The Trump tariffs

scary_robot_music

scary_robot_music

Other Christian
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I saw a Trump speech yesterday where he explained his logic behind the tariffs. According to the president, in the late 19th century, the government was funded mainly through tariffs and the economy was in general far stronger than it has been since the introduction of income tax in 1913. Also, China, Canada, Mexico, and others have been somehow taking advantage of the US for a long time due to unfair trade deals, or something to that effect and the tariffs are supposed to somehow fix this. I don't know the details. Anyway, the president promised his tariffs would lead to a new golden age where we're all going to be "very, very rich" here in America.

All of that sounds good to me, if it's true. I like money </Frito Pendejo from Idiocracy voice>.

Then this morning I saw a headline in the MSM saying that Canada and Mexico are planning retaliatory 25% tariffs on the USA. Should we be worried? A lot of the avocados I buy seem to be grown in Mexico, and maybe the Canada Goose jacket I've always wanted but never been able to afford will be even more ridiculously expensive now. Other than that, I have no idea.

Obviously, I don't know much about tariffs and how they work, either in theory or in practice. If there's already a thread for tariffs or they're being discussed at length somewhere else someone please point me to that thread or discussion, but I couldn't find anything so I thought I'd start this thread. I'd like to hear your opinions.
 
The way I see it, canceling the income tax would lead to a lot of extra disposable income Americans have to purchase domestic goods. These goods will almost certainly be more expensive than the imported ones we're currently getting, but we should be able to afford them with our extra income. This also means people will have more cash on hand to start businesses and create jobs. The purchase of more domestic goods will also promote job creation, so it goes top down and bottom up.

Now with other countries imposing tariffs on us, our exports will no longer be as successful. So the focus will have to mainly be on the domestic market, which as I said, will grow larger anyways. So in the end a new equilibrium will be established. America will be more economically disconnected from the rest of the world, but not necessarily any poorer. But if Trump isn't careful in how he does this, there could be some serious short-term price volatility. Every move at one point in the supply chain affects every other point, and sometimes the effects are magnified down the line.
 
scary_robot_music said:
Should we be worried? A lot of the avocados I buy seem to be grown in Mexico, and maybe the Canada Goose jacket I've always wanted but never been able to afford will be even more ridiculously expensive now. Other than that, I have no idea.
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Tariiffs can cause a spike in ratail prices of imported goods, but not in all cases and not to the value of the tariff - if for example, the jacket You want was now 25% more expensive, the sales would tank since not many people would be willing to pay that much. It would make more sense for the ratailer/manufacturer to lower their markup and keep the sales going - make less per one jacket, but keep the volume. So what, most likely, we will see is a split cost of the tariff - slight increase in retail price and decrease of corporate profit margins.
 
TruckDriver9 said:
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I tend to buy this analogy. I used to sell things online. I never bothered selling to Canadians because I didn't need them as customers, due to Canda's relatively small population. Plenty of buyers in the US, and I assumed it would be a hassle to send things to Canada because of figuring out shipping costs and not being able to track the package, more complicated returns, things like that, so I never serously looked into it or considered it.

Then years later on some forum I encountered a Canadain ranting about stupid, ignorant, uneducated American sellers who won't ship to Canada and pointing out that there is actually tracking between the US and Canadian postal systems, something about which, to be fair, I was ignorant. Thing is though, Canadian online sellers absolutely need American customers, so they're motivated to figure out how to ship to the US. The reverse is not true, simply due to the difference in population size between the two countries. I pointed this out the the angry Cannuck in question, commenting that even with my inferior American education the math is pretty simple and obvious. His response , let's say, cast doubt on the strange stereotype that Canadians are polite.

My point is that I could see a tariff war between the US and Canada working out the same way on a vastly larger scale. Essentially, they have to sell to us to survive, whereas not selling to them is at best a minor incovenience to us.

Who knows though.
 
I don’t mind getting rid of the military industry complex . That’s what will happen if we get rid of income tax.

We started the income tax to pay for the world wars and just kept it
 
scary_robot_music said:
I tend to buy this analogy. I used to sell things online. I never bothered selling to Canadians because I didn't need them as customers, due to Canda's relatively small population. Plenty of buyers in the US, and I assumed it would be a hassle to send things to Canada because of figuring out shipping costs and not being able to track the package, more complicated returns, things like that, so I never serously looked into it or considered it.

Then years later on some forum I encountered a Canadain ranting about stupid, ignorant, uneducated American sellers who won't ship to Canada and pointing out that there is actually tracking between the US and Canadian postal systems, something about which, to be fair, I was ignorant. Thing is though, Canadian online sellers absolutely need American customers, so they're motivated to figure out how to ship to the US. The reverse is not true, simply due to the difference in population size between the two countries. I pointed this out the the angry Cannuck in question, commenting that even with my inferior American education the math is pretty simple and obvious. His response , let's say, cast doubt on the strange stereotype that Canadians are polite.

My point is that I could see a tariff war between the US and Canada working out the same way on a vastly larger scale. Essentially, they have to sell to us to survive, whereas not selling to them is at best a minor incovenience to us.

Who knows though.
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I'm 20 minutes from the border and one of my e-commerce businesses sells an in house manufactured product which would translate to any market and has a very small footprint. A few years ago I set up a small office in Canada to take advantage of the reduced shipping costs and transit times, significantly reduced competition so I could charge a higher price and just tap into an easy new underserved market. It was garbage, even at the same prices I was barely doing anything above my current sales to Canada from the USA when I used to offer shipping to Canada at huge rates. Their economy is total trash I couldn't figure out how any small business survives there, nobody has disposable income and as shocking as it is their mail is far worse than the USA.
 
FrancisK said:
I'm 20 minutes from the border and one of my e-commerce businesses sells an in house manufactured product which would translate to any market and has a very small footprint. A few years ago I set up a small office in Canada to take advantage of the reduced shipping costs and transit times, significantly reduced competition so I could charge a higher price and just tap into an easy new underserved market. It was garbage, even at the same prices I was barely doing anything above my current sales to Canada from the USA when I used to offer shipping to Canada at huge rates. Their economy is total trash I couldn't figure out how any small business survives there, nobody has disposable income and as shocking as it is their mail is far worse than the USA.
Click to expand...

Population of Canada = 40 million people
Population of the USA = 335 million people

Bonus stat:
Population of Mexico = 128 million people
 
Vox Day posted on this.

Testing the Free Trade Hypothesis - Vox Popoli

It has long been a mantra of the free trade crowd that both sides lose from a trade war. President Trump has called that mantra into question by launching a trade war with Canada, and likely Mexico and China as well: Canada will retaliate against President Donald Trump’s new tariffs with 25%...
voxday.net voxday.net

His point is that the US is running a very large trade deficit with these three countries, so the trade income to those countries increases their GDP by 3-9%, while it reduces the US GDP by smaller amounts. He says that in a situation with large trade deficits for the US, and large surpluses to those countries, representing a significant portion of their total GDP, a protectionist tariff will help us more than it hurts us.

For example, the US used to produce large amounts of avocados, but water restrictions and low cost production in Mexico destroyed the US avocado producers. With water and tariffs, they can now start producing for the market again, and that money stays in the US, instead of going to Mexico.

I know a lot of economists claim free trade is better for the economy over all, but I think experience has shown that while it is better for rich people, it is not better for the general population. Tariffs keep production inside the country, providing jobs for millions of working and middle class people, and this makes the country stronger overall.
 
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