No shit.
This is literally in the first paragraph of every economics textbook when they talk about tariffs.
Donald Trump didn’t win the Presidency by reading textbooks.
How do you get by in life without reading? I mean, don’t you have to know what the symbols on clocks mean to tell time?
don’t you have to know what the symbols on clocks mean to tell time
not all types of clocks.
Numbers aren’t words duh.
“Today’s show is brought to you by the letter 3!”
And you don’t need a textbook to understand how the very basics of business work. You know, the thing people seem convinced he understands? A fucking toddler has more knowledge than Trump. The United States of America doesn’t have two brain cells to rub together
They heard lower taxes, and simply misunderstood that tariffs are another form of taxation.
They heard whatever they wanted to hear, because that rambling shitgibbon said everything to everybody.
They heard that from a proud liar. It’s not a secret he lies constantly
He won it by taking bribes from billionaires, like a true politician
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No, the first page is how it introduces inefficiencies into a supply/demand equilibrium, resulting in a lower quantity supplied and at a higher price.
No one who every studies economics, even in passing, would even consider another country paying a tarrif for something you buy. The concept is just… what?
Yeah, the, misguided, idea is that the increase in price from imports will drive domestic production, of those things, as the high prices reduce demand, and cut into profit margins. This used to be something that was a sensible assumption of what would happen. However the contemporary world has far too much infrastructure for tariffs to truly work like that any longer. It will, usually, be cheaper to increase the costs for the tariffs, than to restructure back to domestic production.
It could drive up domestic production, however there us a good reason we import, which is similar to your last point.
Bad example, but its the same reason you “import” Mexican workers - their skills and work ethic, along with willingness to work long hours for low wages. You aren’t going to get hundreds of thousands of Americans to decide to work in a sweat shop, or on farms, or doing handyman work for the same wages.
I was going to mention the low cost of a life in China, and the lax H&S, ethic and environmental regulations, but America is trending that way too.
Yes, for capitalism to exist, there must be both a consumer class, and a labor class, below the capitalist class. The cost of labor in highly industrialized countries is one of the largest driving factors behind the development of this infrastructure. We need to make sure we can import from places where the cost of labor is low enough, for the long term. Even China, and India, are starting to off-sure labor. The problem is that this, along with population growth, can’t be perpetual. Which is the inherent problem underlining capitalism as a permanent economic system.
Clearly we need to add those to the banned books list
My friend just got into a fight with some MAGATs on facebook about why we need things like civics education so we know what we’re voting for.
You’ll be shocked to learn the MAGATs called him a communist for daring to want to educate them. They don’t even want to open the textbook let alone read it.
It’s a certainty, not a fucking "likelihood’. That’s how they work.
You mean there’s no chance that Wal-Mart might choose to absorb the increased prices out of the goodness of their hearts? :o
Well, the far-right courts made that illegal for publicly-traded companies, so, no.
But the question is, will American manufacturing make up for the costs? Or, will American manufacturing just raise their prices to match the tariffs and lump the profits into their executive bonuses. They deserve it after all for being smart enough to raise prices.
American manufacturing CAN’T, it would take years, decades honestly, to get back the capacity to make all the crap we’ve outsourced to other countries.
And this is the absolute brain rot fantasy of tariffs that I keep explaining to these idiots, and keep getting blank stares or awkward silences.
Tariffs are 100% punitive, without a domestic/alternative sourcing strategy. They can work long term to reduce a foreign nation’s competitive advantage in an industry while allowing a domestic industry space to exist, but that only works if there’s a domestic industry that already exists (at enough scale to meet demand) or a long term government program to nurture and build those industries - education/vocation training, regulatory concerns, infrastructure development, raw materials availability, etc
Tariffs Chinese steel/electronics/machine tools/etc into oblivion? Either buy the imported at a high price, or buy the domestic at a slightly less high price - but the cost is always carried by the consumer no matter what.
And then there’s the ensuing trade war that always happens, with the countries retaliating with their own tariffs to the US. Tariffs are a lose-lose scenario, just like they were in 2019.
And they want to kill the CHIPS act, which was going to build some of that local supply.
IMO that’s the height of economic policy stupidity because if/when Taiwan gets invaded, China will own nearly all semiconductor manufacturing outside of the highest end fab houses such as Intel or GlobalFoundries. The future of domestic manufacturing is high tech or specialty like Corning glassworks or L3-Harris, even car manufacturers get beat out by imports with our current tariff structure
And beyond that, it will incentivize further automation rather than more blue collar jobs.
More like generations IMO
This is largely accurate unfortunately. A good example is Apple. They tried to make a high-end desktop computer manufactured in the US. To do this they needed a specific type of screw. In the area near their factory, they only found one machine shop that could make the screw and they could guarantee an output of 50 screws per day after a 3 week lead time to tool up. And that was the final offer.
When they finally moved to China, they submitted the same request. Multiple vendors appeared offering thousands of screws per day and if they wanted to place a bigger order the company would set up a new factory just to produce those screws and could output tens or hundreds of thousands per day depending on requirements.
Another example is the iPhone and Gorilla Glass. There were a few Chinese companies in the running to manufacture the glass panel that would go on top of the phone. The one that got the contract, in anticipation of getting the contract, had already purchased the machine to form the glass and had samples ready for inspection at the contract signing.
We have allowed our business climate to become so bogged down in red tape and liability and lawyers and insurance, that most American companies are simply unable to execute at the same speed as China when it comes to manufacturing.
I would absolutely love to get more manufacturing back in the US. But the process of outsourcing is not going to get unwound overnight. It took two decades to move everything to China, even if the whole country agreed that was a mistake it would take another two decades to bring it back. Because as the Apple screws demonstrate, it’s not just about the factory that produces the widget. It’s about everything that goes into that factory, the companies that make the parts and the screws and the plastic. When you deal with China, they are all right there and they are all ready to go. Same can’t be said for the US.
I was sorta on board until you blamed regulations as a reason businesses can’t have manufacturering I. The US.
Regulations are written in blood. Stop pretending like a living wage and no slave labor is a bad tbi g inhibiting production.
Tarrif the snot out of the slave wage countries.
While youre correct, it’s worth noting that alot of the reason China can outmanufacture us is the lack of those sane regulations. Nets for suicidal factory kids and all that. Thing is, the tarrifs also arent just being applied to slave wage countries, but the entire world basically
Unfortunately, the United States is also a slave country within it’s prison system.
Want a slave? Just trump up some nebulous charges about them, so to speak. Profit.
An awful lot of regulations are written in blood. I am not suggesting we relax any of them. I’m talking about the endless supply of permits and forms and local government licenses and that sort of thing. There is an awful lot of regulation that does absolutely nothing to increase safety, it’s just bureaucracy. We could get rid of all that without impacting safety.
If some other countries are any indication, not only will they raise the prices but they will raise it way more than the tariffs and just blame on tariffs and with time people will just think that is the way it is. “X cost 3 times as other countries? That is because the tariffs” no mind that the tariffs is like 50% and not 300%. Like they already do with gas prices. Gas go up immediately when oil prices rise but only goes down, if ever, for new stock.
During his first term Trump put a tariffs on Washing Machines. The price of imported washing machines went up. The price of domestically manufactured washing machines was also raised. Even the price of dryers — which didn’t have a tariff — went up on both imported and domestically manufactured appliances.
I have yet to see an economist that thinks Trumps tariff plans will benefit the working class.
Those prices entirely rebounded by the end of 2019. Thats how tariffs work. It became more expensive to import, companies slowly replaced imports with cheaper local goods, the cost settles.
There are surely instances where it didnt rebound entirely but thats not one of them.
That doesn’t change that putting the tariff in place was a stupid idea that didn’t help anyone. Rebounding after the removal of the tariff doesn’t undo the damage done while it was in place.
Didnt help anyone? You can’t think of a single way it might have helped?
Overall, no, I do not believe they helped anyone.
And even if they did, they still did more damage to everyone else than any small group of people they may have helped. Which is still reason enough to say that it didn’t help anyone, because, as a group, the country was worse off with them in place.
Am I one of the people damaged by higher washing machine prices? How would I know?
That is exactly what US steel did in response to the steel tariffs back in Trump round one.
I think we know
I think you guys know.
I don’t think that guy over there knows.
I think we all know except for him too!
Haha number go up again
Uff the country that loves to buy temu crap is forced to buy american crap
Pretty sure everyone was told this before the election.
Problem:
“Harris outperformed Biden’s 2020 numbers among white voters with college degrees. Meanwhile, exit polling from NBC News gave Republicans a 9-point gain with voters who never attended college.”
Thing is, basic economics is a high school subject, except:
“Sir, when am I going to have to know how tariffs work in the real world?”
You had econ in HS? Mine had it but it was only an elective.
I don’t think mine even had it as an elective. We were too busy spending 2 years of history classes learning how nice the Pilgrims were to the natives. And this was in Massachusetts, which I believe ranks #1 in education in the US.
#1 in education.
And also the only state in the country where every precinct voted for Harris.
Surely that must be a coincidence, right?
Basic economics was not a required class in my high school. Macro and Micro Economics were both electives.
tariffs, trade wars, and their effects surely were covered, or at least touched on, in a history class or two.
Hmm maybe my highschool was far below average then
I was the idiot who though skipping school to partake in smoking weed was the better outcome of studying at school, although I do partially blame being bullied at school for me avoiding it.
‘I love the poorly educated’, donald j trump, feb 2016.
A simple google search would have many credible sources giving the answer to what tarrifs are.
But to the magats, only fox news has the truth.
I bet a big portion of that 9% shops at Walmart.
Would been smart for Wally’s bottom line to maybe tell their customers about this before the fucking election.
They don’t care. The owners of Walmart are some of the richest people in the world. So like all rich people they just figure they’ll hike prices and people will still pay (and they’ll have to, because Walmart tends to drive all its competitors out of town).
They do not care, and the Waltons probably like Trump. They’ve got their money already. Waltons don’t care about America; they’ve been in bed with China since Sam died & they’ve been gobbling up the excessive profits for years. Cheap Chinese goods for low-ish American prices.
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just like mexico paid for his ‘wall’
That wall probably bought him a lot of renovations at Mara Lago.
It doesn’t even matter:
https://www.axios.com/2024/11/18/consumer-confidence-trump-republicans-white-house
Turns out, a lot of consumer mood is literally just people’s social media feeds. Even if prices go up and QoL goes down, on average, consumers might feel better simply because Trump being in office makes them feel good.
I am not going to point out how monumentally problematic this is… Nope. There’s definitely no bad precedent for that.
Turns out, a lot of consumer mood is literally just people’s social media feeds. Even if prices go up and QoL goes down, on average, consumers might feel better simply because Trump being in office makes them feel good.
Well, we just were told that nearly all economic indicators pointing to a good economy was not “really” good because people just weren’t feeling it. Even if things were actually better. Sure, not everyone is invested in stocks, so that’s not really saying much and people don’t really see how things like GDP are going to help them make ends meet. Understood. But nearly everything was turned around, or turning around, under Biden.
Still not good enough - the Democrats apparently did nothing for the price of eggs so voting for donvict was going to make things “better”, even if they really won’t. And now a whole lot of dipshits are saying everything is better, even though donvict is not in office yet. WTAF.
/facepalm
It’s even simpler than that, it’s people being told what to think.
I think “people” speaking very generally used to not read a ton of news, heard stuff from the grapevine, and so on. “Elites” and news junkies had somewhat more monolithic sources.
And that’s not true anymore. Nearly every “average” person’s life is now dominated by a personalized feed, a podcast, TV, radio, chatroom, whatever, and it’s having an outsized influence compared to their observations of reality now.
It’s my belief that there’s basically nothing Biden could have done to alter this (other than regulating algorithms, and it’s far too late) and ultimately it’s the DNC’s fault for “taking the high road” and not playing the propaganda game.
100% guarantee price raises across the board, even for stuff not affected by tarrifs/mass deportation labor shortages.
It’ll be covid all over again, an excuse to price gouge the fuck out of those who can least afford it.
If companies are going to suck consumers dry just because they can, they’d better put Republican’s name on it.
Are you kidding ? This is absolutely going to be blamed on Biden, loudly and repeatedly.
I know I know, Walmart is in the GOP’s pocket. But if the DNC knows what’s good for them they’ll take any scraps they have from Harris 2024 and painting the entire Republican movement as lovers of raising prices on Americans.
They won’t.
Wonder who they who are they gonna blame then?
What are you talking about? It’ll all be Biden’s fault.
It will be blamed on Obama’s missing long form birth certificate and the bulge in Michelle’s skirt. Hillary’s true remark on the deplorables. Kamala’s cackle. Biden’s age.
Yes, but don’t worry. Elon and Trump will be FINE. Stop worrying, everyone!
There are two bright sides to this (and dark sides as well):
-This will decrease demand of Chinese goods in the U.S., hurting a country that is … problematic to say the least. (Anyone remember the Uyghurs? The O.G. Gazens?) It probably won’t shift demand back to the U.S. factories, but maybe it is time for another country to become the slave-labor-ish manufacturing capital of the world.
-When the prices skyrocket, along with food from all the missing immigrant farm hands, Trump will get blamed. I just hope this wasn’t the plan all along and those “fake” inflation hikes back after covid weren’t to cover for the real ones down the road.
When the prices skyrocket, along with food from all the missing immigrant farm hands, Trump will get blamed.
i really hope you’re right, but i think that will most likely get blamed on biden “ruining the economy” in his last term, or something in that vein. a lot of trump voters get their news from fox news or directly from donald trump, and i can’t imagine either of those sources criticizing trumps economic policies.
Funny that we both posted the same concern at the same time.
i’m glad that we both realized that 17 minutes ago was the perfect time to post that comment
Trump will get blamed
Ha, ha, ha, he will blame Biden, or immigrants, and his moron supporters will believe him just like they have when he lied the other thousands of times.
Trump will get blamed
Oh honey…
When the prices skyrocket, along with food from all the missing immigrant farm hands, Trump will get blamed.
In all likelihood, only a small percentage of his voters will actually blame him for the predictable consequences of his tariffs. The rest of them will believe Trump when he blames it on Biden’s economic policies that were put in place before Trump’s second term. Our egos have a funny way of making us do mental gymnastics to avoid having to accept the idea of oneself being wrong.
Trump will get blamed
Like they blamed him for his COVID-19 response?
If that didn’t get through… honestly, I have no idea what would. Americans are just stuck in their feeds and divorced from reality now.
The OG Gazans
Oh my you must be in your early 20s…
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Everything he will do contributes to anger, division and the collapse of the United States.
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China will pay for the tariffs in the same way Mexico paid for the wall.
Realistically it will shift more work to India, vietnam, mexico. I’m not in supply, but I’m pretty sure my company has started shifting out of china in prep for this.
Didn’t part of the wall fall over into Mexico a while back?
I feel like no one bothered to campaign against Trump… until… AFTER he won
The I voted for him for cheaper eggs crowd are about to call this fake news.
It’d be kinda ironic if eggs were about the only thing that didn’t rocket up in price…
Duuuh. Did they really think the company would just eat the additional costs? What a bunch of maroons.
They thought the exporting country/company would pay for it.
and without raising the price they sell it at. which is just many millions of sad examples of how ‘effective’ the republicants war on public education has been.
I have a trick to get others to pay it for me:
Yeah, I mean I knew that, you knew that, Americans are so uneducated that the majority had no idea how basic economics work.
Well FAFO, we’re all going to learn the hard way I guess.
And fuck those of us who already knew the lesson. Its like school but without getting to go home at the end of the day. And just like school, the kids who need it probably wont pay attention
First of all walmart doesnt have to do this, they are choosing to.
Second, last time trump did tariffs prices went up in the following months, and then returned back to baseline following that.
There will be a reactionary period once they are placed. Walmart will either shift to buying more locally to maintain the most profit they can, or a competitor will undercut them.
Shifting to buying more locally can work when there are local businesses that can ramp up production easily to meet demand, it doesn’t work when there is no local production that can be easily expanded, or when there aren’t enough local resources to supply local manufacturing (for example lithium for battery production)
Also, trade has been our leverage keeping China in check, we need their stuff, and they need our money, so we get along. If suddenly we say “we don’t want your stuff anymore, and we’re not giving you our money” they’re gonna turn around and sell more to India, Russia, and Europe. They’ll be fine, but we’ll both lose our leverage and toilet our economy for at least a decade while we try to recover from shooting ourselves in the leg.
I think thats awfully simplistic but if you can point me to some source that goes into the details of what you are predicting I’d be happy to read it.
Always fair to ask for sources, but what exactly do you want to see here? Or what part are you contesting?
The lack of specificity. They already replied with more detail and I largely agree, although I simply dont think its a permanent harm if nonessential goods rise in price and then drop over a period of a year or two.
Not sure if this is at all what you are asking for, but here goes:
As to the first bit I won’t provide as many sources as I’m not finding many that bring it all together in an understandable way, it’s basic economics of supply and demand. Here’s a video that explains some of the basics of supply, demand, and tariffs (it’s a bit jargon-filled, but I’m not finding much that strikes a good balance between understandability and oversimplification: https://youtu.be/3pSysspeCxY
In addition to the usual supply and demand changes that Tariffs bring, throughout the 80s, 90s, and 2000s a lot of US manufacturing was moved out of the country, to countries with cheaper labor. Often physically transporting the production line equipment from the US to China where labor was cheaper. So in most of those instances, our local production capability was reduced, and getting it back will require rebuilding it from the ground up (which oftentimes takes years). And that’s industries where we have the natural resources (and harvesting/mining facilities) to supply local manufacturing, where we have to spin those industries back up it could take longer.
Moving on to the trade leverage with China. I’ll try not to get too bogged-down with the history, but the US is China’s biggest “customer” in percentage of their exports bought. But considering our rivalry, they’ve been wanting to change this for years, and are making good progress in becoming less dependent on the US buying their exports. In 2004, the US bought 21% of China’s exports https://wits.worldbank.org/CountryProfile/en/Country/CHN/Year/2004/Summarytext and in 2023, even though the US imported more from China than 20 years ago, we only bought ~15% of their exports https://tradingeconomics.com/china/exports-by-country - we’re still their largest trade partner, but they have done a lot of work to be less-dependent on US trade.
Along with this, there’s also a bit of a rivalry between the G7 (America, Canada, France, Germany, Italy, Japan and the UK) and BRICS (Brasil, Russia, India, China and South Africa). There’s a lot of complicated geopolitics in this, but the part that’s relevant to trade is that the GDP of those nations has now surpassed the G7 nations: Here is a graph comparing the GDP of the G7 to BRICS countries over time. https://en.m.wikipedia.org/wiki/BRICS#/media/File:BRICS_AND_G7.svg Essentially China now has other friends, that go to a different school (and they’re actually real). And their new friends have money, want what China’s selling, and aren’t as likely to try to tell China what to do.
With regard specifically to the US relationship with China there is this from Biden’s Tariffs from 6 months ago which contrasts China’s response now to their response in 2018 when we had more trade leverage. https://www.reuters.com/markets/what-doesnt-kill-you-makes-you-stronger-china-trolls-new-us-tariffs-2024-05-15/
Here is a more recent article where a Chinese official says the the tariffs will backfire on the US https://apnews.com/article/china-economy-tariffs-us-commerce-trump-843769cd7175011d8e34be32cc8d045f
On one hand, less dependence on Chinese manufacturing by the US might be a good thing (one example I’ve seen of this is as drone warfare becomes more common, the US being reliant on China manufacturing the batteries isn’t ideal). But there’s a smart way to go about it (things like the CHIPS act that incentivize industries to move manufacturing to the US). If we don’t get manufacturing back before implementing tariffs we won’t have enough local supply to meet demand and prices across the board will go up.
I think I agree with all that, although I dont think China or America needs each other at this point.
I agree it would be ideal to have things prepared for when tariffs hit and companies are free to do that. They have some lead time now, and they could have prepared plans for this in advance as well.
If prices do go up, it will be because most companies choose to raise the price and/or drag their feet. People are increasingly critical of corporations these days, I dont think they will get off as easy as last time.
Buying local is an option to evade paying tariffs on imported goods.
But what do you do if buying local is no real option?
I’m thinking of coffee, chocolate, computers, mobile phones, game consoles, cars, etc.Unpopular opinion but Americans as a whole need to get used to less of nearly any nonessential good.
You gotta learn how to present ideas around here:
Make do with less.
“NOOO! FUCK YOU! AND BILLIONAIRES SUCK!”
Stop over consumption to starve the billionaires and save the planet.
“YEAH ALL YOU GREEDY PIGS! STOP!”
