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Non-political tariffs thread


DixonHur

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52 minutes ago, DixonHur said:

Have you considered going back to your cesspool CR?

The adults are talking

It was a serious question. You told other people it would work. I was hoping you'd realize through this comparison why that doesn't make sense. 

I actually don't hate tariffs as a rule. Tariffs can help us create certain domestic industries that we have lost or are losing (chip manufacturing, solar panel manufacturing, ship building, etc). But these tariffs on goods like lumber from Canada are just going to raise prices. There is no real economic windfall or development to be gained. Supply chains went through hell during Covid. Expect more of the same if these go into effect. 

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3 hours ago, Guadaloopy said:

This is a graph of the incidence of tax, not the pass through.  It reflects a change in consumer and producer surplus, not who actually pays the tax.  In a competitive market, the pass through will be 100% to the consumer.

This is nonsense. The producer does not pass through a $25 tax on its product by changing its price from $100 to $90 and thereby the consumer sees a tax markup on their bill from $90 to $115. The producer is still bearing $10 of that tax. Only $15 was able to be passed through. 

 

The economic burden is who actually pays the tax. Not the nominal accounting of who is doing the remits or on whose bill it's showing.

Edited by elfenix
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1 hour ago, Dahobbs said:

It was a serious question. You told other people it would work. I was hoping you'd realize through this comparison why that doesn't make sense. 

I actually don't hate tariffs as a rule. Tariffs can help us create certain domestic industries that we have lost or are losing (chip manufacturing, solar panel manufacturing, ship building, etc). But these tariffs on goods like lumber from Canada are just going to raise prices. There is no real economic windfall or development to be gained. Supply chains went through hell during Covid. Expect more of the same if these go into effect. 

What are you babbling about?  What did I tell people would work? 

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16 hours ago, DixonHur said:

Sounds like it's time to adjust my international fund portfolio

Mine did this for me. Just about everything down. Mexico, Europe, South Korea (although there may be more at work than tariffs there).  

I’ve been thinking about this for some time. So my question is … if you think tariffs are simply a technique/playbook for creating negotiating leverage for the current president for whatever reason (maybe it is reducing fentanyl and immigration…who knows ..threatening tariffs on Denmark for Greenland seems to be a thing) then maybe these threats either go away or get resolved in a few months/quarters after whatever goal is achieved….and thus is this really the time (or maybe in the near future when sentiment really gets bad) to double down?

If the tariffs get implemented and are “long lived” then my losses are just that. Probably not worth doubling down and hoping for long term reversals.
 

Playing out the “long lived” theme … inside the US borders I expect that materials will get more expensive (following the earlier logic presented by several other posters). US materials suppliers margins would increase but will their volumes hold up? 

And then, whether industrial manufacturers can pass that along or they just have to eat all/some of their input cost increases….

How this plays out in the (larger) service sector and in conjunction with the deportation policies/activities isn’t quite as obvious to me.

Then there are the “unintended” consequences of retaliatory actions … although not every country will be willing/able to retaliate. History shows us that agriculture is vulnerable and may even get some kind of double whammy from retaliatory tariffs and a potential labor crunch (but hey if China isn’t buying soybeans why contract the labor to pick them … oversimplified thinking I know).  Are there other ways/industries to retaliate against and would the objective be?

Interesting times.

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1 minute ago, Vintner said:

How this plays out in the (larger) service sector and in conjunction with the deportation policies/activities isn’t quite as obvious to me.

 

I'm not sure it's clear to anyone.  This is a bit of an economic grey area, I think.  But, on balance, history has told us that most of the possibilities are not good.

The one positive thing tariffs can do is protect domestic industry.  But that assumes that there is an industry.  A solid example of this is EVs.  We have an industry, but it's delicate and could be severely undercut by dumped Chinese imports (dumped meaning sold below cost/subsidized by China and exported here).  And, in any case, I think that justification requires temporary tariffs only, not long term or indefinite.

 A lot of the industry these would ostensibly protect I don't think really exists here and it will take years and massive investment to bring it back, if it comes back at all.  Examples are probably steel, aluminum, timber, textiles.

So, what we're going to do, most likely, is find other cheap-ass places to import goods from and consumers/purchasers will suffer in the mean time.

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14 hours ago, atomheartbevo said:

People do not understand that we can’t just ramp up food production, and a lot of stuff that is assembled from various suppliers has finely tuned supply chains that will have serious ripple effects.

The Northern Plains of the US (North Dakota and such) import a lot of fertilizer (largely potash and nitrogen) from Canada.  What ever backfills that will cost more.  Your Wheat Thins are gonna get more expensive.

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Another thing this points out is the dilemma with domestic vs. offshore manufacturing.

The main reason offshore manufacturing is cheaper is that lack of regulation in "third world countries" permits them to produce at much cheaper rates.

That is, regulation pertaining to the environment, worker safety, living wages, etc.  But even with proper or adequate regulation, those industries are inherently hazardous to the environment and to workers.  In some sense, we may actually be better off not having those industries domestically because no matter how well regulated, they are hazardous.

We sure as shit don't want those industries back with 19th century regulation or lack thereof.

But, offshoring doesn't really solve the problem because those hazards have a global dimension, particularly environmental ones.

And, over the long-long haul (that we may not survive as a species that long), global prices are going to equalize.

So, in some utopian world, we would have kept those industries, regulated them appropriately to mitigate the hazards as best as possible, and consumers pay the prices.  And we'd have a better industrial base, more decent jobs, and better national security.

Tariffs are not THE solution to any of this, but might be a small part.  

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5 minutes ago, TwiceHorn said:

Another thing this points out is the dilemma with domestic vs. offshore manufacturing.

The main reason offshore manufacturing is cheaper is that lack of regulation in "third world countries" permits them to produce at much cheaper rates.

That is, regulation pertaining to the environment, worker safety, living wages, etc.  But even with proper or adequate regulation, those industries are inherently hazardous to the environment and to workers.  In some sense, we may actually be better off not having those industries domestically because no matter how well regulated, they are hazardous.

We sure as shit don't want those industries back with 19th century regulation or lack thereof.

But, offshoring doesn't really solve the problem because those hazards have a global dimension, particularly environmental ones.

And, over the long-long haul (that we may not survive as a species that long), global prices are going to equalize.

So, in some utopian world, we would have kept those industries, regulated them appropriately to mitigate the hazards as best as possible, and consumers pay the prices.  And we'd have a better industrial base, more decent jobs, and better national security.

Tariffs are not THE solution to any of this, but might be a small part.  

Rare Earths are a perfect example of this. Rare Earths aren’t actually rare (the “rare” in the title references a unique set of properties the lanthanides possess as a class of elements).

The Chinese have generous supplies of lanthanides, but so do we, as does Australia and the Russians.

The Chinese have a modern hammerlock on global supply because the processing of Rare Earths is nasty and toxic.  They do it cheap, with little regard for human or environmental consequences. And they have a near monopoly on the processing of REs to the point that if we reopened Mountain Pass we’d still need to ship the ore to China for processing unless the government wanted to subsidize processing to make the refined product economically competitive. 

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23 minutes ago, Parliament said:

The Northern Plains of the US (North Dakota and such) import a lot of fertilizer (largely potash and nitrogen) from Canada.  What ever backfills that will cost more.  Your Wheat Thins are gonna get more expensive.

Welp, I’m getting my pitchfork and flaming torch 

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Another thing this points out is the dilemma with domestic vs. offshore manufacturing.
The main reason offshore manufacturing is cheaper is that lack of regulation in "third world countries" permits them to produce at much cheaper rates.
That is, regulation pertaining to the environment, worker safety, living wages, etc.  But even with proper or adequate regulation, those industries are inherently hazardous to the environment and to workers.  In some sense, we may actually be better off not having those industries domestically because no matter how well regulated, they are hazardous.
We sure as shit don't want those industries back with 19th century regulation or lack thereof.
But, offshoring doesn't really solve the problem because those hazards have a global dimension, particularly environmental ones.
And, over the long-long haul (that we may not survive as a species that long), global prices are going to equalize.
So, in some utopian world, we would have kept those industries, regulated them appropriately to mitigate the hazards as best as possible, and consumers pay the prices.  And we'd have a better industrial base, more decent jobs, and better national security.
Tariffs are not THE solution to any of this, but might be a small part.  

Twice’s last two posts are dead-on. Tariffs DO have a place in the set of policy tools, mostly as a means of protecting critical domestic industries.
For example, we learned a lot during the supply chain crunch of the pandemic: we are at risk if we don’t have domestic production of a lot of medical goods (PPE, certain drugs, etc), if we don’t have domestic production of critical chips/processors, etc.
In order to move some of that strategically important production back to the US, we can use a carrot/stick approach, with incentives for re-shoring (see the thus far very successful CHIPS act…which is of course under attack) and tariffs on foreign sources of those items, so that American manufacturers can compete.
Of course, that’s not what’s happening at all here. Here, they’re being used as a “negotiation” tactic who treats every negotiation and transaction as zero-sum one-offs. Our POTUS engages only in “distributive bargaining.” Which is beyond stupid and short-sighted in a world where we will continue to have relationships with the other parties. In that kind of world, integrative bargaining (working to create win-wins) is the path. Sure, there’s time for out-and-out conflict….but that time is not “all the time, with everyone.”
Like everything else with this admin, yes, tariffs are a thing, and a tool with real utility. But that’s not how they’re being used here.
I really am not trying to CR this - the fact is that we have a regime that has a totally different approach to tariffs than we’ve ever had, and you have to acknowledge and understand that if you’re going to discuss and understand how they’re being deployed.
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2 hours ago, TwiceHorn said:

The one positive thing tariffs can do is protect domestic industry.  But that assumes that there is an industry.  A solid example of this is EVs.  We have an industry, but it's delicate and could be severely undercut by dumped Chinese imports (dumped meaning sold below cost/subsidized by China and exported here).  And, in any case, I think that justification requires temporary tariffs only, not long term or indefinite.

It's not just the final product.  EV manufacturers (among many) use all kinds of materials sourced out of Asia.  There is no substitute.  This will wreck all kinds of American suppliers.

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3 minutes ago, jimmyjazz said:

Then why post it?  

Because someone literally asked the question why they are tariffing CA and Mex.  Those are the reasons the administration has given.  
 

Speculation beyond that is most certainly CR territory.  Which of course y’all are just aching to do.  It’s palpable 

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We already have a good example of the impacts of tariffs from the first Trump administration with washing machines. He imposed a 20 to 50% tariff on residential washing machines in his first term. The tariffs expired in 2023.

Immediately after imposing the tariffs, the price of US made washing machines increased greater than the overall rate of inflation. Samsung and LG ultimately ended up putting a couple of plants in the US creating approximately 2,000 jobs. When the tariffs expired in 2023, the price of washing machines decreased.

One study estimated that each new job created by the tariffs cost American consumers $815,000.

 

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Fentanyl, per the DEA "While Mexico and China are the primary source countries for fentanyl and fentanyl-related substances trafficked directly into the United States, India is emerging as a source for finished fentanyl powder and fentanyl precursor chemicals."  Unless you're a brainwashed, brain damaged fuck, you'll notice what country is NOT named on this list. https://www.dea.gov/documents/2020/2020-03/2020-03-06/fentanyl-flow-united-states

Further "China remains the primary source of fentanyl and fentanyl-related substances trafficked through
international mail and express consignment operations environment, as well as the main source for all
fentanyl-related substances trafficked into the United States
."

3 hours ago, TwiceHorn said:

Another thing this points out is the dilemma with domestic vs. offshore manufacturing.

The main reason offshore manufacturing is cheaper is that lack of regulation in "third world countries" permits them to produce at much cheaper rates.

That is, regulation pertaining to the environment, worker safety, living wages, etc.  But even with proper or adequate regulation, those industries are inherently hazardous to the environment and to workers.  In some sense, we may actually be better off not having those industries domestically because no matter how well regulated, they are hazardous.

We sure as shit don't want those industries back with 19th century regulation or lack thereof.

But, offshoring doesn't really solve the problem because those hazards have a global dimension, particularly environmental ones.

And, over the long-long haul (that we may not survive as a species that long), global prices are going to equalize.

So, in some utopian world, we would have kept those industries, regulated them appropriately to mitigate the hazards as best as possible, and consumers pay the prices.  And we'd have a better industrial base, more decent jobs, and better national security.

Tariffs are not THE solution to any of this, but might be a small part.  

Are you under the impression the US is a high regulatory nation that requires payment of living wages and clean industry and frequent regulatory visits? The fact is, what the companies currently producing in China are/were after is cheap labor. That's it. If you think driving up the cost of living in the US by raising tariffs across the board is even a small part of the answer to bringing some industries back to the US, you might want to have a re-think. (and if I'm misinterpreting your intended meaning, my apologies)

Edited by Chopper
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17 minutes ago, Chopper said:

Fentanyl, per the DEA "While Mexico and China are the primary source countries for fentanyl and fentanyl-related substances trafficked directly into the United States, India is emerging as a source for finished fentanyl powder and fentanyl precursor chemicals."  Unless you're a brainwashed, brain damaged fuck, you'll notice what country is NOT named on this list. https://www.dea.gov/documents/2020/2020-03/2020-03-06/fentanyl-flow-united-states

Happy Hour Drinking GIF by Barstool Sports

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3 hours ago, Bateshorn said:

Rare Earths are a perfect example of this. Rare Earths aren’t actually rare (the “rare” in the title references a unique set of properties the lanthanides possess as a class of elements).

The Chinese have generous supplies of lanthanides, but so do we, as does Australia and the Russians.

The Chinese have a modern hammerlock on global supply because the processing of Rare Earths is nasty and toxic.  They do it cheap, with little regard for human or environmental consequences. And they have a near monopoly on the processing of REs to the point that if we reopened Mountain Pass we’d still need to ship the ore to China for processing unless the government wanted to subsidize processing to make the refined product economically competitive. 

They’re already refined and on ceramic pellets, under 95% of the cars in America. Harvesting that crop is getting more and more popular. 

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About 42% of all imports in the US come from Mexico, China, and Canada.

Free link to very short article, but it has a long list of about 150 products that we import the most from these countries. Good to scan to see what's likely to start costing more:
https://www.nytimes.com/interactive/2025/02/01/business/economy/mexico-china-canada-imports-tariffs.html?unlocked_article_code=1.t04.VLdD._cURLID1HUgD&smid=url-share

image.thumb.png.0eb8fe9c3f91dbbcd18ad3448ef4e8d3.png

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38 minutes ago, David Dennison said:

Just checking in, but has anyone figured out how tariffs are non-political yet?

I really don’t think the stock market is going to give a fuck about anybody’s political ideology come Monday.  

Trudeau put this statement out within the last hour.

Quote

The United States has confirmed that it intends to impose 25% tariffs on most Canadian goods, with 10% tariffs on energy, starting February 4.
     
I’ve met with the Premiers and our Cabinet today, and I’ll be speaking with President Sheinbaum of Mexico shortly. We did not want this, but Canada is prepared. I’ll be addressing Canadians later this evening.

 

Edited by atomheartbevo
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7 hours ago, Chopper said:

Fentanyl, per the DEA "While Mexico and China are the primary source countries for fentanyl and fentanyl-related substances trafficked directly into the United States, India is emerging as a source for finished fentanyl powder and fentanyl precursor chemicals."  Unless you're a brainwashed, brain damaged fuck, you'll notice what country is NOT named on this list. https://www.dea.gov/documents/2020/2020-03/2020-03-06/fentanyl-flow-united-states

Further "China remains the primary source of fentanyl and fentanyl-related substances trafficked through
international mail and express consignment operations environment, as well as the main source for all
fentanyl-related substances trafficked into the United States
."

Are you under the impression the US is a high regulatory nation that requires payment of living wages and clean industry and frequent regulatory visits? The fact is, what the companies currently producing in China are/were after is cheap labor. That's it. If you think driving up the cost of living in the US by raising tariffs across the board is even a small part of the answer to bringing some industries back to the US, you might want to have a re-think. (and if I'm misinterpreting your intended meaning, my apologies)

Of course not. 

 

But the tards would have you believe that we overregulated and either couldn't keep manufacturing and other business here or that's the reason it won't come back. 

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1 hour ago, TwiceHorn said:

Of course not. 

 

But the tards would have you believe that we overregulated and either couldn't keep manufacturing and other business here or that's the reason it won't come back. 

Also, I guess the corollary or flip side to the utopian world and what happened here is we offshored excessively because cheap rates means more profits and corporations don't give a flying fuck about anything else. And maybe a side dish of lower consumer prices for commodity-type goods and a number of value-added. And hardly anyone else could get unassed to see the big picture, including government, unions and just about everyone else.

That was a galactic failure on our part.

Edited by TwiceHorn
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2 minutes ago, TwiceHorn said:

Also, I guess the corollary or flip side to the utopian world and what happened here is we offshored excessively because cheap rates means more profits and corporations don't give a flying fuck about anything else. And maybe a side dish of lower consumer prices for commodity-type goods and a number of value-added. And hardly anyone else could get unassed to see the big picture, including government, unions and just about everyone else.

That was a galactic failure on our part.

Bill Clinton done messed up.

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12 hours ago, TwiceHorn said:

I'm not sure it's clear to anyone.  This is a bit of an economic grey area, I think.  But, on balance, history has told us that most of the possibilities are not good.

The one positive thing tariffs can do is protect domestic industry.  But that assumes that there is an industry.  A solid example of this is EVs.  We have an industry, but it's delicate and could be severely undercut by dumped Chinese imports (dumped meaning sold below cost/subsidized by China and exported here).  And, in any case, I think that justification requires temporary tariffs only, not long term or indefinite.

 A lot of the industry these would ostensibly protect I don't think really exists here and it will take years and massive investment to bring it back, if it comes back at all.  Examples are probably steel, aluminum, timber, textiles.

So, what we're going to do, most likely, is find other cheap-ass places to import goods from and consumers/purchasers will suffer in the mean time.

The EV industry is a good case study on tariffs, because while the US would want to protect against a flood of cheap cars from China, the domestic industry relies heavily on rare earth metals from...checks notes...China 

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