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Analyzed from 4415 words in the discussion.
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#tariffs#trade#more#country#canada#https#trump#american#bad#money
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Discussion (217 Comments)Read Original on HackerNews
Furthermore, he's very up front about this in On the Principles, and from this information you can calculate the exact number of people who read the damn thing between the person repeating the talking point and the person originating the talking point.
[0] https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
And of course they limit their analysis to "welfare of the people", first-order, ignoring how loss of industry will (and is already) come back to bite us. As if our only interests were those of passive consumers.
[1] " ... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules." - https://en.wikipedia.org/wiki/Comparative_advantage#Criticis...
I think an under-appreciated aspect of all this is the complete schadenfreude from everyone. The story goes tariffs only hurt yourself but then we see retaliatory tariffs in response. "Oh yeah I'm going to cut off my leg to show you whose boss!" Very funny.
And then you have people predisposed to higher-taxes who are contorting themselves over the economic cost of this tax while supporting significantly more economically destructive tax policies. Very funny.
And, of course, the opposite. Republicans in my state are campaigning on lowering taxes and inflation while also defending tariffs! Very funny.
That's how the story goes with someplace like China. If you impose tariffs on imports you have no cost-effective alternative for, yes, the tariffs will only hurt the importer, because buying habits will not change. (I suppose Chinese cars are a big exception here)
But in this case, the math is probably different because none of these tariffs affect products the US must realistically buy from Canada (e.g. oil and potash). So Canadian exporters will feel some pain and American importers will feel some pain.
What should Canada do in this case if the two can't come to a trade agreement? Continue to import from the US at the same rate as before?
Agree. Much better to lower the tariffs on other countries that compete with the US.
If Trump wants to kill Canadian auto industry then we'd better open wide our markets to Chinese or European cars.
https://en.wikipedia.org/wiki/The_Belly_and_the_Members
Oof.
A better analogy for the trade deficit would be sitting on the couch slamming potato chips and observing the shift in our body away from muscles and towards fatty tissue. Should we be excited to see this example of specialization in action? Is it wrong to want to fix our diet and push our body composition in the opposite direction?
https://yalebooks.yale.edu/book/9780300261448/trade-wars-are...
They're explicitly pointing out that the US (and most of the western world) has abandoned the manufacturing sector of their economy, outsourcing work that used to employ millions of people to the developing world.
This is a trade-off that can benefit both countries, but, it is wise to consider both WHO benefits from this, and what the LONG-TERM implications of this entails. It's great for an investor class in America that has the capital to create factories in China, and it's great for China to take USD and start to employ their workforce. But, the question is whether or not this is actually a good thing for the American worker.
The rust-belt would certainly have an opinion on this. My father was a factory worker that was able to support a family on a single income, and when that manufacturing plant closed, it absolutely destroyed the finances of my family.
"Destroy American affluence so that we can't pay with assets instead of exports" is probably the worst conceivable way to unwind the exorbitant privilege of the American Economy. We could have spent that money helping people, instead we spent it on wars and tax breaks for billionaires. We could have spent that money on targeted industrial policy (the IRA and CHIPS acts under Biden were examples of this done right, just not at the scale we needed) but instead we are doing it the hard way. Sigh.
now the news is full of all these tarriffs about canada?
What's the factual non-partisan reasoning by which trump has been found not to have the power to create tarriffs, but is still doing it with canada?
whitehouse.gov/fact-sheets/2026/07/fact-sheet-president-donald-j-trump-imposes-additional-tariffs-on-canada
The ruling wasn't as generalised as that. What it said was that the president doesn't have the authority to impose tariffs under the provisions of the International Emergency Economic Powers Act, which Trump had cited as the basis for some tariffs. That made those tariffs effectively illegal, but the ruling said nothing about tariffs which had other legislative provisions as their legal basis. The tariffs that you see today cite some other rule as their basis rather than the IEEPA.
The Supreme Court ruled against the tariffs because while it allows the president to regulate foreign imports as a measure against economic threats; it does not specifically grant the president power to impose tariffs, duties or other taxes which is typically a power that belongs to Congress.
The tariffs on Canada are now being imposed under Section 338 of 1930's Tariff Act which allows the president the authority to apply up to 50% tariffs on countries the president finds has "discriminated", directly or indirectly, against the United States.
Until anyone does, "crime is legal", as coffeezilla says.
This is a bit peculiar, because it ignores the whole "the money we are spending is being exchanged for goods that come back to the US" part of the trade. I.e. it's not a problem that I have a "trade deficit" with the grocery store, because I have my groceries.
https://finance.yahoo.com/economy/policy/articles/trump-brag...
My point is that reducing it entirely to "did I gain or receive cash-money from this?" isn't a particularly useful framing.
You need to trade your labor for money, and you need to trade your money for food. I would argue that there isn’t a huge difference in the fundamental nature of those two trades. Framing them in terms of “trade deficits” is pointing out which direction money is moving in each instance, but fundamentally they’re both just trades.
In Canada's case the reliance of one trade partner (see https://atlas.hks.harvard.edu/explore/overtime/?exporter=cou... ) is probably a weakness that retaliatory tariffs can influence.
For example: if Donald Trump tariffs the country you are in charge of, you are likely willing to pay the economic cost of a retaliatory tariff to seem like you are standing up to America to your constituents. The politician’s goal is to be re-elected.
The politician may aim to deter getting tariffed in the first place, and promising a retaliatory tariff if another country tariffs you first is also reasonable as a deterrent from a game-theoretical perspective.
All it takes is for one world leader to not understand or care about the clear economic negatives to tariffs to start the chain: everyone else can be a rational actor.
The real world version is "they're ripping us off by giving us cheap stuff that our producers can't compete with on price." Which is arguably a problem, yes, but the one thing it's not is a "ripping us off" problem.
Unfortunately the feedback loop in nations is much slower than in bodies.
You would expect the US industry to silently absorb his trade policies and only break decades after he leaves. Somehow, they aren't healthy enough for that.
Everyone has been optimizing to increase profits for decades. A 1950's US economy would have taken a lot longer to collapse.
thats not true for different players in some level-or-not playing field
But I’m glad you had a chance to feel like a clever little boy
https://m.xkcd.com/3290/
Everyone loves the EU and Canada and their tariffs. In Canada for example American poultry and dairy have as much as 200-500% tariffs. Usually it is seen as a big win to prevent undercutting the working class with cheap foreign labor. But as soon as it has any association with Trump all of a sudden the Progressives forget everything they believe in and turn into laissez faire libertarian capitalists.
In the US the dairy industry is supported through subsidies. In Canada the dairy industry is supported through supply management.
If the US would be willing to stop 'artificially' supporting their farmers (and allowing some to go bankrupt) then perhaps Canada would be willing to stop 'artificially' supporting theirs. Otherwise it's a tom-ay-to/tom-ah-to stand-off.
Of course European farmers complain (they will get competition and potentially lower quality products), so yes, some people like the current tariffs.
Behind every tariff there will be an interest group. If you are producing X in a country and there is an import tariff on X you are happy. If you are buying X you are not happy.
There can be strategic industries that you want to encourage, but the issue is if tariffs are applied with a plan or not. Opinions might differ on this one but history will tell.
Liberals and progressives don't agree on most things related to (free) trade, but agree on not "bullying" allies for no reason and little profit.
This is what confuses me most about Trumps tactics. These are longtime friends and allies who would’ve gladly worked together to try to improve any perceived imbalances.
I cannot fathom treating a friend this way. It makes no sense to me and is destructive.
The difference is the dumb way Trump is doing them and a smarter way of doing them.
Obviously, this comic completely misses that nuance and promotes a pseudoscientific idea that tariffs are somehow bad.
https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
Literally 100% of the 50 expert economists polled by the Kent Clark Center think tariffs overall make Americans worse off.
Nobody in politics can say this simple truth because the rust belt states are critical swing states.
https://www.commerce.gov/news/fact-sheets/2024/05/fact-sheet...
https://www.npr.org/2024/05/14/1251096758/biden-china-tariff...
https://www.internationaltradeinsights.com/2024/07/biden-adm...
The Biden admin went after Canada repeatedly for unfair trade practices, and issued a blanket 10% tariff on Chinese goods.
The only difference is to what degree they wield the tariff hammer, and in which direction it is swung.
The one thing the current admin does have a point on is non-tariff meddling. Numerous countries make it almost impossible to sell goods in their countries while the same is not true in reverse, or they levy a high price in garbage regulatory fees (see the EU's new packaging identification directive that completely destroys small business), or in completely made-up fines for vague behaviors not even they can define (see the EU's DSA which is exclusively used against monopolizing American companies while completely ignoring monopolist and predatory EU ones like Booking.com).
You are ignoring a massive difference. Trump wants balanced trade with each individual country. Pretty much everyone else who wants the US to reduce or eliminate its trade deficit just wants that to apply to total trade, not to each individual country.
The main reason money was invented was so you don't have to have balanced trade with each individual trading partner.
What is booking.com doing that violates DSA?
Despite qualifying for DSA thresholds, the EU pretends it doesn't exist and is not a monopoly. Because it's not American.
It's also not the only European company to be designated as VLOP, as you'll find some EU-based adult content sites on that page as well, but if you really want a European company that is inexplicably missing from this list, I'd go with Spotify.
What were these practices?
Citation needed, I'm in the EU and there is small business
The EU has recognized this and they are scrambling to fix it in legislation due later this year.
This regulation forces very small businesses to pay thousands and thousands of dollars to comply and register in EACH EU country (what the hell's the point of the union, exactly?). Even if they sell only 10 widgets to Belgian buyers, they need to register in Belgium and pay the fee. Insane.
So a small business selling 5-10k of widgets in EU now has to pay 2-5k in business destroying regulatory compliance fees, putting them out of business. Incredible incompetence from the people who brought you ineffective cookie nag screens.
It's not possible to exist as a small business in the EU because they create regulations to destroy you.
Try creating a business in Germany. You need 25,000 euros to create a GmbH! In the US you can walk into the office in New York City and have an LLC for $9 per 2 years.
The EU is a nightmare hellscape of over-regulation. This is why there are essentially zero EU unicorns. EU bureaucrats support ONLY large and entrenched businesses.
https://en.wikipedia.org/wiki/Plaza_Accord
The United States proposed a deal to France, Germany, Japan, and Britain (the G5): you buy up your own currencies, the dollar falls, and in return we reduce our budget deficit, meaning you no longer have to effectively finance U.S. development.
The United States agreed to reduce its budget deficit and lower interest rates. The other parties to the agreement committed to raising theirs. In addition, West Germany agreed to cut taxes, while Japan agreed to allow the yen to appreciate. As a result, over the following two years the U.S. dollar fell by 46% against the German mark and by 50% against the yen. However, the U.S. government ultimately failed to reduce its budget deficit. Meanwhile, the sharp appreciation of the yen made Japanese exporters less competitive in foreign markets. In the United States, by contrast, the period following the agreement saw substantial economic growth and low inflation.
A classic American move: promise the world — we’re all in this together, we’re marching toward a brighter future — and then screw everyone over.
Protecting workers from that kind of competition seems fair. Tariffs aren't bad in itself. They are just a tool.
Unfortunately fools wielding a tool like this can cause a lot of damage, but that's true for any tool.
[0]: <https://chomsky.info/secrets03/>
Does the same hold for going from 5 days to 7 days or 8 hours to 16 hours?
A reasonable person should agree at some point adding more time will make people less productive due to lack of breaks, rest, etc.
Is it obvious where the line is? if so, where?
In, say, China a worker doing 996 will make 720 items. Te average working hours in the Netherlands are 36 hours or so per week. Making 360 items.
As long as there is free trade the Chinese factory will simply outproduce the Dutch one since they utilise their capex better.
Obviously European workers can't be reasonably asked to compete in an open market when labour laws, salary, health inspection etc... in China are at a 1920 Dutch level.
This was worked out by David Ricardo 200 years ago. You still benefit from trade even if (granting the argument) you are worse at producing everything.
At second approximation, the <Dutch> factory in that example might net make a larger number of items per hour because the workers are more alert and concentrated and make less mistakes. So the <dutch> factory and the <chinese> factory might actually be producing the same number of items.
Of course then there's more steps to this, and you need to start actually looking at systems and what you're optimizing for etc etc.
And, not everything is factories. For instance, if your operator (at eg. Smit or Mammoet) is operating a large crane that's lifting a 100 ton oil platform, maybe you'd prefer them to be wide awake and on the ball, regardless.
If your factory workers spend twice as long working, it's likely that more widgets will get made. I'm not certain you can generalize too far from that, though.
(edit: And only if you don't fall asleep at the controls and destroy the factory first. 12 hour shifts are brutal. At least one place I know bans you the next day if you exceed 11h, for your own protection if nothing else)
(edit2: This was documented in the 1st world war when munitions factories that tried to ramp up by increasing shift durations past a certain point ended up hardly improving productivity, but did increase accident and sickness rates to the point that it was starting to hurt the war effort. )
Yes, because it's a one-panel comic.
It seems I've 'stung the wasps nest' on HN by not denouncing them outright it seems.
A scalpel is one thing.
Dynamite is something else.
Like, "other countries pay the tariffs."
No. They don't.
How can we have nuanced conversation about the trade-offs, if the leader of one political party blatantly lies about a fundamental detail of how tariffs work?
600% reduction in the price of drugs?
We can't even start a discussion with people who believe this. At all. They reject any information, even their own knowledge of how numbers work.
Given the timing and the metaphor of blood being sent to and from a limb, this is almost surely a reference to the tariff threats against Canada.
Sorry, I'm European and can't keep up with the erratic US Gov. I read a summary at the end of the week.
Tariffs are a way of warning other countries "don’t take us for a ride." They help American workers, factories and towns that were hurt when jobs went overseas.
Tariffs shouldn't feel like hurting yourself for no reason. They are an important tool for standing up for yourself when other countries (to say nothing of bad trade deals) want to take advantage of you
The main reason we have open-ish border for people and goods is to reduce the risk of war. You are not going to wage war with a country that do business with.
This undermines this idea.
Open borders can be GREAT, but they can also be a point of vulnerability if we lose control of them