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LibHorizons: The midwest auto industry is complicating Democratic messaging on tariffs.
A Michigan Democrat said tariffs could help bring auto manufacturing jobs back to the United States...
The Trump administration announced last week that new 25% tariffs on imported cars, light trucks and auto parts would take effect this week. The announcement has been embraced by the United Auto Workers union but criticized by economists who say the levies could raise car prices by thousands of dollars.
Shawn Fain, the president of the United Auto Workers union, supports President Trump's announcement.
What does it tell you that Fain supports Trump's tariffs policy?
"I'm going to be very blunt with you. Nobody believed me, especially in my party, when I said that Donald Trump would win the presidency in 2016. You'll remember that and they all thought I was crazy.
"I said it for one reason: It was trade. Democrats did a terrible job on trade. I was in and out of union halls. I'm still in and out of union halls, and I hear two things when I'm in union halls. I do hear people worried about what's going to happen to everyday costs, but I also hear finally somebody's fighting for us.
Many Democrats are critical of Trump's tariffs. What's your message to Democratic leaders about how they should talk about tariffs and the economy?
“I'm pretty blunt in our caucus that we've got to stop just being anti-tariff..."
debbiedingell.house.gov
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Before this conservatives were saying that Trump didn't mean it when he said there was going to be general tariffs on everything.
Now they are saying it's just a negotiating tactic and they will be gone soon. It's wishful thinking. The man does what he says he will do. Tariffs will stay until someone forces him to remove them.
Notice how the US tells other countries not to react. It's because his people know he will raise tariffs even more and they know that despite how bad these tariffs will be to the US the combined effect of a sudden onset of general tariffs that completely stop imports in combination with opposing tariffs aimed at key industries will be devastating. Because you can't replace everything and industries that rely on those will grind to a halt.
Of course there will be reciprocal tariffs because these ones are completely bonkers. In most cases the US put in tariffs magnitudes higher than the ones on them and called them "reciprocal". Countries won't let that slide. In fact the EU could simply completely mirror Trumps tariffs, make vast cutouts for products they don't want to tariff and go "see, we are now doing the exact same things are you do. Lower yours to 0% and so will we" and we would still be increasing tariffs dramatically on the US.
Remember all the other things he has said he will do.
The first thing is to use the trade war against the EU to paint them as enemies.
Next he will drop sanctions on Russia and try to increase trade with them dramatically.
When the mid terms starts coming up he will annex Greenland.
After that he will likely use the geographical advantage to blockade Canada in order to force them to submit.
The positive thing is that you can get off the ride at any point. Conservative politicians would very much like to not deal with this shit but they don't want to lose their elections because of MAGA. Let them know that there is will among US conservatives to end this shit even by voting with democrats and that they are more likely to lose if they don't do something.
Congress can easily remove the president's right to control tariffs. They also have the war powers act so they can stop him from Greenland and Canada too.
Could also pass laws about sanctions on Russia and aid to Ukraine.
I would suggest thinking on at which point enough is enough.
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The net positive of the situation is that the EU should experience stronger unity and measures might be put into place to lessen US influence here, for example the funding of and public support for right wing extremists and their parties.
Meloni tried a diplomatic approach that Musk and Trump simply aren‘t interested in. They will attempt to cheat and strongarm their way into the continent by all means necessary, even by supporting Russia.
We are caught in a pinch between two jingoists at this point.
Makes the PRC look moderate.
It‘s like that meme with the dude poking something with a stick except it‘s the US poking us like ‚c‘mon, turn fascist‘ or something.
We are so free here it causes physical pain in their citizens.
They‘ll even believe that for every Tesla I torch, Soros sends me a 1k check. Bollocks.
As my godfather used to say, the best things in life are free.
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Norway28621 Posts
On April 03 2025 20:26 GreenHorizons wrote:LibHorizons: The midwest auto industry is complicating Democratic messaging on tariffs. Show nested quote +A Michigan Democrat said tariffs could help bring auto manufacturing jobs back to the United States...
The Trump administration announced last week that new 25% tariffs on imported cars, light trucks and auto parts would take effect this week. The announcement has been embraced by the United Auto Workers union but criticized by economists who say the levies could raise car prices by thousands of dollars.
Shawn Fain, the president of the United Auto Workers union, supports President Trump's announcement.
What does it tell you that Fain supports Trump's tariffs policy?
"I'm going to be very blunt with you. Nobody believed me, especially in my party, when I said that Donald Trump would win the presidency in 2016. You'll remember that and they all thought I was crazy.
"I said it for one reason: It was trade. Democrats did a terrible job on trade. I was in and out of union halls. I'm still in and out of union halls, and I hear two things when I'm in union halls. I do hear people worried about what's going to happen to everyday costs, but I also hear finally somebody's fighting for us.
Many Democrats are critical of Trump's tariffs. What's your message to Democratic leaders about how they should talk about tariffs and the economy?
“I'm pretty blunt in our caucus that we've got to stop just being anti-tariff..." debbiedingell.house.gov
I mean if the US wants to implement tariffs on imported cars to strengthen american car manufacturing, that's one of those targeted tariffs that you could argue makes sense. It's been an important industry in the US and if you want to argue that it's more important that the US produces their own cars than that the population gets the best bang for the buck, that's like, okay, fair enough.
But the way these tariffs are implemented and just matching them to the trade deficit and claiming that they're reciprocal tariffs is an absolute joke. Yeah Lesotho is really exploiting the US through not importing more American goods. Honestly this is probably the primary example so far of destructive incompetence rather than a destructive agenda being the cause of problems.
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On April 03 2025 21:45 Liquid`Drone wrote:Show nested quote +On April 03 2025 20:26 GreenHorizons wrote:LibHorizons: The midwest auto industry is complicating Democratic messaging on tariffs. A Michigan Democrat said tariffs could help bring auto manufacturing jobs back to the United States...
The Trump administration announced last week that new 25% tariffs on imported cars, light trucks and auto parts would take effect this week. The announcement has been embraced by the United Auto Workers union but criticized by economists who say the levies could raise car prices by thousands of dollars.
Shawn Fain, the president of the United Auto Workers union, supports President Trump's announcement.
What does it tell you that Fain supports Trump's tariffs policy?
"I'm going to be very blunt with you. Nobody believed me, especially in my party, when I said that Donald Trump would win the presidency in 2016. You'll remember that and they all thought I was crazy.
"I said it for one reason: It was trade. Democrats did a terrible job on trade. I was in and out of union halls. I'm still in and out of union halls, and I hear two things when I'm in union halls. I do hear people worried about what's going to happen to everyday costs, but I also hear finally somebody's fighting for us.
Many Democrats are critical of Trump's tariffs. What's your message to Democratic leaders about how they should talk about tariffs and the economy?
“I'm pretty blunt in our caucus that we've got to stop just being anti-tariff..." debbiedingell.house.gov I mean if the US wants to implement tariffs on imported cars to strengthen american car manufacturing, that's one of those targeted tariffs that you could argue makes sense. It's been an important industry in the US and if you want to argue that it's more important that the US produces their own cars than that the population gets the best bang for the buck, that's like, okay, fair enough. But the way these tariffs are implemented and just matching them to the trade deficit and claiming that they're reciprocal tariffs is an absolute joke. Yeah Lesotho is really exploiting the US through not importing more American goods. Honestly this is probably the primary example so far of destructive incompetence rather than a destructive agenda being the cause of problems. LibHorizons: It's ostensibly why Biden kept and raised some of Trump's tariffs from his first term.
I think there's a possibility this goes sorta like the firing half the government thing does. Basically he'll claim credit for any positive changes and blame Democrats not supporting his tariffs for companies/countries that don't respond favorably. Something about how Democrats lack of commitment to US manufacturing/industry/workers is why these countries/companies aren't building things here with American labor. It'll be mostly stupid and wrong, but not entirely, and that'll be enough.
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United States42419 Posts
You don’t create investment and new jobs with uncertainty and Trump has created more uncertainty than anything else. Even his own policy is capricious, he backtracks on his own commitments daily. If Canadian aluminium was definitely unavailable then they’d grit their teeth and invest in American aluminum. But if there’s a risk that competitive Canadian aluminium returns in 4 years and your plant has a 10 year payoff then you’re not going to spend the money. And Trump backtracks on his own tariffs in the same week.
It also assumes that American workers are currently doing nothing. American workers are currently optimized into the highest value labour because that’s how trade works. You could make one A but you’re really good at making B and you can make two B and then trade them for two A. Trump is taxing that imported A to force you to make it yourself which means quitting the productive B job and instead doing the bad A job.
Job maximization is the objective of a slaver. At a certain point it’s like concluding the combine harvesters are taking all our farm jobs from rural children.
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The US runs around a $1 trillion trade deficit with the world. It's around 3-5% of GDP, although as a pure value it appears larger because of the size of the US economy. But also because a trillion dollars is actually a lot. A tariff - whoever pays it, is a tax essentially on capital leaving the country. The less capital leaves, the more it stays in the economy, and because it's a tax, at the same time the more that capital leaving is taxed, the less you have to tax capital moving around inside your own economy, which encourages it to move around.
Furthermore, foreigners own about $8 trillion in treasury bonds that they buy with the capital they extracted from the US. Or about 30% of treasury bonds. The interest they earn from treasury bonds is then paid for with taxes collected from the tax base of the United States (consumers and citizens) by a government which continually operates at $1-2 trillion budget deficits. Meaning the US government is turning its citizens into indentured servants of foreign capital, foreign capital that also relies on the same citizens' perpetual dependence as consumers.
If Trump's tariff bomb results in an interest rates spike and a stock crashcorrection, the result, roughly, is domestic capital rotating from high risk, volatile stocks, and reallocating into bonds and onshoring business and manufacturing by investing into the US economy to keep their capital from becoming worthless to inflation.
There is also the chance that the country of Wall Street itself is such an independently powerful and enormous entity, that international and multipolar dependence on it as a global secondary capital market may actually prop it up from negative repercussions of US trade policy, if such a thing is conceivable.
Lack of US manufacturing in key sectors is both an economic and national security issue obviously, but the broader issue of a general trade deficit with the world, which again the US runs the largest of any country (which again by percent doesn't look like much but a trillion dollars isn't a rounding error in any framework). Trump's use of a bludgeon here does not preclude the scalpel in other specific goals like guaranteeing domestic pharmaceutical or chip production, or backing US auto companies.
This is a fascinating and historic play and I love when Trump actually does things for the simple fact it gets people thinking and talking about ideas again.
There is no way to guess the elasticity without actually doing the policy, and then we will know how much people/companies will just absorb and pay the difference, vs. what sectors will have what levels of demand shift. That's why months ago on the campaign trail you have wildly divergent papers and studies predicting the effects. This isn't really done at this scale in this century so it's not clear.
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Capital extraction is the debt incurred for buying stuff from other countries. As such, it‘s perfectly fair. You can also stop imports altogether.
If you tax it, it can be a gain if the purchase rate of outside goods stays stable at the same price. The ideal behind it.
It can also mean you get less goods and at a higher price.
Which should encourage manufacturing at home ?
Will it though ? Depends more on imports from China than anything else. Maybe you get more manufacturing, but it‘s not as competitive considering how low of a wage they work for, so your own manufacturing should end up costing more anyway. And the new jobs will earn less.
Apple pulled the US the most with manufacturing in China, high quality and high price tags.
They‘re still my favourite when it comes to phones.
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I feel it's the death kneel for the slow but steady process rules-based multilateral trade liberalization. It was already ailing with Trump1 and Biden's attacks on the WTO settlement dispute body, but Trump2's unilateral tariff show of force demonstrates that the US will do what it wants the rest be damned. We'll be pretty much back to blocs and countries negotiating bilateral deals instead of working within a single framework.
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On April 03 2025 23:04 oBlade wrote:
The US runs around a $1 trillion trade deficit with the world. It's around 3-5% of GDP, although as a pure value it appears larger because of the size of the US economy. But also because a trillion dollars is actually a lot. A tariff - whoever pays it, is a tax essentially on capital leaving the country. The less capital leaves, the more it stays in the economy, and because it's a tax, at the same time the more that capital leaving is taxed, the less you have to tax capital moving around inside your own economy, which encourages it to move around.
Furthermore, foreigners own about $8 trillion in treasury bonds that they buy with the capital they extracted from the US. Or about 30% of treasury bonds. The interest they earn from treasury bonds is then paid for with taxes collected from the tax base of the United States (consumers and citizens) by a government which continually operates at $1-2 trillion budget deficits. Meaning the US government is turning its citizens into indentured servants of foreign capital, foreign capital that also relies on the same citizens' perpetual dependence as consumers.
If Trump's tariff bomb results in an interest rates spike and a stock crashcorrection, the result, roughly, is domestic capital rotating from high risk, volatile stocks, and reallocating into bonds and onshoring business and manufacturing by investing into the US economy to keep their capital from becoming worthless to inflation.
There is also the chance that the country of Wall Street itself is such an independently powerful and enormous entity, that international and multipolar dependence on it as a global secondary capital market may actually prop it up from negative repercussions of US trade policy, if such a thing is conceivable.
Lack of US manufacturing in key sectors is both an economic and national security issue obviously, but the broader issue of a general trade deficit with the world, which again the US runs the largest of any country (which again by percent doesn't look like much but a trillion dollars isn't a rounding error in any framework). Trump's use of a bludgeon here does not preclude the scalpel in other specific goals like guaranteeing domestic pharmaceutical or chip production, or backing US auto companies.
This is a fascinating and historic play and I love when Trump actually does things for the simple fact it gets people thinking and talking about ideas again.
There is no way to guess the elasticity without actually doing the policy, and then we will know how much people/companies will just absorb and pay the difference, vs. what sectors will have what levels of demand shift. That's why months ago on the campaign trail you have wildly divergent papers and studies predicting the effects. This isn't really done at this scale in this century so it's not clear.
As pointed out by many people the trade balance looks worse than it is because it's hard to count services. In pure numbers the US has a surplus service trade balance already. It export high value services, and imports physical goods.
But that doesn't account for many US companies having subsidiaries in other countries that don't get counted but which still relies on advanced and high paying jobs in the US.
A trade deficit in itself isn't particularly bad if it's not powered by a budget deficit. It would certainly be possible to reduce the budget deficit and reduce debt without touching the trade balance. If anything it would correct itself naturally.
If the US wanted to move back certain types of manufacturing that would be understandable. Targeted tariffs would be a sensible way to do that. It could even help with the trade balance (although I still don't understand why that is supposed to be bad).
However why the fuck would you put tariffs on countries like Bangladesh, Cambodia, Botswana etc? You buy clothes, natural resources and maybe some coffee and fruit from them.
You don't want to, and will never, move manufacturing of the things they do into the US. The only thing it will do is to increase inflation and reduce spending power in your own consumers. Spending power that you want them to have because you want your consumers buying a more expensive American car than the previously less expensive but now tariffed German car. Now they won't be able to afford a car at all.
It's what discounts this from being some great experiment because parts of it is so mind blowingly dumb. It's pretty clear it's not 4D chess anymore.
Vance has already said it several times. The presidents want something (tariffs, Greenland, Canada) and since there are only yes men left they oblige. Someone likely tried to explain things to Trump but he wanted tariffs on the countries with the biggest trade deficit and they simply calculated that and applied tariffs.
Either way how does this even affect the budget deficit? You can argue you can use the income from tariffs to pay down the debt but there seems to be no plan to do that and it could have been done much cleaner with targeted tariffs and taxes to raise the same revenue without causing an economic shit storm.
There are no signs of the national debt going down or even the deficit decreasing and in all likelihood this little maneuver will only make it worse.
Edit: Saw a funny but accurate quote.
"The US has tried massive tariffs in 1828, 1930 and 2025. They are spaced roughly 100 years apart because everyone who remembers it needs to be dead before we get to the idea of trying it again."
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United States42419 Posts
"Even after adjusting for the massive differences in wages and the resulting overvaluation of US goods/services and undervaluation of foreign goods/services the US still gets far more goods from the world than it provides. The rest of the world essentially exists to provide things for the American public for free. We must fix this!"
If the rest of the world is giving you a trillion of shit each year in exchange for paper currency that you control then that is not a problem that needs to be fixed.
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On April 03 2025 23:21 Vivax wrote:
Capital extraction is the debt incurred for buying stuff from other countries. As such, it‘s perfectly fair. You can also stop imports altogether.
Certainly the act by itself of buying something with money and getting it in return is a fair exchange on both sides. I wouldn't ever mean to imply otherwise. However, the situations in which this happen can be less than ideal and for those reason people can want to rebalance the situations.
For example, if you were a coal worker issued scrip to spend at the company store, when you bought a loaf of bread at the store with your money, that would be fair. But the bigger picture of only having one store to shop at, owned by the company paying your wages, charging you 2-3x fair market value, wouldn't be desirable for you. The conditions are a problem at a lower level.
On April 03 2025 23:41 CuddlyCuteKitten wrote:Show nested quote +On April 03 2025 23:04 oBlade wrote:
The US runs around a $1 trillion trade deficit with the world. It's around 3-5% of GDP, although as a pure value it appears larger because of the size of the US economy. But also because a trillion dollars is actually a lot. A tariff - whoever pays it, is a tax essentially on capital leaving the country. The less capital leaves, the more it stays in the economy, and because it's a tax, at the same time the more that capital leaving is taxed, the less you have to tax capital moving around inside your own economy, which encourages it to move around.
Furthermore, foreigners own about $8 trillion in treasury bonds that they buy with the capital they extracted from the US. Or about 30% of treasury bonds. The interest they earn from treasury bonds is then paid for with taxes collected from the tax base of the United States (consumers and citizens) by a government which continually operates at $1-2 trillion budget deficits. Meaning the US government is turning its citizens into indentured servants of foreign capital, foreign capital that also relies on the same citizens' perpetual dependence as consumers.
If Trump's tariff bomb results in an interest rates spike and a stock crashcorrection, the result, roughly, is domestic capital rotating from high risk, volatile stocks, and reallocating into bonds and onshoring business and manufacturing by investing into the US economy to keep their capital from becoming worthless to inflation.
There is also the chance that the country of Wall Street itself is such an independently powerful and enormous entity, that international and multipolar dependence on it as a global secondary capital market may actually prop it up from negative repercussions of US trade policy, if such a thing is conceivable.
Lack of US manufacturing in key sectors is both an economic and national security issue obviously, but the broader issue of a general trade deficit with the world, which again the US runs the largest of any country (which again by percent doesn't look like much but a trillion dollars isn't a rounding error in any framework). Trump's use of a bludgeon here does not preclude the scalpel in other specific goals like guaranteeing domestic pharmaceutical or chip production, or backing US auto companies.
This is a fascinating and historic play and I love when Trump actually does things for the simple fact it gets people thinking and talking about ideas again.
There is no way to guess the elasticity without actually doing the policy, and then we will know how much people/companies will just absorb and pay the difference, vs. what sectors will have what levels of demand shift. That's why months ago on the campaign trail you have wildly divergent papers and studies predicting the effects. This isn't really done at this scale in this century so it's not clear. As pointed out by many people the trade balance looks worse than it is because it's hard to count services. In pure numbers the US has a surplus service trade balance already. It export high value services, and imports physical goods. But that doesn't account for many US companies having subsidiaries in other countries that don't get counted but which still relies on advanced and high paying jobs in the US.
The trade deficit, including services surplus in the US favor and goods deficit against it, is on the order of $1 trillion as I said, services included. Unless you are implying further that "services" are uncountable in some way that makes the true value unknowable to us, but somehow knowable enough that it balances out the goods deficit and means Trump is making a fuss about nothing.
On April 03 2025 23:41 CuddlyCuteKitten wrote:
A trade deficit in itself isn't particularly bad if it's not powered by a budget deficit. It would certainly be possible to reduce the budget deficit and reduce debt without touching the trade balance. If anything it would correct itself naturally.
The only way I see to do this - reduce the budget deficit - that either side of the aisle has proposed is corporate and wealth tax/expropriation. The problem with this is it only works once and is accompanied by a hamstringing and hobbling of US companies and US capital markets. It's a huge gamble that if it's not accompanied by titanic spending cuts, which the Democrats can't and won't do, would be national suicide. Gutting the wealth and companies of the US, which are its only assets right now, the only cards it's holding, is a one time play that would almost certainly fail. There's no manufacturing. There's no goods. That's why there's a deficit. The only thing the US has is the "US-ness" of Apple and Tesla and Nvidia and so on down the line... Confiscate their domestic assets and wealth in a commie scheme to pay for the gov't, and their stock tanks publicly, China will seize and copy IP and everything because with US stock markets crashed, foreign investors would have no reason to continue to prop up the US system. And then the US would barely have its own companies left to rebuild.
On April 03 2025 23:41 CuddlyCuteKitten wrote:
If the US wanted to move back certain types of manufacturing that would be understandable. Targeted tariffs would be a sensible way to do that. It could even help with the trade balance (although I still don't understand why that is supposed to be bad).
Since you didn't say you disagree, just that you don't understand, I'll just lay out the general thesis a little more succinctly? Don't feel obligated not to disagree as well. The idea is this:
1) US consumers patronize foreign companies.
2) Leads to -> US consumers rely on foreign companies, US manufacturing disappears and US jobs are lost.
3) Foreign entities use extracted capital to buy US treasury bonds
4) Foreign entities get revenue from interest on US treasury bonds, which is paid through US government revenues, which are funded by taxes from US citizens and their children, the next generations of citizens
5) Foreign entities spitroast US consumer/citizen in a perpetual headlock of extracting money both from taxes because the US can't gov't can't default on its obligations, and extracting money from the US consumer base because they have no options to buy from domestic producers or even international producers that are allies rather than polar adversaries (ex. Chinese control of US pharmaceutical market)
Trump wants to... stop? oppose/reduce this.
On April 03 2025 23:41 CuddlyCuteKitten wrote:
Either way how does this even affect the budget deficit? You can argue you can use the income from tariffs to pay down the debt but there seems to be no plan to do that and it could have been done much cleaner with targeted tariffs and taxes to raise the same revenue without causing an economic shit storm.
There are no signs of the national debt going down or even the deficit decreasing and in all likelihood this little maneuver will only make it worse.
There is 100% a plan to do that, it's the rationale behind the "ERS" which Blumpf gets maligned for and it's the reason he likes Pres. McKinley and thinks tariffs are genius because the federal government was funded entirely through them. At any rate, if government revenues exceeded spending, what else did you think they would do besides repay the debt? Sit on it?
If you think you can get the same revenue with (more) targeted tariffs only, mathematically it looks roughly something like this.
You make, say, Xamount from taxing the world at an average of 20%+. (I understand the "baseline" of Trump's plan is 10%. That is a minimum, not average. I'm looking for a hypothetical average for the sake of argument, EU is 20% and China is higher so just imagine that ballpark. The exact number isn't key and I think 20% is on the generous side.)
Let's assume then that "X" is enough to make significant annual payments on the national debt, which is currently $35+ trillion, overcoming an annual deficit of like $1 trillion in government spending a year. Okay. So imagine/assume that is possible.
But because this is too... not "clean," let's substitute it with targeted tariffs. Okay. What percent of the world's economy are you targeting with it? 1% of the world's economy?
EU cars are about 1% of the world's economy. (This hypothetical can be further assailed by the fact that it's not true that 100% of EU cars go to the US, the US isn't the only customer of EU cars. Just bear with it please.) If you were to get the same revenue from targeting EU cars as you get from 20% average towards everyone (100%), you would need tariffs of 100x size to get the same revenue. Meaning you would need 100x20%=2000% tariffs. If you targeted any industry with 2000% tariffs, it would guillotine the industry from the US consumer base instantly. Yet that it is how much you need in order to get revenue substantial enough to repay the debt if the brunt, broad, across the board tariffs were also able to deliver that.
Target 1% at 2000%. 5% at 400%. Target 10% at 200%. Target 20% at 100% and the bigger we go the farther we get from the definition of "targeting."
It's kind of like asking someone with metastatic cancer why they need chemo and can't just get it done surgically. It's everywhere. There isn't enough surgery to get it all that way. Not that anyone is specifically saying not to do surgery for the obvious tumor that is also sticking out. Surgery's good too.
And this all assumes mass tariffs are enough to affect the deficit themselves to begin with. Which is the only hope the US has.
On April 04 2025 00:13 KwarK wrote:
If the rest of the world is giving you a trillion of shit each year in exchange for paper currency that you control then that is not a problem that needs to be fixed.
Thank you for the opportunity hidden in a one-liner as always. The aptly described "trillion of shit" becomes used, spent, and worthless, and is 99.9% depreciating assets, consumables, or Chinesium.
The paper currency, now held by foreigners, becomes worth more than a trillion, and it does so by being paid interest via taxes by the very same people who bought the "shit" before. The US consumer is giving other countries trillions in future wealth in exchange for debt that they have to pay to makers of knockoff products, mass market stuff stolen IP, foreign cars, and so on.
This process compounds over time and is therefore not sustainable in an indefinite sense.
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On April 03 2025 22:40 KwarK wrote:
You don’t create investment and new jobs with uncertainty and Trump has created more uncertainty than anything else. Even his own policy is capricious, he backtracks on his own commitments daily. If Canadian aluminium was definitely unavailable then they’d grit their teeth and invest in American aluminum. But if there’s a risk that competitive Canadian aluminium returns in 4 years and your plant has a 10 year payoff then you’re not going to spend the money. And Trump backtracks on his own tariffs in the same week.
It also assumes that American workers are currently doing nothing. American workers are currently optimized into the highest value labour because that’s how trade works. You could make one A but you’re really good at making B and you can make two B and then trade them for two A. Trump is taxing that imported A to force you to make it yourself which means quitting the productive B job and instead doing the bad A job.
Job maximization is the objective of a slaver. At a certain point it’s like concluding the combine harvesters are taking all our farm jobs from rural children.
Didnt florida just pass a law to allow rural children to do farm labor? The day of outlawing combines is not far in your future...
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On April 03 2025 07:11 Legan wrote:
Many will be liberated from their money tomorrow. It's fantastic stuff. Also, I could not spot Russia in any list yet. Hopefully, the EU has its counter package ready already.
We don't even need counter tariffs, this is a self-correcting issue. There's no untapped labour force in the US, except 10-14 year old Americans I guess but there's only so much they can do in the extra time they get for being liberated from education.
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On April 04 2025 00:48 Dan HH wrote:Show nested quote +On April 03 2025 07:11 Legan wrote:
Many will be liberated from their money tomorrow. It's fantastic stuff. Also, I could not spot Russia in any list yet. Hopefully, the EU has its counter package ready already. We don't even need counter tariffs, this is a self-correcting issue. There's no untapped labour force in the US, except 10-14 year old Americans I guess but there's only so much they can do in the extra time they get for being liberated from education.
Who's to say that compulsory education for children under 16(ish) will actually remain the norm? I wouldn't be surprised if some red states eventually decide that all of high school is optional. And if that's the case, who really needs middle school? Or elementary school? It's all supposedly liberal propaganda anyway, right? Even seven-year-olds could probably do something labor-related...
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United States42419 Posts
On April 04 2025 00:25 oBlade wrote:Show nested quote +On April 04 2025 00:13 KwarK wrote:
If the rest of the world is giving you a trillion of shit each year in exchange for paper currency that you control then that is not a problem that needs to be fixed. Thank you for the opportunity hidden in a one-liner as always. The aptly described "trillion of shit" becomes used, spent, and worthless, and is 99.9% depreciating assets, consumables, or Chinesium. The paper currency, now held by foreigners, becomes worth more than a trillion, and it does so by being paid interest via taxes by the very same people who bought the "shit" before. The US consumer is giving other countries trillions in future wealth in exchange for debt that they have to pay to makers of knockoff products, mass market stuff stolen IP, foreign cars, and so on. This process compounds over time and is therefore not sustainable in an indefinite sense.
The idea that getting things is worthless because you got to use them is certainly weird.
If you give me a car and I give you nothing in return then I guess you win that because the car is depreciating.
As for the interest, it's not you give me a car and I give you two cars later, it's you give me a car, I give you paper, and the paper entitles you to get more paper in the future.
If at some point in time the trading partners start requesting value for the paper then the very act of making that request devalues the paper they're holding. It fixes itself. The paper gets you whatever paper gets you on the day that they want to use it, nothing more. If the whole objective here is to make foreigners take more US goods and demand more US labour then there's no action required, they'll either eventually do that to get some tangible material good from their paper in which case job done or they won't (because the paper is itself a tangible material good because it facilitates trade functioning as gold used to) in which case free car.
The US is in the situation it is in because the world uses US issued paper for trade settlement which means it is no longer an IOU, a future demand on US labour, it is now a valuable commodity in its own right.
That's what people like you fail to understand. If it was gold you could get your heads around it, they give you a car, you give them gold. The gold is then consumed by the other party by melting it down and issuing coinage to transition what was once a barter economy to a money economy with huge domestic productivity and efficiency gains from the resulting explosion in trade. Both sides got what they wanted. But change it to paper and suddenly you get lost.
When the US buys steel and sells paper then the trade is settled. Both sides got what they wanted out of that. The paper is what allows India to settle trades with Brazil. The paper is what allows insurance underwriting. The paper is what allows participation in the banking system. The paper is to the modern economy what gold was to the Medieval economy.
The US is sitting on a giant gold mine and the world is desperate to give the US steel and oil and labour in exchange for the gold the US has and Americans work far less hard than anyone else because the gold is right there and everyone wants it and as a result they're incredibly rich, fat, and lazy. And you're desperate to somehow even up the scale here because to you all that free stuff is a problem that requires urgent fixing. Because, you ask, "what happens when they have enough gold and want stuff"? Well, worst case scenario it fixes itself, Americans just get a job like everyone else has to. But lets think back to our Medieval example. You're sitting on the gold mine and everyone else is giving you stone and steel and labour in exchange for the gold that you just pick up out of the ground for free. And then one day they decide they want you to actually contribute. They'll find that you're sitting in the castle that their workers built with the stone that they gave you and you're holding a sword that they forged and all they have is a shitload of shiny yellow discs. "lol" you'll say. "lmao"
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United States42419 Posts
Essentially Trump's populist message is
"The foreigners are making our lives too comfortable. They're doing too much for us. When was the last time you worked for a foreigner? When was the last time you laboured all day making shoes for some brown guys to wear? Isn't it time that more American labour went to non Americans?"
Well, as an American, I say "no!". I say that foreigners should do more work for us, not less, and that we should give them less in return. I say that our days of freeloading aren't over, they're barely coming to a middle. Our best days of exploiting the developing world are still ahead of us. I believe in a future where Americans are fatter and lazier than ever and I believe that we can make it happen. This woke liberal bullshit where we have to give as well as get is frankly unAmerican. Trump would have us working all day and for what? So some foreigner can get paid for the labor they do? Labor that I, as an American, should be entitled to anyway? Fuck no. I say "why are they only giving us a trillion a year in tribute? Why not two?" And they'll say "thank you" for it.
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The trade deficit, including services surplus in the US favor and goods deficit against it, is on the order of $1 trillion as I said, services included. Unless you are implying further that "services" are uncountable in some way that makes the true value unknowable to us, but somehow knowable enough that it balances out the goods deficit and means Trump is making a fuss about nothing.
That's exactly what I'm implying yes. It's not to the tune of 1 trillion of course but it is significant. You don't know because you are American so it's a net benefit for you and probably nobody talks about. But it's very common to have local subsidiaries making money for American companies. They are part of a vast and complex corporate structure. And then when it's time to pay taxes that money is not in the country it was anymore due to financial maneuvers that are far too complex for me to understand. But they resurface in the US as income to the American parent company.
Why? Because you have much lower corporate taxes. Which is why we know about it because there is a lot of bitching about it.
It's of course almost impossible to pull with actual physical goods but with services it seems to be very common.
The only way I see to do this - reduce the budget deficit - that either side of the aisle has proposed is corporate and wealth tax/expropriation. The problem with this is it only works once and is accompanied by a hamstringing and hobbling of US companies and US capital markets. It's a huge gamble that if it's not accompanied by titanic spending cuts, which the Democrats can't and won't do, would be national suicide. Gutting the wealth and companies of the US, which are its only assets right now, the only cards it's holding, is a one time play that would almost certainly fail. There's no manufacturing. There's no goods. That's why there's a deficit. The only thing the US has is the "US-ness" of Apple and Tesla and Nvidia and so on down the line... Confiscate their domestic assets and wealth in a commie scheme to pay for the gov't, and their stock tanks publicly, China will seize and copy IP and everything because with US stock markets crashed, foreign investors would have no reason to continue to prop up the US system. And then the US would barely have its own companies left to rebuild.
You don't have to confiscate all their wealth and you don't have to butcher your entire budget. But you would have to raise taxes on corporations and the rich (like the 4,5 trillion tax cuts Trump wants to make permanent) and probably cut some of your spending.
There is a reason capital flows to the US, see the point above.
Since you didn't say you disagree, just that you don't understand, I'll just lay out the general thesis a little more succinctly? Don't feel obligated not to disagree as well. The idea is this:
1) US consumers patronize foreign companies.
2) Leads to -> US consumers rely on foreign companies, US manufacturing disappears and US jobs are lost.
3) Foreign entities use extracted capital to buy US treasury bonds
4) Foreign entities get revenue from interest on US treasury bonds, which is paid through US government revenues, which are funded by taxes from US citizens and their children, the next generations of citizens
5) Foreign entities spitroast US consumer/citizen in a perpetual headlock of extracting money both from taxes because the US can't gov't can't default on its obligations, and extracting money from the US consumer base because they have no options to buy from domestic producers or even international producers that are allies rather than polar adversaries (ex. Chinese control of US pharmaceutical market)
Trump wants to... stop? oppose/reduce this.
1. Yes, because they are cheaper or better. And it also includes resources and products that are refined into higher value ones.
2. You have a 4,1% unemployment rate which is very good. You have the most amount of high paying jobs in the world.
3. 75% of the debt is owned in the US but sure. Correct me if I'm wrong here but the more bidders you have for public bonds the cheaper the rate is. So if there were fewer people who wanted to buy the interest rates would get higher. So exactly how does it matter *who* owns the debt and how would it be better if few people bid on it?
4. Sure, but otherwise you would have higher interest rates and your debt would cost more. You know you could just forbid foreign entities from buying US bonds, right? The difference is that you would have it all in the US but it would be owned by your richest people/corporations and it would cost you more.
5. The alternative is the US consumers buy more expensive goods and because of this consume less. This will also reduce your tax base. Sure capital doesn't flow away but your economy shrinks.
You still have to pay the debt and your obligations, this doesn't solve anything.
There is 100% a plan to do that, it's the rationale behind the "ERS" which Blumpf gets maligned for and it's the reason he likes Pres. McKinley and thinks tariffs are genius because the federal government was funded entirely through them. At any rate, if government revenues exceeded spending, what else did you think they would do besides repay the debt? Sit on it?
If you think you can get the same revenue with (more) targeted tariffs only, mathematically it looks roughly something like this.
You make, say, Xamount from taxing the world at an average of 20%+. (I understand the "baseline" of Trump's plan is 10%. That is a minimum, not average. I'm looking for a hypothetical average for the sake of argument, EU is 20% and China is higher so just imagine that ballpark. The exact number isn't key and I think 20% is on the generous side.)
Let's assume then that "X" is enough to make significant annual payments on the national debt, which is currently $35+ trillion, overcoming an annual deficit of like $1 trillion in government spending a year. Okay. So imagine/assume that is possible.
But because this is too... not "clean," let's substitute it with targeted tariffs. Okay. What percent of the world's economy are you targeting with it? 1% of the world's economy?
EU cars are about 1% of the world's economy. (This hypothetical can be further assailed by the fact that it's not true that 100% of EU cars go to the US, the US isn't the only customer of EU cars. Just bear with it please.) If you were to get the same revenue from targeting EU cars as you get from 20% average towards everyone (100%), you would need tariffs of 100x size to get the same revenue. Meaning you would need 100x20%=2000% tariffs. If you targeted any industry with 2000% tariffs, it would guillotine the industry from the US consumer base instantly. Yet that it is how much you need in order to get revenue substantial enough to repay the debt if the brunt, broad, across the board tariffs were also able to deliver that.
Target 1% at 2000%. 5% at 400%. Target 10% at 200%. Target 20% at 100% and the bigger we go the farther we get from the definition of "targeting."
It's kind of like asking someone with metastatic cancer why they need chemo and can't just get it done surgically. It's everywhere. There isn't enough surgery to get it all that way. Not that anyone is specifically saying not to do surgery for the obvious tumor that is also sticking out. Surgery's good too.
And this all assumes mass tariffs are enough to affect the deficit themselves to begin with. Which is the only hope the US has.
X% tariffs are just a sales tax on things you import. Sure it's more efficient to tax everything except to tax only some. But it's still just a tax, paid by US citizens.
It can also move some manufacturing to the US.
However it seems extremely stupid to do it this way.
Take the tariffs on Bangladesh. It will increase prices on cheap clothing. This doesn't really affect the rich in the US but it hits the poor working class a lot. Suddenly they have to spend less. At the same time it's not the type of manufacturing you want in the US.
You have a 4,1% unemployment rate and this us unskilled low value labour that requires a lot of people. You will lose people in some industries and put them in clothing manufacturing. Maybe the local hair stylist who no longer have enough clients. And at the end of the day the T-shirt is still more expensive.
Tariffs on raw materials and parts are an even worse equation.
Tariffs on the EU, China and other industrialised nations makes sense because they will generate more revenue and they have jobs you want to take. Tariffs on 3rd world countries make very little sense.
And at the same time there are more efficient taxes that you can have domestically that generates more revenue in a less painful way for the nation. There is a reason that when you need to pay a debt or do taxes for massive military armament you often taxes high incomes, luxury goods and some corporate taxes.
Also your debt is large but it's nowhere near unmanageable if you switch to a sound fiscal policy. Tariffs aren't a magic bullet, they aren't going to solve the underlying problem.
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We're all arguing like the point of tariffs is to improve america. It's not, it's isolationist/protectionist and the point is to pull us out of the world economy, which is objectively bad for anyone who cares about the economy.
I appreciate you taking the time to explain economics to oblade though.
"Tariffs on Bangledesh/Vietnam is like a hedge fund manager fighting his cleaning lady for the right to clean his own toilet" lol
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@Kwark
I remember you making the same argument a while back, with the gold mine, and maybe even castle and all, lol
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EPT
