[I'm attempting to ask this question in an apolitical way].
The consensus amongst economists appears to be that tariffs will have net negative impacts on our economy. Can someone explain the support amongst financially sophisticated people (e.g. Marc Andreessen) for a candidate whose economic policies rely heavily on tariffs? Is it just that they believe the benefits of Trump's other policies (e.g. deregulation of crypto) will outweigh the negative impacts of tariffs?
I think the only people who can explain their rationale would be those people you’re talking about. We can wildly speculate (low regulation, pro business, etc), but domain experts broadly agree the tariffs in question would be detrimental to the US economy. I suppose we’ll have data from a natural experiment shortly. Will the data matter? Probably not.
We reversed on Smoot-Hawley in a few years. I expect the same this time. If you have capital, there will be a lot of agricultural and manufacturing assets in distress. If you don’t, I guess get some? (I’m putting aside cash to buy farmland.)
One of the common meme answers is that a destroyed economy is easier and cheaper for an international megacapitalist to pick apart and buy up. The long-term profits and power from those acquisitions outweigh a decade or two of inconvenience and bad charts.
It can make more sense to buy pieces of a company during a bankruptcy firesale, instead of buying out that company as a bailout. In this case, the company is the USA.
EDIT:
Realistically, there's more blood to squeeze from the consumer stone - you can raise prices with the increased costs, and compensate by 'allowing' people to go far further into debt for longer.
Feels a bit like the rise of the kleptocrats after the fall of the USSR. This is more a plutocracy, where the already very wealthy get to be the last man standing.
It stresses the bounds of my ability to take the question at good faith or seriously, if Marc Andreessen is the example of "financially sophisticated." His technolibertarian California-ideology unchecked-rule-by-the-rich fervor doesn't feel well considered, it feels emotional. (If there is an ideology, it's "America's greatness is purely a function of my personal greatness", from what I can see.)
As another poster pointed out, Harley Davidson had a painful time, and ended up having to make more motorcylces outside the US.
Similarly, Soy Bean farmers needed a large bailout.
Both of those sound pretty bad to me, and they were somewhat targetted - he has suggested blanket tariffs, which you only need to look back to Smoot-Hawley, which is generally accepted to have worsened the great depression.
The tariffs let Trump push tax cuts. People want the tax cuts. The tariffs are just a way to say they’ll be paid for. (Dems do that same with deficit financing and ‘tax the rich’ schemes.)
There are also communities who don’t think tariffs will be reciprocated. If we truly engage in a trade war, American farming and car manufacturing will be in crisis—they’re overbuilt for a domestic-only market.
In 2017 Harley-Davidson was devastated by a European counter-tariff. I'm confident that in 2025 Twitter and Tesla amongst other signature American brands will be hit by some massive counter-tariffs.
Did Brazil not blackhole Twitter until Musk paid up? Which he did? And Brazil went after Starlink?
What do you think China could do, comparatively speaking? If we look at what they did to Jack Ma [1], I could see China doing far more harm to Musk's China interests than the US can do to China.
> that in 2025 Twitter and Tesla amongst other signature American brands will be hit by some massive counter-tariffs
Maybe. Agricultural products is easy because there isn’t a billionaire at the top to be spiteful. Detroit auto a middle ground between pissing off Elon and not retaliating.
Tariff targets are generally chosen on industries that have an oversized impact on politicians. Harley-Davidson was chosen because while those tariffs would have little impact on the European or US economy, they figured it would have an oversized impact on Trump.
Farmers are typically chosen for counter-tariffs for the same reason -- politicians listen to farmers a lot more closely than their voting or economic impact would imply. Upset farmers get a lot of media time.
Musk has Trump's ear. That's why he'll be targetted.
> Tariff targets are generally chosen on industries that have an oversized impact on politicians
In 2016, when countries were trying to influence policy. There are other motivations for tariffs, from seeking autonomy from an unreliable trading partner to straight-up spite. There is also the domestic component: you target industries you have domestic competitors for because that now makes them happy.
Andreessen holds major investments in many of the companies that will benefit. The paper says that tariffs make the US economy less efficient. Inefficiency == profit. An efficient market is one where prices are close to costs. Inefficient markets provide more profit to capitalists.
Because of Trump's planned tax cut renewal the profits of US companies should not only keep at current levels (whereas they were going to drop when tax cuts expired under Kamala) and even rise a little bit.
Making stocks rise is pretty much the purpose of the whole sector. Hence ...
The consensus amongst economists appears to be that tariffs will have net negative impacts on our economy. Can someone explain the support amongst financially sophisticated people (e.g. Marc Andreessen) for a candidate whose economic policies rely heavily on tariffs? Is it just that they believe the benefits of Trump's other policies (e.g. deregulation of crypto) will outweigh the negative impacts of tariffs?