[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.