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Comment by Sabinus | Hacker News Reader

Any bets on how this will be justified by Trump voters?

I'm thinking at first it'll be 'playing hardball negotiating tactic' and when it looks like the tariffs are here to stay 'paying more is patriotic'.

View on HN

"These are external taxes paid by the exporting countries. Beautiful tariffs will allow the US to eliminate the IRS and replace it with an ERS".

Basically no point in even having a conversation about it. The same way you don't discuss evolution with someone who thinks the universe is 6000 years old.

This is so frustrating, because of course manufacturing countries aren't going to operate at a loss, so whatever price increase that happens will be paid for by the consumer eventually.

And if they eliminated the IRS because the ERS covers all our expenses, that would effectively mean that we have shifted all of our income tax revenue away from relatively wealthy high-earners to the poor (who currently pay little to no income tax), since the poor have to buy items at the price they're listed.

Who pays the tariff depends on the relative elasticity of supply and demand.

It is extremely rare for manufacturers to absorb the tariffs.

Profit margins in most industries simply aren't high enough to cover it. A business can't absorb 20-25% tariffs if its profit margin is only 5%.

And manufacturing is particularly known for its low profit margins.

So no. I mean, in theory you are technically correct. But the way elasticity works in practice is that the buyer is who pays the tariffs in virtually all circumstances.

This is the case of low elasticity of the supply curve.

Yes, that's what I meant with my last sentence.

Is your reasoning that the supplier has the option of eating the tariff by cutting prices, such that the price paid by the purchaser remains the same?

If they had that much margin headroom available to cut prices by 20% and remain profitable, wouldn't that basically prove that they weren't dumping product in the first place?

What I stated is the textbook definition.

For suppliers with fixed costs there are strong incentives to lower prices to stimulate demand sufficient to maintain utilization where possible. The commodity NAND market is an example of this. The fabs are extremely sensitive to utilization which leads to wild profit and loss swings.

sure, and a good baseline assumption for most consumer goods is that price elasticity of demand is pretty low in the short term, so consumers pay most of the tariff. then in the long run perhaps things change and more non-tariffed substitutes become available resulting in maybe a 50/50 split of "who pays" (after all, the substitutes didn't have comparative advantage before, so are probably a bit more costly to produce). in any case, total quantity sold will be less, consumers benefit less, and suppliers benefit less... but the government does get revenue.

Can you give a few examples of this?

Its very very stupid. Tariffs can work but not like this. A good tariff policy would be targeted at a strategic industry, have a long phase in period, and have a guarantee that it won't be removed quickly. Businesses don't like risk, especially if you want them to commit to building a new factory in the US with a decade long payback period.

well, going to r/conservative, top answer in a tarriff thread:

>To influence companies to produce their goods domestically instead of internationally. What is so hard to understand about this?

So they are stuck in Just World Land.

another top comment linked this: https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-pr...

So they more or less buy into "The extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl"

P.S. more than happy to take suggestions of a better forum representing conservative opinion

r/conservative is a bad litmus test. Between AI-driven bots (read comment histories!), flair-only posts, and chronically online users it's a terrible reflection of the average American who identifies as conservative.

We need to stop reaching for the easiest data source just because we're desperate for a data source. There's a reason great research is hard - mostly because it requires stupendous effort (and funding!) to get reliable results.

>We need to stop reaching for the easiest data source just because we're desperate for a data source.

I agree. Pretty much all internet sources are inherently biased due to response bias, so there's no fixing that without talking to such people face to face (which is a bit hard in my area).

But if you aggregate enough data you can at least start to see some sort of prevailing trends and sentiments. So I am open to better sources and some biased/compromised forums are still better that choosing to be trapped in an echo chamber. I have browsed around on other comments sections from news sources and the results unfortunately make Reddit look like a think-tank.

> r/conservative is a bad litmus test. Between AI-driven bots (read comment histories!), flair-only posts, and chronically online users it's a terrible reflection of the average American who identifies as conservative

Sure, the average American who identifies as conservative just shows up every 4 years and hits the R without giving it much though. Thinking about them doesn't really give us much either.

I think /r/conservative tells us a lot, even if it's not representative of the constituency. The President is driven by memes and is extremely online. The "vibes" in /r/conservative (and on X, The Everything App) are extremely relevant, because these are the audiences Trump plays to.

What ever happened to the free market consevatives? The ones who were proud to work with Clinton to pass NAFTA in the first place.

Heck Trump himself negotiated USMCA his last term and is now apparently reneging on his own agreement?

"A Trump never keeps his word"

"A Trump never pays his debts"

I don't know if it's dementia or if Putin has compromising info on him, but he seems intent on speed running the tearing apart of the west.

They got tired of nonsensical progressive social policies and threw in their hat with a politician that wins, a lot.

Pre-Trump the 2nd, it seemed to me that conservative view-points were being “shouted down.”

Anecdotally I recall even on HN conservative views weren’t looked too kindly.

Remember that Google engineer who had an odd-take about less qualified Googlers, and getting ostracized for it?

I never particularly thought of "free trade" as a conservative policy. I thought it was fairly bipartisan that large corporations want to get the cheapest prices for stuff (which often is not within the US).

Clinton wasn't able to get a significant number of his own party to vote for it while significant numbers of republicans supported it. At the time free trade was a rebuplican talking point and many democrats opposed it.

Because NAFTA is the brainchild of Reagan. Bush Sr worked out most of the policy with CA/MX. Finally, Clinton signed it into law, with little influence on the policies overall.

Clinton pushed congress to pass it. He may not have had influence to the content (this is false - he added two amendments and had opportunity to restart talks on anything he cared about, though he may have decided some things were not worth bothering with it was still his choice) but he used his influence to get it passed in congress. It was his right to refuse to send it to congress.

As far as I am aware, Free Trade was a clinton era policy, which sparked globalization. Yes it cost American industry jobs, but gave rise to a significant boom in non manufacturing jobs.

Free trade and globalization have been around a lot longer than most of us here have been alive, maybe all of is

It has been a rising tide that lifts all boats on our blue marble

All of us, presuming that there's no-one here aged over 200.

I hear the bicentennials are happily collecting social security or serving in congress

The FTA was Reagan/Mulroney era policy. It was enacted by conservatives on both sides of the border, and the liberals on both sides "opposed" it (and then had a religious conversion once they took power again, and supported its successor, NAFTA).

The 88 election debate in Canada is famous for the confrontations around this topic. I was in my early teens it was the first election debate I remember watching and having strong opinions about.

"Free trade", as a named policy position, goes back to the 19th century, though as a _thing_ it's somewhat older.

In particular it was a major political controversy in the UK for most of the 19th century.

Nothing says “I need to relocate my supply chain” like 24 hours of tariffs

I didn't formally verify it, but during the Russian internet blackout, r/conservative was very quiet. I assume that the responses you read on that forum are not from actual US conservatives. After reddit purged most conservative subs (in 2 waves, when Trump 1 began and when Trump 1 ended), I don't think you'll find any conservative subreddits.

Unfortunately, I haven't found a forum that's accessible and with lots of conservatives. You have some on X and you have YouTube channels. Both are harder to engage with.

Reddit purged them due to infections by what you complain about for /r/conservative.

Plenty of videos around, default rethoric is to 'give them time, they said it would hurt at first' which sounds awfully close what people in abusive relationships would say now that I think about it.

It also sounds like delayed gratification.

Masochistic edging, perhaps.

Or just very stupid, hateful losers.

There's already talk about the tariffs being curtailed tomorrow. Which got the stock market all hopeful at end of day.

Which I'm sure if this happens, will be accompanied by some bullshit claims of some concessions he supposedly obtained.

And a lot of people in-the-know who made easy coin on the stock market today.

And his followers will eat it up. Last month there was all sorts of blather on social media about how "Trudeau caved" because "Trump strong" etc. despite Canada simply re-iterating the same position it had had since December.

It's hard to overstate how pissed off Canadians are about Trump's threats to annex Canada through economic bullying. People I know who have never boycotted anything are now boycotting US goods and services. There will be long-term consequences even if it's walked back tomorrow.

100 years of friendship thrown away by a demented Russian asset president.

Its a brand equity bonfire.

Yeah I am generally not a nationalist by conviction or intellect but this stuff has me tearing up to the national anthem and putting stuff back on the shelf at the grocery store.

Classic Elon Musk securities fraud to publicly declare things, whether true or false, which move the market.

Oh, we've already seen it. I believe Fox News has already come out and said it's "patriotic" to pay higher egg prices.

We live in a post-fact world. There are no principles in play. The key organizing principle of this society is cruelty. Truth is simply what powerful people say it is.

And there's no opposition to any of it. Our supposed political opposition is way more interested in crushing progressive sentiment and voices within their party. They are completely complicit in what's now going on.

Fox - remarkably - were explaining that it would in fact make most things much, much more expensive.

I think support is ambivalent, at best.

A few people are going to short hard and make out like bandits. But all-party social unrest on a huge scale is going to kick off long before they can fulfil their dream of buying up the entire country for pennies.

Cooler heads understand this.

R/conservative on reddit has some real time spin on everything

My irl interactions make it seem like they're not even aware of what's been happening

Not sure about the higher prices, but the coming recession is being talked about in MAGA circles as a correction and a fault of the Fed.

I did start wondering what Trump (or any leader with loyal supporters) would have to do, or what outcomes supporters would have to see, to lose support.

The leader can do no wrong. All its decisions are justified and without nuance. The idea of questioning the logic doesn't even exist. It's a cult.

I haven’t paid attention to the politics here much, but isn’t driving up the price the point?

If you charge Canada a 25% tariff then products sold in the U.S. and shipped from Canada should cost U.S. consumers about 25% more. That, in turn, makes U.S. products look more attractive. A U.S. business pays taxes at the federal and state levels. A U.S. business also hires U.S. employees, who pay taxes as well and spend into the economy.

I’m sure I’m way over simplifying this, to the point of stupidity, but tariffs raise prices on foreign goods to encourage the sale and/or development of local goods, don’t they?

> I’m sure I’m way over simplifying this, to the point of stupidity

This is, to an extent, the problem, yes.

There are plenty of problems, but here's one very obvious one; your own industry almost certainly depends heavily on imports, particularly if you're a developed country. If you basically only have primary industry, then this sort of protectionism can _theoretically_ work and allow development of secondary industry (though in practice there aren't many examples of this), but for a developed country it really makes very little sense.

You're also assuming that local industry _will_ compete on price, versus just accepting the newly-set tariff-induced base price. That will happen in some cases, but not all; in particular for near-monopolistic industries (cars, a lot of heavy consumer goods like kitchen appliances), really, it makes a lot of sense for them to raise their prices under such circumstances.

> I’m sure I’m way over simplifying this, to the point of stupidity, but tariffs raise prices on foreign goods to encourage the sale and/or development of local goods, don’t they?

What about all the businesses that export products or the ones that rely on imports. Businesses go bankrupt, prices go up for everyone and less people have jobs.

We had to bail out soy bean farmers last time to the tune of $25B. That's just one instance of how they backfired and did more harm than good

Way over simplifying.

A study was done on washing machine prices during tariffs of the previous Trump administration. Rather than undercutting foreign goods on price, local manufacturing raised their prices to absorb extra profit. As a kicker, the price of dryers also went up even though they were not subject to tariffs.

The US and Canadian economies have become deeply intermingled over generations. Many materials cross the border multiple times on the way to becoming finished goods and will be subject to tariff each time. There will be 2nd, 3rd, and 4th order effects for a long time even if these tariffs go away quickly, not to mention the poisoning of the closest relationship between nations the world has ever seen.

My fellow Canadians are horrified and enraged at the tariffs that amount to economic warfare and the continuous violations of our sovereignty. I have never seen the whole country this united on anything before. Canadians are furious and every grocery store has American produce rotting on shelves. We will not forgive and forget quickly.

https://www.aeaweb.org/articles?id=10.1257/aer.20190611

>Rather than undercutting foreign goods on price, local manufacturing raised their prices to absorb extra profit.

For another source on this point quoted above- (and for people that prefer video explainers) the wall street journal covered how domestically produced washers/dryers went up in price after those tariffs: https://youtu.be/_-eHOSq3oqI?t=102

Depending on elasticity of demand and supply it will drive up the US made products (if they exist) at the same time.

Also encouraging people to produce the stuff locally only works if they can rely on the stability of the market.

Plus there's an intrinsic advantage that exporters in lower wage zones have over the domestic market. US workers are paid more than Canadian, and certainly paid a hell of a lot more than Chinese ones. So whatever is made domestically is just intrinsically more expensive.

You can make an argument for protectionism and self-sufficiency on various basis. But you can't make a good argument for erratic and sudden and unreliable protectionism.

50% of fruit sold in US, and 60% of vegetables come from Mexico. How is US going to replace that in winter?

That is the theory. But there is no incentive for US manufacturers to compete on price. If the product from China costs $100 (including the tariff), the same product from US will be $99.99. Selling it any cheaper would be stupid.

That would only be conceivable if there was a single domestic manufacturer. You don't need a foreign product to keep prices honest in a competitive domestic market.

You do, actually. Countries that have succeeded with tariffs to "build an industry" eventually forced their companies to compete in the foreign market (look at Japan and South Korea) so that they would not be fake leaders.

These markets produced actually competitive businesses that thrived and outcompeted the market leaders (US and European companies) in multiple industries. So if you keep tariffs forever you end up with Russia or some other backwater where people are forced to buy shitty goods because you have no access to external markets.

The computer market in Brazil, for instance, was like that. Most of what we had were pirated hardware, because there was never an effort to create a real industry in the country, they would just copy and paste whatever was available out there and "launch" in the local market, so even with years of tariffs and protectionism the country did not produce any player in the computer manufacturing market.

See the Soviet and East German automobile industries, and to a large extent the British one pre-European accession. Hideously outdated and uncompetitive, years behind the rest of the world, and both vanished practically completely when the protectionist systems which kept them alive collapsed. When the government more or less makes people buy your shit no matter how bad it is, on the basis that it is the only option that isn't taxed into oblivion, there is little incentive to make it good, and in practice this does seem to hold up to a large extent even when there are a few local competitors.

This isn't 'wrong' but only accounts for a two party market.

That's interesting, so, prices might not drop to pre-tariff levels, until not just one, but many, manufacturers appear in the US, and start competing on price (well, obviously, I guess some would say)

The economic answer is 'it depends'.

The other replies missed a big issue with the tariffs - which is that you're not wrong, but tariffs basically guarantee counter-tariffs, which means that while you're no longer buying imports, you're also no longer able to competitively export. In the case of Canada, if you don't include raw resources, the US has a trade surplus, so tariffs make the inputs of your value-added-over-raw-resources local goods more expensive while also cutting down the export market.

It's stupider than that - a lot of people believe that the manufacturer will just eat a 25% hike in tax. Build a tariff wall and make China pay, as it were.

Don't forget retaliatory tariffs impacting exporters. See

From "Donald Trump’s tariffs will bring ‘nothing but pain’ to rural America, farmers say - " https://www.ft.com/content/ba4569d3-3c54-47d9-90af-125751434...

"Trump’s last trade war, with China in 2018...led to $27bn in losses for US agriculture, according to estimates by farming groups..farms received as much as $23bn in compensation from the federal government"

If tariffs are such a great idea, should California slap tariffs on Florida oranges to protect its domestic orange growers?

Oh they would have tried if it wasn’t for that pesky commerce clause in the constitution

They also raise the price of local foods because the materials they import cost more.

The time and expense to set up a manufacturing line for anything nontrivial is large. And Trump's policy volatility makes the risk completely not worth it.

Yes, but with Trump you have to wonder if the tariffs will be reversed in three weeks when he has a change of mood. So it may not drive long-term investment in factories and supply chains, just a short term advantage for companies that already have local product.

> That, in turn, makes U.S. products look more attractive.

Unless they raise prices to get better margins since their competition has higher prices now. This is exactly what happened with Trump 1.0 tariffs: foreign product prices went up and so did domestic ones.

> A U.S. business also hires U.S. employees, who pay taxes as well and spend into the economy.

It takes time to on-shore, and until that happens the public is paying higher prices, potentially for a few years. So you take the total higher prices, and divide by the number of jobs created, and you can get the price per job. For washing machines it was $800K/job:

* https://www.nber.org/papers/w25767

There is an argument to be made that production capacity is strategic asset of course:

* https://www.noahpinion.blog/p/manufacturing-is-a-war-now

"Tariffs will save the free market!" or some other typical contradictory blather.

When your'e deified, "god works in mysterious ways" sort of thing...

Fascism is not and never was about ideological coherence.

I read an article, can’t find it now, that the Christian right believes Trump is basically a biblical messiah like Cyrus the Great from Isaiah 45. Basically a nonbeliever who God controls to help his people.

People believe what they want to believe.

No, it will be Biden’s fault for ruining the economy and causing inflation. Trump didn’t have a choice, just trying to save the economy really. Doing what’s best for the people.

Trump promised to lower inflation and eggs prices. Are those lowering?

I’m answering a question:

> Any bets on how this will be justified by Trump voters?

This is not what I believe

Imagine actually believing this. Contrary to every economist and qualified takes.

I’m answering a question:

> Any bets on how this will be justified by Trump voters?

This is not what I believe

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