world in which shipping anything long distance is simply too expensive (whether in direct cost* or calculated environmental impact) and so anything produced within ~500 miles is significantly cheaper, and distance directly impacts the cost of finished goods, especially. 

If this were the case, manufacturing jobs could return to where the consumers are.  This would reinforce urbanization in some ways, but perhaps in a more distributed manner than today (as in, more larger cities in the interior of the country).

Globalization of tangible goods is really only possible in a high-energy economy, which is currently only feasible with fossil fuels.  Whether it's lack of supply or realization of environmental impact that forces the change only matters in how the transition is handled.

*This cost could be artificially applied by a form of tariff, but probably more effectively as a sort of VAT based on transportation cost.
Title: Re: Why I'm not against tariffs.
Post by: Prairie Stash on August 30, 2018, 09:41:36 AM

I'm not entirely sure that the US would make much money selling dairy to Canada even without the tariffs to be honest.

It was mentioned earlier, but in Canada you're not allowed to sell dairy products pumped full of growth hormones as is typical of US dairy.  There are different standards in different provinces, but antibiotic usage in Canada is much more strictly measured and tested than in the US.  Because of this, most of the milk currently made in the US wouldn't be eligible for sale across the border anyway . . . so I don't believe that there would be significant benefit to Canadian consumers.

Which is all the more reason to remove the tariffs! Very few mass producers in the USA are interested in producing to those standards, but some do already. Why not let them in? The Canadian consumer would benefit through lower prices and greater selection.

The way that the tariffs on dairy in Canada is implemented, it is just a government enforced wealth transfer from the consumer to the producer.

My dad's a farmer, and I've had a long time to think about Canada's rather odd milk quota system.  It has quite a history, starting back in the 50s I believe as a supply management idea.  There are arguments for and against it, but generally the one given for it is thus:

If the US was given full, unfettered access to Canadian dairy markets, there would no longer be any Canadian dairy farmers.  I bet that within a year they would entirely be wiped out.  This becomes a pretty serious problem if several years down the road there's a shortage in milk products in the US.  You can't just create a new dairy farm in a couple months to meet that demand.  That's why we have supply management on several food items (dairy, eggs, chicken).

It's also important to note that the US has always had tariffs on dairy going into the country from Canada (in the range of 17 - 20% if I remember correctly).  It's weird that Trump is demanding an end to Canadian tariffs but staying quiet about the US ones.
My Dad was a dairy farmer, we lost the farm when I was 12. At the time there was consolidation in the industry, you had to buy quota to expand or you left. Few people remember the losers of the quota system, 90% of dairy farms have closed over the last 30 years. Not everyone in the industry enjoys the quota system, just the 10% that remain. The farmer who bought our quota closed 6 years later.

The argument for Quota is interesting when you compare it to pork and beef which are integrated with the USA. Eggs and chicken are quota, but pork isn't; no one is able to explain that logic. Tell me why porkchops are exempt but nuggets are sacred; my answer is the chicken council is hiding behind the dairy council because they know they don't have a drumstick to stand on. Pig production takes longer to ramp up then chicken, as witnessed in the swine fu and avian flu epidemics, both of which are recent events.

I gurantee dairy would remain in Canada, but not every dairy would survive. The cost to ship 2% milk from wisconsin to my house prevents whole milk making it to my local grocery store, theres a natural protection. Cheese on the other hand is dense, that's the market Americans are after.

When dealing with low value products that are heavy such as milk, logistics is a big cost. Sourcing them near the end user makes sense, just to save on shipping costs. Evrey province in Canada has Chicken, Dairy and eggs, because of shipping costs between provinces. Wisonsin and California have massive Dairies, but I bet every state has some dairy production for the same reason that every province does.
Title: Re: Why I'm not against tariffs.
Post by: gentmach on August 30, 2018, 10:04:54 AM

Look at it this way - if the rest of the world continues to reduce trade barriers between themselves, and the U.S. continues down the path of being a market where it costs extra to ship anything in or out, where should I build my next factory integrated supply chain? Should I build in a location where I can sell to the world (e.g. Mexico, China, E.U, Thailand) or in the U.S. where I will *guaranteed* never produce a competitive export because of the combination of high costs and high tariffs?

The answer is, I build the factory outside the U.S. because all other producers are facing the same dilemma. American consumers will just have to pay the tariff. They'll be a shrinking market anyway.

It seems like the only point is to "shake things up". If we really are the greatest nation to ever live, then why on earth do we want to shake things up? Do we want things to be better-ER? I still do not see how all this helps.

Just because we are king of the hill now doesn't mean we always will be. We also have to be willing to adapt to changing circumstances.

I took a renewable energy course in college where my teacher claimed that we would be out of oil by 2030. I have also heard that we have hundreds of years worth of oil left.

Either way we will run out of oil at some point. Without oil we no longer have cheap energy to sustain our lifestyle. So our quality of life is going to be lowered accordingly.

Since ecological arguments hit a wall with people, you simulate the effects through tariffs. You start forcing companies to rebuild America's manufacturing base to cut shipping costs. Then when the real crisis is upon us everyone is ready.

This is just a perspective. It is some lateral thinking on the subject.

I've been thinking about this as well, as in how there is a triangulated solution to the problem of reduced manufacturing employment combined with the impact of fossil fuel consumption and eventual depletion.  This solution sits in a blindspot of sorts, due to the coalition that would need to form to achieve it.

In short, picture a world in which shipping anything long distance is simply too expensive (whether in direct cost* or calculated environmental impact) and so anything produced within ~500 miles is significantly cheaper, and distance directly impacts the cost of finished goods, especially. 

If this were the case, manufacturing jobs could return to where the consumers are.  This would reinforce urbanization in some ways, but perhaps in a more distributed manner than today (as in, more larger cities in the interior of the country).

Globalization of tangible goods is really only possible in a high-energy economy, which is currently only feasible with fossil fuels.  Whether it's lack of supply or realization of environmental impact that forces the change only matters in how the transition is handled.

*This cost could be artificially applied by a form of tariff, but probably more effectively as a sort of VAT based on transportation cost.

It will take experimentation with bottom-up solutions. There will be successes. There will be failures. But unique solutions will have to be found for every town.

Coalitions will form as practicality demands. It is easy to be a hardliner on a single issue when all your other needs are met. But as things shift people will have to compromise or be left behind.
Title: Re: Why I'm not against tariffs.
Post by: ChpBstrd on August 30, 2018, 03:26:05 PM

Look at it this way - if the rest of the world continues to reduce trade barriers between themselves, and the U.S. continues down the path of being a market where it costs extra to ship anything in or out, where should I build my next factory integrated supply chain? Should I build in a location where I can sell to the world (e.g. Mexico, China, E.U, Thailand) or in the U.S. where I will *guaranteed* never produce a competitive export because of the combination of high costs and high tariffs?

The answer is, I build the factory outside the U.S. because all other producers are facing the same dilemma. American consumers will just have to pay the tariff. They'll be a shrinking market anyway.

It seems like the only point is to "shake things up". If we really are the greatest nation to ever live, then why on earth do we want to shake things up? Do we want things to be better-ER? I still do not see how all this helps.

Just because we are king of the hill now doesn't mean we always will be. We also have to be willing to adapt to changing circumstances.

I took a renewable energy course in college where my teacher claimed that we would be out of oil by 2030. I have also heard that we have hundreds of years worth of oil left.

Either way we will run out of oil at some point. Without oil we no longer have cheap energy to sustain our lifestyle. So our quality of life is going to be lowered accordingly.

Since ecological arguments hit a wall with people, you simulate the effects through tariffs. You start forcing companies to rebuild America's manufacturing base to cut shipping costs. Then when the real crisis is upon us everyone is ready.

This is just a perspective. It is some lateral thinking on the subject.

I've been thinking about this as well, as in how there is a triangulated solution to the problem of reduced manufacturing employment combined with the impact of fossil fuel consumption and eventual depletion.  This solution sits in a blindspot of sorts, due to the coalition that would need to form to achieve it.

In short, picture a world in which shipping anything long distance is simply too expensive (whether in direct cost* or calculated environmental impact) and so anything produced within ~500 miles is significantly cheaper, and distance directly impacts the cost of finished goods, especially. 

If this were the case, manufacturing jobs could return to where the consumers are.  This would reinforce urbanization in some ways, but perhaps in a more distributed manner than today (as in, more larger cities in the interior of the country).

Globalization of tangible goods is really only possible in a high-energy economy, which is currently only feasible with fossil fuels.  Whether it's lack of supply or realization of environmental impact that forces the change only matters in how the transition is handled.

*This cost could be artificially applied by a form of tariff, but probably more effectively as a sort of VAT based on transportation cost.

It will take experimentation with bottom-up solutions. There will be successes. There will be failures. But unique solutions will have to be found for every town.

Coalitions will form as practicality demands. It is easy to be a hardliner on a single issue when all your other needs are met. But as things shift people will have to compromise or be left behind.

If energy became expensive, I would expect producers to utilize more barge and rail traffic, and arrange fewer miles via diesel trucks and especially air freight. This would be a good fallback for the rail and barge industries, which are currently very dependent on moving fossil fuels around. It would be bad news for producers and consumers though, because these less-energy-intensive modes generally take longer to deliver to their endpoints, this requiring more inventory to be held in transit, which consumes more working capital, which means higher prices in addition to the effect of higher fuel costs!

Or maybe electric trucks, solar roofs, alge-based oils, work-from-home software, and dynalift aircraft will enable us to continue using energy at increasing levels even as the costs of fossil fuels increase.
Title: Re: Why I'm not against tariffs.
Post by: pecunia on August 30, 2018, 09:20:40 PM
ChpBstrd:

"If energy became expensive, I would expect producers to utilize more barge and rail traffic, and arrange fewer miles via diesel trucks and especially air freight. This would be a good fallback for the rail and barge industries, which are currently very dependent on moving fossil fuels around. It would be bad news for producers and consumers though, because these less-energy-intensive modes generally take longer to deliver to their endpoints, this requiring more inventory to be held in transit, which consumes more working capital, which means higher prices in addition to the effect of higher fuel costs!

Or maybe electric trucks, solar roofs, alge-based oils, work-from-home software, and dynalift aircraft will enable us to continue using energy at increasing levels even as the costs of fossil fuels increase."

There are thousands of years left of emission free Thorium and Uranium to be used as fuel for future nuclear power.  You needn't worry about Peak Oil.  Many good jobs would be created enhancing the electric infrastructure to provide emissions free shipping and transportation.

Getting back to the subject at hand, this would be domestic energy.  The fuel is here.  The jobs would be here.  The money would stay here.  No need for extra military adventures to protect oil trade routes.  No worries about tariffs.  The windmills could be kept as monuments.  I like windmills.