I haven't seen one other piece, anywhere, (including alt-media places like zerohedge) that accurately hashed out the Tariff thing.
- It's not a drill
- it's not negotiation (outside the hemisphere, I think we'll normalize with Canada / Mexico)
- It's not off-the-cuff crazy orange-man stuff.
Pretty sure all the previous announcements were warning shots -> Start moving
-> They're gonna do it, dump the markets... then repeal the income tax (but probably not right away, they gotta take their cut of the fake gains first)
That's why they're scrambling to cut the size of gov. (Nobody is stopping this)
Also: Medicare stays and more taxes on the wealthy
None of this is even "Trump". He looks all bitter about being the heel.
This is somewhat optimistic... I'm pretty sure this is the plan.. yet I have no confirmation bias.
You need to think in terms of scales. From big to small:
This is about restructuring debt first , then trade , then currencies and the rest is just fallout.
Western governments debt restructuring is coming , but it will be a process , not a single event.
I think another part of this strategy, is they're leaning into crashing the economy, to get the interest rates down, so they can issue new forms of debt..
Yes I agree, that is part of the reset and restructuring phase. A shakeout if you will.
And in that shakeout a lot of wealth will be transferred from middle-class to the ownership class, just like in GFV 08
Curious, could you expand on what you mean with "This is somewhat optimistic"? Do you mean your analysis is optimistic and it could be much worse? Or are you saying this will overall be a good thing?
I say, overall it's a good thing. Just in the long run.
We're decoupling from the globohomo, addressing the debt issues, and I think, im the end, will abolish the income tax.
it's too high to be anything but a war like move to ruin the us.
sort of like the brits who managed that german fag adolf.
Tariffs on imports without local industry that could fully cover local demand just make local prices higher on both imported and local stuff.
Actually it will look like yet another taxation dropped on people. And it will not hurt anybody else. Chineese/Mexicans will still get their $50 for microwave oven, as usual. Just US customers will pay 25% or whatever to the state. It's like VAT, but without naming it VAT.
It depends on the industry. And remember, many of these companies are already American companies that manufacture in China, Mexico, etc. to cut costs.
When it becomes economically advantageous to move manufacturing back to the United States, industries like Automotive can do that fairly quickly (often a year or two), and some industries even faster. Also, there are plenty of industries where there is local competition that will immediately benefit (e.g. home fitness equipment).
If these tariffs are sincere, there will probably be deals where tariffs get dropped for products that make commitments to move manufacturing back to the US, such that those companies are not hurt during the time they are transitioning.
That's not to say I believe these tariffs are sincere. I generally don't trust any of the big stuff that happens, and I don't trust any of these. I do, however, believe that tariffs are a good thing if you believe in the idea of sovereign nations.
Interesting thought that this may be a way to implement VAT.
Tariffs could help domestic industry, but in any case they will rise the prices.
If a customer have to pay X% more for some imported thing, then there is no any reason for local manufacturer to set the price for the similar thing made locally X% lower. This X% will just go to the pocket of the owner.
We have customs taxes for many imported things here for a long time, they always make things more expensive for people. All things, imported and manufactured locally. Of course, this sometimes could help local industry, but that's not for sure.
Shortly, tariffs is kind of a way to indirectly subsidize local industry at the expense of local population. As you might know, subsidizing does not work always and even could make things worse.
Long term, though, it's not at the expense of the local population, but to their benefit (assuming the tariffs only apply where there is a practical possibility for local options).
Compare to before the 60s and 70s. CEO pay compared to average worker pay was ridiculously closer. Things costed more but people made more. People did not have so many random electronics, but the thing they had were well built and lasted (and were repairable).
Then, manufacturing started to outsource to the third world to cut costs. Some of that went on to the consumer, but much of it went directly to the top. And more importantly, a once strong middle class started to bifurcate into a few extremely wealthy and the rest barely able to scrape by even with two incomes (and all of the follow-ons from that like birth rate decline and massive immigration).
In the end it's all subjective, but I prefer a strong middle class with real power and liberty.
If they worked as intended, of course. However there should be a lot of other conditions for subsidizing of whatever kind to be successfull. F.e. average enterpreneur will not rise the quality and reliability of goods he produce, if he could just sell them for higher price thanks to tariffs.
Here we comes to question of ethics in profit-driven capitalism, which is unfortunately have bad answers.
The reason state need tariffs to support domestic business is that local businessmans decided that they will get more profit moving manufacturing out of country to the cheaper regions. With some ethics and care about local people from the businessman, there would have no such situation in the beginning. And now the same businessmans who destroyed local manufacturing get subsidies from the state. Guess how that will go.
State need not only subsidies/preferences for local manufacturing, but also strict control over manufacturers on how they use that situation - just happily fill their pockets doing so called "screwdriver assembly" of "made in USA" things or really invest into means of manufacturing and skilled workforce for whole production cycle.
Not very subjective, really. Strong middle class means reliable state and well-being of whole population.
If you make it too expensive to outsource manufacturing, then those companies need to compete with other local companies. In even a moderately efficient market, if you are price-gouging then there will be other competition that comes in at a lower price. Similarly, if you need to compete with other local companies for labor then you need to pay better.
This assumes efficient markets, though. However, every system will always tend towards consolidation and monopoly, it is ingrained in human nature. To counter this you would need robust breakup of monopolies. This also will eventually be gamed or corrupted.
Then we're back to natural cycles of consolidation, revolt, decentralization, repeat.
Of course. But that's not what happening. F.e. iPhones completely made in China are accounted as "made in USA" and not fall under tarifs.
Today it is nearly impossible to do anything with monopolies, unfortunately. Electronics and software made vendor lock and monopolisation even simplier than any time before.
That's not right if civilisation can't develop without that cycles. Unfortunately nobody cares.