[talltimtom]

If you feel like you aren’t paying more for something when you pay 5$ more just because I pay 20$ more, then have some magic beans to sell you.

China is “paying for the war” or “losing” in the sense that more of their soldiers are dying (more increase in cost), but at the end of the day no one is better of in the middle of a war than in peace and soldiers are dying on both sides. Also, at the end of it they may end up winning the war even if they do have larger losses along the way.

[dexen]

You are mixing the analogies here, thus the confusion.

Unlike in war, the tariff 'war' casualties is either money being transferred between countries in different direction than per the usual, or more money paid as import/export duties to the governments.

No money is magically destroyed; instead it changes hands - between the private sector and the government. Now the supposed "dying soldiers" is just more money to fund infrastructure, or invest in company's growth.

That aside, I believe the most important outcome will be diversification of supply providers, as discussed upthread. Right now China has unhealthy near-monopoly on certain key goods and components, especially the cheaper ones, and thus is able to hold the low-to-mid earning americans hostage via the implicit threat of price hikes.

Once diversification progresses sufficiently - i.e., a significant chunk of the sourcing and manufacturing moves out of China and into other countries, like India, Vietnam etc. - the USA will be able to negotiate trade with China on much more equal and equitable terms.

The diversification of supply and manufacturing will strengthen all the sides.

[bzbarsky]

One casualty you do not mention is the actual physical goods that consumers do not get as a result of the tariff 'war'.

That is, consumers spend the same amount of money, but get fewer goods in return. This is an economic loss for the consumers.

Put another way, the "no money is magically destroyed; instead it changes hands - between the private sector and the government" argument taken to the obvious limit would imply that there is no problem with the government just confiscating everything. While some people do think that, the empirical evidence seems to be that this is a bad idea: standards of living drop a good bit when this happens. So on its own this argument is not sufficient to prove that a policy is not causing hits to standards of living.

[dexen]

>would imply that there is no problem with the government just confiscating everything

I am unhappy you condensed my points down to something akin "taxation is theft mkay".

On the point of taxation (of which import/export tariffs are a form of), I prefer as little as practical, and consider it a proper thing to do in general. It's matter of degree, to be decided via normal democratic processes.

However the gist of my post was not immediate monetary costs or returns; instead it's about a long-term balance of strengths in the trade exchanges. Right now certain sectors of american economy are very reliant on single source of resources, components and complete products. This gives the source - China - an undue influence on the prices. Fixing that problem by diversifying sourcing & manufacturing will bring long-term prosperity to americans.

Given the points raised upthread - that the tariffs seem to burden chinese more than american economy - it's more of a game of chicken than a shooting war. The first one to blink ends up picking up the tab - in case of this tariff 'war' that'll mean returning to the bargaining table, ready to make some concessions.

[bzbarsky]

> I am unhappy you condensed my points down to something akin "taxation is theft mkay".

I was definitely not aiming at that, and I'm sorry if that's how my comment came across. I was trying to point out that saying "this just moves money around; money is not created or destroyed" is not a logical argument for anything. The real issue is what happens with actual goods or services as a result of the new distribution of money.

I largely agree with you on the long-term implications here, for what it's worth.

> in case of this tariff 'war' that'll mean returning to the bargaining table, ready to make some concessions

That's one plausible outcome, yes. Another one, though, is that we just keep on as we are, with somewhat reduced standards of living in the US in exchange for a stronger geopolitical position. This might well be worth it, but I think it's important to be clear that this is the real tradeoff we're making here.

[yellowapple]

Right, but like in physical war, even the winning side is expected to have casualties, and those casualties are the price to pay for (hopefully) a better net outcome than not going to war.

[sbhn]

Who is better off are the companies that run customs,