Guest post by Steve Witherspoon
[It’s shaping up as “Tariffs Monday,” at least in the morning! JM]
I worked as a Manufacturing Engineer in a metal fabrication plant for thirty years (I wore many hats in this small company) and I personally saw what other countries (especially, China, Mexico, and Canada) were doing to undermine manufacturing in the United States of America. The USA should have put tariffs on at least these three countries 20+ years ago, but instead they were allowed to continue to unfairly practice “free trade” with us unabated.
China took one manufacturing and assembly job after another, then China used its financial capital to seriously undercut USA steel manufacturing causing steel mills in the USA to slow to a dead crawl and increase their cost a lot. In addition to that, the steel coming out of China was rusty and didn’t meet quality standards and distributors were having real problems providing quality steel to long term customers like our company. We had to slow production of some products as a result of supply problems and that hurt some of our customers and that trickled down to problems for some consumers.
Canada has been undermining aluminum and stainless steel manufacturing in the USA for over twenty years, as they practiced their unfair “free trade” with us unabated. When Canada’s stainless steel production slowed we had to seriously slow the manufacturing of some products. One stainless steel product that had to be slowed we made for a local company and that product ended up on United States Navy submarines. I personally know people who worked (past tense) in aluminum mills and they watched as the plants slowed down to a crawl. People got laid off and retired early as Canada took over most of the market for some aluminums.
Then there is Mexico. That nation has been undermining USA assembly plants of all kinds for well over twenty years. Where do you think a huge portion of assembled consumer goods are coming from, including PC computers? Yup, it’s Mexico and usually just across the USA/Mexico border. These are not the only countries that have been unfair with all this “free trade” bull shit.
Just in our small town manufacturing facility, the consequence of losing just one of our very long term very large manufacturing and assembly jobs to China was that we lost more than half of our manufacturing staff and one-and- a-half administrative positions. A couple of years later, we lost another small manufacturing and assembly job to China and that lost job cost us a few more full-time manufacturing positions. One of these jobs was a really high volume product: we made nearly thirty million pieces per year and the parts were manufactured and packaged in our plant, delivered locally, shipped all over the USA and sold off the shelf at just about anywhere office supplies were sold. The other job was short run labor intensive job developed by someone in the University of Wisconsin Athletic Department. It kept a few full time people employed. In total, we lost around 65% of our full time positions and one and a half administrative positions. The owner and I took substantial pay cuts for over a year to help keep the company afloat and keep the rest of the full time manufacturing staff employed even if they just swept the floors and cleaned the machines for forty hours a week. Eventually we got some more manufacturing jobs but nowhere near what we had before China undercut everyone. That’s just one small company, in a small mid-western town. Tthere are thousands of similar and larger (some much larger) companies out there that are struggling to survive.
Some years ago when things were pretty bad for the company I worked at, the owner openly discussed taking a couple of our own products and getting some quotes from China, I told him if he did anything of the sort I would walk out the door in a heartbeat and take 100% of the knowledge hats I wore with me, which could have been a very serious problem for the company. The topic was never raised again.
A few years ago, a couple of the employees bought the company after the owner died. I decided to retire on January 1, 2024 and only go in for a couple of hours a month for very technical things that no one there can do and where the work can’t be effectively contracted out at this point in time. I’m friendly with the new owners after working with both of them for over twenty years; I’d like to see them and the company succeed as they reprioritize and streamline some of the manufacturing. When I retired, it gave the owners the ability to invest more of their earned dollars back in the company instead of paying me my salary; I was ready and prepared to retire anyway.
No one in the USA government has done a damn thing for many years to help the manufacturing industry in the US. The government sat on its collective hands preaching their “free trade” bull shit and ramming it down everyone’s throat while our middle class in the USA was being undermined by both friend and foe. In my opinion, “free trade” is an utterly delusional concept much like the socialistic styled utopia delusion; as always, Kumbaya is a figment of the imagination. Companies in the USA were expected to compete directly with companies in countries that only needed to pay their employees pennies on the dollar compared to the USA in many cases.
In short: Free trade, HOGWASH!
Manufacturing is one of the core industries that directly supports the middle class. It always has and likely always will. Tariffs WILL help manufacturing in the USA and that will help the economy in the long run because employment in the private sector will increase for both labor & administrative positions. This, in turn, will cause the supporting industries like retail sales and service to increase their output. Everyone will be spending more money because they will be earning more money, more taxes will be collected across the board, more people will have dollars to save for larger purchases like homes, and the country as a whole will be more prosperous. If by chance the government can significantly reduce their overall debt and annual spending so we can help reduce the overall annual tax burden on consumers, that would be another big benefit.
I’ve written it before and I’ll write it again, whenever you possibly can, support your neighbors and buy…
Made In America!
Ethics Alarms 
Primo, Steve; I tried to post it to BikeShorts Blog, but wordpress is being snitty.
Whenever you want to find a Pro-Union Protest in the 77 Square Miles Surrounded By A Sea Of Reality, just look for the lot filled with NON-UNION assembled vehicles, and slave-labor assemble Trek BIKIES.
PWS
It might not be WordPress that’s being snitty, maybe Bike Shorts banned you like he did me.
Thanks for sharing your experience, Steve. I’m still in MA and spent time with a very close family friend. He is the largest distributor of injection molding machines, imported from China, in North America. I’m fairly confident he’s personally making millions – a year. (Or, what my kids would call “fuck you money.”) He was asked about the tariff situation and while he joked about going bankrupt, he followed up with “in all seriousness, manufacturing needs to come back to the US.” Now, for all I know, being the business man he is, he already has land scoped out and has an architect drawing up factory plans. But I was pleased to hear him put country first considering he’s become an incredibly wealthy man off of imports from China.
Thank you very much for the Guest Post.
Quick Correction Note
The first sentence in the fifth paragraph should read,
“Just in our small town manufacturing facility, the consequence of losing just one of our very long term very large manufacturing and assembly jobs to China was that we lost more than half of our manufacturing staff and one and a half administrative positions.”
The section in bold is the correction.
Fixed.
Thank you.
Well done Steve. I will comment further when I am not using my phone that causes entire paragraphs to disappear.
I’m always disappointed when there’s something that I’m actually familiar with in the media, because a lot of the media smudging that happens around the areas that they’re familiar with stand out like a sore thumb.
Tariffs have been one of those things. And this attack on Free Trade is another.
You want to know what’s bullshit? The idea that any nation can pull of autarky. No one can pull of autarky and maintain efficiency, product diversity, and quality of life. You will eventually need to trade for something. You want an example for America? Potash. There are exactly three active potash mines in America, because the resource effectively does not exist in America, you import 96% of potash used for crop fertilizer. Without potash imports, you would be unable to add phosphorus to your crop input chemistry, and your yields would suffer. Which would then impact your already insufficient food production system. Your people would literally starve. Which means there will be trade.
Once you pass the hurdle that you’re going to trade, the question becomes how you trade, and the freer trade is, generally, the better off your people are. What Steve whistled past the graveyard on is how America was out-competed. Why those jobs were lost. It’s not good enough to say that American workers are losing their jobs, and therefore Americans are worse off. Because your personal experience is not indicative of the experience of the average American. Steve said:
“Canada has been undermining aluminum and stainless steel manufacturing in the USA for over twenty years, as they practiced their unfair “free trade” with us unabated.”
What exactly do you think Canadians were doing that was so bad? Producing rocket-grade aluminum cheaper than you were able to? The absolute, unmitigated horror!
If American steel is expensive because American regulations and laws make American steel a premium product (and you’ll get no argument from me: Americans make great steel), the price comparison against your competitors price may cause consumers to decide to go with less premium product, particularly for uses that don’t require a premium product…. And in those cases, what’s happened is that you’ve been out-competed. Someone else was able to offer a more right-sized product at a right-sized price, and yeah… Sucks for the guys in the factory… But do you know who wins? The American consumer. Because the inputs for the products they buy are less expensive, the products they buy will be less expensive. As markets find efficiencies, they naturally deliver to the consumer a market-driven balance of function and price. This is the entire basis for the increase in quality of life over the last hundred years: Even as wealth disparity increases, the amount of things we own, the luxuries we enjoy, have ramped up exponentially across all income brackets. You have families with multiple cars, phones in their pockets, personal computers, and TVs, dishwashers, clothes washers, power tools, vacuum cleaners, basically universal interior plumbing and 24/7 electricity, these are things that your ancestors did not have and could not have dreamed of, and they are by and large the products of free trade.
But there are stopping points. Like Steve said, if you’re out-competed to the point where you have no domestic production, and all of a sudden your competitor ramps down production like Canada did with stainless steel, then you’re in a pretty shitty situation. It would be fair in situations like that if a country decided that as a matter of national security, certain trade barriers or subsidies could be enacted in order to protect markets that aren’t particularly competitive in the national market, so that in the case of emergencies you’d have domestic production to fall back on.
Kind of like what Canada has done with dairy.
Canadian dairy producers aren’t competitive, and I make no bones about it. Our winters are colder, our logistical lines are longer, and our markets are more niche, this leads to a reality where our prices should be much higher than they are in America, and a reality where they are still slightly higher than in America. In theory, we should give up on local dairy production and import everything from America…. Except I’m old enough to remember the BSE outbreak that meant that we couldn’t import American beef products for a while, and if there were ever a reason that America couldn’t (or wouldn’t) supply Canada with dairy, we’d be in a rough place. So we subsidize our market and enforce an import quota.
And so while the base premise of “We want to have a certain amount of protectionism because sometimes national security is more important than delivering the maximum efficiency to the market” is sound, you have to do it eyes wide open: You are enforcing a higher price regimen on your people in order to achieve a goal. Trump is trying to ramp up American metal production. Great. Good. Fine. I understand the logic behind that. But make no bones about it: Things you buy made with that metal is going to get more expensive, and while that might benefit Steve’s buddies in the factory, that’s probably a net negative for the American pocketbook.
Speaking of fair trade, on Tariffs Monday, this is a Comment of the Day.
Sorry, I wrote this on my phone and it autocorrected a couple of things weirdly:
“media smudging that happens around the areas that they’re unfamiliar“
“You want to know what’s bullshit? The idea that any nation can pull off autarky. No one can pull off autarky”
HT,
It’s clear that you don’t have the knowledge base that I have in manufacturing but your perspective is good to throw into the mix.
I still say that “free trade” is nonsense. There are far too many cultural, societal, and government ideological differences in countries across the globe to think that completely open free trade between countries is anything relatively close to being “fair”. One thing is for certain, completely open cross border free trade will eventually create industry monopolies within countries as similar industries in other countries are destroyed. Once a country completely looses an industry, it’s extremely hard to regain that industry because the working knowledge is lost and that must be regained before the industry can be effective.
HT, You mentioned regulations as one of the cost factors for steel and aluminum manufacturers in the USA, that’s true and Trump is also trying to address some of those. In my opinion, the reason the price of aluminum and stainless steel has been higher in the USA as opposed to Canada is the high cost of labor and it’s been going up fast for a multitude of reasons, the regulations, and the cost of all the raw materials that are used to make the steel right down to the ore. It seems like everything related to manufacturing steel and aluminum in the USA has been regulated to death, from obtaining the ores from the ground, to the additives used in smelting plants to make specific types of steels and aluminums, the carbon based fuels used, the levels of pollution they emit, etc, etc. It’s as if the US government didn’t want steel and aluminum to be made in the USA and they’ve been piling on cost at every level and making the industry less competitive across the board. Yes as HT fairly noted, Canada companies stepped in, they exploited the differences between our countries, they competed, they won, and I generally don’t have a problem with that. Then when Canada slowed production, companies in the USA couldn’t ramp up production to meet the need because they had been essentially pushed out of that end of the business. My problem is that the US government knew this was happening to the steel and aluminum industry, the government likely planned this, and they did absolutely nothing to change it. The result of this mess is the industry has nearly been destroyed in the USA and that is a disaster. The tariffs on Canadian steel and aluminum and a reduction of some of the US regulations on the steel and aluminum industries should create a better price balance between Canadian and USA steel and aluminum which I hope will create a more balanced competition.
I don’t know squat about the dairy industry.
To HT’s point about that cross border trade needs to happen, I completely agree. Trade between countries needs to happen but it needs to happen at a relatively balanced level that allows fair competition and not a one sided monopoly that destroys the industries in the other countries. The high percentage numbers in Trump’s tariffs are there to be negotiate which is something that hasn’t taken place, at least not fairly. It seems to me that the Democrat’s have intentionally hamstrung the USA because we are a wealthy country and they want to balance wealth globally so they willfully destroy things here in favor of building things in poorer countries. As the Democrats strive towards their goals of equity and globalization, they intentionally shift wealth of the USA across the globe not realizing that the destruction of industries in the USA is a disaster in the long run.
A related side track:
Let me address something I heard this morning. It appears that some people are scared to death that an increase in the price of metal is going to destroy their pocketbooks.
I think some people are making an assumption about the price of metal. If the USA starts producing lots of metal again the price will likely go up simply because it’s made in the USA. The assumption is that that rise in metal cost will significantly drive up the cost of everything consumers purchase that contains metal. Yes it’s true that a rise in metal prices will affect prices but not necessarily how you might expect. Significant increases usually only happen for metal products where the cost of the metal far outweighs the cost of labor and for consumer products that’s really not very many products and the total cost for consumer products like that are usually low.
I’m going to throw out some numbers.
Consider a couple of different products like fabricated bookends (low end user cost) and electrical transformer tanks (very high end user cost in comparison). The manufacturing cost of the metal bookends is nearly all the cost of the raw material metal because the cost of the labor is insignificant per bookend because they are physically packaged as fast as they come off the punch press and that’s usually pushing 4000 pieces per hour per machine. In the manufacturing cost of an electrical transformer, the cost of the metal might be between 3% and 5% of the cost out the door, add a few additional off the shelf parts and welding supplies maybe another 5%-10% of the cost out the door, overhead might be 1%-2%, and the rest of the out the door cost is labor. Manufacturing labor costs do not come from minimum wage jobs, manufacturing jobs are all above minimum wage and some are highly skilled labor like welders and machinists which are very high. So in the end, the cost out the door for a pair of bookends that have a 10% increase cost of the raw material (metal) could drive the cost out the door to around 12% higher which might be only a cost of $.05-$.10 per pair and the manufacturer might only adjust their sale price by $.005 because they’ll make it up in volume. Of course the cost for the bookend end user will be higher, it might go from $4.00 to $4.50 which is a 12.5% increase which is a large percentage increase but a low out of pocket dollar increase. A 10% increase in metal cost for a transformer tank might cause only a 2%-3% increase out the door because the cost for labor far outweighs the cost of the raw material and since these kind of jobs are quoted per order, a lot of the cost might be passed on to the customer, but volume must be considered.
Now compare something like round metal washer and a consumer washing machine. The cost of the metal for the washing machine is far greater than the cost of metal for the washer, but the manufacturing cost of the washer is likely to be well over 90% the cost of the metal out the door where the cost of the raw material metal in the washing machine is likely down in the 10% range because the cost of all the assembly labor is so high.
We had a job where I used to work where we made about 85 million individual identical metal parts per year and nearly 100% of the cost out the door was the metal, very much like the washer I mentioned above. We had to have a supplier that would provide the raw material within very strict specifications because if the thickness of the metal increases the parts per pound can dramatically change and the parts are sold by the thousand. Any shift in material thickness or metal prices per pound causes a reevaluation and new quotes.
The point is that 100% of the manufacturing jobs that have left the USA left because of the increasing cost of labor and over regulation NOT because of the cost of the raw materials like metal. As I wrote before you simply cannot expect manufacturers in the USA to effectively compete with manufacturers in places like China who pay their labor force pennies on the dollar in comparison to the USA.
“In my opinion, the reason the price of aluminum and stainless steel has been higher in the USA as opposed to Canada is the high cost of labor and it’s been going up fast for a multitude of reasons, the regulations, and the cost of all the raw materials that are used to make the steel right down to the ore.”
Where does your opinion come from?
I don’t think the highlighted portions can have the benefit of being true. On labor, we have unions too, I could be wrong, and YMMV, but I don’t think that our labor costs are actually that different. On ore cost, why would Canadian smelters be able to buy aluminum cheaper than you could in America?
I think you’re whistling past the graveyard again, America has made itself less competitive not necessarily through regulation (although also that, yes) but more out of a choice. Canada has some of the most strict environmental protections on Earth, but we make it work, our aluminum smelters are run by hydroelectric power. Someone mentioned nuclear power earlier… Why don’t you do that? Your trade partners aren’t preventing you from doing things in house, they’re just filling the gaps.
“as HT fairly noted, Canada companies stepped in, they exploited the differences between our countries, they competed, they won, and I generally don’t have a problem with that. Then when Canada slowed production, companies in the USA couldn’t ramp up production to meet the need because they had been essentially pushed out of that end of the business.”
You’ve said this twice now, and sorry, but I actually have no idea what you’re talking about, I’ve looked at production numbers over the last 20 years, and aside from a dip around 2007-2009 for the subprime mortgage crash, production trended up, even during Covid lockdowns. And seeing as there was a significant decrease in demand following 2007 I don’t feel like that would have been market breaking. Are you talking about the 70s?
HT wrote, “You’ve said this twice now, and sorry, but I actually have no idea what you’re talking about…”
Ok here’s a bit more of the details.
What you need to know up front is that almost all steels produced world wide have roughly 40% recycled scrap steel in it to reduce the cost of making new steel. It’s simply cheaper to smelt recycled steel than having to smelt 100% raw ore, there are some other advantages too.
My timing might be a little off but my recollection is that this was sometime in the late 1990’s or early 2000’s. What happened is that China use their vast capitol to purchase almost every pound of scrap steel in North America and other areas of the world and they shipped it all to China, one large boat at a time and it snuck under the radar. No one really knew what was happening until it was too late. After all, who cares about junk metal exports? China INTENTIONALLY undermined steel manufacturers in North America and then they flooded the market with the cheap crap steel they were making, which I discussed earlier. So, since North American steel smelters couldn’t get hardly any strap steel they either had to slow production or produce with almost all raw ore. This manipulation of the steel market by China didn’t last very long, we worked through it in about a year to a year and a half. I read somewhere that China is starting to increase their scrap steel purchases again.
This steel slow down was North America wide and since steel producers had been pushed out of the stainless steel market that we needed to purchase we were forced to rely on the Canadian suppliers. Also, the price of SST went through the roof during that slow down period, they came back down later. The Canada SST slow down directly affected our ability to produce a lot of products. There was also an aluminum slow down around the same time, it was really hard to get 6061T6 aluminum sheet stock which we used a lot of, the aluminum slow down was short lived. By the way; Canadian and USA aluminums are really good quality, probably the best in the world. It wasn’t uncommon for us to get both Canadian and USA aluminums in the same shipment because the qualities were equivalent and the warehouses would get what’s available from the few good sources available.
To be completely fair; I don’t know where you’re getting your information from regarding this, but it happened, I had to work through it directly with distributors and mills. China screwed North America. I’m sure most of their shitty steel from back then has already been recycled into new steel in Canada or the USA.
I’m not in metals, and I don’t pretend to be an expert, so I was looking for any source talking about a Canadian production dip and for whatever reason, everything I’m looking at starts tracking in 2000, except for the odd reference about an industry slowdown in the late 70’s early 80’s. Might be that the industry pulled up their collective pants on reporting after what you’re talking about.
Regardless… If the problem was that China had quietly bought up all the scrap, wouldn’t America have been hooped even if they had production?
Humble Talent wrote, “If the problem was that China had quietly bought up all the scrap, wouldn’t America have been hooped even if they had production?”
Yes.
The difference could have been that there would have been more companies involved making production even if it was at a lower volume, therefore supply would have very likely been higher. Remember, I wrote production slowed limiting supply, it didn’t completely cease. If the only major manufacturer of a widely used steel product cuts production of that product by 10%-15%, it might not sound like much of a change overall, but for medium to small manufacturing companies that don’t have as much buying power as major companies like Ford, GM, General Electric, or Whirlpool it can be rather devastating when the big manufacturers buy up damn near everything that’s available.
There was a point that we had to buy some rejected SST sheets from somewhere across the pond and used what we could for the products that required the really high grade product that would also be visually acceptable and used the rest of the less than normally acceptable SST on other parts were power coating would cover up the impurities but needed to be SST for corrosion prevention. This required changing some manufacturing processes to different machines to accommodate sheet products instead of high grade slit product, this was more expensive and considerably slower to maintain product tolerances but but we made it work for a short time. It drove production a little nuts trying to do things that they wouldn’t normally have to do and it created a lot more unusable scrap.
It’s been a good conversation, thanks.
I’m ready to give this a rest, how about you?
What he’s leaving out here is that the reason companies offshore is to evade American labor and anti-trust laws–laws liberals fought hard for over decades.
It’s funny to me to see modern liberals simp for megacorps’ “right” to exploit foreign slave labor and corrupt governments. Hey, as long as it’s not being done in my backyard, who cares if they put 8 year olds in steel mills, right?
In any case, there’s certainly no valid argument against reciprocal tariffs. A company that’s using government debt to dump products on our market and destroy our local economy has no position to whine about fairness in return.
I also want to talk about “trade deficits”, because Trump’s take on them is egregiously stupid.
What a trade deficit means is that you buy more from someone than they buy from you. We as individuals have trade deficits with literally every business we’ve ever shopped at except the ones we work at. You go to Safeway and buy a banana…. Safeway probably hasn’t bought anything from you, so you have a trade deficit with Safeway. Let’s say that you actually own a company, and you sell fan belts. Safeway might actually need some number of fan belts… But do you think that they’re going to need as many fan belts from you as you need food from them, and how will that scale across their business? Answers are: Probably not, and it won’t. Is Safeway ripping you off? Well… Maybe. But not as a function of not buying a number of fan belts equal to your purchases with them.
There are a whole lot of third world countries that export things to America and will never buy much from America, mainly because they are poor. The most obvious example being the coffee producing nations. Quick: Do you think that American companies negotiate favorable prices on coffee, or do we think that tropical island nations are stealing your lunch? Who is likely getting the better deal there?
Obviously there is more to a trade relationship than who trades what with who, and once we get past the obvious: The mere existence of a trade deficit is not evidence of unfair trading practices, then we start to have the good conversations.
But America can’t have those conversations because Trump is approaching economics like a toddler. Sorry, but that infographic he showed on Liberation day? Complete bunk. He’s saying that he’s going to enforce “reciprocal tariffs”, but that graphic didn’t actually have tariff rates on them. In fact, the numbers on there had nothing to do with tariffs: He literally took the trade deficit for these nations and divided them by gross imports.
So now Americans are going to have to spend 46% more for Vietnamese coffee until… What, exactly? What’s the endgame? Because Vietnam doesn’t have 46% tariffs on American goods to remove. They’re never going to buy enough American product to offset the coffee export. And America isn’t going to suddenly develop the climate to grow their own coffee…. So is the plan to just tax the living bejesus out of coffee?
Let’s talk about Canada. We have a trade surplus with America to the tune of 60 billion dollars. We imported 350 billion, America imported 410 billion, both in 2023. Why the disparity? Because we have a whole lot of natural resources and not a whole lot of people, so we’ll generally punch above our weight class… And we tend to sell things that everyone needs on a fairly consistent and constant basis: food, building materials, and energy. Why don’t we buy more from America? Because we only need so much. I mean… Look at those numbers. There are 40 million Canadians and 350 million Americans. Even with that trade surplus, that means that the Average Canadian spends about eight times on American goods what an American spends on Canadian goods.
Again… America doesn’t have a potash industry because there isn’t potash in America, and yet, Canadian potash was singled out for a tariff. What’s the plan? The other nations that produce potash are (in order of tonnage) Russia, Belarus, and Israel. Even if these nations were able to produce enough to offset the Canadian tonnage (and spoiler: they can’t), they’d still have to ship tons and tons of corrosive semi-metal halfway across the globe. So, even if you bought Russian to avoid the tariffs you put on Canada, the logistics costs would increase input costs, and the reality is that you’re probably going to have to buy Canadian potash 25% more expensively than the fertilizer is actually worth.
What do you think that does to food prices?
What’s the goal?
But America can’t have those conversations because Trump is approaching economics like a toddler …. He literally took the trade deficit for these nations and divided them by gross imports.
Is that accurate?
https://www.cbsnews.com/news/trump-reciprocal-tariffs-liberation-day-list/
This seems frustratingly short list, but claims to be the full list.
https://worldpopulationreview.com/country-rankings/us-trade-deficit-by-country
Trade numbers will probably always be a fluctuating number whatever source you use, but they’ll all be reasonably close given the fact we’re discussing millions and billions of dollars.
If you spend the hour or so dumping this data into an excel and cleaning it up, you’ll see that dividing the trade deficit by the gross imports is only one step in the math. Take half that percentage and you get the actual stated tariff rates.
Applying that percentage to imports and you get a number that represents half the trade deficit. The implication here being that half the value of the of deficit moves sides on the ledger table and then balancing the import / export value.
Now the percentages don’t hold consistent for all nations. Some of them receive a wildly heavier percentage. Turns out of like the 27 countries that are wildly disparate – 18 of them are in the European Union and another 2 are European.
So, math is simple here (and math is almost always simple), so it seems a cheap shot to claim it is toddler math. But TDS gonna TDS.
Almost like looking at a city budget trying to allocate a million dollars for a park and the city council levies a percentage tax that raises a million dollars and then saying the city council used toddler math to figure that percentage out.
But see, no one wanted to do the work to double check that original news commentator’s claim about “stupid math”, they just wanted to latch on to “orange man dumb” memeing, so they ran with it.
Look Michael, I’m not Trump deranged, I can call balls and strikes – The work he’s done on the southern border is amazing, he’s basically fixed the issue: There’s been something like a 98% reduction in attempted border crossings, and he did that with the executive order that Biden said he needed a bill for. What Elon and Doge are doing are long overdue reckonings. I like that he shuttered the Department of Education, and I like the base thought pattern behind MAHA.
But sometimes Trump punches, and he hits the right target straight in the face, and sometimes he hits a baby. This isn’t even a Canadian thing: In Trump’s first term, his tax plan re-inverted the Tax inversion between Canada and America, staunching the flow of American companies that were moving to Canada for our lower tax rates. That hurt Canada, but it was obviously the right thing for America to do, and smart policy….
This, however, is legitimately stupid. And you have economists like Thomas Sowell and pundits like Ben Shapiro in my corner saying so. I’m hardly in the company of the Trump deranged.
So, I guess maybe you have to ask yourself: Are you projecting? When Trump punches that baby, are you gonna cheer him on?
“Trade numbers will probably always be a fluctuating number whatever source you use, but they’ll all be reasonably close given the fact we’re discussing millions and billions of dollars.”
The White House literally published the formula they used. It’s sad.
https://www.bbc.com/news/articles/c93gq72n7y1o
“When Trump presented a giant cardboard chart detailing the tariffs in the White House Rose Garden it was initially assumed that the charges were based on a combination of existing tariffs and other trade barriers (like regulations).
But later, the White House published what looked like a complicated mathematical formula.
But if you unpick the formula it boils down to simple maths: take the trade deficit for the US in goods with a particular country, divide that by the total goods imports from that country and then divide that number by two.“
The difference between what I said and what the White House did was the divide by two… And I challenge anyone to come up with a rationale for doing that. I have the impression that the reason they did that was to keep the numbers under 100%, because otherwise they’d look even more ridiculous than they do. Israel’s average tariff is less than 1% because, like I said, the 40 year old free trade agreement they have with you means that 98% of what you sell them doesn’t have a tariff. That chart says 33%. This has nothing to do with tariffs, this has nothing to do with trade barriers, I stand by what I said: This is a toddler’s view of trade: “I buy more from you than you do from me, and that’s not fair!”
Boss, you jumped on the “Trump used toddler math train” with about 5 seconds of critical thinking. I showed you why the math was pretty simple. Once ounce of effort undoes the “Trump is a mathematical dimwit” narrative. Ordinarily, you put in more than an ounce of effort and you didn’t even do that.
You can say the actual objective of tariffs is poorly thought out. But the methodology for determining the tariff rates is actually simple for a reason. Simple doesn’t equal toddler.
I think you are TDS on this topic, as your entire tone of voice and willingness to objectively analyze situations changed noticeably when Trump started touching topics of free trade – especially noticeable when they touched on free trade with Canada.
I think you are emotionally compromised on this. Doesn’t mean your insights aren’t generally good. But you definitely jumped on the “Orange man dumb” bandwagon pretty obviously on the Tariff-math-ridicule when the first commentator thought he discovered something “stupid”.
I don’t know what to tell you… I articulated the math he used, and you came back with “you missed dividing by two”, but what you seem to be missing is that that regardless on whether you divide by two, that isn’t how you calculate tariff rates. And I’d love for you to try to articulate what is being calculated by dividing by two.
Worse, as far as I can tell, no one actually was looking at how the math came out and checked it for sanity: On that list are Heard Island and the McDonald Islands at 10%. The problem? Those are uninhabited Antarctic Islands claimed by Australia. The penguins certainly aren’t tariffing Trump. This doesn’t really matter, because the penguins aren’t importing American good either, but it should be embarassing. Howard Lutnick tried to spin that by saying that if Trump didn’t put his “reciprocal” tariff on the penguins, other people could funnel goods through the islands… Which might have almost made sense, except that there are literally hundreds of similar uninhabited Islandsnot on the list. (The list, by the way, being not hard to find)
That formula has nothing to do with tariffs. It has nothing to do with trade barriers. It is very simple math, and that’s actually not great when you’re discussing complex international trade. It is, in fact, the kind of idea that a young person without a whole lot of information about markets might suggest.
“I think you are TDS on this topic, as your entire tone of voice and willingness to objectively analyze situations changed noticeably when Trump started touching topics of free trade – especially noticeable when they touched on free trade with Canada.”
Again… This isn’t the first time that Trump has done things that negatively effected Canada. Obama called Burger King “unpatriotic” when they bought Tim Horton’s and moved their corporate offices to Canada to take in our sweet, sweet lower tax rate… Trump lowered America’s tax rate lower than ours, enticing companies south across the border, and Trudeau wasn’t willing to follow him down. That was Really Good Trump, and I said so at the time. I said so here.
I’m willing to call balls and strikes. Are you?
You can’t take every criticism of Trump and attribute it to derangement. What he’s doing right now, on this specific portfolio, is stupid. And you don’t have to take my word on it. You can listen to Thomas Sowell, Ben Shapiro, Jerome Powell, the list goes on: A litany of right-coded, generally Trump-Aligned experts are all saying variations of the same thing. And you don’t even have to believe what people say: There’s a giant barometer of what the markets do and don’t like: It’s called the markets. And they’re tanking right now. All the gains from Trump’s administration are gone, and then some.
Here is what I don’t understand: “free trade” encourages practices that progressives revile as violations of human rights… because they are. China can produce cheaper goods because it uses slave labor. Lots of countries pay workers dirt while we argue about the minimum wage. Why aren’t Democrats and progressives thrilled to see China hit with massive tariffs? Why aren’t the unions celebrating?
(because it’s Trump)
If the tariff regime carries over to the next administration, there’s a 50-50 chance nothing would change – because, for the most part, presidents can operate with some freedom on the foreign stage, but the stage is set so rigidly that they don’t have a lot of freedom. The tariffs are response to a world that has already changed – they are not an attempt to change the world (which is how most people are analyzing this).
But I don’t think the tariff regime is going to carry over, which is why I think it’s extra frustrating seeing normally level headed minds, only 4 days into something that doesn’t even implement until tomorrow, drawing conclusions about life from here on out.
Trump has been working on tariffs since February. Doubling down in April doesn’t make the issue new.
Because Democrat outrage is kabuki theatre, we are addicted to cheap goods, and poor Americans depend on those prices staying low.
Indeed. Why aren’t they? I remember the tantrum Dems threw about Ivanka Trump’s clothing line. It was splashed everywhere that her clothing was made with slave labor, dishonest articles went so far as to say she owned a slave-labor based factory in China.
It turns out that her clothing is (or was, not sure at this time) made by GIII Apparel.I was astonished when I saw their portfolio. Levi’s, GAP,Dockers, Rockport, NBA, NFL,NHL,and NBL team uniforms and fan apparel,as well as a host of design houses like Tommy Hilfiger and Dolce and Gabbana. And that’s the short list. I had no idea that almost no clothing is manufactured in the US anymore.The hypocrisy! It’s OK until someone t,hey dislike does it.it hasn’t been a topic with them since.
I’m not going to re-type what I already wrote about why “splitting the value of the deficit in half” to balance the books makes sense as an obvious incentive.
Nor am I going to repeat myself that “simple doesn’t mean toddler”. But you’re fixated on the need for simple to mean “toddler”.
You’re very angry about this because it affects free trade – and I get it, you’ve been a libertarian for the most part – especially on economy.
But tariffs are more than economic tools. And you’re only livid about this because of the economic affects. So yeah, I think you’re a little myopic on it.
I mean, if we’re going to prescribe motive, I think you’re the flavor of Patriot that has a thin-skinned response to any criticism of America, and you don’t like that I’m referring to the bad policy of your golden cow as “toddler logic”.
You can tone police and bitch and whine all you want, but I can articulate why this is bad policy, and point to the real world consequences that that policy will have.
What you don’t seem to be able to do is articulate how I’m wrong.
My man, I haven’t argued that the tariffs are good or bad. I think you’re only considering the short term economic affects of what are ultimately foreign policy tools. And you’re offloading the burden of the discussion on a math formula that feels to simple to you. And for some reason that bothers you even though math is almost always simple. That’s myopic.
When we budget mark ups for our next year’s pricing scheme, it boils down almost always to dividing two different numbers and then temper the outcome by what we think our clients can bear. And that’s not “toddler math” yet it works for the complex internal interactions of our business and complex personal interactions with our clients.
(And before you spin off on that, that isn’t an analogy).
What a trade deficit means is that you buy more from someone than they buy from you. We as individuals have trade deficits with literally every business we’ve ever shopped at except the ones we work at.
The “I buy from Walmart so I live in a trade deficit is the same as the United States trading with Vietnam” is only a sort of useful analogy. But it falls apart as soon as you realize you aren’t printing money for your own consumption in your house nor is the United States going to work in some other country in order to pay for products out of a different country.
There is no inherent good or bad about trade deficits, surpluses or equilibriums *in the short term*. All three contexts carry pros and cons. But in the long term, a trade deficit, continued over multiple generations, does have the effect of draining currency from a nation. Back to the flawed “household economy” analogy – I guarantee you aren’t buying *more* from the Walmart than you can afford from the cash inflow in the business you work at. So, in aggregate, you are *not* operating in a trade deficit (and probably never have, unless you were comfortable with a temporary amount of debt).
Over a long period of time, trade deficits, mathematically, drain currency from a nation. Now, that doesn’t seem to be a problem, because nations are always printing currency to keep up with internal needs. But, I don’t think we really know the long range effects of this. And no basic principle would indicate that it is sustainable in a very long term.
I think a *cycle* of deficits and surpluses are not unhealthy but a natural result of free trade. I think an *overall* tendency to be trade neutral *in aggregate* or at least trade neutral over a time span, is preferable.
But again, that’s only one facet of the discussion. But “I buy from Walmart like everyone else does” isn’t a useful analogy.
I mean… Kind of.
Again… Every single coffee producing nation on Earth is on that list. These tend to be poor countries, and they aren’t going to import a whole lot from America. More, America isn’t going to be able to produce coffee domestically anywhere except Hawaii. These nations are all being taxed at least 10%, so what you’ve done is increased the domestic price of coffee by 10%. Those prices are going up, stock up now.
Now you can make the argument that it’s unhealthy for a nation to print money and have net global trade deficits, and you wouldn’t be wrong. But there are right and wrong ways to do that… Good and bad targets. The problem isn’t that your trading partners are screwing you, it’s that your domestic ability to produce have been hollowed out by your politics.
As a metaphor, and one that’s amazingly apt: This is like a really fat person who has correctly identified that he’s fat, and the reason he’s fat is that he eats at McDonalds, but instead of choosing to eat healthy, he firebombs the McDonalds.
I am glad I waited and had the opportunity to review HT’s comment. I do agree with HT that US regulations on manufacturing processes have indeed caused higher prices for metal production. Every regulation is a form of a tax. Regulate air quality that forces a firm to spend millions on scrubbers is just a tax in a different form. One can argue that the tariff is fundamentally the equivalent of a carbon tax that so many believe should be borne by the end user.
So if Americans want the cleanest air and the cleanest water and no one should ever have to live near an area that has negative environmental externalities (environmental justice) then they should be willing to pay the price for that privilege and not try to shift the actual economic costs of production onto others who are forced to live in environmental shit holes elsewhere on the globe. It really does not matter what we call them all taxes are paid by households. Any excess spending we do now will be financed by imposing current costs on future households. For those demanding someone else pay their fair share, even if they are required to pay the legal incidence of the tax all households will suffer the economic incidence of the tax.
HT referenced comparative advantage drives decision making. No doubt, but what if that advantage is not a real one but a contrived one. Sure we need potash for fertilizer and thus we trade our stuff for their stuff. This occurs among many products such as rubber, latex, to a lesser degree bauxite and we send that in which we have an abundance. This is a natural comparative advantage. We have a natural comparative advantage in energy but production was stymied by those who claim it does environmental damage. Why are they not concerned with the effluent from strip mining operations around the globe? Why did Europe decide to laugh at Trump when he warned them about relying on Russian gas when we could have provide all they needed? Sometimes, trade barriers are erected outside the signed agreements.
Negotiations on trade should focus on balancing value. When we trade we have something we value less than value we place on what they have and vice versa. Because the double coincidence of wants rarely occurs international trade takes on a very complex series of gives and takes. In our daily lives, we use currency to solve that problem of double coincidence of wants.
It is quite interesting that you cannot find any information on what others charge the US for our exports. You will find that Canada’s high tariff on dairy never gets implemented because US dairy never exceeds the Canadian quota of 3% of all dairy production as an excuse for draconian Canadian tariffs. Well bust my britches, it is no wonder we don’t exceed the quota because the Canadian government will just make you prohibitively expensive. Exactly how is that any different than what Trump is doing. Well there you go, we can stop all tariffs on imported goods we just need to limit the amount of goods allowed in to a small fraction of total need. Canada has all the right answers.
To suggest that tariffs alone caused offshoring of American manufacturing is a fools errand. Higher rates of income taxes on US firms along with penalties for repatriation of profits prior to 2017 incentivized producers to invest more heavily in factories overseas where tax rates were more favorable. It was Trump who brought those profits home under the tax reduction act which could then be used to deliver dividends or reinvested in the business here.
Ironically, the very people who are protesting the tariffs are the ones demanding higher production costs on US made goods in the form of higher taxes and regulations. Try to build a pipeline to move energy more cheaply and safely long distances; we started one and then the Warren Buffets of the world pushed to kill it because they made money in transporting Canadian crude by rail. We wound up with East Palestine Ohio – who is paying for that? Warren and his cronies are favorites among progressives because he pledged to give away his wealth when he dies. If that’s the case just give it to the government and let them distribute it.
Try to extract any ore from the ground and it will take years to get the permits because it require on ongoing series of environmental studies to ever get permission to do so. It is far easier on the soul and less costly to us to allow dark skinned children to work the fissures of the earth to get those super important raw materials. They are not our kids so who cares we want cheap stuff.
So Trump the Nazi fascist is trying to reduce government regulations and taxes on production and implementing tariffs to coerce our trading partners to make trade actually freer so our people can produce goods – not just services – for sale with longer lived values which translate to higher value added and subsequently, higher wages for middle class families. The US, even without those egregious regulations that bar our factories from using children to do hazardous work, would be far more productive at lower long run costs because we substitute capital for labor more easily than most every other nation. Capital make humans more productive which lowers costs which means you employ more of both resources.
Making trade more free so that the US was on the same plane as its trading partners was the established and publicized rationale for implementing the tariffs in the first place. So why are our trading partners so averse to just eliminating all barriers to trade if they have a comparative advantage in production. The answer is that they don’t and those governments know that absolute free trade would be detrimental to their economies. As HT pointed out most of these nations need what we produce in the form of goods and services just as we need some thing from them. No one in the administration is that we be isolationist in the world of trade. But, we also don’t want to be the group that must support foreign manufacturing at our own strategic expense.
For those who will counter that America balances its negative merchandise trade account with surpluses in our services account should understand that all the service work in the world will not stop an invading army nor will the majority of Americans enjoy the benefits of such trade who will simply be employed as menial service workers catering to the needs of the Leisure class
Excellent article on why US aluminum production fell relative to the world. Our ability to compete against countries that subsidize the industry cannot be considered free trade through comparative advantage. Energy is the number one driver of aluminum production and volatile energy policies here have prevented firms from getting long term price stability. It is the same reason our refining capacity is decades old.
The government of China which leads global production followed by India and Canada has invested heavily in state of the art smelters many of which are powered by coal fired plants which are also the biggest polluters of Co2 emissions.
Decline of U.S. Primary Aluminum Production and the Growth of Secondary Aluminum – Light Metal Age Magazine
The US on the other hand has invested heavily in buying imported renewable energy (wind and solar) components made from aluminum instead of investing in making energy less expensive to make them ourselves.
Perhaps our government should subsidize the growth of nuclear power so we do not need all the imported aluminum.
“It is quite interesting that you cannot find any information on what others charge the US for our exports.”
I mean…. You can find those numbers. The problem is that tariff rates are usually enacted by product as opposed to by nation and are usually aggregated. As an example… Despite Trump saying that Israel has 33% tariffs on America on his stupid Liberation Day chart, 98% of all goods Israel sells to America have no tariffs because Israel and America have had a free trade agreement for 40 years. Their aggregate is still less than 1%. Canada’s was also less than 2% and America’s tariffs on each was actually higher than the reciprocal rates.
“You will find that Canada’s high tariff on dairy never gets implemented because US dairy never exceeds the Canadian quota of 3% of all dairy production as an excuse for draconian Canadian tariffs. Well bust my britches, it is no wonder we don’t exceed the quota because the Canadian government will just make you prohibitively expensive. Exactly how is that any different than what Trump is doing. Well there you go, we can stop all tariffs on imported goods we just need to limit the amount of goods allowed in to a small fraction of total need. Canada has all the right answers.”
Sorry, but this is a dumb way to look at this. It’s focusing on something that’s technically true, but not really relevant, because the rest of the conversation, while much more relevant is harder.
Canadian dairy gets disproportionately talked about because it’s the one area that we carved out to protect. We did this for the reason I articulated: Canada understands that our dairy industry wouldn’t be competitive and sees a security interest in the industry existing. That arrangement, as negotiated in both NAFTA and USMCA, has been in place longer than most the people in this forum have been alive. The idea that this is uniquely detrimental to America’s economy and trade relationship is one of the weakest, most thin-skinned mewlings I’ve heard in my life. Even if Canada imported 100% of our dairy from America, it would only offset maybe 3-4 billion of the 60 that we have a trade surplus on. Which means that the other 95% of our trade surplus is on items that have effectively no tariffs or barriers.
(I love the word “mewling.” If I were Ann Althouse, I’d write a post on it now.)
What I was looking for was actual product specific numbers on quota amounts and the actual tariffs on such products. I look for reasons why one country moves ahead of another in terms of output. All I could find with relative ease was very pundit discussing Trump’ s tariffs. What I wanted was comparative data. I used to track this but I had better access to databases when I was still working.
Your point about relative size that create resulting surpluses between high population nations and lower ones is fine but the actual issue is why are we not producing proportionately more of everything. Sure, Canada uses less of everything so it buys less of everything but it is now I believe 4th in aluminum production and the US is now 7th when we used to be first. You would think that some proportionality would emerge unless something caused the investment decisions to change in the various countries.
China has a goal to global economic dominance which can translate to political dominance if left unchecked. China subsidizes all strategic industries and has taken advantage of being treated as developing nation with MFN status since Nixon. Using the logic of population size as a determinant of import demand you would have to believe that it (China) and India should be buying more American goods than they do.
I went to great lengths to point out that not every barrier to trade is negotiated. Canada does not seem to have trouble with creating dams to generate hydroelectric power and combined with nuclear represents 75% of of your power needs. Add in fossil fuels and we get 94% of all Canadian electrical generation. That is why you can be a lower cost producer of aluminum. I get it.
Our coal plants are being forced to shut down by our own EPA and because of past agreements with other nations or groups on environmental regulation. We are being forced to destroy dams and hydro electric facilities to save endangered species. The idea of building a nu
What I am saying is that the American public wants all the good stuff but is unwilling to pay the price. My point is that all things that create value have a price. All those wonderful environmental goodies come with a price tag. So the whining that tariffs are inflationary are falling on my deaf ears.
If the US government decided to impose a carbon tax I could not avoid it but a tariff I can. Many already go out of their way to source American made goods. That is their prerogative. If given a choice I too will pay a premium for something made here because my experience with much of what is imported have very short life spans relative to American equivalent products – not all but most. I will not however buy something because it donates part of its profits to some 501C3. If I want to donate I’ll do it myself.
To me the American consumer should buy less and save and invest more. Doing so will reduce their carbon footprint.. Consuming less will probably find them exercising more, and carrying fewer pounds around their mid-section and lowering health care costs. The wealth gap will shrink when we stop spending every dime we have on ensuring we get a new phone with every iteration, or buying all the must haves so you don’t feel left out. It might actually be good for our general and mental health.
I used the dairy issue just to make the point that every nation has strategic needs. You made the very same point. I just went a bit farther to point out the ridiculousness of the way the media portray the fact we never get charged the draconian tariff by Canada.
There is a major difference in that the US and the rest of the western world has to decide if it wants the US to remain the one whose ocean barriers allow it to remain the production capital in the event that bad actors start mobilizing militarily against occidental nations. Steve was making a similar point.
The US does not need to be an autarky but does the world it want us to be the services capital of the world in the event of another major conflict.
I really don’t disagree with either you or Steve. You both make valid points which illustrates why trying to boil down the nuances of trade cannot be done easily -if at all- on an info graphic with any degree of accuracy. I wont blame Trump for trying because the electorate does not seem willing to investigate anything they want bullet points.
“Your point about relative size that create resulting surpluses between high population nations and lower ones is fine but the actual issue is why are we not producing proportionately more of everything.
[…]
Using the logic of population size as a determinant of import demand you would have to believe that it (China) and India should be buying more American goods than they do.”
My point was poorly made. I believe it was Senator Kennedy who recently used our relative population sizes as a reason why our trade surplus is particularly egregious, and that was stupid enough that it’s stuck in my craw ever since. It doesn’t matter how big your population is, or even how big your economy is, what matters is what you can produce, how much of it you can produce, and who you can induce to buy it.
I was trying to make the point that at the extremes, this breaks down completely…. If someone in Vatican City imported a Tesla, and America didn’t import anything from Vatican City (a scenario that isn’t entirely facile in terms of scale), what do you think happens to the population adjusted trade differences? Does that mean that America is ripping off the Vatican? Should America have to purchase trillions of dollars worth of communion wafers to equalize that?
Re communion wafer Right you are.
I’ll say again The Canadian trade issue for me is non issue. The issue to me is that we seem to want to export our negative externalities to keep our prices low. Those who have their panties in a wad over these tariffs should be called out about taxes when they are advocating for higher corporate profits, demanding that I choose more expensive renewable energy source when they also prevent lower cost renewables or nuclear for a variety of reasons that are not based on replicable science. I am an advocate of the idea that we have no tariffs but anything imported must meet our EPA and OSHA requirements that are imposed on our own producers of similar products. You can still import those that don’t meet the regs but the tariff must reflect the compliance costs our producers are forced to pay. That forces both sides to consider the costs of regulations.
I would love to be able to have more domestic competition in the furniture and textile industries but low grade disposables seem to be the only goods available. These are the same folks that are replacing items after a few years when quality lasts and the lifecycle cost is far lower. If some tariffs cause consumers to be jolted into better purchasing decisions that yield long term value I am ok with that.
Chris wrote, “I am an advocate of the idea that we have no tariffs but anything imported must meet our EPA and OSHA requirements that are imposed on our own producers of similar products.”
What about the companies that import their products from places like China who pay their employees pennies on the dollar compared to USA employee pay scales? The cost for assembly manufacturing requiring lots of labor in places like China is considerably lower than the USA and companies that ship their manufacturing there are grossly undermining manufacturing in the USA by undercutting prices to end users while they line their pockets with millions, if not billions, of extra dollars.
When companies can get their products made and assembled in China, then ship many thousands of them on container ships for a week or more to US ports, then transport them across the USA on rails and trucks to distribution centers across the USA, and still have that product ready to put on consumer shelves at a cost of about one third or less than what it costs to manufacture here in the USA, I think the US government enabling this is wrong. Shouldn’t there be a better balance in this area and aren’t tariffs the right tool to use to accomplish that.
We must bring lots of manufacturing back to the USA to rebuild a strong middle class and you cannot do that if the government is enabling and encouraging companies to abandon the USA and manufacture their products in places like China and Mexico.
I am not an economist, and my understanding is that the topic of tariffs is more an economic one than an ethical one. I also belief that Trump’s intentions are good. However economy is a dismal science that explains that good intentions can have bad outcomes.
The economist Thomas Sowell warns that Trump may be repeating errors from during the Hoover administration when the Smoot-Hawley tariffs where enacted, causing a devastating trade war which left everybody worse off. The Smoot-Hawley tariffs are seen as one of the contributing factors that deepened the Great Depression.
Sowell went on to say that if Trump’s tariffs are intended as short-term, limited measures to achieve strategic goals, they may be effective, but if they’re left in place over the long term, they could replicate the “devastating history” of a global trade war and cause consumers and investors to pull back amid the uncertainty.
Please watch the YouTube video, there is also an much older YouTube video where Thomas Sowell explains the disadvantages of tariffs.
Give the recent gyrations of the stock market I am afraid that Sowell is more right than we would like. The unpredictability of which measure Trump is going to take next is causing a lot of fear and uncertainty, causing investors and others to hang on to their money. Add to this that the Senate has not passed a clean bill on taxes and budget, so businesses and individuals do not know what taxes we are going to pay in 1926. If Trump wants to get good results in the midterms, he better makes sure that creates confidence in the economy instead of chaos.
https://x.com/bricsinfo/status/1909474051510202670?s=46
While I would say:
Good, more winning, now Hollywood will be disincentivized to put overt CCP propaganda in all its films and I won’t have to watch “those ok chicoms helped solve another problem for the hopeless capitalists” nonsense.
But I know that the communists in Hollywood will just put in old fashioned western socialist propaganda.
Chuck Schumer on China tariffs.