Tariffs?

[bpj]

Do you think business profits are more important than lower prices? I don't.

And I want to emphasize that when prices are raised (due to a tariff/tax) it isn't just you or me as the final consumer who pays more. It's also the American businesses who make products and provide services using the imported item.

I've been having discussion with a couple of my more conservative friends who don't seem to really know how tariffs work. Their reaction is that if we (America) has a negative balance of trade, we are losing money. I disagree.

Consider this analogy: I go to the grocery store and buy a variety of things. The grocery store buys nothing for me. Literally, I have a negative balance of trade with the grocery. Is this bad? Should I stop "trading" with my grocer? (That was, should I just grow all my food, make my own breakfast cereal, slaughterhouse my own meat?)

Adam Smith wrote all about this in "The Wealth of Nations", published 249 years ago. Free trade is better than having tariffs. Specialization is better than doing everything yourself. Spend your efforts doing what you are best at, then buy the other things. These principles are the foundation of capitalism.

Propping up industries with tariffs and subsidies is state socialism. It might be justifiable in some very specific circumstances, but in general, it's not a good idea. It helps a few and hurts most of us, and the total harm is greater than the total gain.

What a stupid analogy. Wouldn't the real situation be, that the US would have more food producers, cereal producers, and slaughterhouses to produce more food, cereal and meat domestically. This would increase exports of those items making our country more money, instead of relying on us importing those same items. Also, I would think the prices for American-made items would be cheaper, as they would avoid any tariffs at all. This also encourages global companies to consider building and producing here, increasing jobs in the U.S., instead of the other way around.

The analogy is simplistic, but I don't think it's stupid. International trade really is just a special case of any stem of exchange. If Washington apples are sold in Texas, it's business as usual. If the apples are sold in British Columbia, it's international trade.

How about this: Instead of an individual, let's say there is a home country that is resource-rich in almost everything, and is completely self-sufficient. No imports or exports. But if their neighboring county produces better food more cheaply, why not import some? The consumer gets cheaper food. The existing food producers can either [1] innovate and be more productive (i.e., do a better job completing with the imports), or [2] get out of food production and do something that has higher value. This seems like basic economics/capitalism to me.

That's all fine in your hypothetical world.

So Canada doesn't tariff most products they import? Great, neither will the US.

But if they want to sell their cars here in a free market while our cars have a 25% tariff in their markets, well that's not exactly the same is it.

[Michael K.]

It cracks me up, us charging Tariffs is going to ruin the economy, but somehow Canada charges Tariffs and their economy isn't ruined. The question I asked is why is it such a huge issue that are charging Tariffs, and posted the Canadian Tariffs as an example of "why the Hell wouldn't we charge them?"

Both countries would be better off without tariffs. That was the point behind NAFTA and behind the US-Mexico-Canada trade deal of the first Trump term in office.

And yet, Canada still has them, but we are evil for adding our own?

[bpj]

It cracks me up, us charging Tariffs is going to ruin the economy, but somehow Canada charges Tariffs and their economy isn't ruined. The question I asked is why is it such a huge issue that are charging Tariffs, and posted the Canadian Tariffs as an example of "why the Hell wouldn't we charge them?"

Both countries would be better off without tariffs. That was the point behind NAFTA and behind the US-Mexico-Canada trade deal of the first Trump term in office.

Ok, so given that Canada placed tariffs on US products, what other route should Trump have taken to get Canada to remove them besides placing matching tariffs?

Strongly worded letter?

JD Vance on the tariffs, says it protects US industry and jobs (things Democrats say they care about, until its Trump winning)-

“Just look in the past few months at the auto industry as an important example. When you erect a tariff wall around a critical industry like auto manufacturing, and you combine that with advanced robotics and lower energy costs and other tools that increase the productivity of you as labor, you give American workers a multiplying effect. Now that, in turn, allows firms to make things here at a price-competitive basis,” Vance added.

“Our president gets that, which is why last month we posted 9,000 new auto jobs after many many years of stagnation or even decline in the auto sector. It’s why, just weeks in, we already have new plant or production announcements from Honda, from Hyundai and Stellantis worth billions of dollars and thousands of additional jobs on top the ones that were already created,” he continued.

https://conservativebrief.com/vp-vance- ... medium=805

[gil]

It cracks me up, us charging Tariffs is going to ruin the economy, but somehow Canada charges Tariffs and their economy isn't ruined. The question I asked is why is it such a huge issue that are charging Tariffs, and posted the Canadian Tariffs as an example of "why the Hell wouldn't we charge them?"

Both countries would be better off without tariffs. That was the point behind NAFTA and behind the US-Mexico-Canada trade deal of the first Trump term in office.

Ok, so given that Canada placed tariffs on US products, what other route should Trump have taken to get Canada to remove them besides placing matching tariffs?

Strongly worded letter?

JD Vance on the tariffs, says it protects US industry and jobs (things Democrats say they care about, until its Trump winning)-

“Just look in the past few months at the auto industry as an important example. When you erect a tariff wall around a critical industry like auto manufacturing, and you combine that with advanced robotics and lower energy costs and other tools that increase the productivity of you as labor, you give American workers a multiplying effect. Now that, in turn, allows firms to make things here at a price-competitive basis,” Vance added.

“Our president gets that, which is why last month we posted 9,000 new auto jobs after many many years of stagnation or even decline in the auto sector. It’s why, just weeks in, we already have new plant or production announcements from Honda, from Hyundai and Stellantis worth billions of dollars and thousands of additional jobs on top the ones that were already created,” he continued.

https://conservativebrief.com/vp-vance- ... medium=805

When I did my MBA, we did a case study of the effect of US tariffs on the auto industry in the 1980s. Yes, the US companies created jobs. Yes the US companies got record profits. But in the longer term, they got fat and happy and didn't innovate, because the US market was easier picking with the tariffs.

Personally I think companies like Ford and GM have made good turnarounds in the past 15-20 years, but they lost a generation of innovation because they were just milking profits and not innovating. Meanwhile companies like Toyota and Volkswagen were innovating and dominated world markets.

It's just like "smooth seas never made a good sailor." A company protected by tariffs will not become as good as it could be.

[bpj]

Really not much is adding up about tariffs, particularly with Canada. I've seen/read that the tariffs are retaliatory/matching tariffs. Is that true? I'm not positive, and it makes a big difference.

What SoB says about the quotas and never hitting the things like 250% on dairy is true, because it's basically a cap that limits how much we can sell to them.

Maybe that does put our farmers at a disadvantage. I'd rather those products stay domestic personally anyways. But that's above my paygrade.

At this point I'm wondering if it's just about putting pressure on Canada while holding the $200 billion in subsidies over their heads trying to get them as a US territory/state.

[bpj]

Maybe it really is about eliminating the income tax....

https://x.com/DataRepublican/status/189 ... IYr5Q&s=19

[gil]

Really not much is adding up about tariffs, particularly with Canada. I've seen/read that the tariffs are retaliatory/matching tariffs. Is that true? I'm not positive, and it makes a big difference.

What SoB says about the quotas and never hitting the things like 250% on dairy is true, because it's basically a cap that limits how much we can sell to them.

Maybe that does put our farmers at a disadvantage. I'd rather those products stay domestic personally anyways. But that's above my paygrade.

At this point I'm wondering if it's just about putting pressure on Canada while holding the $200 billion in subsidies over their heads trying to get them as a US territory/state.

There is a lot of political intrigue involving these tariffs on Canada, I agree. Drugs, sovereignty, etc. We also have a *heavily* subsidized agricultural sector, so even without any tariffs it's hardly a "free market." My comments are ignoring the politics. I can see that might be one of the reasons that leaders use tariffs, but as an economist (of sorts) I'll still say they cause harm.

What's the $200 billion in subsidies?

[bpj]

Really not much is adding up about tariffs, particularly with Canada. I've seen/read that the tariffs are retaliatory/matching tariffs. Is that true? I'm not positive, and it makes a big difference.

What SoB says about the quotas and never hitting the things like 250% on dairy is true, because it's basically a cap that limits how much we can sell to them.

Maybe that does put our farmers at a disadvantage. I'd rather those products stay domestic personally anyways. But that's above my paygrade.

At this point I'm wondering if it's just about putting pressure on Canada while holding the $200 billion in subsidies over their heads trying to get them as a US territory/state.

There is a lot of political intrigue involving these tariffs on Canada, I agree. Drugs, sovereignty, etc. We also have a *heavily* subsidized agricultural sector, so even without any tariffs it's hardly a "free market." My comments are ignoring the politics. I can see that might be one of the reasons that leaders use tariffs, but as an economist (of sorts) I'll still say they cause harm.

What's the $200 billion in subsidies?

I'd feel fine about tariffs if it eliminates the federal income tax, would you? It becomes a consumption tax rather than a tax on earnings.

The link in the first post of this thread was Trump talking about the $200B, I'm guessing mostly military protection. Which, I don't know why Canada even needs it. Their most likely enemy is the moose.

viewtopic.php?f=9&t=9883&p=318710#p318690

[Seattle or Bust]

He isn't being honest. I mean when you hear Trump talk you should know by now that he's just making shit up.

https://archive.is/z8PA9

He says we're subsidizing $200 billion for Canada b/c it sounds like a large scary number that dumb people will eat up.

He makes it sound like there are 250% tariffs on all purchases because it's a large scary number and concept that dumb people will eat up.

He makes it sound like Canada is even close to being on par with Mexico when it comes to drugs heading over the border (Canada represents less than 1% of the fentanyl coming across the border into the US) because dumb people will eat it up.

He won't tell you that he negotiated the most recent trade deal because of course he wont.

He says he wants to turn Canada into a state because a bunch of dumb people will think it's possible.

It's all to drum up fear so he can get a bunch of dumb people behind him to hate Canada... allowing him to do a bunch of nefarious shit that doesn't benefit the US people at all under their noses.

[bpj]

He isn't being honest. I mean when you hear Trump talk you should know by now that he's just making shit up.

https://archive.is/z8PA9

He says we're subsidizing $200 billion for Canada b/c it sounds like a large scary number that dumb people will eat up.

He makes it sound like there are 250% tariffs on all purchases because it's a large scary number and concept that dumb people will eat up.

He makes it sound like Canada is even close to being on par with Mexico when it comes to drugs heading over the border (Canada represents less than 1% of the fentanyl coming across the border into the US) because dumb people will eat it up.

He won't tell you that he negotiated the most recent trade deal because of course he wont.

He says he wants to turn Canada into a state because a bunch of dumb people will think it's possible.

It's all to drum up fear so he can get a bunch of dumb people behind him to hate Canada... allowing him to do a bunch of nefarious shit that doesn't benefit the US people at all under their noses.

Such as what?

I'm stumped trying to figure out how it benefits Trump?

Is it like Gaza where he wants to build big, beautiful waterfront condos?