[_bin_]

Did anybody actually “trust” other countries to start with? I’m reminded of the cynical yet accurate quote that nations don’t have friends, they have interests. I expect the American feds to pursue the best interests of Americans (though these policies aren’t in those best interests, it seems admin doesn’t know?) and foreign nations to do the same.

This point is especially hollow because it is true that many countries have maintained asymmetric tariffs on us. Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them. I’d take their cries of “lost trust” more seriously if they hadn’t shown with their actions they will pursue their own advantage too.

[wqaatwt]

> Trade deficit aside, we shouldn’t

US has been very successfully exporting its debt (quite literally, almost no other country can run such high deficits for so long) and services.

What do you think happens with all that money if Americans can’t buy those cheap imported goods anymore?

Also other countries like China or Japan won’t be able to continue buying US bonds. Basically Americans are getting free stuff funded by debt they are never going to pay back and still you have people whinning…

> larger %

US decided to charge e.g. 15 times higher tariffs on the EU than the EU does. You believe that’s even remotely reasonable?

Or do you actually trust Donald’s table that they made to confuse clueless idiots?

[_bin_]

Successfully? We blew 3.1% of our GDP on debt service alone in 2024. This is insane, irresponsible, and unnecessary. We are mortgaging our children and grandchildren’s futures. Just like young folks like me correctly complain that old people are leeches sucking America dry - social security, medicare, housing price subsidies, decade after decade, despite a what, $1.7mm average net worth - my generation shows no signs of doing anything differently. “Screw them kids. Boomers got theirs, I’ll get mine.” If our interest burden keeps growing from 20% of federal revenues we could end up spiraling into more and more debt. Or worse we could get to a place where the fed can’t feasibly raise rates to level out the economy and moderate inflation because that would balloon interest payments to a ridiculous degree.

Where Trump is fundamentally correct is that a trade imbalance means selling pieces of your country off to compensate. Equities, bonds, land. All a claim against future money that sucks those returns out to go to foreigners. America has been lucky in the past, in that the huge market for dollars helped us avoid some of this, but that’s not a limitless solution.

Obviously the answer is not that we must make Nikes here. It’s also not that we must have zero trade deficit with any single nation. But we probably should focus on exporting more advanced goods and more services to bring our overall trade deficit down, focusing on a net zero or overall trade surplus outcome.

[wqaatwt]

> We blew 3.1% of our GDP on debt service alone in 2024

As long as GDP growth outpaces (or is even) the increase in debt it’s not a big issue. Some spending cuts and mild tax increases (maybe not so mild for the higher brackets) would solve that.

> focusing on a net zero or overall trade surplus outcome.

If you looked at the countries pursuing such policies like Germany or Japan they haven’t been doing that well at all over the past 20 years. Basically no real growth and they are permanently stuck in the early 2000s. US on the other hand has been doing extremely well (lack of redistribution is another issue).

[_bin_]

What projection suggests GDP growth will be even with the increase in debt? FRED data suggests the opposite is happening: https://fred.stlouisfed.org/series/GFDEGDQ188S

Debt growth is massively outpacing growth in GDP. You're right that it's less of an issue if we grow quickly and effectively keep leverage the same but that's not what's happening.

Germany and Japan haven't focused super heavily on achieving a trade deficit. As you said, Germany has huge problems with her welfare state and Japan has huge demographic issues. I'm not saying we should achieve a trade balance by tariffing everything to death; I am saying we should focus on faster growth to get there and reduce our insane level of consumerism. I don't have an issue with a temporary trade deficit for growth-oriented reasons, but I have little save contempt for people ordering packages of chinesium temu crap.

[wqaatwt]

> Germany and Japan haven't focused super heavily on achieving a trade deficit

They have. For Germany maximizing their trade surplus was one of their primary goals for many decades. Amongst other things that’s why they accepted the Euro (easier than devaluing DM).

> As you said, Germany has huge problems with her welfare state

I never said that.

And Germany specifically has quite low government debt and a very high trade surplus. Yet.. it’s not doing better economically than the US. Welfare hardly has much to do with that.. e.g. US government excluding all private spending spends about the same as Germany as % of GDP on healthcare. Total social spending is not that massively higher either (~23% vs ~28%).

> ordering packages of chinesium temu crap

Sure, but that’s by and large insignificant. If we look up US imports by category consumer goods don’t really make up that much.

Also, I don’t really see how can tariffs do much besides lowering productivity and increasing prices.

Like that complete nutjob Lutnick said they want “millions and millions of people in America screwing in little screws to make iPhones”. That just makes no sense, you want to minimize the amount of easily outsourcable low productivity jobs in your country.

[Aurornis]

The “reciprocal” tariffs are nothing close to reciprocal. I hope you know by now that the numbers Trump presented were not actual tariff numbers that other countries put on us.

The trust issue is domestic, too. Businesses just got slapped with the largest tax increase in history at home. Pointing fingers at other countries is a distraction. It’s ridiculous to think that this will encourage companies to start building factories here when even the raw materials are now heavily taxed on their way in to the country. Any sane company is going to pause US factory investment until there is some clarity and predictability.

[_bin_]

I think I miscommunicated my support for some trade policy change as support for Trump’s “liberation day” tariffs. Here are things I think we should fix:

- America and Hypotheticalstan each export $1T to each other with a bunch of tariffs on various things. America raises $50B in tariff revenue on Hypotheticalstan’s imports while Hypotheticalstan raises $100B on American imports.

- America doesn’t make enough defense-critical stuff: steel, solar panels, chips, aluminum, rare earths, etc.

- America has a ~$918B trade deficit.

Things I do not care about:

- Vietnam makes our Nikes.

- We have a trade deficit with specifically Vietnam.

[d1sxeyes]

> Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them.

Why should you care how much another country charges its residents to import stuff from the US?

Just sell at the price you want to sell at and who cares what goes on after your goods land.

[another-dave]

> Why should you care how much another country charges its residents to import stuff from the US?

Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.

Or they could go, everything's gotten so expensive these days, I'll buy wine less often altogether.

[motorest]

> Because tariffs hurt trade — if you charge someone an extra $4 on a $20 bottle of French wine, they _may_ still buy it, or they may buy different wine.

Sometimes it's hard to tell if the US public is even aware of this. I mean, what is the point of tarrifs other than raising the prices in the domestic market of imported goods and services? That's all they do.

The rationale from the perspective of the central government is that this will finally make foreign goods and services uncompetitive with regards to domestic alternatives, and thus will finally render them viable. But that childish assumption is based on so many absurd notions that are plainly unrealistic. The only thing that's real is the direct impact of tarrifs: increase the price of goods and services in the domestic market.

[d1sxeyes]

I think the problem is that because of the huge disparity between the cost of imported and domestic goods which has developed over decades, the choice that people face is not 'oh, now imported goods are a little more expensive, I will instead buy American', it's 'now I can't afford to buy anything at all.'

You have to get more money into the hands of the consumers in order to be able to implement something like this.

[Aurornis]

> Or they could go, everything's gotten so expensive these days, I'll buy wine less often altogether.

And with this, we’re almost getting to realizing why tariffs in the United States are a bad thing.

Cutting off your own nose to spite your face.

[d1sxeyes]

Wine is a good example because it’s not fungible: one bottle of red wine is not like any others. If you have a domestic wine industry, it likely can’t compete on quality with French wine.

So if France can export wine at a price that’s reasonable enough, your domestic wine industry will fail, undercut completely by cheap French imports.

Tariffs in and of themselves are not all dreadful. They help level the playing field and support domestic industry.

But you can’t go from decades of offshoring manufacturing to suddenly charging punitive tariffs without making imported goods (which were the only ones your citizens could afford) much more expensive, and therefore, yes, folks might buy wine less often altogether.

[wqaatwt]

IMHO it’s pretty fungible at least outside the high-end stuff. Most people would hardly notice where the wine comes from (aside from specific types of grapes and such)

[d1sxeyes]

I'm surprised to hear that. In my experience, most people tend towards the other end (believing themselves to be connoisseurs, etc.) rather than 'just give me the house red'.

[disgruntledphd2]

Yeah, but they mostly can't tell the difference in blind tests.

[_bin_]

Because tariffs aren’t actually a good thing. If you hurt my producers by $1, I should hurt yours by $1 to maintain some level of credibility in our repeated game. If I don’t punish foreigners for tariffing my guys they have no incentive to reduce or remove those tariffs.

I don’t actually care about t-shirts being made in china. That’s not an industry that matters at all. I do care about china closing her entire market to American tech, for instance.

[d1sxeyes]

If you start looking for justice in the world economy, you've already lost the game. The only thing that matters is money. You can stick tariffs on left, right and centre, and all you'll end up doing is pushing goods out of the hands of your consumers.

You can try to 'hurt' another country's producers, but they're likely to just go and find another market for their goods.

[_bin_]

I'm not really looking for "justice", I'm looking to uphold our interests. I don't particularly care if we raise more revenue than some other country does from our imports. I don't think tariffs are the best or only weapon to fix our problems. I do think they have a place, that selling off more and more of our country via trade deficit is unsustainable, and that our priorities as a nation are beyond screwed up.

[d1sxeyes]

Looking at the stock market, do you believe that tariffs are upholding US interests?

[another-dave]

> I expect the American feds to pursue the best interests of Americans (though these policies aren’t in those best interests

I think that's the thing — you plan in business for people to operate in _their own_ best interests. If people stop doing that & their behaviour is volatile, then you're going to put your own mid-term plans on pause until you know what's what.

> Trade deficit aside, we shouldn’t let others collect a larger % of their imports from America than we collect of our imports from them.

Is that happening, trade deficit aside, & when you factor in services as well as goods?

[eecc]

You could start making stuff we're willing to buy. I'll give you a qick rundown of what Europeans might want:

* no junk food, no weird GMO garbage. * road-legal automobiles, no EPA-workaround trucks with shoulder-high hoods. * advanced tech hardware gadgets. * entertainment * no, we're not particularly interested in guns.

Tell me what exactly what aren't we already buying from the US, when it's competitive: quality food we have our own, sorry; cars, well you've gone down a crazy path since I can remember; hardware, well we do, except you chose to offshore manufacturing; entertainment, we do... a lot; guns, be honest, you know you have a problem, not us.

So what's the point of this tantrum?

[disgruntledphd2]

To be fair, the US exports a lot of services to the EU. For some reason these weren't included in the calculations shrug. As an aside, it's hilarious to see loads of Europeans saying that they never use any US products on a bunch of US owned products.