Tariffs only make sense to protect a fledgling domestic industry which is already receiving investment. Even then, does anyone think that for instance US car makers will suddenly be competitive globally?
Yes, profits and growth may not be optimal. But it’s like complaining your 401k isn’t doing as well as it could since you’re paying for healthy food and a gym membership.
That being said the manner trump is implementing these tariffs is ridiculous. They should be slow, meticulous, and announced far ahead of time. These seem optimized for chaos and are likely aimed at political goals (see TikTok and China already) or simply crashing the market (wouldn’t be the first time Bessent has profited off a financial crash).
The main lesson they learned from Trump's first term was that they were better off making big changes and fixing what they broke later. Moving slowly seemed to make it too easy for "the machine" to stop them as it were.
I don't say this as the right lesson to have learned or a good approach, just an observation.
If he would be dictator in 3rd world country, half of his military or personal guard would want to kill him. Then you have lone lunatics or just very motivated people with a good rifle and scope and skill to actually use it for a precise 1km shot. I bet he already pissed off few thousands of those since he very intentionally harms USA as a country and its citizens. Yes millions in gun community, nra etc would eat their shoes before thinking negatively of him, but that's not whole armed community in USA.
I will say, though, that I'm not repeating anything that needs to be acknowledged as fiction. I don't think it is a fiction that Trump and his team learned to move fast and break things because moving slowly will be stopped. That doesn't mean his lessons are learned based in fiction, only that their learning the lesson itself is not fiction.
Tarrifs aren't going to change that.
We don't live every family in a house miles away from work, schools and friends. Many of us live in cities, within flats, with lines of metro or bus close by. Our children go walking to schools. Roads are fine and maintained so regular vehicles can be used instead of 4x4, bikes are respected. Roads have sidewalks to walk.
Also in Europe in the west we have narrow or paved historical roads, and in the east we have many poor quality roads. In both cases smaller (non-huge) car is beneficial.
If you come from somewhere like the USA, Canada or Australia, it's hard to imagine that's even possible. Actually, it isn't possible in the suburbia's those countries have built to house their people. But it turns out it is not just possible if build your cities differently, it's better in some ways. It costs less because there are no cars, you waste far less time in commute, and its healthier because people get more exercise (they use their legs to move around).
"They have ditched cars" is an exaggeration of course. A lot of them still have cars. But most days, they won't use it. Daily commutes are done on foot, or bike. Long distance commutes have a public transport leg. It's hard to get your head around unless you live there for a few weeks.
Car culture is recent and pretty uniquely American. I lived in a pre-car city with a lot of ~8ft lanes and "double lanes" that were converted into one-ways to accommodate modern cars and trucks.
It's true they predate them, but then so do most American cities. When the car arrived the American cities opted to expand their cities, giving everyone their own block of lawn to live on. The European cities could have expanded in the same way too. Utrecht went as far as to build freeways to make it possible. But in the end, they opted not to and Utrecht in particular turned their brand new freeways into canals.
> Car culture is recent and pretty uniquely American.
American certainly has it's own unique culture, but I think we are discussing a specific characteristic of that culture which it shares with other countries like Australia, Canada and New Zealand. The density of most cities in those countries is so low owning a car is mandatory. Existing without one is almost impossible. I know because live in one. Quoting a Japanese exchange student who lives with us for a while - to her surprise even with two cars getting to everywhere we had to be in an average week was a major logistical exercise. In the countries @n3storm is talking about, car ownership is completely optional.
Cities center are transitioning to no-cars, so paved historical roads is not an issue.
Europe is quite a mix also, maybe is an issue in your area, not in Spain.
e.g. London.
And it is a bad thing for cars. It's just not a bad thing for people, because good alternatives to cars exist.
Even among the American general populace, most have traveled to a country besides Canada.
A majority of Americans have traveled to two or more countries:
https://www.pewresearch.org/short-reads/2021/08/12/most-amer...
It became a bit of a discussion point during the ride with the those I visited.
Infact Tesla is (or was) best selling car in Norway and UK too.
European governments may be reluctant to put a tariff on Tesla because of Elon Musk's political association with the Trump government. This is literally how fascism works, and appeasing the bully is distasteful, but that's realpolitik. It will be up to European consumers to reject Tesla because the brand is now toxic.
Horrible parent, horrible boss, racist spoiled nepo kid out of touch with reality with gigantic ego, who grew up in apartheid and evidently took not so good lessons from it... I could go on, it was out there for all who cared to look. Most didn't due to his stellar successes.
Edit: relevant links
https://apnews.com/article/trump-tariffs-electric-vehicles-a...
Datacenter space in Canada is now suddenly very appealing, you can put machines there directly from Asia without paying tarrifs, but still get good network latency into the US
This could explain why, for instance, poor countries use tariffs on goods that have no chance of building a local industry.
Tariffs may work towards an isolationist goal of producing and consuming our own goods. Tariffs are an attempt to unwind globalization though and disconnect our markets from the rest of the world.
Whether it makes us more competitive globally is really a non-goal. It could happen if our resources, labor, and manufacturing costs are lower than other countries but that's extremely complex to predict even if you wanted to try.
Free trade has its own set of negative consequences. Namely that it’s good for owners of the means of production but not for the workers.
What’s interesting to me is that tech is effectively the last “American made manufacturing”, and the relative lack of outsourcing (compared to other forms of manufacturing) has kept tech workers powerful.
The same logic of h1b workers weakening the American citizen tech worker, applies to free trade.
Its at least the largest industry manufacturing here, I'd expect.
I have friends that work in manufacturing in the US though, it does happen.
One, for example, runs a family business making steel buildings and storm shelters. They use American made steel if I'm not mistaken, I'm less certain about other inputs like the paint or equipment used (certainly the welders, heavy equipment, etc are foreign).
Another works in the automotive industry. Parts come in from overseas and we largely just assemble vehicles here today, but I'm not so sure how different that is from software.
I write code on foreign hardware that runs in someone else's server farm also running foreign hardware.
Hell, when Microsoft was still shipping software on CDs you may have noticed a little fine print mentioning the Caribbean island on which the disc was technically manufactured. US employees designed the software, but for tax purposes the manufacturing technically happened offshore.
Software is a huge industry, but it is still heavily dependent on globalization.
I don't recall this at all. What software was it?
Going through my box of ancient software, they all either say made in the US either on the CD/DVD or on the packaging, except for a copy of Office 97 and Office 2007 which says made in Puerto Rico (which is the US).
They certainly had CDs pressed in other countries for foreign markets. I imagine some foreign made laptops might have come with CD/DVDs pressed in those countries.
I don't recall if Windows discs were printed outside the US, though I do believe binaries were compiled and signed outside the US.
All six versions of Office I have seemed to be made in the US. They're all retail copies however.
At this point I'm not even sure that is true. I think instead we'll just see the "cost of doing business" passed along to us consumers.
In addition it’s precisely because of tariffs (of which there have been many on cars and SUVs long before all this) that we have tons and tons of foreign brands actually building cars in the US.
Do European car makers build in the US? Yes. Is that going to change? I don't think so.
Do US cars sell good in Europe? No. Is that going to change? I don't think so too.
> Europeans don't tend to buy American cars because…
Wait until you realize that the EU tariff on American cars has been 4x the US tariff in EU cars for awhile.
(GM also used to have a couple of European brands, but again they were rather different to GM’s big US sellers.)
Can you share the specifics of this lets say end of 2024?
I could find for example: EU has 10% on cars from US while US has 2.5% in general and 25% on pickup trucks. Important to note in USA the pickup trucks market is the biggest one vs mid size being the biggest one in EU.
When looking at it it seems to me that both entities wants to protect their biggest markets: EU with only 10% protecting midsize and USA with 25% their pickup trucks.
> Wait until you realize [...]
Well, I won't buy am american car (maybe a smaller ford, but not the typical US car) because where I live you won't bring them into most parking lots, and for sure not in parking building. Especially in cities many of them are narrow even with typical EU cars.
The question you should be asking is why American manufacturers don’t target the EU market more aggressively and make cars that fit the formats Europeans buy.
It’s not the only reason but an absolutely crucial factor is that EU states protect their domestic auto industry via tariffs and industrial policies/subsidies.
The same is true for America.
That's a simplification beyond what's truthful. Import taxes are different on different types of cars, both in the EU and the US. There's certainly some type of car where the above is true, maybe some type of gas guzzling pickup truck or something, but over the total amount of sold cars it is not. Trade-weighted differences simply aren't that great, which is not a coincidence because a) both the US and the EU are developed economies which are likely to benefit from free trade, b) taxation works in nudging the market what to buy which evens out the differences further, and c) we have had trade agreements where this was an explicit goal.