Yeah, isn't this just regressive taxation?
How much all the imports are realistically going to be made in the US?
How much all the imports are realistically going to be made in the US?
Because, if you think about it, it took decades to get us to where we are today and it'll take decades to reverse, even logistically. This is a bunch of stupidity and meaningless saber rattling that will do nothing but hurt everyone except the extremely wealthy who can afford the additional taxation on the consumer side because the Republicans will further reduce the taxation on the income side.
In 3 decades, the US won't be the biggest market for most products - sooner if the harebrained economic decisions somehow persist.
Capital knows no borders, and American companies will "do the needful" to maximize profits wherever they may be found.
Those statements are offered as truism ( and they do sound true enough ),but are they anything more than a hopeful assertion? I won't go into too many details, but I think it is not exactly axiomatic. It may be have been 99% accurate in the post-world war new world order, but, needless to say, that has shifted.
We can argue over whether it is a temporary pit stop or a longer term change that is likely to remain its place, but 'capital knows no borders' has its place along other otherwise useful phrases such as 'bet you bottom dollar that tomorrow there'll be sun'. As in, sure, but it is more of an expression of our wants, not an if/then scenario.
The Panama papers, the Double Irish sandwich, and the US government pressuring the EU not to tax American tech companies all say otherwise. More prosaically, the average non-resident, non-American has a much easier time registering a Delaware LLC than attempting to get an American work visa.
> It may be have been 99% accurate in the post-world war new world order, but, needless to say, that has shifted.
Trump has proposed a green-card-inspired "Gold Card" for rich Russians^w investors to skip the immigration queue. Lot's of countries have investor visa with fewer hoops to jump than work visa. I don't see this changing any time soon. If you have the capital, and hint that you're interested in investing $1M+, most countries will roll out the red carpet for you.
> As in, sure, but it is more of an expression of our wants, not an if/then scenario.
To be clear I don't want labor to be more restricted than capital.
It is an interesting argument to make. Given current efforts to reshuffle existing system, those may no longer be available. Let me ask you a hypothetical instead: if those 'ways' are gone, is it automatically a given that new ones will emerge? If yes, why? If no, why?
<< Trump has proposed a green-card-inspired
I don't want to write too much of an obvious comment, but.. how is it different from existing pre-Trump green cards sold to interested parties ( with lower price tag, but I am not asking about the price )? Is the existence of the card proof that capital has no borders or of something else? Is it inherent? I am now genuinely curious about your internal world model.
It's important to remember those were not the only ways, they just happened to have be the most effective, and became notorious because of it. Tax havens still exist, and we are still far from taxing corporate in the same stringent ways we tax individuals. The fact that governments only chipped at the edges with no systemic changes is telling.
> I don't want to write too much of an obvious comment, but.. how is it different from existing pre-Trump green cards sold to interested parties
You need to be specific about how green cards are currently sold before I can attempt to explain the difference. Further, if there is no difference IYO, then why is Trump proposing something new?
I was personally referring to EB5[1]
<< Further, if there is no difference IYO, then why is Trump proposing something new?
Eh, I have a personal theory, but that one will likely need some time to confirm. The shortest, handwavy way I can offer is politics ( and separation/differentiation from existing EB5 ), but I am open to alternative explanation.
[1]https://www.uscis.gov/working-in-the-united-states/permanent... [2]https://legalservicesincorporated.com/immigration/minimum-eb...
<< It's important to remember those were not the only ways, they just happened to have be the most effective,
True, but I am questioning how much some of this stuff will be increasingly challenging to evade. The fact that beneficial owner version in US was effectively scrapped suggests the AML regimes were getting pretty close to the issues you were referring to. And, as always, conversations within the industry players are discussing more monitoring, more data.. not less.
<< The fact that governments only chipped at the edges with no systemic changes is telling.
That is true, but it does not prove that capital has no borders ( original point of contention ).
Which is easier to execute: legally investing on a goat project on Mongolia or Djibouti over 2 years vs legally living there for 2 years?
It's self evident that there are far fewer hurdles for capital to transcend national borders than people. I am not certain if your argument is that the existence of minimal friction proves that there are borders for capital. If so, I'll concede that capital crossing market and judicial boundaries will encounter some minor bumps - typically from the country of origin. This heavily contrasts with labor, which faces significantly more resistance, and the resistance is from the destination country/market/juridiction. Would you agree with "Countries bend over backwards for capital inflows, including from individual investors"? It's a mouthful, but perhaps expresses the same sentiment.
I think so. It sounds closer to what seems to be happening. In any event, thank you for this conversation.
For the US / Euro, yeah you can just digitally wire say $ 150 million no problem. You just can't physically fly out with a suitcase of $100 bills.
This is not true for something like China [1].
The counter-topic is usually Labor. You very much cannot just go to the US and work but you could from China invest in a US company. So Capital knows no borders while Labor does.
[1]: https://www.tradecommissioner.gc.ca/china-chine/control-cont...
I don't understand why people take this as a given.
Tariffs are a two-way street. What incentive does a company have to move a billion dollar facility to the USA when it will face reciprocal tariffs on any exported goods from the USA?
The calculus is pretty complicated. Economies of scale become a factor - is one large global factory more efficient than separate regional facilities? Also income disparities; Americans can more afford to pay a 25% premium on a good than most of the rest of the world can; so maybe you just make Americans pay more. Or, maybe you do both, have a world-wide facility and a American facility, but still charge Americans the tariff premium, and pocket the 25% as profit instead (steel producers model; also pickup trucks); this works well in conjunction with the USA's low business taxes.
Then there's "hacks" like shipping goods to a country that has lower tariffs with the USA, then using cheap local labor to do the bare minimum to have the goods considered to be produced there. There are some obvious good choices here, supposing the country's leadership is willing to play ball into the ninth inning.
So it's not a given that that long-term effects are increased domestic production. It's just as likely to be a siphon of prosperity and a impediment to wealth generation since it will be hard to start companies in the USA that export products.
Access to the richest single market in the world ?
Huh? It really is. There's free trade and free movement of labour. How is it not a single market?
It's a lot better than having to deal with each county individually but still way more overhead than US.
1. California has 10 million Spanish speakers 2. Every state has its own regulations and legislation (and taxes!)
But I don't think you would try to make that argument... right?
Free movement of labour and goods make a single market. The other stuff is just normal operational costs of doing business.
Also, and you know this: most of the EEA uses the Euro; the countries that don't are exceptions
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Well what do you know, you're a big fat liar :)
How long do they stay the richest single market in the world if rest of the global world are producing and trading at greater efficiency while the US are facing large short term supply disruptions, higher costs and reciprocal trading tariffs on their exports?
This is going to catch up to most countries very soon. The US will be in a small group of the ones last standing.
Please brother, don't make me imagine a world war with nukes. The whole world is going to collapse, It would take us atleast three century back and it would be the darkest chapter ever.
I think there are some really smart people in the world. We can use them to create beautiful discoveries. Seriously, it sends me shivers thinking of a world war, but it may happen, and I have no control over it. I have to just watch the world wither away.
Their population pyramid looks good though compared to China:
https://www.populationpyramid.net/united-states-of-america/2...
https://www.populationpyramid.net/united-states-of-america/2...
>how do you justify labelling a birth rate that's been below replacement for 18 years as "OK"?
The US being a nation of immigrants has this unique selling point of attracting people to make up for their woes such as birth rate. Unless we see millions of citizens getting deported, the people "voluntarily" relocating don't move the needle in this metric.
That’s also before you get into the fact that stopping immigration into the US doesn’t make those people disappear * , they’ll immigrate to other countries or stay home may very well cause some countries with a declining population to stop or reverse that trend
* Not en masse anyways, that’s come later as more of a final solution
US: https://www.populationpyramid.net/united-states-of-america/2...
The current admin is saying they are going to stop immigration. I don’t find it comforting or plausible if you’re telling me that we have to wait and see because they might fuck up one step of their plan and that’ll make the other steps less painful
India has an overpopulation issue. In India, we literally have more people than jobs. So you guys could just tap into India.
China is also similar, except it has outgrown its master. So I can understand the mistrust. But america put tariffs on India as well which is just ... funny.
Also if america really falls into a recession (60% chance, like I mentioned in my other comment), how much do you think the US would be doing "OK"
I think what the US is right now, is failed democracy. I mean, I used to hate my government, but it was because of their political views/ I just felt that a tiny change in the Indian system is needed (like Media , incentives for middle class), I have hope in India. India can truly change if need be.
I have no hope for america.
By whatever mechanism, imports are now more expensive, leading to less demand. Demand for those products actually stays constant, but the demand for imports goes down.
Now we have a niche. If you can produce a good locally for less than the net cost of import, you have an entire continent ready to buy from you.
The reason this has historically gone the other way is labor costs. Factoring the entire global supply chain into your product, it makes much more sense to do the work in a country where work costs less. If the additional cost to import is less than the delta on labor, you've won capitalism or something.
Or, take another angle. If the US can no longer import vital goods, what do you think will happen? Will the goods magically stop being vital? Will we sit on our hands for several decades and wait for the problem to resolve?
Or does the market respond to a need and rearrange itself to provide as profitably as possible?
If you reply with "but surely BASIC INCOME" then I must ask, what are you personally doing to help make that happen?
As for UBI, who is going to provide the money? I've never heard anyone talk about how that is supposed to work. YOUR comment is the first time I have ever heard, well, read, that point brought up. The government can't pay for UBI because there will no longer be a tax base of income earners due to lack of income. Companies can only contribute to the extent that they have customers. I suppose that a super-efficient, low labor economy could be almost entirely export-driven but that assumes the rest of the world isn't in the same situation.
We could also acknowledge that money is a fiction; money is continually created by the banks under the authority of the government, and money can just be destroyed when it’s taxed instead of thinking it has to “balance the federal budget”. “A dollar” is not tied to any physical store of value but we still love to pretend it is. It’s just a fraction of the overall economic worth of the entire US, and entirely too many of those fractions are in the hands of huge bags of money pretending to be people.
Or we could just ditch “money” entirely. Add things like “lodging” and “food” to the Bill of Rights. There’s probably a lot of problems with this! And a lot of them probably rhyme with the problem that some people just really want to become big bags of money pretending to be people!
Bezos makes ~8mil an hour according to some quick Internet searches and that sure is way over the "giant bag of money pretending to be human" threshold IMHO. The idiot-in-chief is worth ~$5mil and he sure is way over that threshold too.
No - consumers will just eat the cost like they did during COVID.
>> Or does the market respond to a need and rearrange itself to provide as profitably as possible?
rearranging itself will mean leaving the status quo, and passing the cost to consumers. Do you think companies are going to jump to spend millions of dollars and 1 year+ to build factories to work around something that might change in 6 months, or even 4 years ?Yes, you've won capitalism, but sometimes, profit is a lower priority. Resiliency and the ability to avoid critical supply chain dependencies are important too. We learned that during COVID, when we only had one facility to make baby formula in the U.S., and we had a dire shortage of masks, gloves, etc. because we imported it all from China.
Another aspect of resilience is avoiding long attenuated supply chains, even if it is cheaper...for now. Why? Because there is a finite amount of fossil fuels (necessary in greater amounts for non-domestic maritime and air transit). Also, lower fossil fuel usage due to in-country sourcing would be better for the climate. I realize that the Trump administration isn't concerned about that! But it is true regardless.
25% margins are huge. Sounds like that margin is someone else's opportunity....which is exactly what the Administration hopes will happen.
There is an opportunity here: Cozy up to Trump, have him give you a ton of government money and spin up a company that will take those margins.
It's not about efficiency. Companies in the US only build and ship their products from the opposite side of the planet because over there they can abuse the local slave labor and pollute the environment in ways that would never be accepted in the US. Even when they could easily afford to by accepting less profit, they aren't going to move production to the US when it means they can't take advantage of those things.
That reason will be that he and his pals have already bought up all the stocks that are crashing or the businesses that start failing all at insanely low prices which they can sell off for huge profits once the tariffs are reversed and their value returns to normal.
That's the European Union, with no tariffs within the EU, moderately high tariffs at the EU border, and few policy shocks. The EU plugs along, with somewhat protected industries, moderately high prices, good quality, and some export business.
I've this assertion made here multiple times. The LLM's tell me the average tariff on goods coming into the EU is 2-3%. That's not what I would call "high". The tariffs imposed by the current USA administration start at 10%, and range up to 54% for nation it imports most from (China). Now that's what I would call "high", although if you are going to call 2-3% moderately high then you need a better superlative - perhaps "extreme".
Actual sources of information give you 1.39% [1]
[1]: https://data.worldbank.org/indicator/tm.tax.mrch.wm.ar.zs
The world followed the lead and it just wanted reciprocity (exclude the enemies of course). What seems fake to you and who is getting scammed by who?
And why do other countries keep doing it if we are the ones getting the better end of the deal?
The PRC has strict controls of their money because that is how they can became the factory of the world. They played the hand that were dealt with and battled adversity and they are reaping the rewards.
The president said today that the US trade partners and allies/friends have been taking advantage. You can easily verify if that is true or false. US capitalists moved production overseas to make more money at the expense of the local workers. That's the scam.
Ths USA was the number one economy when Trump pegged us.
You are too smart to actually not get this. You call it fake as if money isn't just made up 100% fake 'value units' we all agree to pretend (thus making it real) is real.
For all of the whining about the previous tariffs from the first Trump term, or the TCJA, neither were repealed when democrats had the opportunity, although there were small adjustments. That should really tell you all that you need to know.
It turns out that manufacturing jobs are better for supporting a family than service jobs, hollowing out our economy so there are far less good paying manufacturing jobs turned out to be a huge mistake, originally pushed by CFR, Cato, Brookings, etc. so the only people who are doing well are the rich, because the benefits of global trade accrue almost exclusively to them (although many CPI advocates will make the argument that you’re better off now because you can own a nice cell phone even though you can’t own a house)
The public BSing goes the other way too of course. Imagine getting worked up over classified stuff on a private email server and then letting your cabinet use signal and Gmail.
Why? I hear this implied, or outright said in your case, frequently with no backing for it. It seems like a truism.
So, this chart has job numbers and count for the following resource extraction/manufacturing related fields with the following average hourly pay and the number of people employed in that field today:
Manufacturing: $35.16 - 12,746k
Mining and logging: $40.33 - 623k
Construction: $39.24 - 8,313k
Transportation and warehousing: $31.19 - 6,738k
The weighted average of this category is $35.53 per hour.
In general, these jobs can mostly be performed without a college degree.
Contrast that with service jobs that can broadly be performed with a college degree:
Retail trade: $25.18 - 15,595k
Leisure and hospitality: $22.75 - 16,991k
Other services: $32.39 - 6,036k
The average hourly rate for this class of jobs is $25.24.
So, on average, manufacturing and extraction jobs not requiring a college education pay 40% more than service jobs of the same requirements.
I'm not one of those people like the top poster who thinks that everyone can just go get a college degree and become an accountant or a nurse. I think there are a lot of people out there who can follow instructions to work machinery reasonably well, but aren't going to be a great fit for jobs that require a substantial education. These people are the majority - about 62% of US adults are not college educated. We either owe them dignified employment, or in a democracy, we will suffer their wrath.
This feels sarcastic?, but I'll assume it isn't for the sake of the conversation and since that's easy to misinterpret over text
> In general, these jobs can mostly be performed without a college degree.
> Contrast that with service jobs that can broadly be performed with a college degree:
Are these not apple to oranges comparisons? "can mostly be performed without a college degree" and "service jobs that can broadly be performed with a college degree" seem like different buckets.
On top of that "can broadly be performed with a college degree" means nothing. You could describe people in comas as being able to "broadly perform a coma with a college degree". Especially when retail is being pulled up as one of the major buckets.
>So, on average, manufacturing and extraction jobs not requiring a college education pay 40% more than service jobs of the same requirements.
Yea again, this is disingenuous. You're now comparing "manufacturing and extraction jobs not requiring a college education" with "service jobs of the same requirements" but mere sentences ago you were bringing up data on manufacturing jobs that _did not_ need a college degree, and numbers on service jobs that _did_ need a college degree.
I know believe the numbers in this link aren't matching up with this conversation because they are logically inconsistent
Wasn’t my intention but maybe I was laying it on thick.
I misspoke, the service job categories I referenced can be done withOUT a college degree, that probably should have been obvious because it included the categories “retail” (which, as you noted, can be done in a coma) and “hospitality” - but wouldn’t it underscore my point even more if you could make more money in manufacturing without a college degree than the largest sectors of service, with a college degree?
I didn’t include the service categories that require substantial amounts of post-secondary education such as “healthcare” and “financial.”
Anyways now you’re calling me disingenuous so I’m going to disengage. I hope despite a small mistake on my part, you can still see my point. Have a nice life!
They are talking about getting rid of jobs like journalist, software engineers, accountants, and various other jobs that require college level education as long as its something they associate with some nebulous intelligentsia that they have identified as their enemy
1) The resulting industries are only viable under the tariff regime so we have to keep it forever or until the production costs somehow equalize.
2) Who's going to work all these new jobs with the plan of reducing immigration drastically or practically eliminating it? We're only at 4.1% unemployment today. Are we supposed to baby boom our way to enough workers? While costs are jacked through the roof due to the tariffs?
Only for the internal market. America will never again manufacture steel or cars for the rest of the world. The days of America being the factory of the world (which really only lasted a few decades) are forever gone.
For some of the hardest hit locations, very little. The US would have to invade and claim other countries to start producing, for instance, vanilla or coffee (the US essentially doesn't produce vanilla, and for coffee we grow less than a percent of what we consume). But Madagascar got hit with 47% tariffs.
If it funds tax cuts for the extremely wealthy then potentially its going to be a colossal shit show.
Meanwhile countries are raising barriers against US exports and those losses will need to be made up with increased domestic demand. It is a very brave experiment.
My layman concern though is that these tariffs are not going to be stable enough to convince daddy warbucks to build a $10m factory.