Biden to add new tariff

[Hodad]

6 minutes ago, Nationalist said:

Hodad...you're a hypocrite.!

You can always expect the raw truth from me. You don't like that because the raw truth is not terribly flattering to a hypocrite like you.

Nah, what I expect from you is uninformed mudslinging. For example, you're trying to call me a "hypocrite," because it sounds like an insult, but you don't Even know what the word means. 

[Nationalist]

6 minutes ago, Hodad said:

Nah, what I expect from you is uninformed mudslinging. For example, you're trying to call me a "hypocrite," because it sounds like an insult, but you don't Even know what the word means. 

Lol...sure dweebles...whatever soothes your rotten soul.

Edited May 14 by Nationalist

[gatomontes99]

29 minutes ago, Hodad said:

A target like shooting an arrow haphazardly up into the air and claiming the air is the target? Okay  The point remains, that that kind of unfocused protectionism hurts  Americans without yielding the promised gains. Economics isn't new and protectionism isn't new. It's been tried many times before. No mystery there.

Define hurts.

On one hand, it drives up the cost of the goods from a foreign nation but on the other hand it makes goods from every other nation (including ours) more competitive.

[Hodad]

3 hours ago, gatomontes99 said:

Define hurts.

On one hand, it drives up the cost of the goods from a foreign nation but on the other hand it makes goods from every other nation (including ours) more competitive.

It's  as I described in my first post. It does drive up the costs for goods from the foreign nations but there is no guarantee--or even probability--of that making domestic goods more competitive. Because there aren't infinite options or choices in a marketplace, markets aren't linear. Rather, they are stepped or driven by tipping points. 

If making a widget in the US costs $10 and importing a widget from China costs $5 then there is a $5 gap before the US version becomes competitive. If the government levies a $2 tariff on Chinese imports the goods become more expensive, hurting consumers, but they still have a $3 advantage over US goods. So US manufacturers aren't really any more likely to eat the startup costs and enter the market at a $3 price disadvantage. 

And it gets even less likely when we consider that it's a global marketplace.

• Chinese widget $5
• Vietnamese widget $7
• US widget $10

So if the government imposes a $2 tariff on Chinese goods, likely nothing happens. If it's a $3 tariff, importers are just switching to the Vietnamese manufacturers. Importers and retailers are disrupted (hurt) and consumers are hurt, and there is no benefit to US manufacturing. 

That's a pretty basic version. There are other considerations, like how the tariffs collected are reinvested (or not) in US manufacturing and other interests like strategic or military interests.

So to recap, that's why broad tariffs are generally frowned upon. They have historically caused more pain than benefit. To be effective tariffs need to be strategically focused and scaled. 

Edited May 14 by Hodad

[CdnFox]

12 minutes ago, Hodad said:

It's  as I described in my first post. It does drive up the costs for goods from the foreign nations but there is no guarantee--or even probability--of that making domestic goods more competitive. Because there aren't infinite options or choices in a marketplace, markets aren't linear. Rather, they are stepped or driven by tipping points. 

If making a widget in the US costs $10 and importing a widget from China costs $5 then there is a $5 gap before the US version becomes competitive. If the government levies a $2 tariff on Chinese imports the goods become more expensive, hurting consumers, but they still have a $3 advantage over US goods. So US manufacturers aren't really any more likely to eat the startup costs and enter the market at a $3 price disadvantage. 

And it gets even less likely when we consider that it's a global marketplace.

• Chinese widget $5
• Vietnamese widget $7
• US widget $10

So if the government imposes a $2 tariff on Chinese goods, likely nothing happens. If it's a $3 tariff, importers are just switching to the Vietnamese manufacturers. Importers and retailers are disrupted (hurt) and consumers are hurt, and there is no benefit to US manufacturing. 

That's a pretty basic version. There are other considerations, like how the tariffs collected are reinvested (or not) in US manufacturing and other interests like strategic or military interests.

So to recap, that's why broad tariffs are generally frowned upon. They have historically caused more pain than benefit. To be effective tariffs need to be strategically focused and scaled. 

This was just wrong. 

And shows a very clear misunderstanding of what tarrifs are designed to do. 

If widgets are 10 dollars from the us and 5 from china currently then most likely that's partially because its not worth it for the US companies to invest the money and energy necessary to make it cheaper.  But  if it suddenly jumps to 7 dollars then suddenly it's worth it for them to invest in the gear to bring their costs down to 7 dollars because they know there's suddenly going to be a big market.  Then they compete on shorter supply chain etc.  Price is not the only factor in buying a product. 

But more importantly tarrifs can force other countries to start to make other trade concessions. And that's usually what happens with tarrifs. 

Tarrifs as a form of protectionism aren't great. THey CAN work and DO work but at a cost of increasing the cost to business and slowing the economy. In the end it's the consumer who pays the tarrif.  So it's  a bit of a blunt tool.  But used correctly it can force other govt's to improve other trade conditions that make it worth while. Right now the US can't sell much in china, it's a very one way trade. 

 

[gatomontes99]

1 hour ago, Hodad said:

It's  as I described in my first post. It does drive up the costs for goods from the foreign nations but there is no guarantee--or even probability--of that making domestic goods more competitive.

Thats a completely false premise. The very fact that the foreign good is more costly means the domestic good is more competitive in compariaon to pre-tariff costs. It may not be the cheapest. It is more competitive than before. Full stop.

[Hodad]

1 hour ago, gatomontes99 said:

Thats a completely false premise. The very fact that the foreign good is more costly means the domestic good is more competitive in compariaon to pre-tariff costs. It may not be the cheapest. It is more competitive than before. Full stop.

If markets were perfectly and linear and always had competitive domestic options, that would be true. Many trade goods don't have ANY practical competition from US manufacturers. And manufacturers won't be able to start up until they have some expectation of profitability. And even in cases where we do have domestic production, a US widget priced at $10 doesn't get more competitive if identical widgets produced abroad are $7 rather than $5. It's still just plain not competitive.

You could argue that some sentimentalists at the margin would spend $3 more fore an identical widget if it had a USA label on it, but they weren't willing to spend $5 more for the same label. But then you're talking about extreme, hypothetical margin cases. We still get far more harm than help.

[CdnFox]

39 minutes ago, Hodad said:

If markets were perfectly and linear and always had competitive domestic options, that would be true. Many trade goods don't have ANY practical competition from US manufacturers.

Sigh. 

original hodad argument -  "just because you raise tarrifs doesn't mean the local competitors will be able to compete more".

Everyone else - "it literally means they'll be able to compete more'. 

Revised Hodad argument "  uuhh. .weeelllll THATS because there WAS no local competators in the first place!  Ha HAAA! Charade you are!!!!! "

Double sigh 

1) - many trade goods do. So there you go. 

2) - if they don't, that's probably because it wasn't worth it to set it up due to the low cost of foreign products. But if those products cost more now, there's a good chance it IS worth tooling up to serve the market. As i mentioned. 

ANd that's before the 'other trade concessions' argument. 

 

Your argument is like a little neon sign to the world - 'blink blink, i'm stupid as hell".