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Comment by gtsop | Hacker News Reader

> Do you have some required reading to share here

Lenin's Imperialism

> but bad for economic growth

Yes, it is bad for economic growth, but this is not the tactic of protectionism. It is in the name that the purpose is to protect domestic production. It is done by forcing competition barriers on external producers

> What is the phase called?

Economic crisis / intense rivalry. US is economically threatened by the rise of China, it has been on the radar for many years. Things have reached a point where US can't just sit there and do nothing as China challenges the global status quo.

> What is this amputation and what spreading is it stopping?

The spreading is the slow but ongoing rise of Chinas economic power. The amputation is thr free-trade bariers

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But even if this works. How is the best outcome achieved for the USA? Take phones for example. Today, Apple design phones in the USA and has them manufactured outside the USA by low wage workers. If the phone costs $1000. That price is the sum of production costs and profits (and other things, but those are negligible for this discussion).

If the production cost portion increases, because of tariffs, then Apple either has to take less profit (shareholders unhappy) or increase the cost of the phone (shareholders happy).

If the tariffs are increased enough, Apple could be forced to move production to the USA. But this only happens if the workers in the USA are willing to work the same wages as external production. If USA workers cost more than external production, then again, Apple loses profit or raises prices.

Am I missing something? Unless USA workers are willing to work for wages as external production (give or take the tariff amount), then this simply doesn't work.

There’s one scenario: if there’s room for more automation, manufacturers might have fewer high-wage workers at a more automated plant. The problem with that theory is that it doesn’t work if the task can’t be cheaply automated (much textile manufacturing falls into this category) or if it’s already being automated. I would be surprised if Apple has that much untapped room for automation but other companies might be able to match costs that way.

It is the best outcome by preventing an even worse outcome, not for the worker of course, for the corporations and the US economy in general.

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