| ▲ | cheema33 2 days ago |
| This needs to be repeated. Tariffs are a tax on ordinary citizens. Unlike regular taxes, tariffs are not progressive and therefore benefit the wealthy. These are the sort of things the poor and middle class voted for. To make the rich, richer. And then turn around and complain that rich are getting richer and they are getting poorer. |
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| ▲ | dfxm12 2 days ago | parent | next [-] |
| I'm sure Japan, and other countries doing similar things, don't like the tariffs either. Hopefully actions like this will change voter behavior, either at the polls or to embolden voters to do whatever it is they can to tell their elected officials to revert these changes. Maybe this is a drop in the bucket, but on the other hand, maybe Japan doesn't want to/can't make a bigger a splash. In any case, it is rare that Americans face consequences for bad behavior of American foreign policy. Hopefully Americans get more engaged and introspective this time around. |
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| ▲ | paxys 2 days ago | parent | next [-] | | Not all tax is the same. The left prefers progressive taxation (if you make more income you pay more tax), the right prefers regressive (if you buy or use goods or services you pay tax on them). Sales taxes and tariffs are in the latter category. | | |
| ▲ | georgeplusplus 2 days ago | parent [-] | | It’s disingenuous to consider one’s total income when weighing the fairness of a tax like sales tax. The thought that a sales tax is somehow benefiting one group over the other is ridiculous far left extreme thinking. You pay for a service and that service has a rate. To think that the only good kind of taxation are those that are progressive is the dumbest thing I ever heard. | | |
| ▲ | oblique 2 days ago | parent | next [-] | | The taxes will have to come from somewhere. Tariffs are a regressive tax because money spent on goods will increase sublinearly with income. The % of total income spent on tariffs passed onto the consumer is therefore higher the lower your income is. It's not "ridiculous far left extreme thinking", it's basic math. | |
| ▲ | czzr 2 days ago | parent | prev | next [-] | | It’s very, very basic economics - the marginal utility of money decreases, so progressive taxation is better than regressive taxation. | | |
| ▲ | SpicyLemonZest 2 days ago | parent [-] | | It's basic economics in the sense that it's an oversimplified toy model. In the real world, every country I'm aware of gets a substantial amount of its tax revenue from consumption taxes, and indeed the US's lack of VAT means it's currently much more dependent on progressive income taxes than peer countries. (https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-i...) | | |
| ▲ | czzr 2 days ago | parent [-] | | I responded to a comment that called progressive taxation a crazy “far left” idea - I’m not sure the second and third order details of taxation policy are really relevant here… But ok - yes, sure, in real life it’s a mix and the mix is worth debating. Note also that consumption taxes often have exemptions/reductions to offset the most severe regressive effects. |
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| ▲ | oaiey 2 days ago | parent | prev [-] | | With great power comes great responsibility. Is as simple as that. Is true when you are a strong man, is true when you are a family father and is true when you are a rich person. |
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| ▲ | marssaxman 2 days ago | parent | prev | next [-] | | What "far left" is it that you think you are hearing here? | |
| ▲ | bryzaguy 2 days ago | parent | prev | next [-] | | One impact I’ve seen is small businesses who can no longer afford the tools/supplies they need, which aren’t manufactured in the states, so they are forced to increase their prices on good they sell or go out of business. | |
| ▲ | ActorNightly 2 days ago | parent | prev | next [-] | | There hasn't been a far left leader elected in US, even on a state level. Secondly,the point of a tariff in a normal political climate is to bring manufacturing back home. This won't happen in the current administration. And don't confuse liberals with far left. | | |
| ▲ | gosub100 17 hours ago | parent [-] | | > And don't confuse liberals with far left That's the whole point of using that phrase. It's meant to alienate and disconnect. The phrase originated by the left to make any conservative point of view seem alien and "far" away from reality. I'm glad that it can be spread around more evenly. After all, we don't want any one thing disproportionately affecting any one group, do we? |
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| ▲ | zahlman 2 days ago | parent | prev [-] | | This fails to understand both the "far left" attitude towards taxes (many forms of taxation are accepted and even eagerly pursued; frankly, very few people actually have politics that treat "tax" as a single coherent idea) and the opposition to Trump (roughly, half the country, just as with every other president in a two-party system). |
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| ▲ | pessimizer 2 days ago | parent | prev | next [-] |
| > This needs to be repeated. Tariffs are a tax on ordinary citizens. Unlike regular taxes, tariffs are not progressive and therefore benefit the wealthy. No, people need to stop repeating it, because it's an extremely stupid anti-tax argument. Tariffs are meant to onshore production and raise wages. Telling half the story is simply lying. You might as well complain about buying food because it costs money. You might as well complain about all consumption because consumption is regressive. The problem isn't tariffs, you can send that money to poor people. The problem is that nobody cares about poor people, including Trump. A lack of tariffs isn't going to make America moral. One of the only things Trump is doing unbelievably well on is trade. Tariffs haven't been damaging at all. They should be more damaging, but the US is so dependent on foreign poverty that we have to leave any tariff scheme as filled with holes as swiss cheese. The fact is our manufacturing is so based in the exploitation of low-rights and low paid workers from other countries that entire industries would immediately start failing if we ended up in a real trade war with e.g. China. > To make the rich, richer. And then turn around and complain that rich are getting richer and they are getting poorer. These are Koch brothers policies you're advocating as if they're social justice. The reason why every capitalist you know is complaining about tariffs isn't because they make the rich richer (by some method yet to be explained.) |
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| ▲ | yibg 2 days ago | parent | next [-] | | Details matter. Tariffs CAN promote domestic manufacturing and raise wages. But a few things need to be true for that to happen: 1. Targeted specific tariffs aimed at industries we want to protect. Not a flat across the board tariffs on all / most things coming in. The latter IS just a tax on the consumer. 2. Other policies aimed at promoting the said industries. e.g. CHIPS act. 3. Consistency, predictability and stability of policies. No one is going to move manufacturing to the US if they aren't sure if tariffs are going up or down or will get removed entirely on short notice at a whim. We have none of the above. | |
| ▲ | Spooky23 2 days ago | parent | prev | next [-] | | I’d hold judgement on that. The American empire is built on global trade. We tax the world with the dollar, and we’re killing the golden goose. | |
| ▲ | JumpCrisscross 2 days ago | parent | prev | next [-] | | > reason why every capitalist you know is complaining about tariffs isn't because they make the rich richer …which capitalist is complaining? These tariffs are a regressive tax that rewards political proximity and power. They are also a massive subsidy to our services sector, which is dominated in compensation by finance, insurance, real estate and tech. | |
| ▲ | Sohcahtoa82 2 days ago | parent | prev | next [-] | | > Tariffs are meant to onshore production and raise wages. Both of which would still lead to higher prices on the consumer. > One of the only things Trump is doing unbelievably well on is trade. Tariffs haven't been damaging at all. I don't know whether to laugh at the absurdity of this statement or to cry because someone could actually say it with a straight face. | |
| ▲ | johannes1234321 2 days ago | parent | prev | next [-] | | Using tariffs is A common way to protect local industry. However it is a dangerous weapon, which has downsides. In history tariffs have show to lead to high prices on the domestic market and products which are subpar to globally standards. Domestic companies don't have pressure to innovate, while global market has more competition. Consequence of that is protection by product group for key products one wants to have locally and not per origin on all kinds of goods. This can lead to short term wins, but backfire after a while. | |
| ▲ | Marsymars 2 days ago | parent | prev [-] | | Tariffs based on worker and environmental rights would be great, but Trump's are based on entirely irrelevant things. |
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| ▲ | colechristensen 2 days ago | parent | prev | next [-] |
| I think it's quite the opposite. Tariffs are flat taxes on corporations AND can't be avoided with the tax shenanigans all big corporations use and many small ones can't. Implementation and motivation details aside I'm in favor of small tariffs for all but the most equal trade partners. Corporate taxes have the problem of small business paying much more proportionally than large ones and a flat tax on businesses that rely on cheap foreign labor and goods is deserved. Trump doesn't get to define all of my opinions by me needing to oppose exactly everything he's done. The problem with the current political situation is the establishment in both parties w were too cowardly or useless to address real problems which are now actually being addressed by objectively stupid fascists. And that is the lesson to everyone, get stuff done or get replaced by awful people doing awful things. |
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| ▲ | graeme 2 days ago | parent | next [-] | | >Tariffs are flat taxes on corporations The OP said tariffs are not progressive taxes. You are agreeing with them while believing you are disagreeing. Further tariffs are not specific to corporations. Individuals pay them. Small business pay them. Large businesses pay them. | | |
| ▲ | folsom 2 days ago | parent [-] | | Then you would agree that all corporate taxes are not progressive and are eventually paid by all consumers thus all corporate taxes should be abolished. | | |
| ▲ | jemmyw 2 days ago | parent | next [-] | | Corporate taxes are paid on profit. In theory they should not change consumer pricing in a perfect market. They can be seen as a tool to encourage companies to spend more on R&D and capital investment rather than returning profit. | |
| ▲ | graeme a day ago | parent | prev [-] | | I recall my left leaning economics professor arguing for the abolition of corporate taxes along similar lines actually. You don't really deserve the downvotes other than perhaps for the aggressive tone. (I'm not committing myself to the idea, only that it isn't obviously outside the norms of economic thought) |
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| ▲ | mlyle 2 days ago | parent | prev | next [-] | | In the long run, tariffs basically all fall on the consumer because producer and distributor behavior is near infinitely elastic. Econ 101 predicts that the party who is less able to adjust behavior in reaction to the tax pays most of the tax. In the short run, this isn't true: firms have goods they need to move. | | |
| ▲ | zahlman 2 days ago | parent | next [-] | | This model predicts much higher prices overall than actually observed, especially on the goods deemed most essential (like food). There are many reasons that companies cannot simply charge "what the market will bear". | | |
| ▲ | mlyle 2 days ago | parent [-] | | You’re mixing up two different questions. "What the market will bear" is a monopoly pricing story. Food is messy because it's a commodity with a whole lot of substitution-- consumers have a high elasticity as a result. We are talking about elasticity's prediction for the share producers and consumers each pay when there is a cost structure or tax change. Incidence theory is well validated and fits observed evidence remarkably well, including in 2019 studies of the effects of the 2018 trade war. |
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| ▲ | tsunamifury 2 days ago | parent | prev [-] | | We are in a world economy which actually needs demand more than supply. This is your missing analysis. | | |
| ▲ | mlyle 2 days ago | parent [-] | | "We need demand more than supply" is a macro diagnosis. But tariff incidence is a micro question. Elasticity analysis doesn’t care whether the world has a demand shortfall or a supply glut. It asks: when a tax raises transaction costs, which side is less able to change behavior? In the long run, suppliers usually have more flexibility than consumers. | | |
| ▲ | tsunamifury 2 days ago | parent [-] | | I can't believe I'm going to look like I'm defending this but here it goes: The market 'offering' the most demand to the global economy right now is America, by far and away, with a distant second of Europe and Middle East. America has chosen to use tariffs in an attempt to 'tax the demand offered' to the global economy in order to stop the localize debt accumulation of that demand, along with other justifications (rightly or wrongly) of stabilizing global trade and currency. This is at least the THEORY on Tariffs. Its makes a bit more sense than the 'grrr 1950's trade imbalance' story media keeps spinning, but whatever I'm not going to defend it any more than that. | | |
| ▲ | mlyle 2 days ago | parent [-] | | I'm not talking about trade imbalance. I'm simply saying, tax incidence is predicted by elasticity, and in the long run suppliers have very high elasticity. You can possibly improve trade imbalance with tariffs (though retaliation makes it hard). But it's hard to escape your consumers paying most or all of the costs of those tariffs. | | |
| ▲ | tsunamifury 2 days ago | parent [-] | | I think we agree if I'm understanding you correctly, yes the Suppliers have more elasticity and must ultimately absorb this. I'd say the remaining problem left in our analysis is massive inequality in America leading to enormous consumer elasticity in a small ultra-wealth portion. This I can't figure out | | |
| ▲ | mlyle 2 days ago | parent [-] | | That's the opposite of how tax incidence works. Elasticity means you can change your amount produced in response to changes in price. Producers can’t easily change output, so they bear more of the tax burden themselves. But in the long run, producers can reallocate or exit until they’re producing at minimum(average total cost), which makes supply more elastic and shifts most of the burden onto consumers. This is stuff that's covered in week 4 of a basic microeconomics class. It gets a little fancier with imperfect competition or heterogenous agents, etc, but predicting tax incidence is basically dominated by this even in advanced microeconomics. | | |
| ▲ | tsunamifury a day ago | parent [-] | | Sure ok. You’re being weirdly belligerent. | | |
| ▲ | mlyle 20 hours ago | parent [-] | | You came here in your first comment blindly disagreeing with "This is your missing analysis." Then you seemed determined to misunderstand, e.g. > > But it's hard to escape your consumers paying most or all of the costs of those tariffs. > I think we agree if I'm understanding you correctly, yes the Suppliers have more elasticity and must ultimately absorb this. This is really simple fundamental microeconomics stuff. If you want to understand it, there's plenty of sources online. If you want to argue it, you should learn the basics first. | | |
| ▲ | tsunamifury 14 hours ago | parent [-] | | Literally not arguing with you, asked a few questions and made open statements and tried to listen. Consider if you see everyone around you as the asshole who the asshole might be... | | |
| ▲ | mlyle 13 hours ago | parent [-] | | I think "this is your missing analysis" is a strong assertion to make to another human-- that sounds like an invitation to argue the merits. Through text, we don't have the benefit of tone. If your intention was to be curious about it, your comments don't convey that. > Consider if you see everyone around you as the asshole who the asshole might be... And now you're just effectively calling names. If you want to talk about economic concepts in a forum like this, you should either ask questions or fill yourself in on the foundational knowledge. |
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| ▲ | rapind 2 days ago | parent | prev | next [-] | | > The problem with the current political situation is the establishment in both parties w were too cowardly or useless to address real problems which are now actually being addressed by objectively stupid fascists. > And that is the lesson to everyone, get stuff done or get replaced by awful people doing awful things. I don't think that the establishment who benefitted from the status quo actually cares nearly as much as they pretend to while the poor and eroding middle class bear the brunt of the suffering. I doubt rich reagonites and clintonites who made a killing off of deregulation and cheap overseas labour have many regrets. | |
| ▲ | asah 2 days ago | parent | prev | next [-] | | WSJ had a nice article on this today:
https://www.wsj.com/personal-finance/taxes/corporate-income-... | |
| ▲ | 2 days ago | parent | prev | next [-] | | [deleted] | |
| ▲ | CamperBob2 2 days ago | parent | prev | next [-] | | Corporations don't pay taxes. They pass them on to their customers: us. And applying tariffs to tools and raw materials when you're supposed to be trying to bring manufacturing back to your country is... well, let's just say any government stupid enough to do that isn't likely to improve things in any other respect. | | |
| ▲ | hdgvhicv 2 days ago | parent | next [-] | | Invisible hand forces prices down. If tarrifs on imported goods are high then people choose non imported goods (which might be substitutes for goods which can’t be made in America) as there are no tarrifs. They are dangerous though. If country A stops selling to US it sells cheaper to other countries. It also stops importing from the US (and chooses subsidies). Overall everyone loses out - at least in theory, as everyone uses worse substitutes. | | |
| ▲ | yibg 2 days ago | parent [-] | | If non imported goods were price competitive with imported goods then tariffs won't be needed in the first place. Tariff's are there for artificially force imported good to be more expensive so the previous more expensive domestically produced products become price competitive. | | |
| ▲ | dpkirchner a day ago | parent [-] | | And if the tariff is set too high domestic goods will become more expensive as well as there'd be no reason for a domestic manufacturer to charge substantially less than the price of the imported goods. | | |
| ▲ | hdgvhicv 3 hours ago | parent [-] | | Two domestic manufacturers compete to get more customers by reducing prices, price trends to cost. All tarrifs do is remove foreign competition who have lower costs for a variety of reasons, some which benefit the country imposing the tariff, some not. Neoliberal approach is to always require the cheapest goods, no matter the cost. That’s not the only approach. |
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| ▲ | smohare 2 days ago | parent | prev [-] | | [dead] |
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| ▲ | msgodel 2 days ago | parent | prev | next [-] |
| They're not nearly as bad as income tax which would have to be raised if we didn't do tariffs. At least tariffs tax consumption rather than production. Taxing production/income is horribly evil and in better times (such as when the country was founded) people who insisted on it would have been shot. |
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| ▲ | woadwarrior01 2 days ago | parent | next [-] | | > At least tariffs tax consumption rather than production. Taxing production/income is horribly evil and in better times (such as when the country was founded) people who insisted on it would have been shot. Not true. Producing almost anything in the material world requires raw materials. If any of them are imported, they suffer from tariffs. IMO, if a consumption tax is what you're looking for, then value added tax (VAT) is a more suitable solution. | |
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| ▲ | airstrike 2 days ago | parent | prev | next [-] | | [flagged] | |
| ▲ | os2warpman 2 days ago | parent | prev [-] | | [flagged] | | |
| ▲ | marcosdumay 2 days ago | parent | next [-] | | > I'm a white upper-middle-class military veteran professional landowning (mortgages don't count, buddy) male If you don't own a stable company, you may still be too poor to benefit from those ones. | |
| ▲ | bendbro 2 days ago | parent | prev [-] | | [flagged] |
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| ▲ | bendbro 2 days ago | parent | prev | next [-] |
| > These are the sort of things the poor and middle class voted for. To make the rich, richer. Experts show saving 7.1337% at Walmart is worth losing your job to offshoring! I haven't seen meaningful change for poor or workers with a decade of Democrat policy, so pardon me while I ignore that and vote for some tariffs. |
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| ▲ | hippo22 2 days ago | parent | prev | next [-] |
| Do you think that cigarette taxes should be repealed then? |
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| ▲ | bryzaguy 2 days ago | parent | next [-] | | If I were to pick a place to tax, the addictive, harmful substances seem like a good option. But that’s easy for me to say because I don’t smoke. I do like sugar though. Imagine the impact on our health if there were a sugar tax. | | |
| ▲ | stouset 2 days ago | parent [-] | | There is in some places. California has a hefty sugary-beverage tax, for example. I'm intuitively "for" things like this, but I'm curious if it's been long enough that we've been able to collect data showing any effects. | | |
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| ▲ | 2 days ago | parent | prev | next [-] | | [deleted] | |
| ▲ | zymhan 2 days ago | parent | prev [-] | | https://en.wikipedia.org/wiki/Whataboutism | | |
| ▲ | zahlman 2 days ago | parent | next [-] | | This is not whataboutism. The argument described in GGP would apply the same way to GP's case. Cigarette taxes are a sales/consumption tax (specifically one aimed at discouraging consumption, but cigarettes are addictive) and they are necessarily, inherently regressive, for the simple reason that people with orders of magnitude more income and wealth cannot feasibly spend proportionately more on cigarettes. | | |
| ▲ | zymhan a day ago | parent [-] | | It's bringing up an entirely unrelated topic as some sort of "gotcha". Cigarette taxes were not part of the GGP's comment. I.e. a red herring > The communication intent is often to distract from the content of a topic (red herring). The goal may also be to question the justification for criticism and the legitimacy, integrity, and fairness of the critic, which can take on the character of discrediting the criticism, which may or may not be justified. | | |
| ▲ | zahlman a day ago | parent | next [-] | | > It's bringing up an entirely unrelated topic as some sort of "gotcha" Expecting people to be consistent, and treat similar situations similarly, is not a "gotcha". Challenges like this are raised exactly to hold people to their own standards and question whether they are really okay with the consequences of what they just said. The topic described is not at all "entirely unrelated". There is a clear natural category which encompasses both tariffs and cigarette taxes. | |
| ▲ | hippo22 a day ago | parent | prev [-] | | No, it’s not whataboutism. The original comment made a single argument: regressive taxes are bad. I provided a counter example: the cigarette tax is an example of a regressive tax that is good. This invalidates their argument. That doesn’t mean their position on tariffs is wrong, but they’ve provided an insufficient argument to support their viewpoint. There’s also an implicit corollary that they don’t fully understand tariffs if this is their position. Whataboutism would be something like someone from the US arguing that China’s treatment of Uyghurs is bad, and someone from China countering with “well, what about America’s treatment of Native Americans?” The Native American argument isn’t a counter example of the Uyghur argument. Both positions can be true. It’s unrelated. That’s not the case here. You can’t be anti-tariff purely because it’s a regressive tax and also be pro-cigarette tax. |
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| ▲ | Spooky23 2 days ago | parent | prev [-] | | That’s not Whataboutism. Cigarette taxes are excise taxes, very similar to tariffs, and often implemented to encourage behavior by raising commodity cost. In the case of cigarettes and alcohol they are partially “sin taxes” to discourage negative behavior. In the case of the Trump emergency tariffs, they are seeking to pivot the entire economy. So there’s a nuance and multiple ways to look at it. If you’re GM, the ability to make better margins on shitty cars is a net positive. If you’re in the technology or medical field, well, you’re fucked. |
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| ▲ | helloooooooo 2 days ago | parent | prev | next [-] |
| I don’t think anyone here has yet come to the realization that ending rampant consumerism is the whole damn point of the tariffs. |
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| ▲ | shafyy 2 days ago | parent | next [-] | | No, that's surely not the point of tariffs. Maybe a silver lining, but for sure not the intention. | |
| ▲ | bagels 2 days ago | parent | prev | next [-] | | According to who? That's not the most common justification provided for them, the more common refrain a bag full of lies about what a tariff is and what a trade deficit is. | |
| ▲ | khuey 2 days ago | parent | prev | next [-] | | The "point" of the tariffs is that Trump likes tariffs. There's nothing more to it than that. | | |
| ▲ | lolc 2 days ago | parent [-] | | Why cut off your thinking there? I can think of many reasons why he would like tariffs. Two off the bat: - Allows claiming various benefits like onshoring production, or reduced taxes. This is for the voters. - Allows threatening other countries' industries with tariffs unless they invest in his friends' enterprises. This is for him. |
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| ▲ | LastTrain 2 days ago | parent | prev | next [-] | | Yeah gilding the Oval Office really drives the message home. “Trump calmly reminds nation that desire is the truth of all suffering” - Onion | |
| ▲ | 2 days ago | parent | prev | next [-] | | [deleted] | | | |
| ▲ | dudefeliciano 2 days ago | parent | prev | next [-] | | This is a ridiculous attempt at sanewashing. When has Trump or anyone in the GOP EVER stated that they want to end consumerism? | | | |
| ▲ | add-sub-mul-div 2 days ago | parent | prev | next [-] | | My brain just leaked out of my ear. | |
| ▲ | 2 days ago | parent | prev | next [-] | | [deleted] | |
| ▲ | eagsalazar2 2 days ago | parent | prev | next [-] | | Lol, are you serious? Can you elaborate on your thinking here? Are you suggesting Trump imposed tariffs out of some altruistic goal of reducing waste or the social impacts of consumerism?? That can't be right. What is the motivation in your mind? | |
| ▲ | ActorNightly 2 days ago | parent | prev [-] | | [flagged] | | |
| ▲ | hdgvhicv 2 days ago | parent | next [-] | | You can support some of trumps policies while thinking the insurrectionist peadophile should be behind bars You can also support tarrifs in principal but not support the way they have been implemented (club not calpol, used as a political weapon or to extract mafia style favours) | | |
| ▲ | Latty 2 days ago | parent | next [-] | | The post being replied to says "the tarrifs", clearly referring to the current set of tarrifs implemented by this admin, not the concept of tarrifs in general, otherwise they'd have just said "tarrifs". | | |
| ▲ | hdgvhicv 2 days ago | parent [-] | | Sure. You can support these exact tarrifs and not support trump in general If you have to be against everything Trump does to be against Trump that’s a problem, and you’d be a hypocrite (like Trump) | | |
| ▲ | stouset 2 days ago | parent | next [-] | | That's not even what's being argued here. What's being pointed out is the retcon that "the whole damn point of the tariffs" is to end rampant consumerism. It's clear that the grand^{n}parent poster is flailing about and desperately trying to find the comfort of some coherent and intentional narrative behind a set of inherently incoherent and unintentional actions. | |
| ▲ | ActorNightly a day ago | parent | prev [-] | | Yall missing the point. If your manager at work acted like a legit insane person, but said one true thing, you wouldn't be there saying that he/she is smart in that particular area. If by some chance in hell tarrifs actually work, its due to pure luck, not due to any strategy. Which is what the original person I am replying to made it seem. | | |
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| ▲ | ActorNightly 2 days ago | parent | prev [-] | | Yes, but that is not what is happening here. |
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| ▲ | stouset 2 days ago | parent | prev [-] | | It's absolutely insane. I know we don't want HN to devolve into political bickering, but this is a deeply important meta-observation about what's happening in our country right now. Trump's stochastically random decisions are so inscrutable, but his following is so cult-like, that his followers are forced to flail around to try and find any plausible justification for these actions. You'd think that at some point the sheer effort of this would trigger some sort of introspection, but it never seems to come. Someone, somewhere, latches onto an explanation that's catchy enough, vague enough, and impossible to disprove enough, that the tribe can take the explanation at face value and latch onto it, no matter how thin. This will be studied for a long, long time. | | |
| ▲ | ActorNightly 2 days ago | parent [-] | | I hate that this is somehow is still viewed as political, when the topic has moved far past that to the point where you are arguing with conservatives that can't comprehend actual reality. Like this is philosophical more than political. |
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| ▲ | cuuupid 2 days ago | parent | prev | next [-] |
| Everyone has been repeating this for months but inflation remains relatively normal so prices are not rising. Maybe it's a delayed effect that we won't see until later in the year, but at this point it is a theory and far from a fact, not something that needs to be repeated. We have already observed that the opposite does not hold - in 2017 we slashed corporate income tax by 14% across the board, roughly the same as the tariffs but with far more surface area, and yet prices did not react and the benefits were not passed along to the consumer. All we _know_ right now is that this is going to negatively impact economic growth by hitting corporations, the same way slashing corporate income tax positively impacted economic growth by benefitting corporations. |
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| ▲ | marcosdumay 2 days ago | parent | next [-] | | Tariffs don't inherently cause inflation. The noise about inflation is very likely propaganda trying to focus people on something that the government can control. (Yet, it looks like the US government is giving up on controlling it.) Instead, tariffs have complex effects on the real economy. Universal tariffs do cause the concentration of wealth the GP was talking about (but it's way worse than the GP's claim) and deindustrialization. Inflation may or may not happen, it's not a given. | |
| ▲ | freen 2 days ago | parent | prev [-] | | Companies have reserves, local stock etc. Fixed prices are a bet on TACO and hoping to avoid the orange rage: see what happens when you blame price increases on tariffs. Lots and lots of bribes have been paid. This is yet another. | | |
| ▲ | cuuupid 2 days ago | parent [-] | | We will definitely see but it's still a theory at this point, and one that has not played out the other way in the past with a reduction on corporate tax _across the board_ > Fixed prices are a bet on TACO Having been part of some of these conversations it's mostly a bet that democrats will win back control sometime in the next decade and do a full reversal. When that happens, you don't want to be caught out with less market share because you adjusted your prices to maintain your bottom line. Same logic as startups burning VC cash on offering free compute, 80% discounts on tokens, etc. to grab market share. If you're in an elastic market, your priority is not to maximize profit, it's to make the market inelastic. | | |
| ▲ | ethbr1 2 days ago | parent [-] | | It's not a theory -- every business that imports product from international sellers is staring at their current import prices and their remaining pre-tariff inventory numbers right now. (See the huge import volume burst pre-tariffs) What they're trying to decide is (a) do they eat the cost of tariffs in margin or (b) do they raise prices? That's a decision that doesn't need to be made until they burn through warehoused inventory, but for high-volume businesses (read: retail) it's measured in months at most. Once that hits, either (a) or (b) will be chosen, and neither is great for equities markets / the economy. Moreover, there's no "hiding this under the rug" once publicly traded companies begin to report quarterly financial results AFTER burning through their pre-tariff inventory. They can't not explain to their shareholders why they've taken a hit to profitability. Best possible case is retail prices rise, once, by the amount of tariffs, and that's that. But a 15%+ price hike is going to be an uncomfortable narrative for those in power who insist tariffs won't raise prices... so I'm not betting that conversation goes logically.* * See the reaction part of Amazon got when they "accidentally" line-itemed tariff charges as evidence on how dangerous the administration sees transparency around tariff costs | | |
| ▲ | Scoundreller 2 days ago | parent [-] | | > But a 15%+ price hike is going to be an uncomfortable narrative for those in power who insist tariffs won't raise prices... so I'm not betting that conversation goes logically. As someone selling on eBay from notUSA, the cost increases won’t just be the tariff, but some additional fixed and variable fee for the privilege of determining the tariff and potential loss of the cheapest shipping options. Friction begets friction! |
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| ▲ | arghwhat 2 days ago | parent | prev [-] |
| Tariffs like this is a market regulation that the people pays for. It doesn't "benefit the wealthy" because it's not progressive, it benefits the wealthy that have investments in the tariffed industry by distorting the market to their advantage instead of having to be competitive on a level playing field. The rest of the wealthy are equally annoyed by the tariffs as everyone else, possibly more so as they see their investments tank. |
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| ▲ | Retric 2 days ago | parent | next [-] | | It benefits the wealthy by applying to a smaller percentage of their spending. You can easily avoid all tariffs on a 100 million dollar yacht built outside the US, and you don’t pay it for a personal chef etc. | | |
| ▲ | Scoundreller 2 days ago | parent | next [-] | | Best part is, I don’t even have to pay it on the work of the personal chef I import! | |
| ▲ | arghwhat 2 days ago | parent | prev [-] | | Most wealthy people are not billionaire wealthy. Billionaire wealthy pretty much manage to avoid all taxation, progressive or not, so the comparison is moot. They just trample on everyone else. | | |
| ▲ | Retric 2 days ago | parent [-] | | Billionaires still pay property taxes etc so it’s worth separating how regressive various tax schemes are. | | |
| ▲ | arghwhat 2 days ago | parent [-] | | They don't really. They misreport the value for tax purposes, they own it through some other legal entity that is all negative, they own it through a company that negotiated tax rates to have some other business happen there, they own it in countries that don't to property taxes, etc. etc. You can be damn sure they're paying at most a tiny fraction if not zero of any tax rate you'd be paying for that asset as they'd much rather pay very good lawyers, accountants, and most importantly, politicians to not have to pay tax. You don't need progressive taxes. You just need everyone to pay it equally, without loopholes. Fewer less complicated tax rates are harder to work around. | | |
| ▲ | Retric 2 days ago | parent [-] | | > They misreport the value for tax purposes Regular people also commit fraud which can make some differences here. But in general it’s the state who decides what something is worth for tax purposes not the individual. > they own it through some other legal entity that is all negative Unpaid property taxes result in forfeiture, so again the state’s getting paid here. It’s financial voodoo around other taxes which causes such structures. > they own it in countries that don't to property taxes So do regular people, the important bit is where such property is located not who owns it. | | |
| ▲ | arghwhat an hour ago | parent [-] | | > Regular people also commit fraud which can make some differences here. Yeah, but it's hard for a regular person to under/overreport a property by, say, 200 million USD, and most people do not have the power to negotiate with or bribe municipalities to get different tax treatment like big companies and the rich people owning them do. > Unpaid property taxes result in forfeiture Avoided taxes are not unpaid taxes - we're not speaking of people on the run from debt collectors, but people who cheat their way out of having to pay anything. > So do regular people What regular people own properties in foreign countries selected for their tax benefits, for investment or recreational uses? Most regular people own between zero and one property. Granted, they could move, but it takes extra riches to be able to casually straddle multiple borders. |
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| ▲ | dale_huevo 2 days ago | parent | prev | next [-] | | >it benefits the wealthy that have investments in the tariffed industry If only they invested in venture-backed mass surveillance apps instead | | |
| ▲ | arghwhat 2 days ago | parent [-] | | Oh they do, and you probably have several of them installed... |
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| ▲ | Gud 2 days ago | parent | prev [-] | | There is no "level playing field" when you are competing with literal sweatshops though. Frankly tariffs get a bad rep because of from who and how they are implemented but can absolutely serve a purpose. | | |
| ▲ | arghwhat 2 days ago | parent | next [-] | | The shops you're thinking of are less of a sweat shop than, say, Amazon in the US. Theres no good wages, but factory jobs don't really pay well anywhere. They're mostly just a lot more efficient at scale, with a few plants managing close to the whole worlds supply of random shit. Almost all microwaves by all international brands are made by the same Chinese company, all prismatic LiFePo battery cells come out of one of two factories in China, and so forth. Economy of scale on turbo steroids. Imagine having to compete with Ford by making cars in a garage. Now imagine Ford as the garage shop vs. these factories. The sweat shops you're thinking of is stuff like clothes manufacturing in other third world countries than the usual suspect. That shit is nasty - breathing and handling acid with naked skin nasty. | | | |
| ▲ | Retric 2 days ago | parent | prev | next [-] | | Automation consistently outcompetes sweatshops. What’s missing from these discussions is the idea of competitive advantage. It is inherently more efficient to grow crops in climates where they thrive, tacking a tariff to protect domestic production means intentionally lowering the standard of living of everyone both domestically and abroad to favor some tiny group doing something wasteful. | | |
| ▲ | ethbr1 2 days ago | parent | next [-] | | There are a few situations where tariffs are beneficial: 1. To preserve strategically important domestic industries (historically: food production and mechanization industry) 2. To shield domestic industries while they're growing to take on already efficient and scaled global competitors Benefiting labor or saving jobs is probably the stupidest use of tariffs, if one of the above isn't also in play, because it'd be more efficient just to offshore it to low COL countries and instead refocus internal labor. The slippery slope, of course, is that industries will claim to be included in one of the above, but instead sink their tariff-protected excess profitability into shareholder/self-enrichment instead of business investment. It'd make more sense to require domestic industries in tariff-protected sectors to invest {near tariff} percentages of their revenue in R&D and/or capital expenses (or be heavily taxed). Otherwise the government is simply artificially inflating their profitability, at the cost of any consumers of the product. | | |
| ▲ | Retric 2 days ago | parent [-] | | Food production isn’t some homogeneous entity, it might make sense to subsidize some level of staples but direct subsidies are more transparent and can be more easily limited. But, obviously industry doesn’t want the government feeding through to stop simply because the’ve scaled vastly past domestic consumption. Similarly, military procurement can subsidize relevant industries without impacting the wider economy. In other words you can maintain some domestic steel production etc without impacting the cost of goods. | | |
| ▲ | ethbr1 2 days ago | parent [-] | | I think that under-appreciates the slippery slope of political leverage. There's a reason Iowa is so hell-bent on keeping their primaries first. Without explicitly and financially tying subsidy-fueled gains to modernization efforts, market participants begin to consider the subsidies as business as usual, plan around them, and get lazy.* It removes a primary incentive to maintain pace with global technology improvements. Domestic industry whispers in politicians' ears that their global competitors are unfair for reasons X, Y, and Z, and they really need more subsidies to protect them. {Benefit from politically driving new tariffs / subsidies} must never be higher than {benefit from investing in efficiency increases}. * Lazy as measured by peak international efficiency, not work. E.g. a farmer who works their ass off manually farming is economically inefficient compared to one who mechanizes most of their work | | |
| ▲ | Retric 2 days ago | parent [-] | | That’s a big part of why it happens, but every industry wants subsidies the idealized place of “farming” in the American public’s perception make this significantly easier. That helps explain why chips, cars, airlines, banking etc get subsidized but PVC pipes don’t. |
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| ▲ | cuuupid 2 days ago | parent | prev | next [-] | | Automation is not replacing sweatshops, they've just made the sweatshop workers more productive (economically) while requiring them to be less productive (in activity). So all that's happened is an exponential increase in the output volume of sweatshops :/ | | |
| ▲ | Retric 2 days ago | parent [-] | | There’s many industries that have moved beyond sweatshops due to automation. Pepsi can’t get glass bottles from 3rd world sweatshops at anything competitive with a highly automated factory. In the vast majority of industries it’s just a question of levels of automation and climate control inherently makes automation easier by reducing variability in temperature and humidity. Of course the original distinction around climate control that created the term sweatshops is dying as such operations are largely dying out, but that only reinforces the notion of automation killing off the inherent advantages of unskilled cheap labor. |
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| ▲ | 19 hours ago | parent | prev | next [-] | | [deleted] | |
| ▲ | bendbro 2 days ago | parent | prev [-] | | I don't want to compete with pollution, child labor, slaves, extreme hours, and poverty-tier living conditions |
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| ▲ | Workaccount2 2 days ago | parent | prev [-] | | Bernie removed the section on his website about tariffs being necessary for a healthy economy... Tariffs are a populist thing, and people seem to think it's just a Trump thing. |
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