Why Do Domestic Prices Rise with Tarriffs?(marginalrevolution.com)
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Why Do Domestic Prices Rise with Tarriffs?
https://marginalrevolution.com/marginalrevolution/2025/04/why-do-domestic-prices-rise-with-tarriffs.html
226 comments
And it gets worse for you. That's primarily considering the US market. Your Chinese competitors aren't simultaneously being shut out of non-US markets (since this is a unilateral trade war, not the US + allies).
Your US sales may drop 50% due to the change in price, and your Chinese competitor's US sales may drop by 75%, but their sales in other countries may not change at all. Meanwhile, your sales outside the US are going to drop because not only are your component costs going up driving your price up, you now face tariffs when selling in every other country in the world (if they choose to respond to the tariffs the US is levying on their goods).
Your US sales may drop 50% due to the change in price, and your Chinese competitor's US sales may drop by 75%, but their sales in other countries may not change at all. Meanwhile, your sales outside the US are going to drop because not only are your component costs going up driving your price up, you now face tariffs when selling in every other country in the world (if they choose to respond to the tariffs the US is levying on their goods).
Because of how China desperately needs exports, they'll almost certainly end up being tariffed by the EU, so just because this started in the US doesn't mean it's gonna stay there.
I don’t understand the argument why EU would tariff China just because they need export. Can you elaborate?
Because the EU tariffing Chinese exports will be one of the asks for an EU-US trade deal.
The ability of tariffed countries to sell their output elsewhere is understood by the people doing this.
A better way to look at this is the first salvo to economically re-partition the world into spheres of influence. (i.e. circa 1960s)
The principals have all written about how they see political-economic-military alliances as being inherently tied together.
So their intent is to make this a US-dollar-NATO choice, rather than any of those in isolation.
(Agree or disagree with their premise, feasibility, and/or morality, as one might)
The ability of tariffed countries to sell their output elsewhere is understood by the people doing this.
A better way to look at this is the first salvo to economically re-partition the world into spheres of influence. (i.e. circa 1960s)
The principals have all written about how they see political-economic-military alliances as being inherently tied together.
So their intent is to make this a US-dollar-NATO choice, rather than any of those in isolation.
(Agree or disagree with their premise, feasibility, and/or morality, as one might)
So the goal is to rely on NATO as allies right after they threatened individual members of NATO and generally telegraphed that the alliance shouldn't be relied upon?
Please, just stop steelmanning these actions as anything coherent that would possibly benefit the United States. In the best case, Trump is a demented has-been that only understands the world in terms of bullying. So sure, maybe the "plan" is to keep bullying Europe until they're joyfully professing that Trump's diapers smell just like roses and asking how high he'd like them to jump. But that just doesn't seem very in touch with reality.
Please, just stop steelmanning these actions as anything coherent that would possibly benefit the United States. In the best case, Trump is a demented has-been that only understands the world in terms of bullying. So sure, maybe the "plan" is to keep bullying Europe until they're joyfully professing that Trump's diapers smell just like roses and asking how high he'd like them to jump. But that just doesn't seem very in touch with reality.
That Peter Navarro item resurfacing on news today (he is the chief advisor to Trump on tariffs) explains a lot. He made up at least one of the experts he quotes on trade in his non fiction books using an anagram of his own name. https://www.npr.org/2019/10/18/771396016/white-house-adviser... If something looks entirely stupid one the surface, it is exactly what it looks like, there's no 4-D chess with any of these guys except exploiting inaction of Congress to do things it could, like revoke the law that gave Trump these wide powers to tariff given for the "war on terrorism".
It takes two thirds of the Senate and two thirds of the House to pass legislation. It takes two thirds of the Senate and only one half of the House to impeach and convict. And deposing this anti-American fuck would carry much more weight internationally for starting to repair the damage done to our relationships with our allies. Just sayin'.
For non Americans, a slight clarification, passing a bill to revoke would only requiring half, but to override the presidential veto would require a 2/3 vote.
For the tarrifs specifically it wasn't the case as they were under an emergency powers bill which could be cancelled using a privileged resolution without veto, but that was until the Continuing Resolution which took away that safeguard.
You can be angry, or not.
You can be curious, or not.
But you shouldn't let the fact that you're angry force you to be incurious.
You can be curious, or not.
But you shouldn't let the fact that you're angry force you to be incurious.
Being tired has made me incurious.
But I'm not even that incurious. Rather I think the problem is that their claimed plans rhyme with reality, while being utterly preposterous upon deeper analysis. We need to avoid implying there might be any merit to them lest other people read our comments and, not having been as diligent to separate fantasy from reality, get sucked into the fictional universe where Trump is some master negotiator who is going to bring other countries to heel with pure drunk-uncle-on-the-recliner force of will. And if we do analyze their delusions to figure out what destructive thing they might do next, we should be using the same disclaimers as doctors at a mental hospital.
But I'm not even that incurious. Rather I think the problem is that their claimed plans rhyme with reality, while being utterly preposterous upon deeper analysis. We need to avoid implying there might be any merit to them lest other people read our comments and, not having been as diligent to separate fantasy from reality, get sucked into the fictional universe where Trump is some master negotiator who is going to bring other countries to heel with pure drunk-uncle-on-the-recliner force of will. And if we do analyze their delusions to figure out what destructive thing they might do next, we should be using the same disclaimers as doctors at a mental hospital.
It doesn't matter if you think their plans will work and/or are a terrible idea. I don't waste words on the latter, because I assume stringing together insults on the internet isn't going to change anyone's mind.
Instead and more interestingly:
- Do you think they'll have any outcomes?
- If so, what do you think those outcomes will be?
Hint: there's plenty of academic literature on the topic
Instead and more interestingly:
- Do you think they'll have any outcomes?
- If so, what do you think those outcomes will be?
Hint: there's plenty of academic literature on the topic
I don't think there needs to be this hard distinction between saying a given thing won't work, and proposing specifically what I think will happen instead. On this topic I generally avoid saying what I think the overarching dynamics are, because being specific generally gets written off as a crazy-sounding straw man.
My initial point is that you answered someone's "why EU would tariff China just because they need export" with saying that the US would "ask" the EU to do this - implying that the EU would want to cooperate or is otherwise beholden to the US. That's thinking from within the fictional universe, which is what I called out.
Since you asked, what specifically I think will actually happen is that Trump will continue to alienate our allies, keeping them at the realization they have to go their own way rather than being able to rely on our military backstopping them. To the extent there is leverage Trump can force Europe to put tariffs on China, Europe will only do that as much and as long is required to decrease that leverage. About the only saving grace here is that the EU isn't the type of place that will agree to something de jure and then de facto allow those rules to be skirted.
I think a different administration that was open and friendly to Europe and other allies, reassured our commitment to NATO, increased support for Ukraine rather than turning tail, etc, might have been able to make the case for coordinated international action being necessary to maintain the military advantage enjoyed by the US and its allies. But a savvy administration wouldn't have started with the ham-fisted unilateral blanket tariffs either.
My initial point is that you answered someone's "why EU would tariff China just because they need export" with saying that the US would "ask" the EU to do this - implying that the EU would want to cooperate or is otherwise beholden to the US. That's thinking from within the fictional universe, which is what I called out.
Since you asked, what specifically I think will actually happen is that Trump will continue to alienate our allies, keeping them at the realization they have to go their own way rather than being able to rely on our military backstopping them. To the extent there is leverage Trump can force Europe to put tariffs on China, Europe will only do that as much and as long is required to decrease that leverage. About the only saving grace here is that the EU isn't the type of place that will agree to something de jure and then de facto allow those rules to be skirted.
I think a different administration that was open and friendly to Europe and other allies, reassured our commitment to NATO, increased support for Ukraine rather than turning tail, etc, might have been able to make the case for coordinated international action being necessary to maintain the military advantage enjoyed by the US and its allies. But a savvy administration wouldn't have started with the ham-fisted unilateral blanket tariffs either.
So you want a tradeblock of democratic countries? Like NATOASEA? Could have had that but you sabotaged both ?
You forget what has already happened. Canada has escalated the trade war ... that cannot be explained by your reasoning. And the flaw is this: yes, Canada cannot seriously hope to defend against Russia without the US, and needs a US alliance, but they also see the US has no choice but to defend any Russian attack. Either that, or face Russian nukes in Ottawa. So, Canada escalates.
Plus, I get that it makes sense for you to think about it this way. But given the choice to get fucked militarily BUT get a few more euros now, I guarantee every EU government will choose to get fucked militarily. 95% of the EU countries only have to "sacrifice" in that OTHER countries get fucked militarily, so it's not a hard choice.
And that is before you factor in that Russia is not in any shape to attack any European nation of importance right now, not even Poland. In other words: the politicians choosing to act on the military problem or choose a quick buck ... will be out of office by the time their military decision matters!
And, lastly, I put forward the history of the UN. The great forum for international cooperation and making compromises in shared interests. The first 3 things the UN was going to solve with this cooperation-not-obstinate-refusal-to-accept-reality was the "Arab Issue" (now better known as Israel-Palestine), Kashmir (which under UN guidance has lead to such "successes" as the Partition wars, which when combined made more victims than WW2 according to some sources), and the Congo-Rwanda issue (which has raged on, with no-one actually caring after colonialism ended, and is now at risk of turning into a pan-African war involving every country from Morocco to South Africa). I'm glad they got all those issues solved to everyone's satisfaction before they were going to try forcing the US, EU and ... to cooperate because otherwise absolutely no-one would believe they have any chance whatsoever.
Besides: your hope that foreign governments will act in the interests of "the citizens of the world" (when the vast majority won't even act in the interest of their own citizens) ... what exactly is that idea based on? 12% of the world are free democracies and mostly do that. What about the rest?
Plus, I get that it makes sense for you to think about it this way. But given the choice to get fucked militarily BUT get a few more euros now, I guarantee every EU government will choose to get fucked militarily. 95% of the EU countries only have to "sacrifice" in that OTHER countries get fucked militarily, so it's not a hard choice.
And that is before you factor in that Russia is not in any shape to attack any European nation of importance right now, not even Poland. In other words: the politicians choosing to act on the military problem or choose a quick buck ... will be out of office by the time their military decision matters!
And, lastly, I put forward the history of the UN. The great forum for international cooperation and making compromises in shared interests. The first 3 things the UN was going to solve with this cooperation-not-obstinate-refusal-to-accept-reality was the "Arab Issue" (now better known as Israel-Palestine), Kashmir (which under UN guidance has lead to such "successes" as the Partition wars, which when combined made more victims than WW2 according to some sources), and the Congo-Rwanda issue (which has raged on, with no-one actually caring after colonialism ended, and is now at risk of turning into a pan-African war involving every country from Morocco to South Africa). I'm glad they got all those issues solved to everyone's satisfaction before they were going to try forcing the US, EU and ... to cooperate because otherwise absolutely no-one would believe they have any chance whatsoever.
Besides: your hope that foreign governments will act in the interests of "the citizens of the world" (when the vast majority won't even act in the interest of their own citizens) ... what exactly is that idea based on? 12% of the world are free democracies and mostly do that. What about the rest?
That is a lot of response to a pretty tightly framed comment.
Especially considering most of the consequential decisions and impacts will play out over the next 6+ months.
Maybe people/governments will act one way; maybe another.
Especially considering most of the consequential decisions and impacts will play out over the next 6+ months.
Maybe people/governments will act one way; maybe another.
Classic western mindset. Western liberal democracies aren’t real/free democracies.
If Russia fakes it and cannot make it, nobody can. Ignore the stark difference in behaviour before trump and after trump, because if trump is pure real politics then the before had to be idealistic and well meaning.
You are monsters and the world knows. The thing from the swamp, that is your civilization . A gross, locust like beast, glueing stolen gold and shiny things to its great conquests. Needing war, because western advanced tech saved you from china and the others taking all back. Delenda Moscovia!
You are monsters and the world knows. The thing from the swamp, that is your civilization . A gross, locust like beast, glueing stolen gold and shiny things to its great conquests. Needing war, because western advanced tech saved you from china and the others taking all back. Delenda Moscovia!
It was the Soviets, Russia, that needed war so much they fed the whole world weapons. Russia still does that. The west simply gave some people better weapons to defend themselves.
Because otherwise China will sell all of their tarrifed goods into the EU, undercutting local producers.
Note that the EU is also removing their di minimus loophole (with a longer lead time, announced last month). See the tarriffs on BYD for likely moves on other goods.
And yes, this is a bad idea. But it's the least worst idea available right now.
Note that the EU is also removing their di minimus loophole (with a longer lead time, announced last month). See the tarriffs on BYD for likely moves on other goods.
And yes, this is a bad idea. But it's the least worst idea available right now.
[deleted]
it probably won't end you but maybe try to make sure your neighbors don't vote Right and support ultra-nationalist racists in Eastern European countries.
An old lady in the fashion industry once said "Everything is connected" and if Europe hadn't been mislead for fuck knows how long by dimwitted conservatives and their formidably educated voters, they would have been a proper economic competition with their own social medias instead of a tool to dump and pump stock prices ... which is how you can absorb your losses ... by focusing less on your productivity and more on that of le Wall Street's drivers and handlers of crisis
An old lady in the fashion industry once said "Everything is connected" and if Europe hadn't been mislead for fuck knows how long by dimwitted conservatives and their formidably educated voters, they would have been a proper economic competition with their own social medias instead of a tool to dump and pump stock prices ... which is how you can absorb your losses ... by focusing less on your productivity and more on that of le Wall Street's drivers and handlers of crisis
Any additional cost on top of the 'natural' costs involved with producing a result raises prices.
Additional costs that direct resources to a government are a form of a tax, this includes direct taxes at the point of sale, and it should also include taxes incurred for traversing an arbitrary interface (tariff or toll).
Any form of tax on goods / services proportionately effects those who spend more of their income on those goods / services more. Tariffs on not-luxury goods are regressive taxes on the poor and middle class.
Additional costs that direct resources to a government are a form of a tax, this includes direct taxes at the point of sale, and it should also include taxes incurred for traversing an arbitrary interface (tariff or toll).
Any form of tax on goods / services proportionately effects those who spend more of their income on those goods / services more. Tariffs on not-luxury goods are regressive taxes on the poor and middle class.
This is too simple. Prices float somewhere between cost to produce and value to consumers.
You can’t raise prices beyond value or no one will buy it.
You can’t lower prices below costs (for too long) or you go out of business.
Competition pushes prices down towards costs.
Therefore businesses are always looking for markets with barriers so they can rise prices to value.
Tariffs typically raise costs for all producers, but this only inevitably leads to price increases when competition has driven prices down to near costs.
Unfortunately many staple grocery products fall into this category.
You can’t raise prices beyond value or no one will buy it.
You can’t lower prices below costs (for too long) or you go out of business.
Competition pushes prices down towards costs.
Therefore businesses are always looking for markets with barriers so they can rise prices to value.
Tariffs typically raise costs for all producers, but this only inevitably leads to price increases when competition has driven prices down to near costs.
Unfortunately many staple grocery products fall into this category.
The supply and demand curves are not straight lines. There is not one unit price that consumers value a good at, that's why the marginal price that a consumer will pay depends on the quantity produced. The first most eager buyers would pay a higher price than the rest of the buyers you can find at higher quantities produced (but a lower price).
Tariffs eat into consumer surplus and producer surplus not just by raising prices, but also thereby reducing quantity. I think the only times you'd see no effect on consumer surplus via a tax are when the consumers are always going to pay a fixed amount regardless of quantity they can get (perhaps in some budget-constrained scenario), or if the amount of the thing that can be produced is fixed regardless of price; neither of these scenarios describes consumer goods.
Tariffs eat into consumer surplus and producer surplus not just by raising prices, but also thereby reducing quantity. I think the only times you'd see no effect on consumer surplus via a tax are when the consumers are always going to pay a fixed amount regardless of quantity they can get (perhaps in some budget-constrained scenario), or if the amount of the thing that can be produced is fixed regardless of price; neither of these scenarios describes consumer goods.
Your argument assumes there is meaningful competition to begin with.
In the case of groceries, a few big companies ultimately control nearly all of it. They know you “need” groceries, so they will happily pass along the increased cost. What are you going to do, stop buying food?
In the case of groceries, a few big companies ultimately control nearly all of it. They know you “need” groceries, so they will happily pass along the increased cost. What are you going to do, stop buying food?
Well, also, in the case of groceries, margins are typically very low, due to competition. Large supermarket chains tend to have profit margins in the low single digits; over 5% would be unusual. There’s just very little room to absorb cost increases without raising price.
> You can’t raise prices beyond value or no one will buy it.
Arguably, that's precisely the aim of some of these tariffs. Price the foreign imports out of the market
Arguably, that's precisely the aim of some of these tariffs. Price the foreign imports out of the market
Which could work if there were domestic alternatives or the capacity to produce domestic alternatives. The US lacks the apparel manufacturing capacity to takeover from the countries being hit with the current very high tariffs. We also lack the environmental factors to take over growing (ignoring the years needed to get started) coffee and vanilla and many other agricultural products.
But isn't value subject to drift (inflation) and couldn't we inevitably expect such drift while raising costs across the board?
Value and price aren't the same thing. Inflation is a change in price, not necessarily a change in value of the things being purchased. This is why when you examine how much something has changed in price you should compare real versus nominal changes.
If you bought your home for $100k in 2000 and sold it today for about $185k, you would be selling it for the same real amount despite the nominal change in price. Its value has not changed in real terms. If you sold the home for $300k, that would exceed the increase from inflation alone and indicate an increase in value (either improvements you've made, the local area has become more desirable, or reflecting scarcity of homes in general).
Or look at your own salary. If your salary is just keeping up with inflation, your employer does not see any increase in value from you over the years. If your salary is dropping relative to inflation, you are, arguably, losing value. If your salary increases faster than inflation, you're increasing in value. (Of course there can also be a lag, the 8% inflation in 2022 may result in depressed salaries for 1-2 years before they catch up. Watch the trend over a longer period of time.)
If you bought your home for $100k in 2000 and sold it today for about $185k, you would be selling it for the same real amount despite the nominal change in price. Its value has not changed in real terms. If you sold the home for $300k, that would exceed the increase from inflation alone and indicate an increase in value (either improvements you've made, the local area has become more desirable, or reflecting scarcity of homes in general).
Or look at your own salary. If your salary is just keeping up with inflation, your employer does not see any increase in value from you over the years. If your salary is dropping relative to inflation, you are, arguably, losing value. If your salary increases faster than inflation, you're increasing in value. (Of course there can also be a lag, the 8% inflation in 2022 may result in depressed salaries for 1-2 years before they catch up. Watch the trend over a longer period of time.)
No, I disagree. I think that inflation (on mean) reflects real value that is accrued by an economy.
Obviously it’s a tax increase on working people to fund even more tax cuts for the already insanely wealthy, allowing them to buy up even more assets.
Even if you have a $10m portfolio you’ll be next, once they’ve drained the $100k and $1m lot.
Even if you have a $10m portfolio you’ll be next, once they’ve drained the $100k and $1m lot.
And folks who argue the situation harms the billionaires typically are thinking about it in dollar valuations as opposed to percentage of all wealth owned. If their portfolios shrink on paper to be only worth a tenth as much tomorrow (but everything dropped that same paper value amount) but their purchasing power goes up and are able to buy a larger percentage of all wealth, they are coming out ahead. As #47 said, only the weak (poor) will fail...
Their wealth may increase as a percentage of all wealth in America. For a long time that basically meant the same thing, because the dollar was the foundation of the international financial system. But that was because of the stability of the US government.
When other countries disengage their financial systems from ours in favor of the yuan, being a billionaire in American dollars will be about as impressive as being a billionaire in Zimbabwe dollars.
When other countries disengage their financial systems from ours in favor of the yuan, being a billionaire in American dollars will be about as impressive as being a billionaire in Zimbabwe dollars.
[deleted]
> Even if you have a $10m portfolio you’ll be next, once they’ve drained the $100k and $1m lot.
What does this mean, in practical examples? Just trying to understand your point.
What does this mean, in practical examples? Just trying to understand your point.
You left out exchange rates and therefore purchasing power.
Historically, tariffs have led to a widening of currency spread between the tariffed (weakens) and tariffing (strengthens) nation.
Which generally acts in opposition to inflation, ceteris paribus.
E.g. importers pay more in dollars to import goods from a tariffed country, but if the imposition of tariffs causes the dollar to strengthen and the foreign currency to weaken, some competitive exporter will say "You know, I can sell those to you for less, in dollar terms, because my costs are in my (devalued) currency."
Historically, tariffs have led to a widening of currency spread between the tariffed (weakens) and tariffing (strengthens) nation.
Which generally acts in opposition to inflation, ceteris paribus.
E.g. importers pay more in dollars to import goods from a tariffed country, but if the imposition of tariffs causes the dollar to strengthen and the foreign currency to weaken, some competitive exporter will say "You know, I can sell those to you for less, in dollar terms, because my costs are in my (devalued) currency."
First, prices per se are irrelevant. The ratio of labor price to goods&services price is relevant.
Second, the labor / goods&services price ratio itself is irrelevant, as measured in the short term. What is relevant is the long term outlook of this ratio. See eg the Dutch Disease.
Third, even the long term labor / goods&services price ratio is irrelevant. Not everything in this world is, or should be, reducible to simplistic financial value.
One way to approach the underlying intuition is in terms of homeostasis, at nation state level.
Second, the labor / goods&services price ratio itself is irrelevant, as measured in the short term. What is relevant is the long term outlook of this ratio. See eg the Dutch Disease.
Third, even the long term labor / goods&services price ratio is irrelevant. Not everything in this world is, or should be, reducible to simplistic financial value.
One way to approach the underlying intuition is in terms of homeostasis, at nation state level.
I'm confused, are you asking we close our eyes and only operate on internal bias? Where does the world matter if no single metric is relevant? Regardless of number metrics, what do you think matters? I think a family that can no longer afford a laptop for their child's education matters. I think 10,000 or 100,000 such families matter a lot. How do we tell that story? What options have we but the numbers?
Long term median purchasing power, especially of essentials eg housing / food / energy / education, matters more to the health of a nation than the price of hitech on open global markets at a specific time instant. Furthermore, while the health and wealth of a nation are correlated, they are not the same. I wonder if there is a sensible way to prioritize health over wealth.
Tariffs only make sense to protect a fledgling domestic industry which is already receiving investment. Even then, does anyone think that for instance US car makers will suddenly be competitive globally?
Tariffs make sense to protect industry critical to the independence of a country. Imagine how different the Ukraine war would look if the EU wasn’t dependent on Russian (or US) energy.
Yes, profits and growth may not be optimal. But it’s like complaining your 401k isn’t doing as well as it could since you’re paying for healthy food and a gym membership.
That being said the manner trump is implementing these tariffs is ridiculous. They should be slow, meticulous, and announced far ahead of time. These seem optimized for chaos and are likely aimed at political goals (see TikTok and China already) or simply crashing the market (wouldn’t be the first time Bessent has profited off a financial crash).
Yes, profits and growth may not be optimal. But it’s like complaining your 401k isn’t doing as well as it could since you’re paying for healthy food and a gym membership.
That being said the manner trump is implementing these tariffs is ridiculous. They should be slow, meticulous, and announced far ahead of time. These seem optimized for chaos and are likely aimed at political goals (see TikTok and China already) or simply crashing the market (wouldn’t be the first time Bessent has profited off a financial crash).
A _targeted_ tariff (for instance, a tariff specifically on gas and oil) might arguably make sense there; a blanket tariff absolutely would not.
> They should be slow, meticulous, and announced far ahead of time.
The main lesson they learned from Trump's first term was that they were better off making big changes and fixing what they broke later. Moving slowly seemed to make it too easy for "the machine" to stop them as it were.
I don't say this as the right lesson to have learned or a good approach, just an observation.
The main lesson they learned from Trump's first term was that they were better off making big changes and fixing what they broke later. Moving slowly seemed to make it too easy for "the machine" to stop them as it were.
I don't say this as the right lesson to have learned or a good approach, just an observation.
I just think this is an unreasonably charitable way to frame the observation. "The machine" identified, in Trump's first term, that many of the policies he wanted to implement would be bad for the country or would violate the law. It's true that moving more quickly and chaotically provides fewer opportunities for people to identify and mitigate the problems in advance - but that's not good, even for someone who wants big changes, unless you view causing problems in and of itself as a good thing. (In that vein, I should note that Trump shared a video last week from a guy saying he intentionally crashed the stock market.)
OK so he and his cronies intentionally crash global economy to buy cheaply. How come absolutely nobody stands to them?
If he would be dictator in 3rd world country, half of his military or personal guard would want to kill him. Then you have lone lunatics or just very motivated people with a good rifle and scope and skill to actually use it for a precise 1km shot. I bet he already pissed off few thousands of those since he very intentionally harms USA as a country and its citizens. Yes millions in gun community, nra etc would eat their shoes before thinking negatively of him, but that's not whole armed community in USA.
If he would be dictator in 3rd world country, half of his military or personal guard would want to kill him. Then you have lone lunatics or just very motivated people with a good rifle and scope and skill to actually use it for a precise 1km shot. I bet he already pissed off few thousands of those since he very intentionally harms USA as a country and its citizens. Yes millions in gun community, nra etc would eat their shoes before thinking negatively of him, but that's not whole armed community in USA.
Because the US has taught its military and other branches to respect the balance and rules from the constitution and precedents. Trump, like facists before him, exploit these rule followers to gain power through populous appeals, lies, and subterfuge. Then they push the boundaries to further consolidate power and accomplish their goals, however poorly thought out they may be. Take for example Trump's talk of a third term. He's already tried to start a coup when voted out the first time. He certainly won't stop if there is any chance he'll face real accountability.
Yeah that's totally reasonable. People tend to get so emotionally and politically charged today with anything that mentions Trump that I tried there to just comment on their lesson learned regardless of my opinion on it. I could definitely see that coming across as too charitable
It also seems too close to a common tactic his supporters use of pretending to be a neutral observer to preserve their own reputations while asking questions which reinforce his propaganda. “The machine” never existed except in the sense that breaking the law or bad ideas get opposition, but repeating it without acknowledging it as fictional makes it sound like you’re “just asking questions”.
I actually pulled "the machine" from University of Alabama Greek life, I haven't heard that phrase used before on the national stage or by Trump supporters. If there's an overlap there on my end its coincidence.
I will say, though, that I'm not repeating anything that needs to be acknowledged as fiction. I don't think it is a fiction that Trump and his team learned to move fast and break things because moving slowly will be stopped. That doesn't mean his lessons are learned based in fiction, only that their learning the lesson itself is not fiction.
I will say, though, that I'm not repeating anything that needs to be acknowledged as fiction. I don't think it is a fiction that Trump and his team learned to move fast and break things because moving slowly will be stopped. That doesn't mean his lessons are learned based in fiction, only that their learning the lesson itself is not fiction.
For anyone with a drive by down vote, care to actually say why?
Europeans don't tend to buy American cars because they're too big for smaller older roads and are inefficient (Europe has no domestic petroleum source, so fuel prices are much higher and volatile).
Tarrifs aren't going to change that.
Tarrifs aren't going to change that.
"Smaller older roads" XD
We don't live every family in a house miles away from work, schools and friends. Many of us live in cities, within flats, with lines of metro or bus close by. Our children go walking to schools. Roads are fine and maintained so regular vehicles can be used instead of 4x4, bikes are respected. Roads have sidewalks to walk.
We don't live every family in a house miles away from work, schools and friends. Many of us live in cities, within flats, with lines of metro or bus close by. Our children go walking to schools. Roads are fine and maintained so regular vehicles can be used instead of 4x4, bikes are respected. Roads have sidewalks to walk.
Have you ever been in the US? The roads there are huge. Road lanes are huge. Cars are huge. Crossroads are huge. Parking spots are extremely large. European roads are fine, but they are way more narrow and tuned for smaller vehicles. It's easier to drive with a smaller car (or "normal sized" for you).
Also in Europe in the west we have narrow or paved historical roads, and in the east we have many poor quality roads. In both cases smaller (non-huge) car is beneficial.
Also in Europe in the west we have narrow or paved historical roads, and in the east we have many poor quality roads. In both cases smaller (non-huge) car is beneficial.
I think the point @n3storm is making isn't about the size of the roads. It's far more radical than that. They are saying European city's haven't just ditched SUV's - they have ditched cars.
If you come from somewhere like the USA, Canada or Australia, it's hard to imagine that's even possible. Actually, it isn't possible in the suburbia's those countries have built to house their people. But it turns out it is not just possible if build your cities differently, it's better in some ways. It costs less because there are no cars, you waste far less time in commute, and its healthier because people get more exercise (they use their legs to move around).
"They have ditched cars" is an exaggeration of course. A lot of them still have cars. But most days, they won't use it. Daily commutes are done on foot, or bike. Long distance commutes have a public transport leg. It's hard to get your head around unless you live there for a few weeks.
If you come from somewhere like the USA, Canada or Australia, it's hard to imagine that's even possible. Actually, it isn't possible in the suburbia's those countries have built to house their people. But it turns out it is not just possible if build your cities differently, it's better in some ways. It costs less because there are no cars, you waste far less time in commute, and its healthier because people get more exercise (they use their legs to move around).
"They have ditched cars" is an exaggeration of course. A lot of them still have cars. But most days, they won't use it. Daily commutes are done on foot, or bike. Long distance commutes have a public transport leg. It's hard to get your head around unless you live there for a few weeks.
Most of the world didn't ditch cars, exactly. They just predate them.
Car culture is recent and pretty uniquely American. I lived in a pre-car city with a lot of ~8ft lanes and "double lanes" that were converted into one-ways to accommodate modern cars and trucks.
Car culture is recent and pretty uniquely American. I lived in a pre-car city with a lot of ~8ft lanes and "double lanes" that were converted into one-ways to accommodate modern cars and trucks.
> Most of the world didn't ditch cars, exactly. They just predate them.
It's true they predate them, but then so do most American cities. When the car arrived the American cities opted to expand their cities, giving everyone their own block of lawn to live on. The European cities could have expanded in the same way too. Utrecht went as far as to build freeways to make it possible. But in the end, they opted not to and Utrecht in particular turned their brand new freeways into canals.
> Car culture is recent and pretty uniquely American.
American certainly has it's own unique culture, but I think we are discussing a specific characteristic of that culture which it shares with other countries like Australia, Canada and New Zealand. The density of most cities in those countries is so low owning a car is mandatory. Existing without one is almost impossible. I know because live in one. Quoting a Japanese exchange student who lives with us for a while - to her surprise even with two cars getting to everywhere we had to be in an average week was a major logistical exercise. In the countries @n3storm is talking about, car ownership is completely optional.
It's true they predate them, but then so do most American cities. When the car arrived the American cities opted to expand their cities, giving everyone their own block of lawn to live on. The European cities could have expanded in the same way too. Utrecht went as far as to build freeways to make it possible. But in the end, they opted not to and Utrecht in particular turned their brand new freeways into canals.
> Car culture is recent and pretty uniquely American.
American certainly has it's own unique culture, but I think we are discussing a specific characteristic of that culture which it shares with other countries like Australia, Canada and New Zealand. The density of most cities in those countries is so low owning a car is mandatory. Existing without one is almost impossible. I know because live in one. Quoting a Japanese exchange student who lives with us for a while - to her surprise even with two cars getting to everywhere we had to be in an average week was a major logistical exercise. In the countries @n3storm is talking about, car ownership is completely optional.
They are huge indeed. But is not the reason we don't buy USA cars. In the countryside yes, for years, because they are useful. Transport tools, materials, dogs...
Cities center are transitioning to no-cars, so paved historical roads is not an issue.
Europe is quite a mix also, maybe is an issue in your area, not in Spain.
Cities center are transitioning to no-cars, so paved historical roads is not an issue.
Europe is quite a mix also, maybe is an issue in your area, not in Spain.
When I say "old", I am referring to that the layout/route was thought of centuries ago, long before the invention of the car or anything remotely close.
e.g. London.
e.g. London.
London is somewhat unusual in that its streets are actually rather wide for a European city, due to urban planning regulations enacted after the Great Fire and (until recently) the willingness of its inhabintants to demolish historical buildings. Paris, Vienna, or Prague, for example, are generally much denser, not to mention genuinely medieval cities like Girona.
London is not a representation of Europe, nor Madrid. Even Paris is completely differente. Germany was full rebuild after war. So, is Europe is a mix, but roads are not the reason to not buy tractors, is utility. Tractors are for country work.
The roads are smaller and older. It's just that that isn't a bad thing.
And it is a bad thing for cars. It's just not a bad thing for people, because good alternatives to cars exist.
And it is a bad thing for cars. It's just not a bad thing for people, because good alternatives to cars exist.
There's no point in explaining that. A lot of them have never been outside the country and maybe Canada. Even if they can afford to go somewhere they don't have the time. They can only imagine the world outside as a version of what they know. And everywhere they went hasn't been very different from what they have at home. They won't be able to imagine it.
You're assuming a lot given HN's American demographic isn't exactly reflective of the general population.
Even among the American general populace, most have traveled to a country besides Canada.
Even among the American general populace, most have traveled to a country besides Canada.
Just because only 48% of people have a current passport, doesn't mean only 48% have ever had a passport.
A majority of Americans have traveled to two or more countries:
https://www.pewresearch.org/short-reads/2021/08/12/most-amer...
A majority of Americans have traveled to two or more countries:
https://www.pewresearch.org/short-reads/2021/08/12/most-amer...
Interesting. When I visited the US in 2003, I recall the news reporting on a study showing that more than half had never been to another country, and they stressed that that included Canada and Mexico.
It became a bit of a discussion point during the ride with the those I visited.
It became a bit of a discussion point during the ride with the those I visited.
Have you never heard of the north sea oil fields? Norway funded its pension fonds with it and a few other states use the oil from there.
I think US and other non-european companies can and do make cars targeted to EU market that complies with local laws and customer preference. They can make the cars smaller to fit road/lanes/parking spaces, just like they put the steering wheel on the right for UK.
Infact Tesla is (or was) best selling car in Norway and UK too.
Infact Tesla is (or was) best selling car in Norway and UK too.
Europe has domestic petroleum production.
Ironically, the one American car company that was interesting to Europeans was Tesla.
European governments may be reluctant to put a tariff on Tesla because of Elon Musk's political association with the Trump government. This is literally how fascism works, and appeasing the bully is distasteful, but that's realpolitik. It will be up to European consumers to reject Tesla because the brand is now toxic.
European governments may be reluctant to put a tariff on Tesla because of Elon Musk's political association with the Trump government. This is literally how fascism works, and appeasing the bully is distasteful, but that's realpolitik. It will be up to European consumers to reject Tesla because the brand is now toxic.
I keep asking 2 colleagues how their nazi car is, suffice to say they are not very happy and ashamed of owning it now. Of course both have semi-mandatory stickers with 'I bought this car before elon turned nazi' but that's a bit bullshit... he was utter piece of shit way before he entered government with his salutes. Very effective manager with a good nose on hiring actually brilliant technical people, but that's about it with his positives.
Horrible parent, horrible boss, racist spoiled nepo kid out of touch with reality with gigantic ego, who grew up in apartheid and evidently took not so good lessons from it... I could go on, it was out there for all who cared to look. Most didn't due to his stellar successes.
Horrible parent, horrible boss, racist spoiled nepo kid out of touch with reality with gigantic ego, who grew up in apartheid and evidently took not so good lessons from it... I could go on, it was out there for all who cared to look. Most didn't due to his stellar successes.
I imagine that being a poor Dad with a gigantic ego is pretty common amongst CEO's. Sure there were troubling signs but there were also signs of Musk working for the better good, like pulling out of Trump's advisory council in 2017 to protest pulling out of the Paris accord. It was obvious the guy was weird and a little unhinged, but many of my interesting friends are weird and a little unhinged. Buying a Tesla before 2024 was an unequivocally "left" statement.
Ironically I believe I've seen that U.S. EV manufacturing has already started to slow down & projects being cancelled.
Edit: relevant links
https://archive.ph/J1wSt
https://apnews.com/article/trump-tariffs-electric-vehicles-a...
Edit: relevant links
https://archive.ph/J1wSt
https://apnews.com/article/trump-tariffs-electric-vehicles-a...
I'm not in EVs, but I'm already seeing a "don't import anything to the US if you can avoid it" message at work.
Datacenter space in Canada is now suddenly very appealing, you can put machines there directly from Asia without paying tarrifs, but still get good network latency into the US
Datacenter space in Canada is now suddenly very appealing, you can put machines there directly from Asia without paying tarrifs, but still get good network latency into the US
The Great Cheeto will be demanding network latency tariffs next
I'm not going to quibble with you on this, because I think you're right, but I can think of a secondary use. A country with weak governance could use tariffs to raise money because it's easy to manage at the point of entry, rather than requiring more sophisticated systems such as income or property value reporting.
This could explain why, for instance, poor countries use tariffs on goods that have no chance of building a local industry.
This could explain why, for instance, poor countries use tariffs on goods that have no chance of building a local industry.
This is also why some economists like them, they're hard to cheat on. Know what's even harder to cheat on and has much less long term impact on the economy? Sales tax. A federal sales tax would have been preferable to the import tax. But there are probably other political concerns at stake here.
Tariffs will make them less competitive, mainly because the inputs are also being tariffed whereas international competitors can buy tariff-free inputs. These blanket tariffs will destroy any potential for internationally competitive manufacturing.
Is anyone expecting tariffs to improve global competitive advantage?
Tariffs may work towards an isolationist goal of producing and consuming our own goods. Tariffs are an attempt to unwind globalization though and disconnect our markets from the rest of the world.
Whether it makes us more competitive globally is really a non-goal. It could happen if our resources, labor, and manufacturing costs are lower than other countries but that's extremely complex to predict even if you wanted to try.
Tariffs may work towards an isolationist goal of producing and consuming our own goods. Tariffs are an attempt to unwind globalization though and disconnect our markets from the rest of the world.
Whether it makes us more competitive globally is really a non-goal. It could happen if our resources, labor, and manufacturing costs are lower than other countries but that's extremely complex to predict even if you wanted to try.
Yep I think this is really the important point.
Free trade has its own set of negative consequences. Namely that it’s good for owners of the means of production but not for the workers.
What’s interesting to me is that tech is effectively the last “American made manufacturing”, and the relative lack of outsourcing (compared to other forms of manufacturing) has kept tech workers powerful.
The same logic of h1b workers weakening the American citizen tech worker, applies to free trade.
Free trade has its own set of negative consequences. Namely that it’s good for owners of the means of production but not for the workers.
What’s interesting to me is that tech is effectively the last “American made manufacturing”, and the relative lack of outsourcing (compared to other forms of manufacturing) has kept tech workers powerful.
The same logic of h1b workers weakening the American citizen tech worker, applies to free trade.
> tech is effectively the last “American made manufacturing”
Its at least the largest industry manufacturing here, I'd expect.
I have friends that work in manufacturing in the US though, it does happen.
One, for example, runs a family business making steel buildings and storm shelters. They use American made steel if I'm not mistaken, I'm less certain about other inputs like the paint or equipment used (certainly the welders, heavy equipment, etc are foreign).
Another works in the automotive industry. Parts come in from overseas and we largely just assemble vehicles here today, but I'm not so sure how different that is from software.
I write code on foreign hardware that runs in someone else's server farm also running foreign hardware.
Hell, when Microsoft was still shipping software on CDs you may have noticed a little fine print mentioning the Caribbean island on which the disc was technically manufactured. US employees designed the software, but for tax purposes the manufacturing technically happened offshore.
Software is a huge industry, but it is still heavily dependent on globalization.
Its at least the largest industry manufacturing here, I'd expect.
I have friends that work in manufacturing in the US though, it does happen.
One, for example, runs a family business making steel buildings and storm shelters. They use American made steel if I'm not mistaken, I'm less certain about other inputs like the paint or equipment used (certainly the welders, heavy equipment, etc are foreign).
Another works in the automotive industry. Parts come in from overseas and we largely just assemble vehicles here today, but I'm not so sure how different that is from software.
I write code on foreign hardware that runs in someone else's server farm also running foreign hardware.
Hell, when Microsoft was still shipping software on CDs you may have noticed a little fine print mentioning the Caribbean island on which the disc was technically manufactured. US employees designed the software, but for tax purposes the manufacturing technically happened offshore.
Software is a huge industry, but it is still heavily dependent on globalization.
> Hell, when Microsoft was still shipping software on CDs you may have noticed a little fine print mentioning the Caribbean island on which the disc was technically manufactured.
I don't recall this at all. What software was it?
Going through my box of ancient software, they all either say made in the US either on the CD/DVD or on the packaging, except for a copy of Office 97 and Office 2007 which says made in Puerto Rico (which is the US).
They certainly had CDs pressed in other countries for foreign markets. I imagine some foreign made laptops might have come with CD/DVDs pressed in those countries.
I don't recall this at all. What software was it?
Going through my box of ancient software, they all either say made in the US either on the CD/DVD or on the packaging, except for a copy of Office 97 and Office 2007 which says made in Puerto Rico (which is the US).
They certainly had CDs pressed in other countries for foreign markets. I imagine some foreign made laptops might have come with CD/DVDs pressed in those countries.
Office was the example I had in mind. The discs sold in the US were printed outside the US, they weren't only for foreign markets.
I don't recall if Windows discs were printed outside the US, though I do believe binaries were compiled and signed outside the US.
I don't recall if Windows discs were printed outside the US, though I do believe binaries were compiled and signed outside the US.
Are you certain the island in the Caribbean you were thinking of wasn't Puerto Rico? I can't imagine what other island you'd make them on.
All six versions of Office I have seemed to be made in the US. They're all retail copies however.
All six versions of Office I have seemed to be made in the US. They're all retail copies however.
Puerto Rico sounds right, and if you still have a physical office disc with that on it that totally makes sense.
> Tariffs may work towards an isolationist goal of producing and consuming our own goods.
At this point I'm not even sure that is true. I think instead we'll just see the "cost of doing business" passed along to us consumers.
At this point I'm not even sure that is true. I think instead we'll just see the "cost of doing business" passed along to us consumers.
Oh I think that must be the case. We've spent decades profiting by externalizing many of the costs of our consumption onto other parts of the world. Isolationism means we now how to deal with those costs or change our consumption.
[deleted]
They can also make sense where you largely have primary industry (that is, extractive; mining and forestry and so on). There’s a reason that pretty much all high-tariff countries are low-income developing countries; it _does_ make more sense there.
They already are.
In addition it’s precisely because of tariffs (of which there have been many on cars and SUVs long before all this) that we have tons and tons of foreign brands actually building cars in the US.
In addition it’s precisely because of tariffs (of which there have been many on cars and SUVs long before all this) that we have tons and tons of foreign brands actually building cars in the US.
I think that doesn't answer the question parent asked.
Do European car makers build in the US? Yes. Is that going to change? I don't think so.
Do US cars sell good in Europe? No. Is that going to change? I don't think so too.
Do European car makers build in the US? Yes. Is that going to change? I don't think so.
Do US cars sell good in Europe? No. Is that going to change? I don't think so too.
Have you been to Europe? There are American cars everywhere, though yes they don’t sell as well there as European cars do here.
> Europeans don't tend to buy American cars because…
Wait until you realize that the EU tariff on American cars has been 4x the US tariff in EU cars for awhile.
> Europeans don't tend to buy American cars because…
Wait until you realize that the EU tariff on American cars has been 4x the US tariff in EU cars for awhile.
In practice, the only significant American brands in Europe are Ford and Tesla. Ford has long designed cars specifically for the European markets (their big sellers are very different in Europe and in the US, and many of their European big-hitters are not even available in the US), and Tesla, of course, isn’t doing so great these days.
(GM also used to have a couple of European brands, but again they were rather different to GM’s big US sellers.)
(GM also used to have a couple of European brands, but again they were rather different to GM’s big US sellers.)
> Wait until you realize that the EU tariff on American cars has been 4x the US tariff in EU cars for awhile.
Can you share the specifics of this lets say end of 2024?
I could find for example: EU has 10% on cars from US while US has 2.5% in general and 25% on pickup trucks. Important to note in USA the pickup trucks market is the biggest one vs mid size being the biggest one in EU.
When looking at it it seems to me that both entities wants to protect their biggest markets: EU with only 10% protecting midsize and USA with 25% their pickup trucks.
Can you share the specifics of this lets say end of 2024?
I could find for example: EU has 10% on cars from US while US has 2.5% in general and 25% on pickup trucks. Important to note in USA the pickup trucks market is the biggest one vs mid size being the biggest one in EU.
When looking at it it seems to me that both entities wants to protect their biggest markets: EU with only 10% protecting midsize and USA with 25% their pickup trucks.
I actually live in the heart of it. Yes, there are US cars here but maybe 1 out of 10 is American in my local and wider area. People tend to buy German, Swedish or French cars here.
> Wait until you realize [...]
Well, I won't buy am american car (maybe a smaller ford, but not the typical US car) because where I live you won't bring them into most parking lots, and for sure not in parking building. Especially in cities many of them are narrow even with typical EU cars.
> Wait until you realize [...]
Well, I won't buy am american car (maybe a smaller ford, but not the typical US car) because where I live you won't bring them into most parking lots, and for sure not in parking building. Especially in cities many of them are narrow even with typical EU cars.
You have cause and effect backwards. Cars aren’t some static thing that you grow on trees and sell, where like American trees grow bigger cars.
The question you should be asking is why American manufacturers don’t target the EU market more aggressively and make cars that fit the formats Europeans buy.
It’s not the only reason but an absolutely crucial factor is that EU states protect their domestic auto industry via tariffs and industrial policies/subsidies.
The question you should be asking is why American manufacturers don’t target the EU market more aggressively and make cars that fit the formats Europeans buy.
It’s not the only reason but an absolutely crucial factor is that EU states protect their domestic auto industry via tariffs and industrial policies/subsidies.
> It’s not the only reason but an absolutely crucial factor is that EU states protect their domestic auto industry via tariffs and industrial policies/subsidies.
The same is true for America.
The same is true for America.
> Wait until you realize that the EU tariff on American cars has been 4x the US tariff in EU cars for awhile.
That's a simplification beyond what's truthful. Import taxes are different on different types of cars, both in the EU and the US. There's certainly some type of car where the above is true, maybe some type of gas guzzling pickup truck or something, but over the total amount of sold cars it is not. Trade-weighted differences simply aren't that great, which is not a coincidence because a) both the US and the EU are developed economies which are likely to benefit from free trade, b) taxation works in nudging the market what to buy which evens out the differences further, and c) we have had trade agreements where this was an explicit goal.
That's a simplification beyond what's truthful. Import taxes are different on different types of cars, both in the EU and the US. There's certainly some type of car where the above is true, maybe some type of gas guzzling pickup truck or something, but over the total amount of sold cars it is not. Trade-weighted differences simply aren't that great, which is not a coincidence because a) both the US and the EU are developed economies which are likely to benefit from free trade, b) taxation works in nudging the market what to buy which evens out the differences further, and c) we have had trade agreements where this was an explicit goal.
I unfollowed Marginal Revolution when Tyler joined The Free Press this week. I’d already been pretty skeptical about the content on MR because there was very little rigor in the discourse and there are, apparently, no limits or constraints to what economists think they’re qualified to comment on, particularly when economics isn’t even invoked in the discussion.
I don’t go to my doctor for a discussion on urban planning. And if I do.. not at their medical office.
It’s a blog. Not a practice of economics, this one article notwithstanding.
And it isn’t even by Cowen.
EDIT: The comment section on MR is pretty awful too.
I don’t go to my doctor for a discussion on urban planning. And if I do.. not at their medical office.
It’s a blog. Not a practice of economics, this one article notwithstanding.
And it isn’t even by Cowen.
EDIT: The comment section on MR is pretty awful too.
We need a cross-cutting examination of how bad 'economics' is as a science, outside of a narrow defined set of measurable parameters
Economics is a great way of looking at the world as long as you acknowledge its limitations. I think you're conflating an economist with economics. Economists are human with all that entails.
Absolutely terrible.
The foundations of economics are built on school boy style maths errors.
They have famous "paradoxes" and results that are just bad maths.
It's a ridiculous joke of a research field.
The foundations of economics are built on school boy style maths errors.
They have famous "paradoxes" and results that are just bad maths.
It's a ridiculous joke of a research field.
If you’re going to dismiss an entire field, you could at least point to specifics that are widely held tenants.
A rational actor has never, does not now, and will never exist.
Despite what social media stoics say.
Despite what social media stoics say.
Alex Tabarrok has co-authored Marginal Revolution with Tyler Cowen for a decade.
Alex is a better straight up libertarian-ish guy. Tyler has been on this "but ... what if this CONTRARIAN thing....?" for a long time and I am done with it. I may not agree with Alex on this that or the other thing, but it doesn't feel like he's trying to show off how clever he is all the time.
I bet doctors have many compelling thoughts about urban planning. If they were enthusiastic, I'd curiously listen to what they have to say.
(It is the intersection between domains where wisdom and innovation shine.)
(It is the intersection between domains where wisdom and innovation shine.)
Sure, but that wasn't the essence of my take. Everyone can have opinions on things, but if the doctor said, "As a doctor..." and then just talked about urban planning, I'd be suspect. "As a human..." would be different.
[deleted]
> particularly when economics isn’t even invoked in the discussion…
I think the Professor Cowen fancies himself in the way of the “public intellectual,” so that he takes the liberty to write on a range of topics outside the domain of his academic focus. He does seem extraordinarily well-read; and in many topics he writes about, I have no way of judging his contribution to those fields. While I occasionally read MR, it strikes me as quite technocratic in the way that most libertarian writing is; and this sort of socioeconomic analysis detached from human values of empathy and concern for the wellbeing of the collective isn’t appealing to me personally. But I’m sure it fills an important niche.
I think the Professor Cowen fancies himself in the way of the “public intellectual,” so that he takes the liberty to write on a range of topics outside the domain of his academic focus. He does seem extraordinarily well-read; and in many topics he writes about, I have no way of judging his contribution to those fields. While I occasionally read MR, it strikes me as quite technocratic in the way that most libertarian writing is; and this sort of socioeconomic analysis detached from human values of empathy and concern for the wellbeing of the collective isn’t appealing to me personally. But I’m sure it fills an important niche.
He is part of the Koch network: https://en.wikipedia.org/wiki/Mercatus_Center
Their money is probably a large reason his content gets well promoted.
The Kochs got into politics in the 1980s because of a series of fights with the EPA whom they thought were getting in the way of their chemical company's right to pollute. If you've ever heard a morality play written about hairdresser licensing and why it means Regulation is Bad - that was them, and it leaks on to hacker news sometimes. E.g.
https://news.ycombinator.com/item?id=42982578
https://news.ycombinator.com/item?id=31765644
https://news.ycombinator.com/item?id=31382755
https://news.ycombinator.com/item?id=18798111
They also really like using their money to bludgeon American economics departments into teaching economics the way they "like" it: http://bridgeproject.com/research/koch-impacts-florida/koch-...
Their money is probably a large reason his content gets well promoted.
The Kochs got into politics in the 1980s because of a series of fights with the EPA whom they thought were getting in the way of their chemical company's right to pollute. If you've ever heard a morality play written about hairdresser licensing and why it means Regulation is Bad - that was them, and it leaks on to hacker news sometimes. E.g.
https://news.ycombinator.com/item?id=42982578
https://news.ycombinator.com/item?id=31765644
https://news.ycombinator.com/item?id=31382755
https://news.ycombinator.com/item?id=18798111
They also really like using their money to bludgeon American economics departments into teaching economics the way they "like" it: http://bridgeproject.com/research/koch-impacts-florida/koch-...
And then there's this idiot talking about screws in iPhones. Is this even how iPhones are built? Piles of hidden screws?
https://bsky.app/profile/atrupar.com/post/3lm5p4tdc6a2c
So many screws that we should have human American workers installing screws in iPhones? And this is how we make American workers wealthier?
They think we're stupid or they want us to be stupid. This isn't an economic policy. It's a way to reward fealty and punish disloyalty, to a specific person.
https://bsky.app/profile/atrupar.com/post/3lm5p4tdc6a2c
So many screws that we should have human American workers installing screws in iPhones? And this is how we make American workers wealthier?
They think we're stupid or they want us to be stupid. This isn't an economic policy. It's a way to reward fealty and punish disloyalty, to a specific person.
I’m not gonna tell you Lutnick is smart, but did you watch the clip or just read Rupar’s quote? He’s clearly saying that electronics manufacturers are leaning on low-wage foreign labor as a crutch to avoid the cost of investing in more innovative automated assembly strategies.
"that kind of thing is going to come to America... and be automated". Pretty disingenuous cut on the quote there by the bluesky post.
Tariffs are an additional sales tax.
That's it. That's all you need to do to explain this to people. It's amazing to me how many have fallen for this ridiculous lie that the other country somehow pays the tariff AND there will be no increase in cost to the consumer.
I used to think these lies were cynical, like how Mexico was going to pay for the border wall. But I'm not convinced now. I think there's a not-insgificant chance the president doesn't know this is how tariffs work. And that's terrifying. I would respect a cycnical lie way more.
You buy $1000 in t-shirts from China. The government places a 30% import duty on them. The importer pays $300 to the government. Those t-shirts now cost you $1300. Whoever sells them retail will be charging up to 30% extra to recoup that. It blows my mind that this even requires explanation.
That's it. That's all you need to do to explain this to people. It's amazing to me how many have fallen for this ridiculous lie that the other country somehow pays the tariff AND there will be no increase in cost to the consumer.
I used to think these lies were cynical, like how Mexico was going to pay for the border wall. But I'm not convinced now. I think there's a not-insgificant chance the president doesn't know this is how tariffs work. And that's terrifying. I would respect a cycnical lie way more.
You buy $1000 in t-shirts from China. The government places a 30% import duty on them. The importer pays $300 to the government. Those t-shirts now cost you $1300. Whoever sells them retail will be charging up to 30% extra to recoup that. It blows my mind that this even requires explanation.
It's never purely on the buyer or the seller. The price goes up 30%; fewer customers buy them and the ones that do pay more. The business makes less money; they cut some prices to recoup some sales.... maybe to $900. The lot of shirts now sell for $1200.
Basically, market distortions like that are never paid exclusively by one party or the other; instead, it moves the equilibrium point. Both the buyer and the seller are worse off.
Granted, that does take some time.
Basically, market distortions like that are never paid exclusively by one party or the other; instead, it moves the equilibrium point. Both the buyer and the seller are worse off.
Granted, that does take some time.
[deleted]
The best explanation I’ve seen is that tariffs are a stick that can be used to enforce compliance with other policies, and selectively lifted when companies bend the knee.
That isn’t really how they’re supposed to work, and in a normally functioning country the state could expect to be sued by the injured parties (that is, the competitors of the specially favoured companies) if they tried it. Of course, in 2025 the US is hardly a normally functioning country, but it’s also not clear that its court system is _totally_ compromised, and any company who went along with this would certainly be taking a risk.
Sue and risk further sanctions? We’re already seeing how little backbone there is for standing up to such actions.
Is it recursive?
Presumably the same effect applies if it were tariff between towns, then counties, then states, and finally countries.
Then what, we are missing interstellar trades to lower the prices on earth?
Presumably the same effect applies if it were tariff between towns, then counties, then states, and finally countries.
Then what, we are missing interstellar trades to lower the prices on earth?
The smaller the polity, the less practical it is to produce everything. Most towns aren't going to be growing wine grapes or olives at all, so tariffs would just raise local prices and lower imports rather than shifting local production. But they could also induce people to drive to the next town over for shopping.
See also Krugman's paper on the theory of interstellar trade https://www.princeton.edu/~pkrugman/interstellar.pdf
Ah yes, Paul "Inflation has slowed down (but not reversed) if you ignore all the things people actually need to live" Krugman. That man is a dishonest, partisan hack and if he said the sky was blue I'd go outside to make sure:
https://x.com/paulkrugman/status/1712494317024026761
https://x.com/paulkrugman/status/1712494317024026761
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Yes.
Too bad interstellar trade will probably never be economically viable. But it would lower prices, yes.
Too bad interstellar trade will probably never be economically viable. But it would lower prices, yes.
> Expanding production without increasing costs is difficult
What about economies of scale, though? If you can triple production while only doubling your cost, the unit price should drop.
What about economies of scale, though? If you can triple production while only doubling your cost, the unit price should drop.
If anything, economies of scale are a powerful argument for free trade.
Say, we can have a single company in Taiwan running insanely capital intensive chip factories making chips for the entire world.
One downside of this being resiliency; what happens to the global electronics supply chain if China one day decides to invade Taiwan? Something not taken into account in typical economic models.
For similar reasons developed countries still try to have things like domestic agriculture, despite that being a low value add industry where poorer countries might have a large comparative advantage in a hypothetical free trade scenario.
Say, we can have a single company in Taiwan running insanely capital intensive chip factories making chips for the entire world.
One downside of this being resiliency; what happens to the global electronics supply chain if China one day decides to invade Taiwan? Something not taken into account in typical economic models.
For similar reasons developed countries still try to have things like domestic agriculture, despite that being a low value add industry where poorer countries might have a large comparative advantage in a hypothetical free trade scenario.
I believe they are referring to marginal costs. Yes, with economies of scale can become cheaper to produce, but they still require capital to reach that scale.
https://en.m.wikipedia.org/wiki/Marginal_cost
https://en.m.wikipedia.org/wiki/Marginal_cost
Only if there's competition.
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And the exchange rate is mentioned precisely zero times in that article, as is the current unused and underused labour in the economy. Instead it drops straight onto land which we can’t make any more of.
Do it again with a factory that puts on a double shift with the unemployed and see what happens.
Do it again with the Chinese sovereign wealth funds, the likely source of mercantile intervention, offering 14 CNY per USD rather than the current 7.
It’s unlikely that any production will move. What’s more likely to change is the quantity and location of financial savings. The distributional impact of that change is probably unknown.
Do it again with a factory that puts on a double shift with the unemployed and see what happens.
Do it again with the Chinese sovereign wealth funds, the likely source of mercantile intervention, offering 14 CNY per USD rather than the current 7.
It’s unlikely that any production will move. What’s more likely to change is the quantity and location of financial savings. The distributional impact of that change is probably unknown.
>...the current unused and underused labour in the economy.
Chamber of commerce says:
>Understanding America’s Labor Shortage
>We hear every day from our member companies—of every size and industry, across nearly every state—that they’re facing unprecedented challenges trying to find enough workers to fill open jobs. Right now, the latest data shows that we have 8 million job openings in the U.S. but only 6.8 million unemployed workers. https://www.uschamber.com/workforce/understanding-americas-l...
which doesn't look that promising.
Chamber of commerce says:
>Understanding America’s Labor Shortage
>We hear every day from our member companies—of every size and industry, across nearly every state—that they’re facing unprecedented challenges trying to find enough workers to fill open jobs. Right now, the latest data shows that we have 8 million job openings in the U.S. but only 6.8 million unemployed workers. https://www.uschamber.com/workforce/understanding-americas-l...
which doesn't look that promising.
lmao you think this is going to make the USD worth more? What are you smoking and can I have some?
Nations that sell products in the US have often sought to made their currency worth less vs the dollar, so their products are cheaper here. They might well do it again.
The US will probably keep adjusting its tariffs to make sure it is the supposed cheat, so a better move is to give it as little real value as possible for your quota.
https://www.reuters.com/markets/what-direction-will-trade-wa...
> Beijing has previously said it won't go down the FX depreciation road, preferring to keep the yuan relatively "stable". But that was before Trump's self-styled "Liberation Day". Beijing's first response might be to try and negotiate with Washington to get the tariffs lowered. But if that fails, FX devaluation becomes a real option to offset the shock.
They didn't take the negotiation route. We'll see what's next.
> Beijing has previously said it won't go down the FX depreciation road, preferring to keep the yuan relatively "stable". But that was before Trump's self-styled "Liberation Day". Beijing's first response might be to try and negotiate with Washington to get the tariffs lowered. But if that fails, FX devaluation becomes a real option to offset the shock.
They didn't take the negotiation route. We'll see what's next.
What are the best introductory textbooks on economics for someone who knows multivariable calculus, linear algebra, and differential equations?
Preferably with problem sets and solutions to test understanding. (In fact I'd argue books without those are almost useless outside of a university classroom.)
Preferably with problem sets and solutions to test understanding. (In fact I'd argue books without those are almost useless outside of a university classroom.)
One important cause of comparative advantage is cheap labor.
Or perhaps I should say comparative "advantage" because cheap labor is actually bad from society's point of view!
It used to be that a person in the US could graduate from high school and get a factory job that provided enough income to have a house with a yard, a non-working spouse, and children.
Then the factories moved overseas to exploit the comparative advantage of cheap labor.
If you have a tariff, it undoes the advantage that cheap labor used to provide.
Operating in a society that pays its workers well is ultimately to business's advantage. Workers who have more money spend more money, they generally buy more products at higher prices and higher margins. Social and political stability happens when most people feel the system is working for them, they have a stake in the status quo, and they have something to lose.
I don't dispute the OP article's thesis, that tariffs cause some loss of economic inefficiency. The question is whether the gain is worth the cost.
Or perhaps I should say comparative "advantage" because cheap labor is actually bad from society's point of view!
It used to be that a person in the US could graduate from high school and get a factory job that provided enough income to have a house with a yard, a non-working spouse, and children.
Then the factories moved overseas to exploit the comparative advantage of cheap labor.
If you have a tariff, it undoes the advantage that cheap labor used to provide.
Operating in a society that pays its workers well is ultimately to business's advantage. Workers who have more money spend more money, they generally buy more products at higher prices and higher margins. Social and political stability happens when most people feel the system is working for them, they have a stake in the status quo, and they have something to lose.
I don't dispute the OP article's thesis, that tariffs cause some loss of economic inefficiency. The question is whether the gain is worth the cost.
> It used to be that a person in the US could graduate from high school and get a factory job that provided enough income to have a house with a yard, a non-working spouse, and children.
This is more mythology than reality. The areas where it came the closest to being true excluded over half the population (women, non-white men) and were in industries and times where the U.S. had an enormous advantage over bombed out, financially precarious European competitors while our high upper-bracket tax rates and large numbers of government jobs provided strong support for the economy.
Tariffs can’t get us back there, and alone they can’t even get close because what you really need are investments in a support web of infrastructure, education, and policy over time. That looks more like what Biden did with the CHIPS act where they invested in the factories, employees, committed to doing so long enough to make a multibillion dollar investment safe, and there was no talk of tariffs before alternatives existed. In the cases where tariffs make sense, they’re a limited part of a larger strategy.
This is more mythology than reality. The areas where it came the closest to being true excluded over half the population (women, non-white men) and were in industries and times where the U.S. had an enormous advantage over bombed out, financially precarious European competitors while our high upper-bracket tax rates and large numbers of government jobs provided strong support for the economy.
Tariffs can’t get us back there, and alone they can’t even get close because what you really need are investments in a support web of infrastructure, education, and policy over time. That looks more like what Biden did with the CHIPS act where they invested in the factories, employees, committed to doing so long enough to make a multibillion dollar investment safe, and there was no talk of tariffs before alternatives existed. In the cases where tariffs make sense, they’re a limited part of a larger strategy.
I'm a fan of CHIPS, but let's not pretend that doesn't have some geo-political externalities as well.
We're going to be paying a steep price for trying to shove the (outsourcing real manufacturing) genie back in the bottle. Either we put it all on the National Debt IoU or we cold turkey our cheap good addiction.
We're going to be paying a steep price for trying to shove the (outsourcing real manufacturing) genie back in the bottle. Either we put it all on the National Debt IoU or we cold turkey our cheap good addiction.
> what Biden did with the CHIPS act where they invested in the factories, employees, committed to doing so long enough to make a multibillion dollar investment safe
Don't get me started on the CHIPS act.
I was a true believer in it when it passed. Finally -- finally! -- people outside MAGA were recognizing the problem and trying to do something about it.
I made a medium-sized bet on INTC when Gelsinger, an engineering prodigy, took the helm after decades of business leaders who only cared about the money let the company's technical capabilities rot. The stock had a pretty attractive dividend yield, the new CEO was energetically reversing that trend. I was extremely enthusiastic when I heard the company was building a factory right in the Rust Belt (Columbus, Ohio), with a massive infusion of capital from the CHIPS act.
We now know how things turned out.
Intel continues to erode desktop market share to AMD, completely missed the AI boom, and doesn't seem to have a chance at the mobile or Apple ecosystems.
That factory is now on pause. As a taxpayer, I'm not sure whether my tax dollars were wasted or not. As a shareholder, I just have to look up the ticker to know my bet lost a significant amount of money. In fact, /r/wallstreetbets was making fun of somebody who made a similar bet when he inherited his Grandma's life savings.
I am absolutely livid that in Intel's 2024 annual report, Intel's leadership couldn't even put the location of their multi-billion-dollar chip factory in the correct country [1].
I wanted the CHIPS Act to work. Right now, it's very much looking like it didn't. Is more such investment really going to help us, or would it just be throwing away more money chasing a bad bet?
[1] It sounds unbelievable, but it's right there on Page 14: the dot labeled "Ohio Future Sight (Wafer Fab)" is clearly in Canada. https://www.intc.com/filings-reports/annual-reports/content/...
Don't get me started on the CHIPS act.
I was a true believer in it when it passed. Finally -- finally! -- people outside MAGA were recognizing the problem and trying to do something about it.
I made a medium-sized bet on INTC when Gelsinger, an engineering prodigy, took the helm after decades of business leaders who only cared about the money let the company's technical capabilities rot. The stock had a pretty attractive dividend yield, the new CEO was energetically reversing that trend. I was extremely enthusiastic when I heard the company was building a factory right in the Rust Belt (Columbus, Ohio), with a massive infusion of capital from the CHIPS act.
We now know how things turned out.
Intel continues to erode desktop market share to AMD, completely missed the AI boom, and doesn't seem to have a chance at the mobile or Apple ecosystems.
That factory is now on pause. As a taxpayer, I'm not sure whether my tax dollars were wasted or not. As a shareholder, I just have to look up the ticker to know my bet lost a significant amount of money. In fact, /r/wallstreetbets was making fun of somebody who made a similar bet when he inherited his Grandma's life savings.
I am absolutely livid that in Intel's 2024 annual report, Intel's leadership couldn't even put the location of their multi-billion-dollar chip factory in the correct country [1].
I wanted the CHIPS Act to work. Right now, it's very much looking like it didn't. Is more such investment really going to help us, or would it just be throwing away more money chasing a bad bet?
[1] It sounds unbelievable, but it's right there on Page 14: the dot labeled "Ohio Future Sight (Wafer Fab)" is clearly in Canada. https://www.intc.com/filings-reports/annual-reports/content/...
Sure, I’m not saying it’s perfect by any means - only that bringing an industry back on shore is not something you can do quickly or without a careful plan.
Article assumes saturated resources and finite production capacity - neither of which are true when technology is added to the picture. What if, for example, tariffs incentivize technology development that allows hydroponic wine - making previously unviable land suddenly productive?
Another counter-argument to the article: due to long-term reliance on trading partners for goods, production has likely been “turned down” for some goods/services to a point that there’s less opportunity cost than this article posits. For example the widely-quoted stat that almost one-quarter of Americans are functionally unemployed suggests trade has created new equilibria that leave capacity on the table. Especially when considering China’s well known policy of making the RMB cheaper against the USD than if it were allowed to float.
If tariffs have the potential to drive employment up by bringing latent capacity online (through investment & after a lead-time), you can see how people are okay with experimenting.
Another counter-argument to the article: due to long-term reliance on trading partners for goods, production has likely been “turned down” for some goods/services to a point that there’s less opportunity cost than this article posits. For example the widely-quoted stat that almost one-quarter of Americans are functionally unemployed suggests trade has created new equilibria that leave capacity on the table. Especially when considering China’s well known policy of making the RMB cheaper against the USD than if it were allowed to float.
If tariffs have the potential to drive employment up by bringing latent capacity online (through investment & after a lead-time), you can see how people are okay with experimenting.
> What if, for example, tariffs incentivize technology development that allows hydroponic wine - making previously unviable land suddenly productive?
This is a variant of the Import Substitution idea. Unfortunately, it doesn’t have a great track record. Instead of investment in innovation, sheltered industries tend to become less competitive and increasingly reliant on the shelter granted to them. Indeed, even if innovation occurs, it often becomes very hard to undo the sheltering once it’s no longer needed.
Far better to allow countries with comparative advantage in growing grapes to use their land to make wine compared to investing in hydroponics. The irony of that very example is the vertical farming sector has recently learned this very lesson and is undergoing a market realignment after hopes of improved productivity have been found to be less than expected.
This is a variant of the Import Substitution idea. Unfortunately, it doesn’t have a great track record. Instead of investment in innovation, sheltered industries tend to become less competitive and increasingly reliant on the shelter granted to them. Indeed, even if innovation occurs, it often becomes very hard to undo the sheltering once it’s no longer needed.
Far better to allow countries with comparative advantage in growing grapes to use their land to make wine compared to investing in hydroponics. The irony of that very example is the vertical farming sector has recently learned this very lesson and is undergoing a market realignment after hopes of improved productivity have been found to be less than expected.
"Why Do Prices Rise with a National Sales Tax?"
This post is assuming that a sizeable domestic industry still exists, and also that demand is relatively elastic. This is sensible for wine and maybe sugar, but not for the myriad of equipment and supplies it would actually take to create new factories. If the goal is to paralyze and destroy the country, the high import taxes that Trump is pushing are a great way. That people continue to "4D chess" this buffoon "for the cause" continues to astound me.
This post is assuming that a sizeable domestic industry still exists, and also that demand is relatively elastic. This is sensible for wine and maybe sugar, but not for the myriad of equipment and supplies it would actually take to create new factories. If the goal is to paralyze and destroy the country, the high import taxes that Trump is pushing are a great way. That people continue to "4D chess" this buffoon "for the cause" continues to astound me.
It is fascinating how the positions of the two major U.S. political parties have flipped on tariffs. Democrats, who historically supported protectionist trade measures, now oppose tariffs, while Republicans—once champions of free trade—have embraced them. Yes, party platforms evolve, but this kind of sudden reversal is still remarkable.
What’s even more bizarre is the mental gymnastics on both sides. Some argue that tariffs somehow benefit CEOs and the wealthy, even though stock market reactions consistently show that tariffs hurt corporate profits. Others on the right now frame tariffs as a fundamentally “Republican” principle, despite decades of GOP support for free markets and globalization.
Here’s my prediction: many CEOs and wealthy individuals will gravitate toward the Democratic Party. Why? Because tariffs reduce profits, and Trump’s policies seem designed to benefit a narrow segment of the rich rather than the broader business class. Over the next 8 to 16 years, we may see the GOP fully reposition as the party of the working class, while Democrats become the party of the affluent elite.
Personally, I’ve always favored genuine free trade, which is why I’ve leaned Republican. But now, I’m not so sure. I used to argue with my liberal friends that tariffs are essentially a regressive tax—they raise prices for everyone, especially hurting lower-income consumers. The counterargument, of course, is that tariffs could incentivize companies to bring production back to the U.S.
But let’s be honest: that’s not happening. Tariffs raise prices, but they don’t magically bring manufacturing back home. From my conservative perspective, companies should have the flexibility to offshore production—especially if they face pressure from unions or rising domestic costs.
What’s even more bizarre is the mental gymnastics on both sides. Some argue that tariffs somehow benefit CEOs and the wealthy, even though stock market reactions consistently show that tariffs hurt corporate profits. Others on the right now frame tariffs as a fundamentally “Republican” principle, despite decades of GOP support for free markets and globalization.
Here’s my prediction: many CEOs and wealthy individuals will gravitate toward the Democratic Party. Why? Because tariffs reduce profits, and Trump’s policies seem designed to benefit a narrow segment of the rich rather than the broader business class. Over the next 8 to 16 years, we may see the GOP fully reposition as the party of the working class, while Democrats become the party of the affluent elite.
Personally, I’ve always favored genuine free trade, which is why I’ve leaned Republican. But now, I’m not so sure. I used to argue with my liberal friends that tariffs are essentially a regressive tax—they raise prices for everyone, especially hurting lower-income consumers. The counterargument, of course, is that tariffs could incentivize companies to bring production back to the U.S.
But let’s be honest: that’s not happening. Tariffs raise prices, but they don’t magically bring manufacturing back home. From my conservative perspective, companies should have the flexibility to offshore production—especially if they face pressure from unions or rising domestic costs.
> Democrats, who historically supported protectionist trade measures, now oppose tariffs
Can you provide a source for this one? On the front of free trade, NAFTA comes to mind where there was some support and some oppositions within both parties. And of course there was TPP which Obama was championing (to no avail -- every major presidential candidate in 2016 opposed it).
Is this a reference to the chicken tax during the LBJ era? Nixon had also placed a 10% global tariff on all dutiable imports when we got off the gold standard, so I don't see it as being obviously a single-party issue.
And of course, Smoot-Hawley was a heavily partisan bill championed by the Republican side of the house. The Republican fascination with tariffs goes all the way back to at least 1861 with the Morill Tariff (and even further back if you consider their predecessors in the Whig party).
Can you provide a source for this one? On the front of free trade, NAFTA comes to mind where there was some support and some oppositions within both parties. And of course there was TPP which Obama was championing (to no avail -- every major presidential candidate in 2016 opposed it).
Is this a reference to the chicken tax during the LBJ era? Nixon had also placed a 10% global tariff on all dutiable imports when we got off the gold standard, so I don't see it as being obviously a single-party issue.
And of course, Smoot-Hawley was a heavily partisan bill championed by the Republican side of the house. The Republican fascination with tariffs goes all the way back to at least 1861 with the Morill Tariff (and even further back if you consider their predecessors in the Whig party).
Honestly, I was under impression Democrats were for tariffs :-) I guess I was unnecessarily worried that Democrats love tariffs. It is the other way around now.
I do remember this speech by Bernie Sanders: https://www.youtube.com/watch?v=RzpmhBEA9Ok
I do remember this speech by Bernie Sanders: https://www.youtube.com/watch?v=RzpmhBEA9Ok
Yeah, Bernie Sanders has consistently staked out a number of protectionist / populist positions, but he is not representative of the Democratic party as a whole.
In case you're wondering, the resolution in question failed with large margins in both parties (although it garnered a somewhat larger share of D votes -- 23% versus 17%).
https://clerk.house.gov/Votes/2005239
Outside of a few limited occurrences, from 1980 up to the early 2010s, both Republicans and Democrats generally supported free trade and lowering tariffs. (This may extend all the way back to 1934, but I haven't checked all the votes in Congress to see, for instance, if this sentiment extended beyond Eisenhower to the rest of his party in the 1950s.)
In case you're wondering, the resolution in question failed with large margins in both parties (although it garnered a somewhat larger share of D votes -- 23% versus 17%).
https://clerk.house.gov/Votes/2005239
Outside of a few limited occurrences, from 1980 up to the early 2010s, both Republicans and Democrats generally supported free trade and lowering tariffs. (This may extend all the way back to 1934, but I haven't checked all the votes in Congress to see, for instance, if this sentiment extended beyond Eisenhower to the rest of his party in the 1950s.)
> Yes, party platforms evolve, but this kind of sudden reversal is still remarkable.
I don't think there's been a Democratic platform that's advocated increasing tariffs or trade barriers in living memory.
Most have outright called for free trade, though in recent years also "fair" trade which meant trying to push for worker protection/environmental/etc laws and end foreign subsidies and barriers onto other countries to level the playing field rather than increasing trade barriers.
There is a more protectionist wing of the Democratic party that has advocated for increasing trade barriers (or in some cases, ceasing trading altogether), but despite sometimes being quite loud, they've never had a majority.
It was the American left that were anti-globalization, like with the protests WTO conference in 1999. Their flip has been... weird.
I don't think there's been a Democratic platform that's advocated increasing tariffs or trade barriers in living memory.
Most have outright called for free trade, though in recent years also "fair" trade which meant trying to push for worker protection/environmental/etc laws and end foreign subsidies and barriers onto other countries to level the playing field rather than increasing trade barriers.
There is a more protectionist wing of the Democratic party that has advocated for increasing trade barriers (or in some cases, ceasing trading altogether), but despite sometimes being quite loud, they've never had a majority.
It was the American left that were anti-globalization, like with the protests WTO conference in 1999. Their flip has been... weird.
Here's a simple explanation for what is going on in the US. I'd love to know if people think this is sufficient.
There are two types of taxes:
- Domestic taxes are levied by congress
- International tariffs are controlled by one person (the president)
So if the president wants to control people via taxes, they use tariffs. By this theory it has nothing at all to do with financial policies or political parties: it's just another tool we've given the president and we shouldn't be surprised if it gets used. By the same theory, if the president had full control over domestic taxes we'd see exactly the same thing.
There are two types of taxes:
- Domestic taxes are levied by congress
- International tariffs are controlled by one person (the president)
So if the president wants to control people via taxes, they use tariffs. By this theory it has nothing at all to do with financial policies or political parties: it's just another tool we've given the president and we shouldn't be surprised if it gets used. By the same theory, if the president had full control over domestic taxes we'd see exactly the same thing.
The "surprise" is that people expect the President to use those powers to work in the best interests of the country, rather than focusing on enriching themselves by stealing everything they can for themselves and for those who bribe them. The executive is not supposed to be an adversarial position that the rest of the country needs to defend against. And if the President does abuse their letter-of-the-law powers, then we expect Congress to impeach and convict rather than enabling the behavior out of some sense of partisan grievances.
Tariffs were supposed to be approved by the Senate (Article 1 section 8, Article 2 section 2), but Trump is using "emergency powers"
With so much of American goods coming from China, it's kind of hard to see how the US could win a war with them without, for example, improved domestic production of bandages
https://natlawreview.com/article/can-president-impose-tariff...
https://www.globaltrademag.com/adhesive-bandage-import-in-un...
With so much of American goods coming from China, it's kind of hard to see how the US could win a war with them without, for example, improved domestic production of bandages
https://natlawreview.com/article/can-president-impose-tariff...
https://www.globaltrademag.com/adhesive-bandage-import-in-un...
Very interesting, thanks!
So the "emergency" is a possible war with China? But how does that justify taxing (for example) Canada, or Mexico (or Lesotho)?
So the "emergency" is a possible war with China? But how does that justify taxing (for example) Canada, or Mexico (or Lesotho)?
He declares different "emergencies". Tarifs on Canada and Mexico used a fentanyl emergency. Now he has declared the trade deficit an emergency.
"Today, President Donald J. Trump declared that foreign trade and economic practices have created a national emergency"
https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-pr...
"Today, President Donald J. Trump declared that foreign trade and economic practices have created a national emergency"
https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-pr...
Also low water pressure in showers:
https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-pr...
https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-pr...
The emergency is "I wanna".
I don't think many Democrats have been arguing for blanket tariffs for some time. It kind of seemed like there was a bipartisan consensus for the use of some combination of tariffs and stimulus to ensure there was domestic manufacturing capability for critical industries... at least until trump. Nobody in their right mind has been calling for a return to domestic t-shirt manufacturing, but there are national security and competitiveness reasons to think about semiconductors. And that's what the chips act did, and at 64-33 that's about as bipartisan as things get these days.
If you favor genuine free trade, how do you view the protectionist measures that Reagan put on Japanese car imports in the 80s?
I disagree with that measure — that was a sell out in order to get votes in Detroit.
That said, it's true that a selective reading of his statements and legislative actions could be used to support almost any position.
But here’s something worth considering from a broader policy perspective:
Ronald Reagan cited three prominent 19th-century champions of free trade as his heroes: Richard Cobden and John Bright, founders of England’s Anti-Corn Law League, and Frédéric Bastiat, a renowned French economic writer. Reagan specifically praised Cobden and Bright for their efforts to eliminate tariffs on imported grain in the 1840s.
Throughout his presidency, Reagan consistently expressed support for free trade. In his July 1981 “Statement on U.S. Trade Policy,” he pledged to reduce government-imposed barriers on international trade and investment.
One of his strongest affirmations came during a January 1988 speech in Cleveland, where he framed America’s trade deficit as a sign of economic strength. On several occasions—often in response to protectionist moves by congressional Democrats—Reagan reiterated his free-trade stance. For instance, he vowed to veto the House trade bill if it included a restrictive amendment sponsored by Representative Richard Gephardt (D-Mo.).
That said, it's true that a selective reading of his statements and legislative actions could be used to support almost any position.
But here’s something worth considering from a broader policy perspective:
Ronald Reagan cited three prominent 19th-century champions of free trade as his heroes: Richard Cobden and John Bright, founders of England’s Anti-Corn Law League, and Frédéric Bastiat, a renowned French economic writer. Reagan specifically praised Cobden and Bright for their efforts to eliminate tariffs on imported grain in the 1840s.
Throughout his presidency, Reagan consistently expressed support for free trade. In his July 1981 “Statement on U.S. Trade Policy,” he pledged to reduce government-imposed barriers on international trade and investment.
One of his strongest affirmations came during a January 1988 speech in Cleveland, where he framed America’s trade deficit as a sign of economic strength. On several occasions—often in response to protectionist moves by congressional Democrats—Reagan reiterated his free-trade stance. For instance, he vowed to veto the House trade bill if it included a restrictive amendment sponsored by Representative Richard Gephardt (D-Mo.).
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> But let’s be honest: that’s not happening. Tariffs raise prices, but they don’t magically bring manufacturing back home. From my conservative perspective, companies should have the flexibility to offshore production—especially if they face pressure from unions or rising domestic costs.
I mean... in theory they would if the numbers work out i.e. if tariffs offset the additional labor/regulatory costs. The problem is they are hard to trust to stick around long enough for the capex to pay off.
I mean... in theory they would if the numbers work out i.e. if tariffs offset the additional labor/regulatory costs. The problem is they are hard to trust to stick around long enough for the capex to pay off.
[deleted]
> Democrats, who historically supported protectionist trade measures, now oppose tariffs…
Targeted tarrifs. Not blanket ones on the entire planet (including, you know, the uninhabited island full of penguins). Hell, Biden kept some of Trump's.
Targeted tarrifs. Not blanket ones on the entire planet (including, you know, the uninhabited island full of penguins). Hell, Biden kept some of Trump's.
Maybe I missed it, but your not seeing a lot of Bernie/AOC push-back on these tariffs. While I am sure that hate the way Trump goes about implementing these tariffs they don't seem opposed, to even large, tariffs on principle.
You absolutely missed it.
AOC: https://thehill.com/homenews/house/5108287-donald-trump-alex...
> “To ‘punish’ Colombia, Trump is about to make every American pay even more for coffee,” the New York Democrat said on the social platform X. “Remember: WE pay the tariffs, not Colombia,” she added. “Trump is all about making inflation WORSE for working class Americans, not better. He’s lining the pockets of himself and the billionaire class.”
Bernie: https://x.com/SenSanders/status/1908221908954263821
> Our trade policies should benefit American workers, not just corporate CEOs. That includes targeted tariffs to stop corporations from outsourcing American jobs & factories. We do not need a blanket, arbitrary sales tax that will raise prices on products that Americans need.
AOC: https://thehill.com/homenews/house/5108287-donald-trump-alex...
> “To ‘punish’ Colombia, Trump is about to make every American pay even more for coffee,” the New York Democrat said on the social platform X. “Remember: WE pay the tariffs, not Colombia,” she added. “Trump is all about making inflation WORSE for working class Americans, not better. He’s lining the pockets of himself and the billionaire class.”
Bernie: https://x.com/SenSanders/status/1908221908954263821
> Our trade policies should benefit American workers, not just corporate CEOs. That includes targeted tariffs to stop corporations from outsourcing American jobs & factories. We do not need a blanket, arbitrary sales tax that will raise prices on products that Americans need.
Thanks for the links. I don't think there is as much daylight between Bernie's targeted tariffs and Trump's blanket then negotiate exceptions tariffs though. I guess we will see. Or Congress could decide it wants to do its job again and stops delegating its authority to the Executive.
> I don't think there is as much daylight between Bernie's targeted tariffs and Trump's blanket then negotiate exceptions tariffs though.
The fact that you thought Bernie and AOC were quietly supportive of his tarrifs perhaps indicates the value of this opinion.
Tarrif rates have been steadily dropping to near-zero, since the 1930s, under both political parties. We're now returning to a rate not reached in over a century. https://www.statista.com/chart/34236/average-effective-tarif...
The fact that you thought Bernie and AOC were quietly supportive of his tarrifs perhaps indicates the value of this opinion.
Tarrif rates have been steadily dropping to near-zero, since the 1930s, under both political parties. We're now returning to a rate not reached in over a century. https://www.statista.com/chart/34236/average-effective-tarif...
megaman821(1)
> From my conservative perspective, companies should have the flexibility to offshore production
This is a very (neo)liberal viewpoint. It’s economic liberalism. There’s nothing “conservative” about it at all.
This is a very (neo)liberal viewpoint. It’s economic liberalism. There’s nothing “conservative” about it at all.
The corn laws were interesting. They were tarrifs on food imports, supported by the land owners.
> the repeal of the Corn Laws benefitted the bottom 90% of income earners in the United Kingdom economically, while causing income losses for the top 10% of income earners.
Obviously it’s not hard to see why the wealthiest like tarrifs.
> the repeal of the Corn Laws benefitted the bottom 90% of income earners in the United Kingdom economically, while causing income losses for the top 10% of income earners.
Obviously it’s not hard to see why the wealthiest like tarrifs.
American conservatives, until recently, espoused economic liberalism.
It is considered "conservative" because it has been the status quo for a rather long period, and they advocated conserving it.
It is considered "conservative" because it has been the status quo for a rather long period, and they advocated conserving it.
The people who voted for Trump need to think again … they will end up being the suckers of all of the Trump policies…
The racism overrides everything with these people. The red states have had the worst outcomes for generations but they still vote Republican like lemmings solely because of it. Trump just has to mention "trans" and they switch off their brains.
It’s just anti-intellectualism and fear across the board. And that’s been the GOP MO for a long time now.
Convince people that the colleges are full of crazy liberals and you should go into the trades instead.
Now that you’re in the trades, don’t join a union. Unions are bad (unless it’s the police union).
Don’t look now but the Mexicans are coming for your job. The trans/gay people are coming for your children. Nevermind that the GOP is openly corrupt and has a pervert in the White House.
Think back to the aftermath of 9/11 and the Bush Admin’s constant fear campaign that successfully pushed the US into two wars.
Convince people that the colleges are full of crazy liberals and you should go into the trades instead.
Now that you’re in the trades, don’t join a union. Unions are bad (unless it’s the police union).
Don’t look now but the Mexicans are coming for your job. The trans/gay people are coming for your children. Nevermind that the GOP is openly corrupt and has a pervert in the White House.
Think back to the aftermath of 9/11 and the Bush Admin’s constant fear campaign that successfully pushed the US into two wars.
If you're not being targeted, like from a distance, it looks like "anti-intellectualism and fear". He's just running "distractions", or "scapegoating" Mexicans or something. It's easy to minimize it. Up close though, if you're the one actually being targeted, there's a bit more urgency. It's more like an abusive/controlling relationship. How many lives were destroyed or otherwise ruined by Bush's useless wars in the Middle East?
Now imagine if Bush had instead built out a massive train network, like China did with close to the same amount of money.
Now imagine if Bush had instead built out a massive train network, like China did with close to the same amount of money.
They switch off their brains?
See: How Tribalism Overrules Reason, and Makes Risky Times More Dangerous
https://bigthink.com/articles/how-tribalism-overrules-reason...
https://bigthink.com/articles/how-tribalism-overrules-reason...
I listen to this YouTube video about logical fallacies for falling asleep. It’s almost like Trump and team use almost all of the fallacies for their arguments https://youtu.be/bNE4uBMsnP0?si=xpYiwBtKf_e4eBlU
You'd never guess from reading HN or Reddit, but I have to remind myself that not all who voted for Trump last year are MAGA.
My understanding is that America has a lot of low-information voters. They don't watch debates. They share cat videos on Facebook. They certainly never comment on HN, they don't even know HN. On the election day, they think "The eggs are too damn expensive!" and vote accordingly.
All the rhetorical offensives, counteroffensives, contortions, and motivated reasonings won't reach these people, when they go to the grocery and find everything getting more expensive.
(Some of them might even have 401K and IRA. Yeah, I know, boomer stuff.)
We'll see.
My understanding is that America has a lot of low-information voters. They don't watch debates. They share cat videos on Facebook. They certainly never comment on HN, they don't even know HN. On the election day, they think "The eggs are too damn expensive!" and vote accordingly.
All the rhetorical offensives, counteroffensives, contortions, and motivated reasonings won't reach these people, when they go to the grocery and find everything getting more expensive.
(Some of them might even have 401K and IRA. Yeah, I know, boomer stuff.)
We'll see.
This is the most baffling thing about Trump’s strategy to me. Trump is essentially asking people to embrace pain now in exchange for jam tomorrow. But there’s no reason to think that the American public have any intention of embracing pain! Look how upset they got about eggs! This really all feels like it could very easily blow up in his face.
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TaurenHunter(5)
We now have to raise our prices, but our Made in China competitors have to increase theirs even more. That isn't a net benefit for us, given the product is "nice to have" and does not have an inelastic price.
If my sales drop by 50% and the Chinese competitors drop by 75%, is that winning ? I am still in shock and denial by all this. After 11 years in business, this manufactured/avoidable crisis can't be what ends us.