American Disruption | Hacker News Reader

American Disruption

stratechery.com

239 pointsshishy200 comments

Surprised there isn't mention that a big part of the tariff strategy is to throw the equity markets into chaos in an effort to drive down the price of the 10-year bond. There was a panic last night because the 10 year bond price started going up as stocks were trading down, which is not supposed to happen. It would be truly disruptive if the whole game gets blown up by a lack of buyers for US debt.

> the 10 year bond price started going up as stocks were trading down,

Correct me if I'm wrong, but the abnormal thing happening was that treasury yields were going up, which meant that prices were going down (due to lack of buyers, as you said), right?

https://www.theguardian.com/business/2025/apr/09/dramatic-se...

> The yield – or interest rate – on the benchmark 10-year US Treasury bond rose to 4.516% on Wednesday before slipping back to 4.451%, up 0.14 percentage points on the day.

Yes, that's what I meant.

Q is anyone knows: would yield on the 10y going down actually help the US to refinance its existing debt (akin to a mortgage refinance), or simply issue new debt more cheaply?

I think it's both, more debt is added all the time and the existing debt gets refinanced as it rolls over.

Just found an article about this whole strategy (and how it's not working) here[1].

[1] https://www.reuters.com/markets/rates-bonds/us-10-year-yield...

if all these shenanigans kill the whole driving point of bonds anyway (the full faith and credit of US Govt) - will it ever be as easy for the treasury to issue bonds again?

If foreign investors like China dump our debt, prices will go down and yields will go up. As long as we increase our debt ceiling and don’t do anything intentionally crazy like try to renegotiate existing debt (which would be a technical default), we could always issue more treasuries at the higher rates with the caveat that more money will need to be spent servicing the debt, which requires even more debt be issued. A vicious cycle for sure.

New debt would be cheaper. Most US treasuries are fixed rate debt. There may be some FRNs (floating rate notes) floating around (pardon the pun) but not many. Tbills are discount instruments but also wouldn’t be affected until they mature and new ones are issued.

> a big part of the tariff strategy

You mean, a big part of one of the inconsistent explanations people are desperately theorizing, because they're too afraid of the simple answer... that there isn't any strategy at all?

[Edit: Or, to be more precise, no strategy which is both (A) sane and (B) designed for America rather than for specific individuals.]

> chaos in an effort to drive down the price of the 10-year bond

I assume this means "the US government will benefit by being able to borrow money more cheaply than before because so many people can't trust stocks". That explanation rests on a big fat false assumption that trust in the particular debtor issuing the bonds remains unchanged as more people want to lend them money.

Instead, economic trust in the US--built up over decades--is being actively firebombed into the dirt by the new Republican regime. This means the US government can easily end up in a far worse position than before, because creditors will demand higher interest-payments to offset the "holy shit your country might implode first" risk they're taking on.

Or, y'know, they'll take their money out of US stocks and then buy the bonds of some other government entirely...

> Instead, economic trust in the US--built up over decades--is being actively firebombed into the dirt by the new Republican regime.

I think that's an important thing to reiterate.

This isn't Trump. This isn't MAGA. This is the entire Republican Party apparatus that is allowing this to continue. The Republicans of the Nixon, Regan, Bush eras are long gone.

> This is the entire Republican Party

1000%.

The malfeasance from the executive branch could be curtailed almost immediately if there were responsible GOP reps in Congress. They're not powerless passengers on this train, they're actively shoveling coal into the steam engine.

For a concrete example, the law Trump is abusing--where some smuggled fentanyl constitutes National Emergency that lets him invent a tax on Americans--states that any motion in the House to terminate the "emergency" must be given a vote within 15 days or less.

But last month, the Republican majority in the House voted (party-line) to declare that calendar-days for the rest of the year just... don't actually count as time passing, for no particular reason.

That's active complicity.

https://www.reuters.com/world/us/house-republicans-block-con...

https://www.congress.gov/bill/119th-congress/house-resolutio...

I think that drawing a distinction between Trump, MAGA, and the Republican Party may be a mistake. It's all one and the same. Which makes me wonder about all the "moderate" Republican voters, and what's going to happen when Trump kicks it.

This doesnt make sense. When money moves out of stocks, it has to go somewhere. Typically, it moves to less-risky assets, like bonds. That makes their prices go up, and yields down.

Likewise, why would the tariff strategy be to drive down bond prices? Lower prices means receiving less for their issuance/paying more interest...

Youve got it all backwards friend

Flight to cash.

could be, but it doesnt change the fact that the parent comment had bond prices and yields completely backwards

Pretty sure you're confusing the price of bonds with their yields, which are inversely correlated. Yields have gone up (to put it mildly).

Funds selling bonds to cover their losses on equity side.

Trump explained his tariff idea to Oprah in previous century. But sure, it's a dynamic plan in response to a 2025 bond sale.

> using trade flows to measure the health of the economic relationship with these countries — any country, really, but particularly final assembly countries — is legitimately stupid

A simple way to see this is you have can a system of three countries, A, B, and C, where A only exports to B, B to C, and C to A. All have net neutral trade, but are in a deficit with someone.

And this does happen (most prominently involving the Atlantic slave trade): https://en.wikipedia.org/wiki/Triangular_trade

This essay seems to be built on a flawed analogy.

Clayton Christensen’s model of disruption (or models, counting his low end version) involves innovation by both the incumbent and disruptor. The disruptor’s innovation is immediately appealing to the low end of the market while the incumbent is focused on the high end.

His example of Hong Kong factories manufacturing Fairchild chips doesn’t fit this template even though he claims it does. It’s just targeting the low end of the market with lower prices. That’s just basic business competition, it’s not disruption as he defined it in this piece.

Side note, I’ve never been a big fan of his giant block quotes, especially when he does not bother to summarize them much. It’s asking the reader to connect to the dots and arrive at the insights he is supposed to be providing.)

Not to be a hater, but this is Ben Thomspon's style. Dial up the word count until people think your analysis is comprehensive, to disguise the fact that you're not saying anything substantive.

I think you're being unfair: try steelmanning. Assume that he is genuinely giving his best and most comprehensive analysis of the situation. It might be a flawed analysis, but at least give credit that it's a genuine effort.

The main flaw of the analysis I can see is that he is seeing patterns that aren't there - being used to analyzing complex international economics, and then being confronted with something as simple as this pump and dump scheme.

See also Scott Siskind and Curtis Yarvin.

Talking about the merits of these tariffs kind of misses the point. The person who wrote this article is very smart. I am sure they are smarter than I am. He has produced a pretty solid analysis of trade policy. But in articles like this people ascribe their own motivations and goals to the tariffs that aren't actually there. Buried in this article is the assumption that the motivation of tariffs and trade policy is to maintain competitiveness with China in manufacturing for both economic and security reasons.

This may be important to the author but it isn't a top priority for the administration. Competitiveness with China and onshoring manufacturing are certainly talking points but they is not stated as the primary motivation for the tariffs. The administration characterizes trade imbalances as countries taking advantage of us. The tariffs are targeted based on trade imbalance. If manufacturing was the goal why apply tariffs to things like raw materials? If competition with China is the goal why apply tariffs to South Korea or Japan, pushing them closer into China's orbit? These are just not the goals of the tariffs and neither their rhetoric or actions suggest that they are.

People have a hard time dealing with values and motivations that are wildly different from their own so they construct all sorts of parallel explanations and defend those instead. But talking about these explanations is non sequitur. It is like the administration adopted a policy of jailing all Capricorns and only Capricorns and people started writing think pieces about how the criminal justice system would be more efficient if they focused on programs to reduce recidivism.

It reminds me a lot of Brexit. Politicians in the south of the country were warning that the financial sector (predominantly in London) would loose 100,000 jobs and people in the north were saying "oh, that sounds pretty good".

A few years later when that didn't happen to that extent I remember an interview with someone from a fishing port which lost a lot of business that previously went to Europe. They were complaining that Brexit wasn't hurting the right people and why are prices increasing all the time.

It seems no amount of logic is going to convince some people.

Tbf the fishing ports were some of the most rational Brexit voters. They were aware that EU fisheries policy quotas seriously impaired their ability to catch fish and believed that leaving the EU meant leaving the quotas behind.

Unfortunately for them, they happened to be completely wrong about this (arguably not unpredictably: the UK MMO was more zealous than most European countries about enforcing catch restrictions) so they didn't lose the quota system but did lose an export market.

The EU quotas didn't impair them from catching fish, it allowed them to catch fish. The problem for British fishermen being that the fish people like to eat in the UK are the ones that tend to hang out in other countries waters, and vice versa.

Feels like they were just taking out their rage on the decline of their industry, which is much more to do with British govt policy and business consolidation than the EU policy. The govt has shown time and again that they don't really care, speak words and take the opposite or no action. I can't say I have much sympathy, the fishing industry in most countries seems out to destroy itself with over-fishing and is highly resistant to regulation designed to save it from itself.

> The EU quotas didn't impair them from catching fish, it allowed them to catch fish.

The quotas were a specific limit on how much they could catch, including in domestic waters. A specific gripe with the inshore fleet was that cod quotas were set so low they could in some cases barely avoid hitting their quota limits very quickly fishing off the UK coast. And cod of course, is something they could actually sell to Brits if they were allowed to catch more of it. Of course, the tradeoff was that larger, longer range vessels wanted to be able to fish in other waters, and fish markets wanted to at least be able to attempt to export what we don't eat, so an agreement with the EU was reached. Now it's not unpredictable this agreement didn't involve dismissing DG Mare's views on sustainable fishing levels or denying foreign vessels reciprocal access to British waters, but I wouldn't call the fishermen's hope for considerably fewer restrictions on what they could catch irrational, especially not compared with some of the other rationales...

Yes but there's always going to be a quota and at least with an EU one you can catch fish in EU waters not just your own, which is what I meant by it allowing them to catch fish.

is it rational that they didn't do their homework to find out that the quota wasnt going to be removed once they'd left the EU?

I'm not sure it's entirely irrational to fail to predict what the government would eventually settle on, especially when said government was at least feigning interest in getting a better deal for fishermen...

Particularly not compared with some of the other Brexit vote rationales

What the fishing industry in the UK wanted out of Brexit was pie in the sky though. It's not like the plan was to saw the British isles off the continent and set sail into the Atlantic, so they still had to deal with the fact of fishing in commercially contested waters.

It seemed like their plan was to be able to do more fishing of the kinds of fish that are available around coastal Britain that aren't popular in the UK and sell them to the Europeans. I say plan, I mean "barely thought out idea". Because the reality is that the ships that do that fishing already exist and already have agreements with the processing businesses, which are already in the EU. And fishing is such a tiny part of the UK economy in comparison to some other countries that access was just traded away.

MAGA is just hate doctrine, rooted in propaganda not a functional worldview. And the hate is primarily reserved for the educated professional class - not even the truly wealthy elites.

I'm trying to figure out what you mean. Experts forecast Brexit would hurt the financial sector, Northerners said they were cool with that, the forecast was wrong, Northerners were upset. Nothing about that sounds illogical. Vindictive and short-sighted, sure. But everything follows reasonably.

I say this as someone who's stomach sank when I'd heard that Brexit had passed and that there was a real chance that Donald Trump could be elected.

A lot of voting, Brexit and other stuff, comes mostly to whether people are pissed off with the current situation or not. If pissed off they vote for a change as in Brexit, otherwise not. I'm not sure a lot of the reasoning gets much deeper than that.

I remember asking Brexit voters who said they didn't want EU regulations to name one actual regulation that inconvenienced them and I don't think I got one answer.

That's fine, but "Brexit voters were generally irrational or misinformed" does not change the fact that this particular case features Brexiters who voted cynically for an outcome that they were assured would happen by the very people who were seeking to prevent Brexit, who were then justifiably upset when those predictions didn't come to pass. It's not a good example of the irrationality of Brexit. Maybe of the futility of attempted revenge.

The primary architect of trumps tariff strategy in his first and second term is Peter Navarro. If you want to understand the tariffs today, just go read one of his many books. His goals are pretty simple:

reindustriaize America

No more free trade

China is evil and the worlds enemy

It should be no surprise to anyone observing trump since he took office that the end goal was always to decouple from China.

> The primary architect of trumps tariff strategy in his first and second term is Peter Navarro.

He's also a complete and utter liar. I happened to come across him speaking on Fox News when he stated that "Canada has been taken over by Mexican cartels". [1] As a Canadian and as someone who isn't living in some bizarre alternate reality, I can assure you that Canada has not been taken over by cartels. The claim is insane. The fact that his interviewer did not challenge him on this insanity is unsurprising yet also insane.

I bring this up first because it made me angry, but secondly because I think it's relevant to this discussion: of course things are going to turn out badly when the architects of policy are either liars, are living in an alternate reality, or both.

1: https://www.mediaite.com/tv/trump-adviser-insists-canada-has...

Here another example of him lying:

It recently emerged a that he had been inventing quotes in all his books from a certain ‘Ron Vara’ a distinguished but entirely fictional economics professor.

https://www.nytimes.com/2019/12/11/us/politics/navarro-ron-v...

If this were a goal, the USA would not want to push other countries into China's sphere of influence. The simpler explanation is that non-tariff taxes require congress and are not fully under control of the executive branch. This allows the executive branch to seize the power of the purse.

Tariff taxes also require congress. It’s a constitutionally enumerated power of Congress specifically to levy import duties.

Well, I mean, since we threw out the opposition in Congress?

I'm thinking we'd better not rely on Congress to put a stop to anything. A simple veto removes that problem. No way what's left of the opposition in Congress comes up with the votes to override a veto.

I believe the real architect of the strategy is Ron Vara [0]

[0] In case you didn't know Run Vara is a fake economist that Navarro made up in his books and memos to justify his own deeply flawed policies.

Tha fact that he just shuffled around the letters of his own name for the fake economist is simply amazing.

Brave new world.

It tells you a lot about him. Honesty is not a defining feature.

    > It should be no surprise to anyone observing trump since he took office that the end goal was always to decouple from China

Then why are we also slapping tariffs on Taiwan, Canada, Japan, Mexico, EU, RoW?

If we assume what is said is valid (a huge assumption, I know) and ignore the contradictions: They claim that China is able to pass into the US through Canada, Mexico, etc. and that the tariffs there are to put pressure on those governments to also put the squeeze on China in kind.

Then why did he just lift them on everyone except China?

He said because of the bond market reaction.

Don’t forget Laos!

And Lesotho, a country Trump had apparently never heard of.

We're more likely to 'on shore' with 3D printer like automated fabricators (think next baby step between CnC machines and Replicators).

As far as any mention of jobs? Those are long gone and never coming back.

Trade still makes sense for raw inputs and any outputs though.

And since when the US has a “job availability” problem? Unemployment is low. We have a jobs quality problem. Good pay, good hours, benefits. It doesn’t matter if it’s manufacturing or services.

Somehow some people think their parents had it easier working for a factory, but a lot of blood and sweat went to get that. We can shed blood and sweat to get better barista jobs too. It’s not about where jobs are performed.

Agreed. I'd go so far as to say that the compensation/job quality balance has been out-of-wack for years. It has never been about skill, either, but leverage. And even "unskilled" workers can conjure leverage by creating chokepoints that they can toll, if they're able to organize and hold out.

https://news.ycombinator.com/item?id=43604145

https://www.tiktok.com/t/ZTjJgfspg/ shows it all too well.

Except that people liked those jobs because they were doable for people who aren't bright enough to write code. If you're not the brightest tool in the toolbox, and not the most professional, and have a criminal record, you still need a job, and the trades are open for business. Amazon warehouses skill level, without the dystopia.

I'm sure I'll do fine, it's my friends who have been underemployed for decades that aren't as bright who don't have a career to speak of that feel helpless and disempowered. Some of them voted for him. I can't say I don't see where they're coming from.

Again, America had low unemployment. And low level blue color job can be aw much dystopia as warehouse - your not bright person with criminal record an no skills will be taken advantage as much.

What the unemployment numbers, even digging into U4 vs U6, don't account for, is how hard people have to scramble to find those jobs. it's not that they aren't out there, people do still need to pay bills after all, it's that gone are the days when you'd just show up to the union hall and know you'd just be assigned some work. That feeling of solidarity, that you can just rely on the fact that you're needed and necessary and can get a dollar to feed yourself today, whenever you need a dollar. That doesn't show up on unemployment numbers.

Arguably driving for Uber/whatever does that today, but you can't seriously believe that you can build an entire economy off of everyone delivering people and food to the rich.

I do not think there is space for solidarity where these changes are going. The people voting for president and supporting him see solidarity as a weakness and something for suckers - or worst as taking something away from them. Again and again, republicans are against any measure or action where someone might get something.

Even if factories are rebuild, there will be no solidarity. Nor work that gives you much meaning - factory work is repetitive no fun no spiritual anything work. With a lot of steps that seem pointless to the person doing them.

the things that made a factory job good are long gone too. pensions. stable employment. companies that cared about their employees.

Even if we assume manufacturing does bring back high quality jobs: The people still have to leave their low quality jobs they are currently doing to fill those jobs. Which means the American people are going to have to give up something. Which probably means things like their Big Macs, with a return to home cooking like in the heyday of manufacturing.

A win from a health perspective, perhaps, but going back to the age where people didn't do anything other than spend all their free time maintaining their home life probably isn't what people are dreaming of.

Even Navarro (or is it that other guy who's name refuses to stick in my brain) that admits that the jobs they want to take out of China (screwing in many tiny screws) will not be jobs in the US but automated factories. So it's not a jobs program they are pushing. It's having manufacturing on local soil and less money going offshore. This is not something they mentioned during the campaign, but are saying it now. During the campaign it was all about those manufacturing jobs.

What really stood out to me is that they say the factories will produce their own power on-site, with approvals for power plants happening "faster than we've ever had before", because the grid is "at risk of bombings". Which suggests to me that it not just about having manufacturing local for the sake of it being local or to stop money going offshore, but because it is preparing for war.

> What really stood out to me is that they say the factories will produce their own power on-site, with approvals for power plants happening "faster than we've ever had before", because the grid is "at risk of bombings".

Where can I read about this?

Right here.

The article? It did not contain the quoted strings. Your comment? An anonymous HN comment is not a suitable source.

Article? It came to me by way of a video of it being said (by Trump, if that wasn't clear). You're looking at the only article I know of.

If the content on HN isn't to you liking, that's fine, but, uh, why are you wasting your time reading stuff you don't like? You do realize that you don't have to be here, right?

Then they are playing the long con in expecting to not have to vacate at the end of the term as there is no way that enough manufacturing returns to be local with the ability make enough of anything in the time span of this single term

> expecting to not have to vacate at the end of the term

Perhaps that's exactly where the need is foreseen? Such a takeover would assuredly lead to a bout of violent conflict, that very well could lead to all out civil war if not managed well. You wouldn't need the kind of manufacturing required to take on the world, but you'd need a little bit to keep the people at bay. Americans with manufacturing facilities might not be so friendly after that kind of stunt, but if you can make new friends from abroad with facilities on US soil...

3D printing (additive manufacturing) isn't really a differentiating factor one way or the other. It's only economically viable for certain types of parts made in relatively low volume. And the USA doesn't have much of a comparative advantage.

There will never be anything like a "replicator". It's not physically possible.

Yea, they're not talking about high value manufacturing. They practically want to burn that down; it's all about bringing low value textile production back.

I think you have cause and effect backwards. Trump pulled in Navarro because Navarro had the plan that Trump's been advocating for since the 80's. IOW, it's Trump's plan that Navarro is actualizing, not a plan that Navarro convinced Trump to make happen.

Trump's first term tariffs happened under Lighthizer, who was much more rational than both Trump & Navarro.

> China is evil and the worlds enemy

And what is the US under the Trump administration? China didn't start a trade war, accuse every other country of ripping it off, hasn't talked of acquiring Greenland and making Canada it's 51st state, or discuss bombing cartels in Mexico.

let's not forget about arguing against due process, prison without trials, weird interpretations of ancient laws, mercurial application of the law. or the free speech threats. the AP, threaten licenses from news orgs, threaten law firms, sue news orgs.

And today he's signed an executive order to investigate Miles Taylor and Chris Krebs because he doesn't like what they've said about him as president. This is authoritarian playbook stuff.

The parent comment is summarizing the viewpoints of one of the delusional people responsible for these policies, not endorsing them. The fact that it is all illogical and hypocritical is precisely the point.

> It is like the administration adopted a policy of jailing all Capricorns and only Capricorns and people started writing think pieces about how the criminal justice system would be more efficient if they focused on programs to reduce recidivism.

I was born on January 19. Should I be concerned?

No, Just say January 19th is a leap year.

Worse than projecting one's values onto a rationalization of the new tariffs is to simply take the administration's rhetoric at face value. That other countries are "taking advantage of us" is just a talking point. We have to look at how the tariffs fit historical conservative programs. Republicans have long wished to replace our progressive income taxation with a flat tax system, but that's simply not achievable, even for Trump. Further decreasing tax rates from high earners and replacing revenue with tariffs to avoid the ballooning of the government debt, for which Trump was heavily criticized during the first term, may be the closest he can get to approximating flat taxation.

It’s even better, I was introduced to the term “narrative shopping” today.

> The second order effects are a much more fertile territory for narrative creation. That’s because, as with any other policy, the second order effects of tariffs don’t lend themselves to the same kind of certainty as first order effects. They involve people and how they will respond and act. Any argument in favor of tariffs can only live in the world of second order effects.

https://www.epsilontheory.com/narrative-shopping/

There is no logic here, seeing depth in a shallow pond, is the same as staring at the emperor’s new clothes.

PS> I have seen young voters happy to see Wall Street, elites and older generations feel pain.

I don't take their explanation at face value. I think you very well could be right in your analysis here.

It is more interesting to me that actual targeting is based on trade imbalance. They could easily have used the same rhetoric and targeted the tariffs based on something else. I think the way they are targeted is sufficient to rule out a lot of explanations I have seen proposed like I mentioned above. What you are mentioning seems super plausible to me I just can't be sure yet.

You hit the nail on the head with the targeting. Trump has a long held obsession with tariffs based on an inability to understand that trade isn't a competition where if you buy more stuff you lose.

It's arguments about tariffs as a revenue source replacing other taxes which are ancillary ones thrown out to appeal to other vaguely Republican instincts. Obviously if the US actually wanted to use them as a revenue source they wouldn't set them at punitively high rates likely to simply eliminate trade, frame it as a battle to reduce import dependency or dangle the carrot of trade deals to anyone willing to bend the knee. Not to mention his rapid reverse ferret reframing it as focusing on China

We've always had a flat tax in the form of printing new money -> inflation.

That's my feeling too. The tariffs are just another variation for the plan to replace income tax with sales tax. You could argue tariffs are a little better because in theory they result in more jobs at home.

> You could argue tariffs are a little better because in theory they result in more jobs at home.

No serious person would argue this because it's ridiculous. Tariffs on components of finished items don't do anything to help manufacture those items. The only way to increase manufacturing with tariffs is to target them to very specific industries or segments of industries and use the proceeds to subsidize the industries you want to create.

Manufacturing just about anything at scale to make it affordable/desirable requires leveraging a deep efficient supply chain. Everything from raw material harvesting to manufacturing to warehousing to transport. It takes decades and a lot of investment and real estate.

Asinine tariffs won't do any of that. They're effectively just a regressive national sales tax.

Tariffs are also revenue. It just moves the revenue from income taxes, which can affect the rich if they have incompetent accountants, to consumption taxes, which affect predominantly the poors and middle class.

Tariffs are a tax levied on American consumers, not on foreign governments. Using them to decrease income taxes on the rich is something only an out-of-touch millionaire could dream up. Qu'ils mangent de la brioche!

And the effect of consumption taxes is generally to reduce consumption. The economy is likely to shrink a bit as a result of these taxes. It's hard to see how that helps anything.

It is considered socially unacceptable to armchair psychoanalyze other people, but I think we can waive that when it comes to the most powerful politician on the planet.

https://www.nytimes.com/2025/04/09/opinion/trump-tariffs-rat...

In some cases, Occam's Razor says, "this person is not acting rationally" and you have to weigh that possibility even if it is uncomfortable. Desire for dominance is common, and is not rational. Why should it surprise us to see it in Trump?

Looking at trump's actions as desire for dominance makes them seem rational, in the sense that they have a common motivation.

From that perspective, he's at least acting consistently, and has been rewarded over his lifetime for it.

Punch people/organisations/nations in the mouth repeatedly until they beg for mercy, then keep pounding them until they forfeit their dignity and pledge allegiance.

Everyone, everywhere, all the time. The weaker the better. Until stopped.

The confusing part is that the actions don't seem logically consistent with any of the possible goals.

>The tariffs are targeted based on trade imbalance

Ok, I buy that based on the stupid formula they showed. Is "not ruin everything else" not also part of his goals? Can you explain what I'm missing?

I think people just keep underestimating exactly how stupid and ignorant Trump is. That's why nothing makes sense. He does not understand the law of comparative advantage and thus doesn't understand that trade is the engine of growth. He only sees fixed size pies and win-lose deals, so he's not capable of finding real solutions.

> Can you explain what I'm missing?

That goal 1 is to make Trump feel important and to prop up his ego. Goal 2 is probably to dismantle the rule of law and democracy in the US.

Thank you. I see these coping strategies everywhere, from sources I would never imagine would try to find reason within the damage these will do. People want to feel like these are rational well thought out choices with experts behind the reasoning and that they must be missing something. Because how could the POTUS willingly cause so much harm to the country? So there is cope instead of coming to terms that this man is single handedly destroying the economy and their future.

> So there is cope instead of coming to terms that this man is single handedly destroying the economy and their future.

Now I'm imagining new posters in the style of Obama's Hope but with Trump and Cope underneath

Indeed, Paul Krugman has been doing the rounds on podcasts recently and he seems to think that Trump is doing tariffs and trying to eliminate trade imbalances because he has always had that idea of doing tariffs and thought that trade deficits were being taken advantage of, and the talk about a greater strategy are post-hoc rationalizations. Sometimes a simple person has a simple reason divorced from complicated reality.

Trump thinks he can replace income taxes with tariffs: https://www.cnn.com/2025/02/20/economy/trump-abolish-irs/ind...

Punishing other countries is just a bonus.

> The administration characterizes trade imbalances as countries taking advantage of us.

it seems likely to me that they know their voting base is too dumb to understand, so they make up stuff that sounds good to get the support.

Like how they keep incorrectly characterizing VAT.

It's interesting how they kept changing their excuse for not putting tariffs on Mother Russia, and finally landed on something they thought was plausible.

Broadly that is true of the administration's motives, but as concerns trade with China, they are obviously aware of both the national security and competitiveness angle. Not only did Biden take the lead on that already with the exact above rationale, China is currently more steeply targeted.

Agree, and I find this totally bizarre.

The Trump administration's power is based in the Russian propaganda machine and xenophobia. Blanket tariffs (except towards Russia and Belarus, not mentioned in Ben Thompson's article of course) are in service of those two power bases.

US is still sanctioning Russia, meaning there's zero trade between US and Russia. It's illegal for US people and companies to buy from Russia.

That's why there are no tariffs on Russia: there's no trade, there's nothing to tariff.

I don't see how you concluded that US is currently "in service of Russia".

Are you sure? In 2024, exports of Russian goods to the US totaled $3.27bn, and the US exported $526m worth of goods to Russia. Not a ton, but more than many countries that received tariffs. Or what definition of zero trade are you using?

> US is still sanctioning Russia, meaning there's zero trade between US and Russia. It's illegal for US people and companies to buy from Russia.

Quoting the Trump administration:

U.S. goods exports to Russia in 2024 were $526.1 million, down 12.3 percent ($73.5 million) from 2023. U.S. goods imports from Russia totaled $3.0 billion in 2024, down 34.2 percent ($1.6 billion) from 2023. [0]

If the same formula were applied to Russia as every other country in the world, the Russian tariff would be above 40% since it's half of (3500-500)/3000 = 85.7%

[0]: https://ustr.gov/countries-regions/europe-middle-east/russia...

The tariffs undermine US-Europe alliance, and US hegemony. These are core goals of Putin's Russia.

Bingo -- analysts of Trump are way too overeager to attribute "4D Chess" super analytics driven goals to Trump.

In reality, he's doing exactly what is on the tin: reducing tariffs, and doing what he wants to do, because he feels like it.

> There is one other very important takeaway from disruption: companies that go up-market find it impossible to go back down, and I think this too applies to countries.

There's a lot of talking past each other here. This observation, framed a bit differently, is precisely the argument for radical disruptive change. If there's a structural ratchet mechanism, where outsourcing a particular kind of manufacturing work means the US can never do it effectively again, doesn't every tick of the ratchet pose significant risks?

> If there's a structural ratchet mechanism, where outsourcing a particular kind of manufacturing work means the US can never do it effectively again, doesn't every tick of the ratchet pose significant risks?

Yes, and in an earlier post Ben made that argument and said that the broader conversation on tariffs has been straw manning and wasn't trying to understand where they were coming from. He did more or less agree that the post-ww2 and post-nixon economic setup created this and articulated why it's problematic.

His thesis is just that this approach is wrong, and that it's hard to unpack the reasons because you don't know what to trust: is what the admin says a PR problem, a bad argument, directional or literal, etc.

Here's the older post (the one I shared in this thread was a continuation): https://stratechery.com/2025/trade-tariffs-and-tech/

In which metaphor the thesis would implicitly be that we can't for some reason disassemble the "ratchet" and carefully retract or remove the "pawl," but have to chuck a "lit stick of dynamite" into the "workshop."

No, there is still a lot of work to do before we get close to making this make any sense.

I agree, and the reason I don't support the dynamite is precisely because I think there are less destructive ways to reshore manufacturing if we want to. The author seems to be making the opposite point, that the problem is so intractable the US must not "seek to own supply, but rather control it". (Which is clearly true for some things - it's very silly to have nonzero tariffs on coffee and bananas - but he seems to intend it more broadly than that.)

It isn't especially culpable of Thompson, I think.

If he's not immediately well suited to think through a kind of political times last seen outside living memory, well, who immediately is? He didn't build his reputation instantaneously the first time either, but over years. I just think it may now be more a hindrance than a help, in having established a higher expectation than circumstances may any longer allow reliably living up to for a while at least.

As I say, I don't really hold it against him, even on a professional level. Someone who's consistently wrong in an interpretable way is not of much less value than someone with a string of good calls - maybe more, if the contrarian is strong on theory and the "superpredictor" shows signs of capitalizing on a run of good luck. Which of those he turns out to be if any I suppose we'll find out, and previously having put everything new behind a paywall is questionable, but at the very least I suspect that to keep up with his doings may remain of some interest.

Can anyone give a manufacturing example for the phenomena for which he uses Uber? It seems off to use a gig economy company in this article with its tariffs/manufacturing focus.

> the company spent its early years building its core technology and delivering a high-end experience with significantly higher prices than incumbent taxi companies. Eventually, though, the exact same technology was deployed to deliver a lower-priced experience to a significantly broader customer base; said customer base was brought on board at zero marginal cost

Ironically, this was the plan laid out for Tesla early on. Very expensive Roadster, pretty expensive Model S. Make some cash and build a reputation for how good a luxury electric car can be. Then use that cash to go down market.

Of course zero marginal cost does not apply with the Model 3, but they did dramatically lower their own cost-of-materials by the time they released the Model 3, making it profitable at scale.

> The takeaway from that Article isn’t that Uber is a model for the rebirth of American manufacturing; rather it’s that you can leverage demand to fundamentally reshape supply

Anecdotally, I know that Tesla became an aspirational brand, a dream car for many. A status brand. So the demand was there, and if you could get a "dream car" for $35K USD then why wouldn't you?

The Uber example is also an outright lie.

They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them.

Then they raised prices beyond their competition to account for their ridiculous overheads.

> They acquired those customers by burning billions of dollars to deliver rides below the cost of providing them.

That is exaggerated. Uber was losing something like $0.50-$1 per ride in 2018.

Uber/Lyft were (and still mostly are) just _better_ than taxis.

It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions.

I don’t know if I trust Ubers numbers on this. I don’t know what they’re counting as “cost per ride”. Does engineers salaries factor into that? What about data centers? Advertising?

If you factor all of it in, then they’re losing billions.

> It’s not exaggerated. Uber was losing hundreds of millions of dollars per year operating. That’s billions.

Well, yes. However, the impact of that on the ride cost is exaggerated.

> Does engineers salaries factor into that? What about data centers? Advertising?

Yes.

> If you factor all of it in, then they’re losing billions.

And when you divide it by the number of rides, you get into sub-$1 figures.

> Well, yes. However, the impact of that on the ride cost is exaggerated.

Yeah, because they’re losing the money. Meaning YOU’RE not paying it, it’s being lost.

Keep in mind this is also with:

- uber not providing the capital for their rides. Taxi companies buy taxis, uber says you buy it.

- vastly underpaying their work force.

- skirting employment laws with gig work

- relying on tips! The ride cost doesn’t include tips, despite that being a huge portion of wages!

Uber was a 9 year old company in 2018

Taxis still exist and are still more expensive. You pay for them to use bus lanes in SF and so on. Uber prices are not beyond the competition.

Where I live, Uber is recognized as the high prices option. Once VCs stopped subsidizing rides prices went up and availability went down - it was a running joke for years that at DCA you’d see people waiting in line for 20 minutes to spend $20 more than hopping in a waiting cab.

That makes sense for me. I would easily pay $20 more to take an Uber over a cab in SF. The prices are the other way around which is convenient for me. The last time I took a cab from the airport the guy asked me which cross streets and how to get there. That's not my Uber experience. I don't want to be telling this guy how to do his job. I want personal transportation and we can chat about something else if he likes but I want him to use the satnav.

Yeah, there are real regional variations. I think the problem Uber has is that they’re valued like a high-end tech company (with locked in overhead like compensation) but they don’t have much of a competitive moat. They can have a better app and global reach is a plus for frequent travelers, but at the end of the day their profit is anchored by how much a taxi costs – even if the service is better people only value that so much, especially in a down economy like the one just created.

They've created a business model any metropolitan community can duplicate for practically nothing, and the first community that does so will share their notes with the rest of us.

People should be asking themselves if their service is a quango waiting to happen, because most of them definitely are.

For a lot of people $20 is an amount that they will think about spending.

Ridiculous to think that a cab driver in 2025 is not using GPS. I don't believe that.

Been burnt too often by american taxis that won't take cards or won't give receipts or have adverts on screens as you're travelling.

That’s not a problem here (they have an app, too) but it’s definitely valid for Uber to compete on better service. I am skeptical that they will be able to get the kind of returns which their investors want that way, however.

I fly into a random city, say Denver.

I could start hunting around for a local taxi app, which may or may not work, may or may not have any cars

I could get in a waiting taxi at the airport, but then I run into issues with cash etc

I could use uber while I'm still collecting my bag and have a known car and known experience waiting for me

Sure, as I said they have a potential edge in service and people who frequently travel to new places. My point was just that it’s not a very big edge: most people are not traveling to new places all of the time and if there’s a big savings they’ll switch. That doesn’t mean that Uber is doomed, just that they’re not a Google/Facebook money printing machine where local competitors can pop up easily.

they already IPOed so the original investors made out with a ton of money. if you think there's still a version where Uber evaporates overnight, I have some puts to sell you.

I’m not expecting anything like evaporating, only that things like their share price and compensation are more like a tech company than a taxi company but they don’t have a strong moat. There’s interest around things like self-driving taxis, but they don’t own the technology so it won’t open up extra margins.

Most individual share prices is buoyed by continuous pumping from 401ks and the like buying into funds, not on the fundamentals of the companies in question.

At least in Seattle, it's actually about 50% cheaper to get a taxi from SeaTac to the city than to take a Lyft or Uber.

>, it's actually about 50% cheaper to get a taxi from SeaTac to the city than to take a Lyft or Uber.

That type of ride from a "hub" where a bunch of taxis congregate to take the next passenger -- such as SEATAC airport -- is optimal for traditional taxis and can be cheaper. But using Uber for suburb-to-suburb routes away from any hubs is cheaper than taxis and I tried to explain why that happens: https://news.ycombinator.com/item?id=30660517

your "hack" is just how it works for food delivery. If you don't leave a tip, they'll ignore it and itll never get picked up.

I'm curious as to why that is. A few months ago I took a taxi from the airport in Austin (because I had neglected to book my Uber/Lyft before I got to the rideshare area and there was a significant wait) and I vowed "never again". It was about 50% more than Uber/Lyft, and everything about the experience was worse in the ways taxis have always been worse - payment is much more of a pain in the ass, you don't know how much it costs until the end, and the cab smelled.

I can wholeheartedly understand complaints about Uber and Lyft, but I don't understand at all when I sometimes see this collective amnesia about how much taxis sucked before rideshare came on the scene.

I think its less amnesia and more that many commenters were too young to have experienced pre-Uber taxis: the call for a pickup thats routinely ignored, flailing arms in the cold hoping someone stops, the smelly car, refusal to pick you up because your ride is too short or too long, getting taken for an extended ride to your destination, the credit card machine thats always broken. Oh, and if you want to complain I hope you can make an 8am hearing at the taxi commission in 6 weeks.

> I'm curious as to why that is

Seattle has added some extra fees and pay requirements for drivers that drive up the cost of a ride share. In retaliation to these laws, ride share companies have also raised prices.

An Uber from my house to the SeaTac airport used to cost about $30 5 or 6 years ago. It's now around $100. A taxi is about $80 now. Paying for parking is cheaper now than either of those options.

Ah then it’s regional. In SF it’s typically 30% more expensive in a taxi from the airport to 4th and king.

it's like $40 to take a car vs like $15 on Bart into the city.

BART takes 2x the time station to station. Try it out right now.

The time is 1256 as of the time of this comment.

SFO International to Montgomery St. Station: Earliest arrival is 1346

Driving: Earliest arrival is 1323

My experience is that the car takes ~6 min to arrive to pick you up for Uber. You can call it earlier, but assuming you call it when you arrive and then wait that's 1322. You lose 23 minutes to BART.

And that's BART station to BART station. Change it slightly, like to my home near Caltrain and it's pointless. The cost in time is way more than $25.

What are you going to do on your phone in the Uber vs on your phone on your couch when you get home vs your phone on Bart? If you have an important in-person meeting to get to then by all means pay the surcharge but let's be real about how some of us are spending those "saved" minutes.

Thank you for doing the math - we're only talking about 23 of them? it's entirely possible to capitalize on 23 minutes, but seriously, 23 minutes?

Can use your laptop in the car safely. A friend of mine had his laptop yanked on BART. Chap ran off, my friend gave chase, and that guy threw away the laptop. Surprisingly, only dented! But I'd rather not experience that. 28 minute ride vs. 45 minute ride after 10 min wait is pretty large difference IMHO. If no traffic, that's even shorter. For me, from Caltrain station (where I live) to airport I have a record door to gate of 16 min. That's a no planning choice. If I have to make a 45 minute ride I have to plan: take the T-line to Powell, switch to BART, ride down to the airport? Crazy. No chance.

Yikes that's scary. I'm still gonna take Bart tho. Do what's right for you!

Where I live taxis are on par with Uber, sometimes cheaper when Uber has surge prices. We also have Bolt, an European competitor, which is usually 10-40% cheaper than Uber or taxis.

Every Uber or Bolt can also operate as a taxi since the regulations stipulate that any private passenger transport service is the same as a taxi, and has to follow the same regulations.

I think this is the typical modern American bias of idolizing 'tech' companies - it makes a lot of money so it must be because it's very technologically sophisticated.

In reality I'd guess building an Uber scale tech company is not particularly difficult - after a quick ChatGPT query, it seems a city like New York, has about 90kish drivers at any moment - if we assume they make a query to the API every 5 seconds (and add once as many for users) - the scale doesn't look particularly daunting, something manageable with optimized tech on a small server cluster.

Sharding is trivial since New Yorkers are not really interested in taxies from Brussels etc.

And the proof of the pudding is there are tons of competitors, and most of them work just as well as Uber does (on the technology level, driver availability or market penetration might be a different issue).

Uber is a brand like McDonalds - you could say people go to McDonalds because they have the best burgers enabled by their superior logistics and equipment - and that's certainly probably a factor, you can't really ignore that they are where they are due to brand strength, availability, and early mover advantage - while also recognizing they are far from the only players in the business.

American tech companies have immensely benefited from being the 'default' providers of services - Google, Gmail, AWS, etc. People didn't give much thought on what they chose - and assumed everyone chooses them because they are the best, not because people lacked sufficient incentive to give proper consideration to what service they use.

Thanks to Trump, that has certainly changed in Europe at least, literally overnight.

I worked at Uber a long time ago - there was some amount of overcomplicated engineering but you genuinely can't completely shard by city because a big part of Uber's value proposition is that you fly into a city for the first time and Uber just works.

You probably know much better than I do, but that doesn't seem it would make it impossible to do sharding? You just pick a shard based on the current location of the driver/customer.

It has been a long time and my memory is based on hearing about it rather than using it, but I believe there was a notion of a rider's "home" datacenter (based on where they signed up from), and there was some complexity from propagating a rider's data from there to all other datacenters proactively, so that things would just work no matter where in the world they were. And I think the datacenter serving the area where a user was currently located could accept writes for that user, meaning that it would have to get written back to the home datacenter... you can see how this got complicated.

Sure, but aren't we past rational debate on this point? Not only are the new trade policies irrational, it's quite possible that they're intentionally irrational as a bargaining or maneuvering tactic. We're not going to reason or argue our way out of this one.

As I commented yesterday, there's a playbook for reshoring that's being totally ignored:

First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms. (They already do this in a very small way with In-Q-Tel and others, so it's not totally beyond the pale. For a time there was even a US Army VC firm.) If you talk to a Chinese factory owner or mine boss, many of them will tell you that they got their start with a >$2M direct investment from their government.

Second you gradually tighten the screws on foreign finished products, not industrial inputs like metals, plastics, ores, etc.

Third you streamline export paperwork requirements and relax things like ITAR.

Then, when that's all humming along and the factories are working, you can launch blanket tariffs to protect your nascent industries, if need be. But you must exempt necessary industrial inputs from tariffs.

It's possible that personnel problems can, to some extent, be solved with automation.

But, anyway, the playbook's being torn up and read backwards, so it's all moot. We're just going to have to ride the tiger and see what the world looks like in a few months.

> it's quite possible that they're intentionally irrational as a bargaining or maneuvering tactic

This is the rationalization being projected onto the situation, but it doesn’t make logical sense.

The administration launched a trade war with 100+ fronts and left no time to negotiate with all of them, let alone the biggest players.

The biggest players are already calling the administration’s bluff with counter-tariffs. If there was an expectation to use the threat of irrational tariffs as a bargaining chip, they didn’t leave enough time to do it.

I don't see how else they could've done that - if they decide not to tariff some countries, countries that did get tariffed could trivially reroute their goods to go through said exempt country - I'm not even sure goods would need to move physically to said country or they could get away with cargo ships registered under them and/or ports handed over to be the territory of said country.

tariffs are assessed based on the country of origin. you can't skip a tariff by routing your goods through another country. or maybe you can, but that's called smuggling and the only way to do it is outright fraud and lying on the import forms.

if your product is sourced from china, you pay the tariff on china whether you are importing it from a canadian supplier, a cambodian supplier, or a chinese supplier.

> the only way to do it is outright fraud and lying on the import forms.

It seems like the incentive to do this has just gone up immensely.

There are also more creative ways to get around country of origin labeling, as I understand it. For example, do 90% of the work in the high-tariff country and the final 10% in the low-tariff country which becomes the point of origin.

If your product is imported through China as the supplier, depending on how you structure your arrangement, it can be sourced from wherever you like, at least on paper.

again: that's fraud, it's illegal, and the consequences begin with getting your whole shipment seized.

if you want to smuggle products illegally, that's on you. but the parent's assertion was that tariffs can be trivially bypassed by changing the country of origin. maybe we have different understandings of "trivial", but for me it being illegal makes it non-trivial.

It's fraud, and illegal, any way you cut it. It's trivial to commit fraud.

Behaving irrationally, intentionally or not, is scaring investors away rather than attracting them.

Seen from abroad, trust in the rule of law and property rights has been eroded. Today Trump sends randos to El Salvador, maybe tomorrow he will nationalize enterprises or other assets, with no meaningful opposition from the Congress and the judiciary? Germany is already pulling gold from the US, that had been stored there for decades. Better safe than sorry.

Amazingly, this is exactly what Russia has been trying to do for years now: introduce chaos and uncertainty. Capitalism can handle bad news all day long, but it can't withstand prolonged unpredictability and ambiguity.

It just took a while for Russia to get their stooge in place.

Meanwhile the price of the Ruble is skyrocketing since trump took office. Everything he does is a gift to Putin.

I think you actually _should_ assume that he's acting rationally, just that his motivations aren't aligned with what you think they should be. Trump has a mafia mentality, and the purpose of the tariffs has absolutely nothing to do with policy and everything to do with control. He wants to have a guillotine hanging over the head of every country and corporation that he can use at will, so that every CEO has to come to him and bend the knee, so he can grant them an exemption on a case by case basis in return for personal loyalty to _him_.

There is a reason that the power to tax resides in congress, and it's specifically to prevent that. They've just abdicated their role and here we are with a king instead of a president.

+1. Everyone else here seems to be in denial about that.

> Sure, but aren't we past rational debate on this point?

No.

> Not only are the new trade policies irrational, it's quite possible that they're intentionally irrational as a bargaining or maneuvering tactic.

Not really, at least not a well-considered bargaining or maneuvering tactic. There is no incentive to comply if there isn't a clear compliance goal and a clear willingness to reward progress toward it as well as punish noncompliance. Irrationality is poor bargaining.

More to the point, though, the space for rational debate is NOT with the architects of the policy, who, yes, seem beyond reason. The space for debate is among everyone else, including the people who have the Constitutional power to arrest the executive policy in this area (whether that debate centers on the merits of policy in the broad sense or their own narrow future political fortunes or some combination of those.)

> As I commented yesterday, there's a playbook for reshoring that's being totally ignored

Broad reshoring of industries or broad sectors that have left the US because its comparative advantage in the present world trade regime has shifted elsewhere is an objectively economically harmful idea, and expending resources on it consumes resources that could be productively employed in pursuit of relative economic inefficiency. There may be select industries that can be identified where there is a rational argument that that would be only a short-term hit and that there would be long-term benefits, or where security or stability issues given real expected international threats make that a cost worth bearing (though in the latter case it is still generally probably better to work to maintain existing alliances and work jointly to "reshore" critical industries broadly within our international political alignment rather than making it an isolated national policy, both because there are often going to be other places in the alliance where it is less out of line with present comparative advantage and because it is a broadly shared benefit where it makes sense to share the costs.)

We don't need a better playbook to achieve autarky, we need to reject it as a goal.

That's what smart experienced people would do. But if you run the power game as an ego polishing reality show with whole world stuck in it, all logic is off the table. Sad to be part of it and absolutely powerless

> Sure, but aren't we past rational debate on this point?

There is no point debating the administration or supporters. Peter Navarro hatched this idea, and he is nearly alone in his logic.

However, a broader debate is useful. A professor in Europe recently pointed out that Nixon did the same thing in the 1971. The intent was to destabilize and reset the dollar value compared to other currencies. He basically set off a grenade in the office. He proposed "New Federalism", and "Nixon's decision to end the gold standard in the United States led to the collapse of the Bretton Woods system. According to Thomas Oatley, "the Bretton Woods system collapsed so that Nixon might win the 1972 presidential election.""

https://en.wikipedia.org/wiki/Richard_Nixon#Economy

By the way. Bretton Woods and Treasury monetary policy after WW2 was crafted by Lauchlan Currie. Currie was a renowned economist and worked at US Treasury from 1934. In WW2, Currie was Franklin Roosevelt's chief economic adviser. Currie was also a Russian agent. His US passport and US citizenship was revoked in ~1954 and he lived the remainder of his life in Colombia.

https://en.wikipedia.org/wiki/Lauchlin_Currie

I thought the major shift after WWII with Bretton Woods was that throughout all of human wars up to that point, the winner usually took the land in some way or another and the US wasn't interested in that and more interested in a global economic stability pegged to the US dollar. And the US decided policing trade routes and peace across western countries was more important than claiming spoils of war.

Preferences are independent of rationality, surely?

If a guy with a finite lifespan has a preference for autarky, expansionist military invasions, racial hierarchies and a secret police regardless of the consequences and then rationally pursues those preferences in ways that are likely to bring them about before his death of old age, the guy doesn't qualify for the category "delusional" and instead fits into one of the moral categories.

One of his preferred "gurus" is a guy who pushed one of those self-help bullshit "if you just believe hard enough, you'll manifest your desires!" proto- The Secret frameworks, and he does appear to operate that way—strident bluster, declaring defeats and "white peace" as unqualified victories, willfully ignoring inconvenient facts, all that stuff. Like, look at the totally-bizarre sharpie incident in his first term, for a trivial but illustrative example.

However, it's worked out well for him personally (less so for those he does business with, or near, or for the US...) so despite being on-paper delusional, I admit the waters are rather muddied.

https://en.wikipedia.org/wiki/Norman_Vincent_Peale#Influence

A certain amount of bullshitting is a rational strategy for sane, low-conscientousness actors with middling intellects.

> it's quite possible that they're intentionally irrational as a bargaining or maneuvering tactic.

You're giving them too much credit. This is more of a "some men just want to watch the world burn" situation than a "4-D chess" situation.

Hopefully we're never past rational debate.

I mean, the people making decisions might be well past rational, but hopefully there's always a contingent of people putting deep, rational thought into what might be the best plan to utilize going forward. And hopefully good ideas keep spreading and somehow find their way back to the top. Before it's too late.

The problem when someone only hires sycophants is that competence is pretty far down the list of requirements. And, even if someone is competent they won't share dissenting ideas out of fear they'll end up replaced by another sycophant.

If the goal was to really reshore there are a lot of ways to encourage companies to move in that direction. The CHIPS act is one but Trump wants to cancel it. And I'm sure there are others than can work, but broad based tariffs are not a solution.

I don’t think this playbook works for complex products. Before every component needed for an iPhone is locally manufactured, the overseas competitor manufacturers of those components would be many generations further. You’d be competing with the whole world.

The designers of the chips in the iPhone are basically US entities. (And more generally, Apple, Nvidia, AMD, Qualcomm, etc. are US companies.) They can gradually limit foreign production and re-shore with subsidies.

Sure, foreign chip manufacturers might gain a leg up, but it might not be totally ruinous. There's a way to do it that's smooth, gradual, and mostly painless.

The US has maintained full employment for quite a long time now. You can bring the factories to the US. You can likely even automate a lot of the work. But not all the work – in a place where everyone who wants a job already has one.

So, the question really is: What are Americans willing to give up? Something has to go if workers are reallocated away from whatever they are doing now into these factories.

But it will a lot more expensive.

> First you invite industry to reshore via subsidies and preferential access to government contracts. If necessary, the government must directly invest in new firms.

Summarized: the government gives money to companies, or more charitable "invests".

I would totally agree with you on this path forward BUT FOR the fact that thos nation is dead broke. Completely dead broke. There's no responsible money to do this with. None.

It's not though. The US has been getting compensated for its military investment all around the world.

The explicit architecture of the petrodollar system is that the US will protect international shipping, and in return all petroleum contracts will be priced and executed in dollars. This makes the USD the international reserve currency, and every country participating in international trade needs to hold USD.

How can they put those USD to work? By buying up safe US government debt and other financial instruments.

The US has been rewarded with near unlimited borrowing ability assuming it remained the most stable, powerful, and trusted partner. We could use that to fund practically any investment we want.

> that the US will protect international shipping, and in return all petroleum contracts will be priced and executed in dollars

People say this, but the dollar is free-floating against other currencies and oil is priced on (OPEC-manipulated) supply and demand, so it seems like an accounting fiction. Like, we could price oil in pork belly futures.

Yes but they are settled in dollars, and all the countries of the world are in fact holding dollar reserves.

There's no money because your parties always vote for tax cuts and never for revenue raising measures.

And because of the dollars currency hegemony, the world helps you do it. Just let the tax cuts expire and increase the federal tax rates on higher incomes.

Even if you didn't want to do this, the world will literally fund whatever nonsense you want and you could deficit spend to restore manufacturing.

You as a country have a bunch of options (more than most) and it's sad to watch ye flail around ineffectually.

To me (European), there is no strategy behind these tariffs other than Trump's thirst for a dominant display. Just to show that he can, that he has the cards.

He introduces a shocking measure and then wants to humiliate the affected by letting them beg for relief. Submission. In a speech yesterday he literally said that "countries are coming to kiss his ass" and he clearly took great joy in this validation of power.

What he forgets, and so does this article, is that due to the above tactics this isn't a USA vs China situation. It has become a USA vs everybody else situation.

And surely "everybody else" is working on alternatives.

> And surely "everybody else" is working on alternatives.

Well, it really depends on the competence of "everybody else"...

Can you be more specific in what you mean by that?

If I were a lazy incompetent politician I'd do the short sighted thing (kiss the Trump ass to placate my voters) and leave the long term thinking to whoever unfortunate enough to succeed my position.

> kiss the Trump ass to placate my voters

Why do you think that placates voters? Quite the opposite for most I believe..

Placates the "stonks go up crowd" at least.

I find amusing that people still want to rationally discuss this thing.

What the U.S. is doing is just Brexit 2.0. If reason didn't work with Brexit, why would it work with this?

The best each one of us can do is to isolate ourselves from the disaster.

> I find amusing that people still want to rationally discuss this thing.

You certainly seem to practice what you preach, lol

> Brexit 2.0

Apples to oranges

> isolate ourselves from the disaster

The one that will never come? Go ahead, more for us "rational" folks.

> is just Brexit 2.0

They are (were? will be?) exiting the world, not just the EU...

A jumble. Really one of his least coherent pieces.

My 2 cents in wake of recent news:

It's all a scam, Trump is literally stirring the pot to manipulate the stock market and to enrich his fellow billionaires. This is the same man that started his presidency with a crypto rugpull less than 6 months ago. No wonder DOGE went so hard after every stock market regulatory agency so hard.

I think this misses the point. The president and his closes aides are fascists. They aren't economics professors and diplomats trying to play some game, they're people who look towards the future and see that this world is going to end for a number of reasons. Productive capacity in China, climate change, the decline of patriarchal white supremacy, the facade of a 'rules based order', international payments and finance systems, &c.

Defending a world that is inevitably on the way out is for suckers and weaklings. And boy howdy do they despise the weak. How do you clean out the weak from finance and start preparing a command based war economy?

Volatility, the violence of markets. Move fast and break things. Then there's chaos under the heavens and the situation is excellent, or however the maoist saying goes.

At least to me this looks like trying to get advantages in an expected world war. Sensitive businesses need to die and release labour that can be transfered to a war industrial economy, and the plainly weak people need to die so the people that cares for them no longer have to and can labour with something else like pregnancy or trauma medicine.

Elon Musk is surprisingly not fully on board with this, either he doesn't understand the team he joined or he's started having second thoughts when his stocks crashed. I'm guessing the former, and that he to some extent joined the fash to look cool and manly, and liked it when he got to be on the world stage throwing about their taboo, highly recognisable signals. But now he doesn't find it exciting and refreshing to watch the world burn, he likely doesn't have his own vision for it.

None of the others are into deep sophisticated reasoning. It's not how they think. Mainly they lust, and the thinking they do is to dress up their lust in a way that doesn't turn public speeches and statements into moments of intimacy and vulnerability, because that would be effeminate and look weak.

The war they expect is north versus south, and not east against west. When the climate refugees come and the equator is unlivable, the far north will be the attacked home of the supreme humans, the masters of the future.

Ben Thompson was a leading industry commentator in the 2010s. He was well suited for those times. Less so for these, perhaps.

Has anyone done deconstruction of his thesis / arguments and found his predictions to be lackluster?

He's just spent ten thousand words not very convincingly defending the fundamental misapprehensions which informed one of his own work's major theses, I would argue actually its central one, for the past four years.

Who has the stronger incentive to steelman? And if that's the best he can do right now, I grant that's not the same as saying he will certainly fail to adapt to the post-globalized, much more broadly and deeply impoverished world now taking shape. It is, though, about the same as saying he has not yet obviously begun succeeding.

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