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Comment by verroq | Hacker News Reader

I don't understand the hate Trump gets for doing what needs to be done. All these issues esp. theft of intellectual property, IP transfer, currency manipulation are much more important in the long term than some tarrifs.

One shitpost tweet crashed SZSC by 7%, most of China couldn't even read it. Trump is in a position of power at least with this negotiation.

China deserves the pain train for backpedalling.

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The trade war isn't helping anyone. It's costing US consumers, companies, farmers and the stock market.

Just a quick search, I couldn't find any mainstream, usually Republican leaning economists, magazines, or newspapers that said it was a good idea.

It isn’t costing consumers much. I run a company that was affected by the tariffs. If we had kept manufacturing in China, cost of goods sold (COGS) would have gone up by 25%. But COGS are only 50% of the price customers pay for our products. So the price increase to our customers would have only been 12.5%. But we didn’t keep our manufacturing in China, we moved it to Taiwan and Vietnam. As a result, our COGS went up by roughly 8% (prices are higher at our new factories), which works out to a 4% increase in prices to our customers. And our products have an unusually high COGS relative to most things consumers would buy at, say, Walmart. So the real impact of the tariffs to the prices most consumers are paying is in the very low single digits, percentage wise. Not really a big deal. Mostly the tariffs are/were very inconvenient for US business that manufactured in China.

I don't think it's that trivial for most companies to upend their entire supply chain

Emphasis added to my original quote:

> Mostly the tariffs are/were very inconvenient for US business that manufactured in China.

It isn’t costing consumers much. I run a company that was affected by the tariffs.

So you’re generalizing your experience from a “company you run” to a country with a $19.39 trillion GDP....

Months ago, I saw an analysis done by a European financial firm. The burden of the tariffs is 83% paid by China. This is very well aligned with his example.

The burden we do pay isn't so bad. It can substitute for other taxes. We used to do this in a big way, funding the country without an income tax. The local employment is pretty good too. Those industrial jobs, for example steelworkers, are reducing income inequality.

So we are creating those jobs at a cost of $900K per job. Tariffs are hardly ever a good way to create jobs.

https://www.washingtonpost.com/business/2019/05/07/trumps-st...

If that supposed $900K comes from Jeff Bezos, owner of the Washington Post, I'm OK with it. In that case, he alone is worth a hundred thousand jobs. I can see why his newspaper might be complaining.

No, the $900K it costs the economy per job. So you are doubting the number because it's from the "liberal media"?

In that case what about Forbes?

https://www.forbes.com/sites/ikebrannon/2018/07/02/steel-tar...

There are far bigger reasons to doubt it, so the "liberal media" issue is moot. Not that "liberal media" isn't a fine reason, but Jeff Bezos is literally the owner of the Washington Post. He also runs Amazon, shipping lots of Chinese goods. His bias is obvious.

This isn't even a political conflict along the liberal/non-liberal axis though, so Forbes doesn't change a thing. I'm sure you've heard of the uniparty, demipublicans, republicrats, and so on. The leaders of multinational corporations have a globalist mindset. Aside from desiring regulatory capture to suppress competition, they also have a libertarian mindset. Very few media sources and very few politicians break from either mindset by much, except some hot air from some politicians. Politicians don't last long if they anger the large multinational corporations.

There is almost nobody with interests aligned with the American worker. Of the few who are, many would admit to loving the tariffs only if somebody like Bernie Sanders had imposed them. Generally, all of those with a big voice (media and politicians) would gladly wipe out American jobs in exchange for greater profit. This is short-term thinking, ignoring the slow collapse of the nation and the changing balance of world power.

So there should be some studies somewhere that say the best way to brings jobs to America that in aggregate is beneficial is to impose tariffs and protectionism is to spend money on industries retraining workers?

Are you also in favor of laws in some states that don't allow people to pump their own gas to save jobs?

I feel like "regulatory capture to suppress competition" and libertarian mindset" don't go together all that well

Mostly my point was about basic arithmetic: 25% sounds like a big deal, but consumers are not paying anywhere near an additional 25% on goods they buy because so much of the retail price of a good is made up of things other than production cost. That is something anybody who has run a business that sells goods can tell you, I was just using my personal experience to illustrate the point.

In other words the tariffs, like all tariffs, did absolutely nothing but harm the country putting them in place.

Brilliant.

In the scenario outlined, China is the biggest loser, Vietnam the biggest winner, USA is a small loser.

The scenario did not indicate the benefits to the US, so the tally is probably not correct.

All I did was outline the costs to the US. You would have to also consider the benefits before you could come to a conclusion.

> I couldn't find any mainstream, usually Republican leaning economists, magazines, or newspapers that said it was a good idea.

That's because tariffs aren't a traditionally right wing, "free market" position. This is actually an economic view that Trump shares with Bernie Sanders.

yep. that's what I see too. In addition, Sanders harshly criticized the TPP:

"The Trans-Pacific Partnership is a disastrous trade agreement designed to protect the interests of the largest multi-national corporations at the expense of workers, consumers, the environment and the foundations of American democracy. It will also negatively impact some of the poorest people in the world."

https://www.sanders.senate.gov/download/the-trans-pacific-tr...

And Trump seems to have agreed with that as well.

there are some narrow interests that favor Trump tariffs. e.g. the United Steelworkers Union:

"China ... dumps its excess aluminum and steel on the world market at super-discounted prices. The United States, in conjunction with European allies and others, has repeatedly over the past decade negotiated with China to stop defying the rules it agreed to abide by when it gained entrance to the World Trade Organization in 2001. China repeatedly has said it would. And then it doesn’t."

http://inthesetimes.com/working/entry/21027/union_steel_tari...

“Trump’s steel tariffs cost U.S. consumers $900,000 for every job created, experts say“

https://www.washingtonpost.com/business/2019/05/07/trumps-st...

I didn't say it was good for everyone. You said "The trade war isn't helping anyone." I only pointed out that some narrow interest groups favor it because it's helping them.

There are other inefficiencies in the US economy, jobs that are preserved or are high paying solely because existing laws limit competition, limit participation by potential additional workers, etc

The real issue here is not "Have these tariffs caused our economy to deviate from pure efficiency?" It's "Which special groups are allowed to have their own interests protected and extended by law and by government action?" This stuff is happening all over the economy.

Very similar story with the Obama tire tariff. $926,000 cost to consumers per job saved, plus the loss of 3 retail jobs due to consumers spending more on tires and less on other stuff.

http://www.aei.org/publication/2009-tire-tariffs-cost-us-con...

As usual, when the government gets involved in the market and the economy, with a combination of incompetence and cow towing to special interest, it makes the situation worse.

This is the one thing where I find myself supporting the policies of the Trump administration.

I have to agree. And, while I will hate myself for this, but after Biden's statement that China is not a competition, who I will end up voting for in the next election is no longer given.

Yep, one of the hardest and most important things in life is the ability to agree/compromise with people you have fundamental issues with.

This is one of those cases and his tweet is correct, they can just wait this out until the next election after someone new gets in and we do a 180.

They might be waiting until 2025. That's a long time to wait.

> This is one of those cases and his tweet is correct, they can just wait this out until the next election after someone new gets in and we do a 180.

No. Chuck Schumer, one of Trump's major political rivals tweeted this in response his tweet on tariffs:

> Hang tough on China, President @realDonaldTrump. Don’t back down.

> Strength is the only way to win with China.

https://twitter.com/SenSchumer/status/1125143336837206016

The US isn't going to do a 180 until a pro-business Republican or a Libertarian sits in the Oval Office, and its unlikely that will happen next cycle unless Trump dies or is impeached.

I am with him on this issue but I have strong doubts about him being able to find a resolution. When I look at the North Korea situation, his health care “plan” and other issues he seems to like going in and talk tough but in the end he gets nothing done. I wouldn’t be surprised if at some point China would flatter Trump with some nice words and then Trump would declare “I love China” and forget about the whole thing.

> Trump gets for doing what needs to be done.

Reducing new borrowings and doing dramatic gestures to reduce debt? No, he is not doing that. US deficit shot up dramatically as giant loads of new t-bills went into circulation, and financial players got strong signal on US interest rates.

To reduce the trade deficit, the first thing to do is to reduce the fiscal deficit — a thing that has little to do with trade.

What would you do if you were going to perform an audit of the Federal Reserve?

Lets say that the Fed has not been exactly lawful with the way they sling money. And you know it because you've put someone in charge that could take a look. So you have the justification for shutting it down. Wouldn't you max your "credit card" out if you knew you were going to be able to cut it up?

Trump knows debt better than anyone on this planet. Don't let him fool you.

theres a lot of reasons for someone to look at both what and how trump is approaching this, and rationally come away less-than-enthused:

1. Poor execution & personnel at odds with each other leaking play-by-play details has led to a lot of market fluctuation and difficulty for the market to price in the "real world". Anyone exposed to this gets a first hand look at the monetary cost of this. 2. Real impacts of the tariffs felt by american manufacturing & farmers as well as american consumers. If trump wanted an extended trade war he should have been much more upfront with people & prepared to cushion it. You say it's "some tariffs" but this minimizes real household struggles. 3. General impacts of "losing the people". He's a highly polarizing leader; anywhere from beat street to wall street to pennsylvania ave, people who don't get along with others will find it very difficult to be trusted on any given issue even when they're right. This is a near-constant in life, some people manage to be a net-benefit with that attitude but it's usually by leaning on other crutches like being highly gifted. Trump isn't that person.

The facts say differently:

GDP growing around 3%.

US net exports up about $55b.

Unemployment 50 year low.

Minority unemployment record low.

Non-farm payrolls up by about 3%.

Business confidence (Fed Ind Businesses) highest in 45 years.

(sources)

https://www.whitehouse.gov/trump-administration-accomplishme...

https://www.cnbc.com/2018/09/07/how-trump-has-set-economic-g...

Presidents (of both parties) like to take credit for those kinds of economic results. In reality the federal reserve and what they are doing with interest rates and the money supply is mostly responsible for economic cycling, not the president.

This is not correct. My profession put(s) me in a position to work directly with CEO's nationwide. Trump's election and his policies moved these folks to invest in people, plants and equipment. Fed policy had nothing to do with it. Believe what you will, but I'm relaying to you the ground truth.

Continuing the trends of the last decade.

2018 was not a great year on the markets (regardless of feel-good business confidence in 2018), farms & manufacturing are getting killed by the tariffs. Your facts & my facts coexist in the real world.

Farms are going to see a big turnaround after China's hog famine this next year.

Don't forget that yield curve inversion

Indeed, good work by the Trump admin. here.

I'll bite instead of just downvoting.

> China deserves the pain train for backpedalling.

Fine, I'll accept your premise here. Now, on the flip side:

Why do I deserve "the pain train" for what's happening with China? Why should I and others I know suffer for this?

> I don't understand the hate Trump gets for doing what needs to be done.

Because things for me were good before, and now they are less good as a direct result of things he's doing. Trump isn't doing anything to alleviate that, and if he is, I'm not seeing the results.

Finally, he serves me, so I have every right to demand results. He made lots of promises, and he's failed many of them already.

So answer my questions. Especially with the context of him not saying we'd have to suffer for his failures.

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