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Comment by scarface74 | Hacker News Reader

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.

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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.

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.

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.

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.

> 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...

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.

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.

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