Trade (and Tariffs)
xkcd.com
xkcd.com
I think an under-appreciated aspect of all this is the complete schadenfreude from everyone. The story goes tariffs only hurt yourself but then we see retaliatory tariffs in response. "Oh yeah I'm going to cut off my leg to show you whose boss!" Very funny.
And then you have people predisposed to higher-taxes who are contorting themselves over the economic cost of this tax while supporting significantly more economically destructive tax policies. Very funny.
And, of course, the opposite. Republicans in my state are campaigning on lowering taxes and inflation while also defending tariffs! Very funny.
Agree. Much better to lower the tariffs on other countries that compete with the US.
If Trump wants to kill Canadian auto industry then we'd better open wide our markets to Chinese or European cars.
That's how the story goes with someplace like China. If you impose tariffs on imports you have no cost-effective alternative for, yes, the tariffs will only hurt the importer, because buying habits will not change. (I suppose Chinese cars are a big exception here)
But in this case, the math is probably different because none of these tariffs affect products the US must realistically buy from Canada (e.g. oil and potash). So Canadian exporters will feel some pain and American importers will feel some pain.
What should Canada do in this case if the two can't come to a trade agreement? Continue to import from the US at the same rate as before?
Furthermore, he's very up front about this in On the Principles, and from this information you can calculate the exact number of people who read the damn thing between the person repeating the talking point and the person originating the talking point.
[0] https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
I do not see another path, but perhaps I am mistaken. I am always open to being corrected when wrong.
Tariffs can be a good way to pay for this but they are always negative for consumers, and most of the time also net negative for domestic industry. Hard quotas and trade bans put up a wall that completely removes buyer choice and turns everything into a corrupt seller's market.
The American tradition is using negative tools because of their anti competitive effects. Car makers really don't want people buying cheaper cars from overseas so they lobbied for the chicken tax. In a country where funding from corporate super PACs is the most reliable way to win elections no president will change policy if it means losing a big sponsor.
And of course they limit their analysis to "welfare of the people", first-order, ignoring how loss of industry will (and is already) come back to bite us. As if our only interests were those of passive consumers.
[1] " ... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules." - https://en.wikipedia.org/wiki/Comparative_advantage#Criticis...
Oof.
Here's a direct link to ... several versions of ... the fable:
A better analogy for the trade deficit would be sitting on the couch slamming potato chips and observing the shift in our body away from muscles and towards fatty tissue. Should we be excited to see this example of specialization in action? Is it wrong to want to fix our diet and push our body composition in the opposite direction?
https://yalebooks.yale.edu/book/9780300261448/trade-wars-are...
"Destroy American affluence so that we can't pay with assets instead of exports" is probably the worst conceivable way to unwind the exorbitant privilege of the American Economy. We could have spent that money helping people, instead we spent it on wars and tax breaks for billionaires. We could have spent that money on targeted industrial policy (the IRA and CHIPS acts under Biden were examples of this done right, just not at the scale we needed) but instead we are doing it the hard way. Sigh.
They're explicitly pointing out that the US (and most of the western world) has abandoned the manufacturing sector of their economy, outsourcing work that used to employ millions of people to the developing world.
This is a trade-off that can benefit both countries, but, it is wise to consider both WHO benefits from this, and what the LONG-TERM implications of this entails. It's great for an investor class in America that has the capital to create factories in China, and it's great for China to take USD and start to employ their workforce. But, the question is whether or not this is actually a good thing for the American worker.
The rust-belt would certainly have an opinion on this. My father was a factory worker that was able to support a family on a single income, and when that manufacturing plant closed, it absolutely destroyed the finances of my family.
I personally believe that strategic tariffs should be used to protect our national interests, including providing meaningful employment.
This administration has no interest in strategic tariffs. Instead, they are made overbroad (50% on everything from Canada vs, say, cheap imported steel) and they are made and removed capriciously (tariffs on English whisky dropped after King Charles' visit to the White House).
If Trump really wanted to bring your dad's factory job back, he'd specifically target whatever industry he was working in AND ideally spend the tariff money boosting that industry. This is precisely the strategy countries like Japan used to reach first world status.
Instead Trump uses tariffs like a cudgel -- much closer to what the XKCD comic depicts. There is no chance his tariffs will lead to your father's factory ever being reopened, as that would require, at the bare minimum, a tariff that investors know will stay in place for years, as opposed to one that could be lifted with the visit of a charismatic member of nobility.
Which was more or less the intent of the CHIPS and Science Act for the semiconductors industry.
And the chips act was subsidies
It's also worth pointing out that while, yes, there is 50% tariff on Canadian goods, this only effects ~5% of imported goods, meaning 95% of the Canadian imports are unaffected by this nonsense.
It's also worth pointing out that some of these tariffs actually are being used to help build out US industry, like the CHIPS act.
I don't think that we disagree on anything here, haha
The US has the highest share of revenue going to owners than it ever has in history. We've left behind the Gilded Age.
https://libertystreeteconomics.newyorkfed.org/2026/06/the-po...
An actual plan would be targeting specific industries where america has the ability to scale up, and having congress pass tariffs that slowly ramp up over time to allow a smooth transition.
Capitalism produces where it is convenient to do so.
And no politician can change it.
You can try to protect very few critical sectors, but not whole "manufacturing" which by the way keeps rising in US since ever.
What politicians want to sell is the "good old times of well paying manufacturing jobs".
Robots have long come for those.
If you want to protect your whole "manufacturing", you also need to make peace with the idea that consumer and industrial prices will balloon.
You can only compete, choose your battles, but you can't live in a world that does not exist.
Before tariffs, unemployments was ~3.5% and real wages were rising, and part of why wages have been rising is because the cost of goods like TVs have been falling.
Manufacturing is facing the same fate of agriculture: machines and robots will keep displacing people. Nothing is going to stop it.
2. There is no such world where we'll choose to do things less efficiently to artificially save few jobs. And it's not about your TV being 100$ more expensive, it is about everything you touch and see being considerably more expensive, with a cascade effect on the businesses that need the equipment.
3. Average Joe in US is as much a shareholder as some imaginary person you have in mind. And a company's duty is towards shareholders first, workers second.
> a company's duty is towards shareholders first, workers second.
This is just like, an opinion, man. There's no reason a company has to be like that.
It just benefits company management to act like it's an objective truth because their pay is stock-based.
Law. Board and CEO have fiduciary duty towards shareholders.
Management has to act in shareholders' best interests especially when those conflict with their own.
That's not the same thing as shareholders above workers (or anyone else for that matter).
Laughably untrue.
Is it most convenient to produce semiconductors in taiwan? No. Decades of taiwanese industrial policy produced that outcome.
Capitalism takes advantage of current conditions, but those conditions aren't inherent or natural, they're the result of history and specific choices by specific people.
That's the tragedy of it -- Democrats in office understood the macro picture and worked diligently and intelligently to fix it, the spurned labor interests in the MAGA movement understood what had hurt them and correctly rejected it, but the former didn't know how to message to the latter so a demagogue swooped in and here we are.
The gonzo free-trade rhetoric of the Clinton era should never have happened, second best time to get rid of it was 10 years ago before Trump I, third best time was a few years ago before Trump II, but the fourth best time is now.
If you disincentivize investment, economic surplus tends to shift toward rent-seeking behavior which creates relatively little labor demand. Many economies in Europe are poster children for this phenomenon. Ideally you want an economy that strongly incentives investment over rent-seeking.
There are circumstances in which tilting tax, labor, trade etc policy towards capital is actually good for everyone, in which trickle-down economics actually does work, but they are rare and specific, typically apply to developing economies, and are not nearly as universal as they are portrayed in the typical American econ class. Here's how you judge: look at interest rates. Real rates, not nominal rates. The price to rent money. Is it high? Then the economy knows how to productively deploy a marginal dollar of capital, as evidenced by people willing to pay to do it. Is it low? Then the economy has no idea how to deploy the marginal dollar of capital, as evidenced by its willingness to let you try for dirt cheap. In the latter case, proposals to shift tax, labor, and trade policy towards capital are simply propaganda put forward by the wealthy for purely self-serving reasons.
I agree with everything you're saying except this bit. I don't think democrats were working to fix it in any fundamental way. They're too beholden to corporate interests to do anything that overturns that apple cart. They were trying to tweak the program slightly to make it less bad, sure. But that's not a real fix for such a broken capital/labor split.
In general, stop trying to steelman the looters. Sometimes a con artist is really just a con artist.
Re-read my comment in the context of the message to which it replied.
If that was not your intent, then please don't take it personally.
It's just that because those products don't come in boxes anymore but are distributed over the Internet people think they don't count?
(Also, if you're trying to reduce imports, that messes up the balance of payments of your trade partners who get mad, and if you do it obnoxiously enough then other countries start substituting away your exports)
https://en.wikipedia.org/wiki/Manufacturing
Most of this manufacturing is just not consumer facing.
US industrial (absolute, not per capita) production hasn't grown since 2007: https://fred.stlouisfed.org/series/INDPRO
But the population has increased by 13.5%: https://en.wikipedia.org/wiki/Demographics_of_the_United_Sta...
It's one hell of a gamble to rely so much on software "products", while anything that software actually runs on is made in Asia. Building up a software industry will be a lot easier than it was to grow the industrial and tech ecosystem. And that ecosystem will give sweetheart deals to homegrown software, while extorting yours. Sorry, did I say "will"? I meant it's already doing so:
Apple CEO Tim Cook "secretly" signed an agreement worth more than $275 billion with Chinese officials, promising that Apple would help to develop China's economy and technological capabilities - https://www.macrumors.com/2021/12/07/apple-ceo-tim-cook-secr...
In China a small outfit can get financing and open a factory anywhere.
You can't do that in the USA. You are too small for the lenders or investors who do such things to care yet too risky for traditional financial institutions to risk anything on you.
If I want to buy a couple of CNC machines and start making a product in my garage I have to hope I have enough room on credit cards to do it because I cannot get the money from anyone. Doesn't matter if I have a good idea. Doesn't even matter if I have some initial customers/orders.
If the government is going to piss away money then at least piss it away on that sort of economic activity. If you can present a coherent business plan or product design then lend people the capital secured by the equipment and/or IP with generous repayment terms. Set progressive milestones to unlock additional financing... for example give a gov backed credit account at SendCutSend. When you have an engineer's report on the prototype to turn in you unlock financing to order your first CNC machines. Develop a pipeline. A script to follow. Something a person can follow to get big enough to become a real business.
Grant time to pivot if necessary. If that doesn't work then ultimately the government takes possession of the equipment. Make it clear so long as you return everything in good working order then in X years you're eligible to re-enter the program. Then hand that equipment over to the next person in line.
You need a high credit score (680 at least) to even have a hope and 10% cash to put down if not more.
Unless you can prove experience managing a business forget it. You have to demonstrate other outside income (hope your spouse works a good job) or enough cash in the bank to cover living expenses for a year or more.
If the business is going to be a new venture you have to put together financial projections that demonstrate how you are going to start making money and it had better be quickly. You will not get 2 years to ramp up. And if you fail to meet projections they can call in the loan.
Oh and by the way: you must sign an agreement to take unlimited personal liability for the loan. So if the business fails they get to take away your savings, retirement, even your house. In fact if you don't have significant assets they will put a lien on your house as part of the loan closing!
In China if you want to start a factory in an area the national government lists as desirable the state-owned bank will almost shove money into your hands. Repayment timelines are extremely generous. You mostly don't take on personal liability - instead they focus on the assets, land rights, etc. That is if the business starts to fail you will own machinery, a lease on the land, and/or a factory building so they are content to secure the loan against those things.
When the state bank underwrites your loan in China they only care that your project is technically viable and you have some kind of plan. They assume you will find a way to be profitable and worst case they can take the factory away from you and give it to someone else. As long as your plan makes sense - if your plan says you're going to make robot arms but your plan doesn't mention buying any CNC machines or hiring any electrical engineers you will have difficulties. And if you want to build a factory to make lathes expect serious pushback - the Chinese government considers that sector to be "over-capacity" so they are reluctant to finance new factories for such things.
Not that it matters because unlike the USA if you aren't a Chinese citizen then you can piss right off because you aren't going to be approved for anything and you aren't allowed to own property anyway. Not that any court would ever side with you in any case either.
The entire philosophy is different and I'm saying we should adopt the Chinese philosophy. Instead of letting risk-adverse private banks make the decision the government should make the decision. And instead of focusing on credit score and making you sign an unlimited personal liability contract - do the opposite and secure the loan against the actual factory, machinery, and assets. Build a network of such so if a business fails you can turn around and offer it to the next suitable applicant who can bootstrap their business instead of selling everything for pennies on the dollar at auction.
But you’re right. Everything is in execution and for critical manufacturing it makes sense to pay the fraud price to boost it.
If the business fails the bank will pay someone to come take the machines away then dump it at the nearest auction. If something happens to the machine no one involved cares because you eat the liability (good luck proving otherwise when you're broke).
($LOAN_BALANCE - $AUCTION_PRICE) + $REPOSESSION_FEES + $AUCTION_FEES + $LOAN_DEFAULT_FEES = $YOUR_LIABILITY.
If you dig into the stats actual startups and small businesses mostly don't use any government small business programs. The few that do get used are most often gamed by much larger companies who "contract" with RandomJoe Inc who exists only to claim to be a small business.
1. Sending machinery, food, equipment in exchange of pieces of paper with national heroes printed on them should make you think who's benefitting really from the deficit
2. This is the 21st century, you can't ignore services. How many Office and Adobe licenses, credit card transactions, Netflix subscriptions, Hollywood movies and shows, advertisement space online, US companies sells and it doesn't enter the trade argument?
We also have enough nukes to glass the surface of the planet, enough firearms for every man woman and child to dual would them and 7x the rest of the worlds military.
The US’s people don’t need protection from other nations we need protection from each other.
2. We're talking about the US, the last country on the planet to have to worry about wars. First because it's blessed by geography and separated by two oceans from anything relevant. The US has fought many wars. None of them on their soil since the war with Canada 200 years ago. Second because it is always the aggressor, not the victim. Always. Third, it's the last country on the planet that has to worry about feeding its citizens or having the capabilities to fight a war. Be real and serious. Either in conventional or non conventional wars the US can destroy everything on this planet multiple times over. Drop all of that insecurity.
3. Even more the trade surplus of countries like Germany, Italy. China or Japan isn't good. These countries are working their assess to send stuff abroad, and getting pieces of paper in exchange. Those pieces of paper won't magically materialize tanks, trucks, drones, ships and food in case of a sudden need.
2. Right but if it is dependent on a foreign nation for something vital that means it no longer can confidently assert its independence
3. Don’t disagree at all
Independence is a stupid goal that’s promoted by selfish small-minded people who don’t understand how the world is better off when people trade.
We also have the biggest military by far, and it's not even close. So that covers your two bases.
What I can do for myself, nations do every single day.
I don’t know what this “real power” language is about, but it sounds like claptrap to me.
(Seriously, knock it off with the attitude. You have no idea who you’re talking to. People with highly varied educational and career backgrounds are represented here.)
I don’t have an attitude, it’s just annoying hearing people still pretend history is over and great power conflict is no longer a concern because we’ve reached utopia, and thinking that because they have a certain job that means real, cold and calculating, geopolitics is no longer a requirement.
> the last 80 years of global trade has been upheld by American military might
Have you considered whether these might be coincidental, not causative, and that the Bretton Woods system is largely responsible for this? Leading by example and through persuasion and making friends tends to be much more effective than building armies and making implied threats, dangling a Sword of Damocles over the world. (Case in point: the U.S. has never been able to bring Afghanistan, North Korea, or Iran into the fold, and keeps holding to the same failing strategies regarding these nations despite their persistent ineffectiveness.)
> I don’t have an attitude
I'm telling you how it's coming across. Calling someone "out of touch" is demeaning.
Unless we plan on manufacturing our own shoes and clothes, competitive advanced manufacturing is going to require cheap industrial inputs from around the world.
Another analogy that's in my mind is cancer. You certainly don't want to provide more nutrition for those literally parasitic cells.
This is a bit peculiar, because it ignores the whole "the money we are spending is being exchanged for goods that come back to the US" part of the trade. I.e. it's not a problem that I have a "trade deficit" with the grocery store, because I have my groceries.
https://finance.yahoo.com/economy/policy/articles/trump-brag...
Used to favor the US. Trump's policies and behaviors are ruining the US' reputation as a stable trading partner by demonstrating what damage can be done by an idiot with unchecked power. The rest of the world is going to permanently veer away from US services because it's not impossible (and sadly likely) another feckless imbecile will get put in charge.
My point is that reducing it entirely to "did I gain or receive cash-money from this?" isn't a particularly useful framing.
You need to trade your labor for money, and you need to trade your money for food. I would argue that there isn’t a huge difference in the fundamental nature of those two trades. Framing them in terms of “trade deficits” is pointing out which direction money is moving in each instance, but fundamentally they’re both just trades.
Nations have interests and there’s a real conversation to be had that a country should ensure it has strategic industries so its existence is never at the whims of another.
Then let that be the reason for tariffs rather than the bullshit argument of trade deficit = taking money.
Maybe some smart people, somewhere, would hypothetically have a strategy. Those people currently hold no power. It's not "political theater", it's our ACTUAL politics. It's just so ridiculous that it looks like theater. Which just means the situation is worse than you originally thought.
Examples here: https://www.hoover.org/research/when-trade-wars-become-shoot...
Somehow we count shoes and timber but not gazzilions in financial and cloud services.
Not defending tariffs, but there's a reason people care about trade deficits.
We do a disservice when we act like he has a strategy or view about these things. He doesn't. He is ignorant of how they work, and to prove it you only have to listen to his own words.
now the news is full of all these tarriffs about canada?
What's the factual non-partisan reasoning by which trump has been found not to have the power to create tarriffs, but is still doing it with canada?
whitehouse.gov/fact-sheets/2026/07/fact-sheet-president-donald-j-trump-imposes-additional-tariffs-on-canada
The Supreme Court ruled against the tariffs because while it allows the president to regulate foreign imports as a measure against economic threats; it does not specifically grant the president power to impose tariffs, duties or other taxes which is typically a power that belongs to Congress.
The tariffs on Canada are now being imposed under Section 338 of 1930's Tariff Act which allows the president the authority to apply up to 50% tariffs on countries the president finds has "discriminated", directly or indirectly, against the United States.
Until anyone does, "crime is legal", as coffeezilla says.
The ruling wasn't as generalised as that. What it said was that the president doesn't have the authority to impose tariffs under the provisions of the International Emergency Economic Powers Act, which Trump had cited as the basis for some tariffs. That made those tariffs effectively illegal, but the ruling said nothing about tariffs which had other legislative provisions as their legal basis. The tariffs that you see today cite some other rule as their basis rather than the IEEPA.
For example: if Donald Trump tariffs the country you are in charge of, you are likely willing to pay the economic cost of a retaliatory tariff to seem like you are standing up to America to your constituents. The politician’s goal is to be re-elected.
The politician may aim to deter getting tariffed in the first place, and promising a retaliatory tariff if another country tariffs you first is also reasonable as a deterrent from a game-theoretical perspective.
All it takes is for one world leader to not understand or care about the clear economic negatives to tariffs to start the chain: everyone else can be a rational actor.
In Canada's case the reliance of one trade partner (see https://atlas.hks.harvard.edu/explore/overtime/?exporter=cou... ) is probably a weakness that retaliatory tariffs can influence.
Targeted tariffs can have more nuanced effects. You'll notice that Canadian politicians are talking about targeting red states with their tariffs. These tariffs will also economically hurt Canada, but you won't see a retaliatory tariff on things that hurt Canada disproportionately which would be the case with universal tariffs. You can expect them to pick luxury industries (like they did with bourbon) where preferences can be changed or industrial/commercial ones where (preferably) local or other suppliers are near parity with the US rather than say gasoline.
2) retaliatory tariffs are targeting the hostile actor, not widely against all (other) trading partners, thus redirecting trade towards less hostile country.
I imagine Carney is picking industries that are assymetricly painful to the USA or, since Trump isn’t up for re-election, congressional Republicans.
The real world version is "they're ripping us off by giving us cheap stuff that our producers can't compete with on price." Which is arguably a problem, yes, but the one thing it's not is a "ripping us off" problem.
Unfortunately the feedback loop in nations is much slower than in bodies.
You would expect the US industry to silently absorb his trade policies and only break decades after he leaves. Somehow, they aren't healthy enough for that.
Everyone has been optimizing to increase profits for decades. A 1950's US economy would have taken a lot longer to collapse.
Exactly: just in time for somebody else to take the blame.
I think, realistically, the limiting factor won't be the politics, it will be his health. He's 80 years old.
that's not what comparative advantage means except in a degenerate sense.
if country A is worse than country B in both making clothes and making paper, their comparative advantage is in the product which they are less worse at; they can maximize their GDP making that product.
That is what those "useless pieces of paper" are good for.
They send us goods, tools, food; we give them pieces of paper; true. I guess they could invest in their own people, pay them well, give them better education. Nope, they're doing "business," they're doing the capitalist game, not the patriot one. What to do with that useless money, lots and lots of it? Buy the most stable stuff: land. Businesses. Just look around... Housing crisis? Where do you think that is coming from? One, ever-more-rich carpetbaggers benefiting from government programs that were supposed to benefit the workers, two, India, China, Vietnam, "poor" countries where the wealthy run the game worse than here and have even less respect for people than POTUS ever could. And of course the oil sheiks, about whom we hear when they get some fashionable property, like the top Europe soccer teams, but otherwise are just quietly parking those "useless dollars" to their best interest.
Everyone loves the EU and Canada and their tariffs. In Canada for example American poultry and dairy have as much as 200-500% tariffs. Usually it is seen as a big win to prevent undercutting the working class with cheap foreign labor. But as soon as it has any association with Trump all of a sudden the Progressives forget everything they believe in and turn into laissez faire libertarian capitalists.
Liberals and progressives don't agree on most things related to (free) trade, but agree on not "bullying" allies for no reason and little profit.
This is what confuses me most about Trumps tactics. These are longtime friends and allies who would’ve gladly worked together to try to improve any perceived imbalances.
I cannot fathom treating a friend this way. It makes no sense to me and is destructive.
Of course European farmers complain (they will get competition and potentially lower quality products), so yes, some people like the current tariffs.
Behind every tariff there will be an interest group. If you are producing X in a country and there is an import tariff on X you are happy. If you are buying X you are not happy.
There can be strategic industries that you want to encourage, but the issue is if tariffs are applied with a plan or not. Opinions might differ on this one but history will tell.
In the US the dairy industry is supported through subsidies. In Canada the dairy industry is supported through supply management.
If the US would be willing to stop 'artificially' supporting their farmers (and allowing some to go bankrupt) then perhaps Canada would be willing to stop 'artificially' supporting theirs. Otherwise it's a tom-ay-to/tom-ah-to stand-off.
The difference is the dumb way Trump is doing them and a smarter way of doing them.
Obviously, this comic completely misses that nuance and promotes a pseudoscientific idea that tariffs are somehow bad.
https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off.
Nobody in politics can say this simple truth because the rust belt states are critical swing states.
https://www.commerce.gov/news/fact-sheets/2024/05/fact-sheet...
https://www.npr.org/2024/05/14/1251096758/biden-china-tariff...
https://www.internationaltradeinsights.com/2024/07/biden-adm...
thats not true for different players in some level-or-not playing field
But I’m glad you had a chance to feel like a clever little boy
Selection pressure rewards successful genetic reproduction.
What actually happens at the scale of the organism is mostly irrelevant except how it affects reproduction.
A genetic predisposition towards chopping legs off would be selected for, if chopping legs off resulted in more children than otherwise.
Chopping legs off after having no more children (e.g. after menopause or vasectomy) has no direct genetic outcome (instead indirectly via improved/worstened reproduction of children or relatives).
To be clearer: reproduction is the key (survival matters for reproduction and upbringing).
That's a good summary, although the details are sublimely trickier. https://en.wikipedia.org/wiki/Gene-centered_view_of_evolutio...
The Biden admin went after Canada repeatedly for unfair trade practices, and issued a blanket 10% tariff on Chinese goods.
The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
The one thing the current admin does have a point on is non-tariff meddling. Numerous countries make it almost impossible to sell goods in their countries while the same is not true in reverse, or they levy a high price in garbage regulatory fees (see the EU's new packaging identification directive that completely destroys small business), or in completely made-up fines for vague behaviors not even they can define (see the EU's DSA which is exclusively used against monopolizing American companies while completely ignoring monopolist and predatory EU ones like Booking.com).
Citation needed, I'm in the EU and there is small business
This regulation forces very small businesses to pay thousands and thousands of dollars to comply and register in EACH EU country (what the hell's the point of the union, exactly?). Even if they sell only 10 widgets to Belgian buyers, they need to register in Belgium and pay the fee. Insane.
So a small business selling 5-10k of widgets in EU now has to pay 2-5k in business destroying regulatory compliance fees, putting them out of business. Incredible incompetence from the people who brought you ineffective cookie nag screens.
It's not possible to exist as a small business in the EU because they create regulations to destroy you.
Try creating a business in Germany. You need 25,000 euros to create a GmbH! In the US you can walk into the office in New York City and have an LLC for $9 per 2 years.
The EU is a nightmare hellscape of over-regulation. This is why there are essentially zero EU unicorns. EU bureaucrats support ONLY large and entrenched businesses.
Sounds like you've identified an opportunity to make a company that helps EU startups navigate bureaucracy. You could do all the packaging registration on their behalf.
The EU has recognized this and they are scrambling to fix it in legislation due later this year.
What were these practices?
https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...
Any others?
Those seem kind of minor gripes.
You are ignoring a massive difference. Trump wants balanced trade with each individual country. Pretty much everyone else who wants the US to reduce or eliminate its trade deficit just wants that to apply to total trade, not to each individual country.
The main reason money was invented was so you don't have to have balanced trade with each individual trading partner.
What is booking.com doing that violates DSA?
Despite qualifying for DSA thresholds, the EU pretends it doesn't exist and is not a monopoly. Because it's not American.
It's also not the only European company to be designated as VLOP, as you'll find some EU-based adult content sites on that page as well, but if you really want a European company that is inexplicably missing from this list, I'd go with Spotify.
tariffs are objectively* bad from a "big picture" perspective.
There are some situations where they create winners and losers so that some people in some countries will win, but they always do more damage than good "overall"(or in aggregate across all parties).
A link to the math behind it: https://en.wikipedia.org/wiki/Deadweight_loss
*in almost all cases... For certain goods where you actually want to lower consumption such as cigarettes, then maybe arguably they are good? Same argument as for https://en.wikipedia.org/wiki/Pigouvian_tax
I mean that's the point, no? Swing the hammer carefully at a nail or with maximum force at your own leg?
Or to drop the metaphor - much of the difference between good and bad policy is a difference in degree. So your counterargument here is valid against "all tariffs are bad" but I believe the point most are making is "the current admin's use of tariffs is bad" which makes your counter appear as a bad-faith mischaracterization.
Which is a huge difference. Targetted tariffs can induce compliance with desired trade practices and influence purchasing towards more desirable sources.
Global blanket tariffs on products without domestic sources of substitute goods is effective for increasing domestic prices and encouraging foreign producers to enhance their ex-US trade networks.
If you wanted to encouage local manufacturing, you would add tariffs on finished goods, but leave raw materials untariffed. You might consider tariffing raw materials with ample local capacity. You might carefully consider tariffs for machine tools and other finshed goods which are necessary for manufacturing where there's not current local production capacity.
You might consider reciprocal tarrifs that were actually reciprocal tariffs... you tarrif me, I tariff you. Not tarrifs on countries that have an export surplus because they can't afford to import goods from the US.
For example, he declared a state of emergency about fentanyl, and used that as cover to create tariffs toward every country on earth. That, obviously, has nothing to do with fentanyl; it's just a smoke screen.
He wants to rule by decree. Biden didn't do that. (OK, didn't do it to anything like the same degree. I'm sure someone can find an example where he did. It still wasn't like this.)
https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off.
Nobody in politics can say this simple truth because the rust belt states are critical swing states.
There are a few specific cases when one may want to implement them:
* https://www.noahpinion.blog/p/when-are-tariffs-good
One should also be mindful one's manufacturing base:
Protecting workers from that kind of competition seems fair. Tariffs aren't bad in itself. They are just a tool.
Unfortunately fools wielding a tool like this can cause a lot of damage, but that's true for any tool.
Given the timing and the metaphor of blood being sent to and from a limb, this is almost surely a reference to the tariff threats against Canada.
Sorry, I'm European and can't keep up with the erratic US Gov. I read a summary at the end of the week.
In, say, China a worker doing 996 will make 720 items. Te average working hours in the Netherlands are 36 hours or so per week. Making 360 items.
As long as there is free trade the Chinese factory will simply outproduce the Dutch one since they utilise their capex better.
Obviously European workers can't be reasonably asked to compete in an open market when labour laws, salary, health inspection etc... in China are at a 1920 Dutch level.
If your factory workers spend twice as long working, it's likely that more widgets will get made. I'm not certain you can generalize too far from that, though.
Tariffs aren't inherently bad, they're a tool.
[1] Caveats apply. For example more advanced machinery with higher stress may necessitate shorter shifts; while highly motivated creative work might permit longer shifts at times.
[2] Adam Smith -for instance- was mostly against tariffs, though he identified certain exceptions such as national defense reasons.
At second approximation, the <Dutch> factory in that example might net make a larger number of items per hour because the workers are more alert and concentrated and make less mistakes. So the <dutch> factory and the <chinese> factory might actually be producing the same number of items.
Of course then there's more steps to this, and you need to start actually looking at systems and what you're optimizing for etc etc.
And, not everything is factories. For instance, if your operator (at eg. Smit or Mammoet) is operating a large crane that's lifting a 100 ton oil platform, maybe you'd prefer them to be wide awake and on the ball, regardless.
This was worked out by David Ricardo 200 years ago. You still benefit from trade even if (granting the argument) you are worse at producing everything.
Does the same hold for going from 5 days to 7 days or 8 hours to 16 hours?
A reasonable person should agree at some point adding more time will make people less productive due to lack of breaks, rest, etc.
Is it obvious where the line is? if so, where?
"As of July 2022, more than 80 UK companies and organisations are recognised as having permanently implemented a four-day working week"
"As 50% of workers claim improved productivity during the period, the Manufacturing Technology Centre (MTC) announced it will permanently provide a four-day workweek to its 820 employees"
(edit: And only if you don't fall asleep at the controls and destroy the factory first. 12 hour shifts are brutal. At least one place I know bans you the next day if you exceed 11h, for your own protection if nothing else)
(edit2: This was documented in the 1st world war when munitions factories that tried to ramp up by increasing shift durations past a certain point ended up hardly improving productivity, but did increase accident and sickness rates to the point that it was starting to hurt the war effort. )
It seems I've 'stung the wasps nest' on HN by not denouncing them outright it seems.
A scalpel is one thing.
Dynamite is something else.
I agree the current US strategy behind tariffs is pretty retarded. Good example of fools trying to use a powerful tool.
If I had to guess at the comic author's intention...
It's commentary that the logic is flawed. If this is why you're doing tariffs, you're not using them correctly.
Not that tariffs should never be used.
Like, "other countries pay the tariffs."
No. They don't.
How can we have nuanced conversation about the trade-offs, if the leader of one political party blatantly lies about a fundamental detail of how tariffs work?
600% reduction in the price of drugs?
We can't even start a discussion with people who believe this. At all. They reject any information, even their own knowledge of how numbers work.
Apparently the dictionary is "woke."
Wikipedia: "A tariff, or import tax, is a duty imposed by a national government, customs territory, or supranational union on imports of goods and is paid by the importer."
Oxford Economics: "Tariffs are taxes imposed by a government on goods and services imported from other countries."
I meant, "Yes, you're so damned right! It's even in the dictionary! I wish people would educate themselves and not believe lies!"
The president says a lot of really stupid things and those stupid things are highlighted, but that’s not indicative of the average and one of the main talking points about tariffs is that they increase costs in order to incentivize local suppliers
Yes, because it's a one-panel comic.
At the cost of consumers paying for goods/services?
Your take is as reductive as the take in the comics.
People in a nation working 5 days a week for 8 hours are getting paid less and less over time. Heck lot of people now need double shifts to make ends meet totaling up to 12 hr or even more. They can only afford a Christmas light from the nation mass producing it by working 6 days a week, 12 hr shift.
And lets not pretend this was only about protecting workers. There were multiple agendas:
1. Bring back jobs 2. Remove trade barriers between countries 3. Make US rich by collecting huge amount of tariffs
All three can't be true at the same time. If jobs are brought back then you aren't going to collect huge amount of tariffs because nothing is being produced outside. If trade barriers are removed then that comes at a cost of slashing tariffs so you can't really collect huge amount of tariffs.
The foolish reasoning highlighted in the comics is the reason there is so much trade war.
If a nation has a decades-long technological lead over another nation, then obviously it will outcompete it in many industries and enjoy major advantages in trade. But somehow that advantage doesn't seem to count in your argument. Cherry-picking one side's advantages is not an analysis of international trade; it's just bias.
Tariffs are a way of warning other countries "don’t take us for a ride." They help American workers, factories and towns that were hurt when jobs went overseas.
Tariffs shouldn't feel like hurting yourself for no reason. They are an important tool for standing up for yourself when other countries (to say nothing of bad trade deals) want to take advantage of you
The main reason we have open-ish border for people and goods is to reduce the risk of war. You are not going to wage war with a country that do business with.
This undermines this idea.
Open borders can be GREAT, but they can also be a point of vulnerability if we lose control of them
But for a beautiful moment in time we created a lot of value for shareholders.
Feel free to start your own factory in US, nobody is stopping you. Just keep in mind that for commoditized products (most consumer stuff, for example), prices are all that matter. "Buy American" is not a product feature.
The answer I found was very sobering and mildly depressing. There was no room for developing the technology itself. That had already been done by large companies with the capital and resources to commoditize things early.
Instead, the real opportunities were found in business/management consulting selling the product and tangential things, like having a construction company to help build out infrastructure needed for the technology.
At this point I think technology no longer interests me because it doesn’t have a place for me.
I find this argument interesting because the US economy is the largest in the entire world by a fairly wide margin. That the US is being robbed implies it's operating from a position of weakness, which is an absurd idea.
Are other countries with factories really responsible for US companies outsourcing manufacturing to them? Do you want cheap goods or do you want your fellow Americans paid pennies?
The international monetary system as envisioned by Keynes was supposed to use a central world bank and settlement currency (the Bancor) to make sure that strong countries couldn't be parasitic on weak countries. This was sabotaged by a US official who was also working as a Soviet spy, Harry Dexter White. Neither pole of the new postwar bipolar order wanted anything that would limit their dominance.
The long-term outcome, however, was that the poverty of the world was much more attractive to exploit than the workers of the US, the consumer base for all of this production was left to deteriorate - to shrink to just the wealthy whose income came from investments, as all production shifted overseas.
Everything would have gone great if it weren't for those dastardly Chinese, who didn't let oligarchs shape their economy, and planned for the well-being of China, not their own personal well-being. Western oligarchs were going for a slave planet controlled by the largest bank accounts; this required no competition because it had (and desired) few real assets. China cultivated a manufacturing powerhouse, perfected its infrastructure, and operated from a base of actual, controlled domestic capital.
The West is now stuck trying to trade paper, and manufacturing whose only value is the poverty surrounding it, for Chinese goods. Now they're going to treat the US like the US treated Mexico. Manufacturing will come back in the US, owned by the Chinese.
Tariffs and the well-being of US workers are the only way out of this. Elite Americans will do anything but this, because they are 1) bad people, and 2) barely American.
(starting long before the current trade war)
that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement (USMCA).
[...] the U.S. has never gotten close to exceeding our USMCA quotasSo I think this supports the point that Canadian politicians are bad for protectionist trade policies, right?
Think tanks around Europe were celebrating an "end to hostilities". And then WW1 happened. Trade does not prevent war. War is not always a rational consequence or act.
What does prevent war is a good standard of living. Eliminate resentment, and one of the great causes of war is lost.
Whether you need tariffs or not to ensure good standard of living I don't know. But the goal should always be to increase standard of living and uphold justice, tariffs or not.
https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off.
Nobody in politics can say this simple truth because the rust belt states are critical swing states.