I have seen a lot of know-it-all democrat voters posting in the last few days about how Trump's economic strategy is bound to fail and those who voted for him for economic reasons are fools. Obviously I am extremely sceptical of these people, as economic literacy has never been a strong point of progressives (not to mention how they are all suddenly experts, like how they were for virus propagation, climate change, etc.).
Nonetheless, I myself am no economist. Can somebody with a better understanding explain the strategy to me, and also any potential ways in which it COULD backfire in the way progressives are suggesting?
In many other countries, yes easily, America though, not really for a simple reason:
You have so much land that is BOUNTIFUL in resources that is grossly mismanaged. California should be a food production powerhouse and there's so much gas reserves and oil available still. So setting up production in the US wouldn't be hard it's the red tape that hampers it so removing that and introducing tarrifs is a good carrot and stick approach.
This is the answer OP.
The United States is easily capable of meeting our own production needs and then some.
But we'd actually have to try to do it. We'd have to throw out a lot of bullshit regulations, we'd have to seal our borders and prevent the entry of low skilled foreign workers. And we'd have to disincentivize foreign goods that could have been made here.
And we'd probably have to abolish women's rights but like the rest of that stuff that needs to happen anyway. But you don't need to say that part when you're talking to normies.
Yeah I definitely understand that America is capable of being self-sufficient. I long for the pre-WW1 isolationist policies if only because of their knock-on social effects. It would probably be better for the rest of the world as well if America turned its focus inwards.
Never forget that the US lost some billion dollars in food industry thanks to British Petroleum causing a spill in our waters causing tens of thousands of jobs to be lost instantly and a huge source of food gone for decades. And they got off with a fine that was 'promised' to go to those effected, but ended up being given to "Clean Water" programs and the Federal Government instead.
Which is why a huge amount of certain seafoods now are imported from farms in China to meet quotas, instead of bought directly from American families who are all still out of work.
Point is, its not just the low skill foreigners destroying American production.
I found it suspicious that BP immediately went on a public relations/damage control blitz all over cable TV, instead of using that money to just clean the spill up.
They claim to have spent almost 20 billion with a b dollars after it was all done in damages. I know hundreds of guys who lost their jobs, generation spanning career and eventually everything that depended on that income who never saw a dime.
They literally paid the Feds apology money, paid for a bunch of photo ops of ducks getting cleaned off, and then just went about their business.
Don't forget Alaska. There's a HUGE swath of Alaska we can basically colonize and utilize for the resources we need.. I think it was something like a century's worth of resources are available over there.
I don't know about colonise as there's places there with an entire month of darkness and there's that one place where the entire town is basically in on large complex that's it.
But resources yeah there's a ton, I think in terms of colonisation, it'd be better to bring that South African farmer magic to 'the great plains' areas you can no longer call any part of that a dustbowl again.
The biggest problem is that corporations will drag their feet investing in the US. It’s cheaper to use foreign slave labor and then blow money on a DIE department and virtue signaling. Tariffs are not a permanent solution, but the whole “free trade” schtick only works if everyone is on an even playing field. The left has regulated America into absurdity, who has made it insanely expensive to invest in American jobs, this was by design. That’s why, magically, our largest manufacturing in the US is… military contracts, somehow we can make nuclear carriers here but an iPhone is just out of the question.
It makes me wonder if it's possible to make DEI illegal at the federal level, or will some faggot activist groups try to say it goes against some civil rights bullshit?
Obviously we will soon have a 7-2 court and they will allow DEI mandates to be eliminated, but that's going to take at least a couple years of court battles as far left groups try to stop them.
Discretion is something the Right is screaming about right now. The FDA recalled butter for not being labelled "contains milk".
Rules are made for idiots to navigate life, at the cost of everyone else and the infantilization of society.
Steel sharpens steel.
My understanding is that America's post-WW2 policy was to deliberately cripple its domestic manufacturing and offshore a lot of it in order to buoy up allies against the Soviets and help war-wracked countries rebuild. I think it makes a lot of political and strategic sense to start bringing that back to the US, but I share your worry that the transition period might be painful in the short term, and I know Trump will get the blame if that's what occurs.
It was also part of the agreement of the postwar global economy, like how the Dollar became everybody's reserve currency. The idea had some merit. "If we shove all the governments out of pursuing autarchy and build an interconnected global economy, a World War III will become less likely since nobody is going to go to war with their trade partners, and if they do then that countries other trade partners will be its allies, making the war harder to win and thus less appealing."
You've gotta remember, after WW1 and 2 everyone thought number 3 was just a matter of time, and with atom bombs proliferating everyone just naturally assumed that was it. The end of the world was just a few decades away, so strange and desperate measures were called for.
I often think about this. I am a staunch nationalist, but I have never lived through the horrific violence of a world war. Both wars appear to have been so traumatising to Europe that they entertained ideas which to us appear completely insane (due to their manifest effects in the modern world). Perhaps, though, when you've lost a good portion of the entire continent's young men to a pointless meatgrinder, the 'peace and love' crowd start sounding a lot more palatable.
I still believe that nations which look out for their own people's interest first and foremost CAN live alongside each other without inevitably coming to blows, but the challenge is finding that balance.
I'm no economist, but the fact is there was no official federal income tax before 1913 or a corporate tax before 1909. It is obvious that tariffs can work instead of taxes but there must be domestic production of necessary products for this strategy to work.
The growing pain will be restarting/bringing back manufacturing that has been offshoring for many decades. This will take longer than Trumps 2nd term, so the torch must be passed on to the next 20 years of administrations to re-implement this kind of system.
In the short term, just the threat of the USA ramping up tariffs could be enough of a bargaining tool that our upside down trade agreements could drastically improve.
It's not just that there was no federal income tax. It's that the federal income tax was unconstitutional. Our founding fathers knew it was basically a "Head Tax" which they didn't want any part of. But thank god those Progressives knew so much better than anyone ever. Now, 30% of my paycheck disappears every time my employer pays me! THANK YOU SO MUCH, PROGRESSIVES
B-b-but think of all the roads....or something....
All those taxes meant for roads.... being funneled to all kinds of stupid pet projects like stadiums:
https://www.youtube.com/watch?v=fb3HcuFyDFQ
Remember this banger?
Roads are paid using gas tax
Only 30%. I got taxed 3 damned times
I didn't include the other ones yet.
But also note that the federal budget was much (x 1000) smaller than what passes as the budget now.
may it be so again.
Trump coming into office is ALREADY getting several nations to play ball with us lol
Mexico is already gathering all the illegals and keeping them on their side of the border.
The EU is actually agreeing with Trump that they should fund their own militaries
Putin is already open to listening to Trump about peace talks.
ROCKET MAN will probably lay the fuck off of South Korea.
It's amazing how a change in presidency suddenly gets countries to listen to us, doesn't it?
Never going to happen though. But your exactly right.
The only people that tariffs benefit are the government, and the people who are the suppliers of said products with tariffs, like when trump passed the tariffs for lumber and steel.
Trump has friends who own steel mills and lumber mills. So no shocker there, just making each other richer, its the true crony way.
How do owners benefit? Tariffs are just passed off to the consumers and intermediates anyway, do you think companies are taking any extra out of their own pockets, think of the poor ceo's guys. I dont think your average normie realizes how much steel and wood is in well, most everything.
I seen people in r/canada bitching about how many British Columbia sawmills have moved to the states to avoid the tariffs. I mean who you gonna blame, the greedy billionaire, or the canadian government to inept and corrupt to do the right thing.
My dad used to have deal with fucking mead the paper company before his family sold the property. If you werent careful those assholes would mark an extra 10 ft of land every few years or so.
I remember my dad constantly having to remove markers and put them back where they were supposed to be. Bunch of greedy assholes.
I've joked that Trump will end the war in Ukraine, which will end the embargo on Russian arms and ammo imports... but the tariffs will mean the cost per round for Russian ammo will probably be more than that's made here.
But with all the other regulations gone, will it still be cheaper than now?
No clue. Honestly I bought my first gun in 2020, and I've only bulk purchased ammo like 10 times since, so my knowledge on that kind of thing is limited. All I know is when I go to ammoseek, the cheapest stuff is almost always foreign made. I'm still working through my last order of Serbian 5.56.
My gun says we're Idaho in the 90's. I did homework for other people and they gave me guns. Ammo was so cheap I didn't even care.
My wife's gun was $350, and the ammo was $40. That same gun would have been $20 and $3.
I just think it's funny that the party of 'tax the rich...and the middle class...and everyone else' whine about how tariffs are taxes, and will increase prices, and how taxing them will just trickle down to the consumers.
Now, I'm no expert on this, but it is somewhat true. It is a tax, it will raise prices. But, the thing is, it also brings back money into the US; it will raise wages (especially in conjunction with mass deportations and the psychological effect alone reducing further illegal immigration), and keep more wealth circulating in our country, instead of flowing overseas to, sometimes literally, fund slavery. It will help US companies compete with foreign countries. Eventually (hopefully we get another Republican next election, as it will need some time to truly flourish), it will more than normalize. More US manufacturing, higher wages; all that is good.
Also, if Trump is serious about lowering taxes (and I have no reason to think he isn't, since he did it last time), it could offset tariffs almost immediately.
So, yes, tariffs are a tax, and will raise prices. But if done well, it's really a nonissue, even in the short term, and a big potential net positive in the mid to long term.
Also, as somewhat of a libertarian, I have to break with them on this issue. Again, not an expert, but it seems to me that this is more libertarian autism, and them letting the perfect be the enemy of the good.
They love to whine about how tariffs are "war," economic and financial war. And, well, that's somewhat true, but conflating it with a hot war is incredibly stupid. Also, all nations are (or should be) in a natural state of competition. Each nation are (or should be) involved in making life for their people better. If foreign countries are taking jobs, the government should try to dissuade that to some extent, as well as reduce the regulatory and tax burdens on domestic production. Especially when we have the resources needed to churn out massive domestic industry.
One of a nation's prime areas of influence is, of course, the border. It's one of the things that defines a nation. Tariffs are, to some extent, government meddling in the economy, which can often be disastrous. But, it's not exactly meddling in domestic economy; it's just giving your own people a boost compared to foreign imports. I think that's fine. Again, not an expert though.
It's funny when even Keynesian economics requires tax increases to make that bag of shit work; government borrows and spend when times are bad, and taxes and repays the debt when times are good.
Of course, no one actually does that, which is why the US economy is a series of bubbles, deficits, and ever-increasing inflation.
I think tariffs are a good thing, but they must be gradually implemented. There may also have to be a change in mindset. If the goal is to tax Chinese imports by 60%, then the mindset of disposable Chinese garbage may need to be set aside in lieu of more expensive repairable longer-use items. It's a huge change in mindset though, and really something that needs to be tread lightly to make it actually work, and it's a long project.
Simple things like oil can be done more quickly, as it's something we can ramp up domestically much easier as it's been done before. Oil imports were already very low end of Trumps last visit.
Yeah, I think the shift from a hugely globalist economy to a more protectionist one has the potential to cause some serious short term pain for the US, but it's definitely the right decision in the long run. The issue is that you know if any economic hardship occurs during Trump's presidency, it will be laid at his--and by extension, the Republicans'--feet.
Agreed, there has to be done in a very smart manner. I really hope with Ron Paul advising he'll be able to keep tariffs down to only what's necessary to strengthen our economic stability because too much tariffs will have a negative effect on us. Tarriffs directly affect the working and middle class the most because of the increased costs. We voted Trump in to fix our economy and bring those prices DOWN. That's not gonna happen if he goes apeshit with the tariffs.
Only if you're a globalist who wants to benefit from slave labor
The same people who want third world slave labor to clean their toilets want third world slave labor sewing their clothes and making their iPhones. Shocking.
Does anyone find it funny that all these Democrats suddenly turn into libertarians when Trump is proposing his tariffs?
Kinda like how when Democrats turn into libertarians about free speech?
It's amazing how fucking SELECTIVE their goldfish memory is. You libertarians should be slapping these leftists upside the head for being such unprincipled insufferable cunts.
An argument against is that they're a long term investment and that the cost will not be worth it if the electorate is impatient. The inflation is an upfront cost. Potentially offset by dropping fuel prices, but still a cost. The payoff is that more people have more opportunity to earn domestically and, so long as that doesn't all end up in unproductive real estate speculation - offset by deportation and stabilization of the adult population, the rising tide will float all boats. Generally, widespread prosperity will decrease the costs of law enforcement, prisons, and social programs.
"Progressives" will make a ton of noise to try and fan impatience. So will NGOs and foreign agitators.
I suppose the question is whether or not the average American will feel a negative or positive impact on their wallet during the Trump presidency. I have no doubt that the media will be hungry to blame him if there is a negative effect, even if it's only temporary. Thankfully Trump doesn't have to worry about re-election, but the Republican party will have to take responsibility for the results after he is gone.
Their nearly insurmountable challenge will be convincing the American public that it's playing out as expected and that things will get better after the course correction. Assuming that cranking up natural resource industries can't be done quickly enough to offset the issue. Mining and Oil & Gas can take years to inch through the courts. They're often frustrated by foreign funded legal teams that sue through non-government organization proxies.
Trump is going to have to bring the Army Corp of Engineers to heel. They're usually the ones resource companies have to call on to do environmental impact studies to push through court proceedings. It's just that the Hawaiian contingent of the Army Corp of Engineers started hijacking the process midway through Trump's first term and they're extremely biased toward giving activists in the Environmental Protection Agency the conclusion they're looking for.
The first years are going to be a slog even if the MAGA movement is sincere and things pan out.
the biggest argument against the tariffs is what could happen if America's local economy does not rise to the challenge. if the tariffs are implemented, but the factories remain closed and American manufacturing and industry remains stagnant, they will be a disaster for the country.
I guess that's my main concern. America is quite clearly capable of being self-sufficient, being a continent-sized country, but the transition from a globalist economic stance to a more protectionist stance is going to be painful if done too quickly and without a lot of thought. Just thinking about how enmeshed the American manufacturing sector is with China makes me cringe. It'll be like untangling Christmas lights...
I will attempt to steel man the best possible arguments against Trump's plan. Please note I'm not going to parrot Democratic claims, because many of them will just be wrong. Instead, I'm going to give valid counter-arguments to Trump's plan. Which, to be clear, involves abolishing the income tax, lowering corporate tax, and basically funding the government with tariffs; which is a pre-Keynesian economic plan which correctly resembles the Whig Party's economic policies, along with being the predominant policy of the US during the Gilded Age.
First and most obvious: Trump is assuming that he will win his Tariff Wars that he's about to start. He's actually arguing that he'll get better trade negotiations when he starts using Tariff's as a weapon. But history doesn't necessarily bare this out. To this day, as he complains about, some tariffs are still in place from post-war reconstruction. Neither side moved on the issue, and some corporations benefited from the trade barriers even though the market didn't. I will remind you also that Donald Trump's monetary & trade war with China caused serious problems for American farmers. Specifically because China decided to damage our agricultural sector by requesting millions of tons of agricultural commodities, then canceling the orders after it was impossible to grow different foods. As bad as America's subsidy system was, stunts like that could have wreaked havoc on food across the globe, and even caused famines. Instead the subsidy system worked to stabilize prices, and basically bailed out some farmers. However, it's called a trade war for a reason. Sometimes you take casualties. If he can get better deals, it'll be fine, but he's pre-supposing that the political pressure from economic damage will save him. In fairness, some people will put up with it for a while. Lots of farmers supported him knowing they're gonna have hard times with a trade war, simultaneously we can look to Milei in Argentina to see that some people will put up with it for years, but it's never forever.
Second, his plan relies on basically de-regulating the US market, so that the US market will grow regardless of the trade wars it starts. Now, he has succeeded at this before, but it took him damn near 3 years to do it, and it still requires cooperation from state governments and the judiciary. He's not going to get a lot of cooperation on some of those things, and yes, Democratic governments might block his way. Depending on the corporation, even Republicans might stop him. Even in the best case of co-operation, it simply takes time to move factories, businesses, employees, and all the other things that make a business happen, and he's only got 4 years. The worst thing he could do is get stuck in an unending trade war with high taxes and high regulation. At that point, he would be re-creating the effect "Old Left" Socialist policies. See the archaic concept of: Autarky.
Third, trade wars can lead to real wars. Currently, under Keynesian Economics, we use our currency as a weapon of war, not trade. This allows us to vassalize countries with our debt, and even control corruption. But a true trade & tariff war means actually causing major economic hardship against our opponent. Weaker governments could potentially collapse in the event of civil unrest from mounting food or energy prices. It's one thing if that is China or Russia, who are (currently) protracted enemies. But it's another thing if the trade war ends up damaging allies with knock-on effects. What happens if the government's of Canada, the UK, or Germany decide they don't want to play ball? Well, we have to hit them with a trade war too. Suddenly, due to knock-on effects of one tariff policy, our friends start trade wars with us too. As for
Fourth, which is an extension of all of this, it could cause a world-wide economic melt-down. Let's say the trade wars start spiraling out of control. If countries across the world start shutting their borders to trade, you're going to see the largest economic collapse in human history. Everyone is over-leveraged, everyone is over-dependent, everyone is inter-dependent. But, if trade stops, the global trade stops, and the world economy stops. It would be cardiac arrest for every economy, everywhere, all at once. To give you an idea of how bad this could get, look at the Lockdowns during covid. The lockdowns shut down the economy, sent unemployment to the fucking moon. In order to keep people gainfully employed the Fed printed more money than had ever been created in all of history, along with every other central bank doing the same. As a result, you got the Supply Chain Crisis and rampant inflation. But that was still the better outcome than shutting down the economy and doing nothing which might have been runaway deflation, with everyone's debts being suddenly called in, and you don't have a job, and the loans you took out are now way more expensive in purchasing power than you can pay down. If a full scale international tariff war shuts down international trade, you'll have created the same effect: a shut down to economic activity which implodes the world economy.
How likely are these situations? Frankly, no body really knows. Not even Trump. He's confident it won't happen because he'll make a deal, but nobody can no for sure because each tariff conflict is going to be unique to each economic and political situation to each country.
Fifth, there's real apprehension about the idea of being able to fund the government programs we have mostly through tariffs. That might sound great for getting rid of the welfare state, but it might be a lot less great for lowering the size of the military or CBP when you're trying to institute the largest deportation program in all of human history. Less money, less programs. Which means you have to hope that you win your budget fights in congress.
Sixth, colonization. I can't say this for sure, but if the government is getting the majority of it's money from tariffs rather than taxes, what is the economic incentive of the government? First, it's not to create a free market. Second, it is to give protectionism to American corporations and promote a lack of competition against international corporations. But third, it means that foreign governments and corporations are how the US government currently makes money. If you're not paying for it, your the product. What's the chance that a tariff system only helps to make the American market a vassal state to foreign corporations and governments, when it is those governments keeping the federal government afloat?
In fairness and transparency, here's my counter-arguments for why these policies are good, even if I don't think they are perfect.
Thanks for the extremely detailed reply. A lot to think about there. I guess like any significant political course change, it is a gamble and there are always risks involved. Most Americans I know, including my wife, had the best economic years in recent memory during Trump's first term. American voters appear to be willing to trust Trump's ability to make a deal for a second time, despite the risks.
Yes, I tend to agree.
We don't know what Trump's plans are.
Saying we're going to convert to 100% tariff-funded government is probably Madman Theory so other countries won't resist targeted tariffs that force BYD to build in America for instance.
If somebody is saying "Trump's plan" won't work they've either defined what they believe Trump's plan is, which may or may not be what his actual plan is, or it's just fear porn.
Largely, it depends on how far reaching and how quick they're put into place.
It'll take time to get manufacturing/etc back here. It won't happen overnight. There's nothing wrong with enforcing a fair playing field
I've heard Germany wants tariffs on Chinese cars because the auto-industry in Germany is doing poorly.
There is a case for tariffs. However if you want to put tariffs on everything from China without a viable local alternative then it will be a mess.
Haven't heard how they want to implement this tariffs, it can be good and it can be bad.
I see a lot of lolbertarians bitching about them because "muh free market" completely forgetting that the free market only works in a level playing field. Other countries have tariffs on our exports, so that's already a moot point.
Tariffs are far more moral than taxes for the simple reason that taxation is extortion and tariffs are essentially taxes on foreign countries.
Tariffs would make things like smartphones more expensive because they rely on slave labor in China to keep costs down, but the jump in price would really serve to highlight how fucked the inflation is in America to the point that the elites couldn't really hide it anymore. The real problem isn't tariffs themselves; after all, we had those instead of taxes for a long time at the start of our country. The problem is that the mismanagement and inflation of our currency by the Fed has crippled the American poor and middle class.
The fact that our industrial strength got shipped off to China means that until we restart our manufacturing here in America, it will be more expensive for the average citizen. However, these are the consequences of our actions, which are long overdue for us to pay for. It might hurt a lot in the short term, but if we can return America to the industrial giant it once was, it will be worth it in the long term.
Most so called libertarians, especially the "left" libertarian" are anything but. If all you want is abortions and to legalize all drugs and deviant behavior, you're not a libertarian you're a fucking degenerate.
Free market economic principles are a system as well, not somehing you can take pieces of and not others. It's a foolish system that only functions with optimum behaviors, and doesn't account for the classical understanding of economic warfare.
Tariffs are a means of protecting local economies from being completely destroyed by foreigners. Everyone was doing them to us and we were playing pretend free market, which any actual economist knows was nonsense. If everyone is on a free market playing field (never gonna happen) it's "fair" competition, but you still need to protect your local industry to preserve resilience of your national economy.
When you're competing against literal slave labor and countries that don't have anywhere near your living standard or respect for life, your choices are to either lose in that market, use tariffs to stop or limit them, or go to war to enforce US labor standards. Tariffs are much simpler.
Sure. In the short term it will raise prices and hurt American consumers. In the long term? lol
Basically your worst fear here is that the companies we're trying to force back will play hardball, but Trump isn't someone you can mess with easily since he's a big time business man and understands the game, so I'm not worried. It might hurt your wallet at first but not only will your wages go up as jobs come back to us, but prices will be forced down as competition rises.
I think it'll work but not completely. I deal with exports and tarriffs generally kill exports to that tariffed area. Like the anti dumping laws for China beds years back. But the reason I say not completely is cause there will probably be work arounds, intentional or not
I'm not an economist, but I think there's a high likelihood of globohomo companies refusing to play ball with rebuilding national industries that tariffs should in theory cause.
Think you've gotten some good responses so I won't address the main question and will just give my vague thought on it.
It's largely a great idea, but the only thing I worry about is there will likely be some short term pain. If it takes more than a year or two before some good benefits start hitting, people will only associate it with failure and will sour on the whole thing. Yes, that's retarded, but so are most voters.
Others have made great comments and I look forward to reading the ones I haven't, but the answer is no, because arguing against tariffs and failing to take a holistic view of our entire system and historic bureaucratic growth will never provide any answers.
Why do we have an almost free direct pipeline to China through the USPS?
Is America the only country not allowed to have tariffs and importation rules? We import German cars but vice versa is unkind to our exports, China prior to Trump 1 had bi-ownership agreements required for manufacturing to be done there, and again importation rules. etc.
Yea because without massive tax cuts on production the cost of the goods will remain really high. Simply putting up tarrifs won't force states to deregulate.
"It will raise the cost of goods on the poor". I guess this is technically true, the poor buy cheap Chinese shit and it becomes more expensive.
Two problems:
That's the whole point, make overseas production of goods more expensive than domestic.
Fuck the poor they just steal everything and commit literally all the crime anyway.
We don't have the infrastructure in place and a Democrat could swoop in and reverse before it's complete it if they win the next election. However this needs to be done sooner rather than later
Peter Schiff discusses this fairly clearly. TL: DR; those countries with sell their goods to other countries and it will deprive Americans of cheap goods.