It will almost certainly accelerate inflation, but won’t it also give domestic manufacturing workers hurt by globalization a lot more demand for their work, and leverage to increase their wages? It seems like the main people hurt by this would be the upper middle class and above, the execs, designers, and managers who’ve directly and indirectly managed large international teams of laborers working at low rates, as they’ll get hit by the inflation, but see no additional demand/leverage to increase their wages. They’re the part of the bimodal wealth distribution that has until now done very well by globalization, and I think this election is largely a reaction by the other mode.
No. You can't just wave a magic wand and order manufacturing home. Capitalists exported a lot of skill and industrial infrastructure to overseas markets, which can't be rebuilt overnight.
There was talk about this in the first term too, and it ended up with a lot of money from tariffs being used to subsidize farmers because they found themselves doing so poorly that suicides spiked.
Right, it seems likely to be disruptive in the short term, and there would be skill shortages and big holes in the domestic supply chain. I mean more abstractly/directionally. It does seem like it’d be best if it was phased in predictably over a longer period of time, but doesn’t seem like that’s the plan.
Elon at least seems to be against sudden implementation of tariffs, he wants them phased in in a predictable over time, he talks about exactly this near the end of his JRE interview: https://youtu.be/7qZl_5xHoBw?si=0XNnSP8psUtXLK2K&t=8426
They also talk about the problems of losing competitive pressure from protectionist systems.
It hurts everyone, the price shocks will be felt for years, and any gains that can be made won't matter.
Wage gains won't keep pace with any price increases either, Republican's have already outlined policies that are regressive to average Americans[0][1]
About the only thing tariffs will do is consolidate power at the top and allow the largest corporations to buy out smaller ones that can't cope as well.
We are remember, talking about broad spectrum tariffs here, which will hit any import, from food to solar panels.
Yes, prices will rise, the question is whether it will increase their leverage in the job market enough to boost their earnings enough to counteract the higher prices.
my point with the JEC wasn't about tariffs its about Republican policies that show that "will it increase their leverage in the job market enough to boost their earnings enough to counteract the higher prices" is fantasy
The highest levels of leadership of the Republican party have shown time and again that they want a permanent poor underclass through their policies (both enacted and proposed) and actions.
There's no sense in speculation here, if they can put the boot on labors neck, they will 100% of the time
I mean, we were just talking about tariffs, not whatever else may be in their plans.
But point taken, you think that the net result will be worse for poor people. I don’t necessarily disagree, it just seems that this one bit might be somewhat positive for the poor.
I don't think the US is the only place where US companies sell things. What about when tariffs are placed on US items, demand will drop with US made things.
I come from a country that tried the high tariff route (Australia).
> What about when tariffs are placed on US items, demand will drop with US made things.
Maybe that will happen, but over long term that isn't the dominant effect. The main effect is the tariff protected industries raise prices because the don't have to complete with international suppliers any more. They soon price themselves out of the international market. It doesn't take very long - a couple of years usually.
That's how it starts. It is usually tolerated because the jobs at the expense of higher local employment was the goal. Then it flows outward as industries that aren't tariff protected are forced to buy local stuff at more expensive prices than their overseas competitors. "Stuff" here includes labour, because these tariff protected industries can afford to pay their employees more. (That was one of the attractions of the tariff idea, right?) The solution is obvious - tariffs for those industries too. Your exports go through the floor.
Eventually it becomes obvious even to Joe Citizen in the street. Locally produced stuff can cost multiples of what the overseas producers can make it for. (Literally, multiples. People start to yearn for the time an electric drill could cost $20.) The quality goes down as well.
The time for change arrives. I still remember our treasurer calling Australia cowering behind tariff walls a "banana republic" [0]; NZ had the same moment without such theatrics. The tariff band aid was eventually ripped off in both countries.
The pain was immense. Protected industries go rapidly broke, unemployment sky rockets. It takes years for the new internationally competitively industries to develop. But here we are, 30 years later, the last 20 without a recession and now with a GDP bigger than Russia's.
Still if the tariff plan is implemented, the next few years will be very nice for USA citizens. I guess the even frog in the pot enjoys the warmer water for a while. Enjoy it while it lasts.
It’s not, but our balance of trade is very deeply negative. We import a lot more than we export. Partly because our currency is kept artificially strong by reserve currency status, preventing our exports from becoming more competitive when we go deeply into debt.
we import some important things though right now. Like a lot of our food. I don't think we can turnover all of the inedible corn we grow for real food?
I can't imagine there will be iphone factories all of the sudden in the US.
I look in my refrigerator and I see a couple cheeses from Europe, butter from Ireland (and from the USA), a Belgian beer I still have around, and food from the US. We are, as a nation, completely self sufficient in food production, we turn a bunch of corn into ethanol (very stupid) and export enormous amounts of foodstuffs of all kinds.
There are very few nations, in fact, who could completely close their borders, in and out, and feed themselves. American could do this easily, furthermore, there would be widespread and worldwide starvation if we stopped exporting (no one wants to do this, just making a point).
This has taught me nothing new. We produce and export positively enormous amounts of food, we also buy a lot of it.
My point remains: that last part is completely optional because this country is food sufficient. If world trade were to shut off, and America could neither export nor import food, many millions of people would starve to death.
