[SSJPython]

There's an excellent book by economist Michael Hudson called "America's Protectionist Takeoff" that discusses how the US used tariffs to promote certain industries in order to compete on the world stage. It was part of Alexander Hamilton's American System. Friedrich List, the German economist that wrote "The National System of Political Economy", used the American System to advocate for the same policies in Germany. Germany eventually adopted these policies and became an economic powerhouse themselves. Likewise, Meiji Japan went so far as to adopt the ideas of Friedrich List's economic policies, which resulted in them becoming a great power in a generation.

Tariffs can work, but only if they are targeted towards certain industries/sectors. They can't just be slapped across the board and be expected to work properly. Furthermore, they must be attached to certain KPIs such as exports (i.e., the ability to effectively compete on the international market). Joe Studwell's "How Asia Works" argues that Japan, Korea, and Taiwan all used tariffs and subsidies to promote their own "national champions". In turn, they forced those companies export their products rather than just sell domestically in order to compete. If they didn't meet those export targets, those companies were cut off from state support. Ha Joon Chang, a Korean developmental economist, likens this to raising a child: you spend their initial formative years supporting them until they are able to support themselves without your help.

[wingspar]

If I remember correctly, India is manufacturing iPhones for export because the government would not let Apple expand sale of iPhones(or was it open Apple stores) in the country unless they produced the phones locally?

So Apple setup production in India starting with old model iPhones. Then expanded to today…

[resters]

The last thing Trump's tariffs could be described as is targeted industrial policy. They are intentionally a sledge-hammer. They are intentionally emotional. Intentionally full of jingoistic rhetoric and victimhood rhetoric.

Sadly there has been zero discussion of doing targeted industrial policy (like China's) in the US. The irony is that Trump's approach benefits China tremendously.

[Waterluvian]

A sober approach to promoting the redevelopment of production industry in America would likely involve some tariffs and could make a lot of sense.

But, yeah, the current American approach is anything but sober.

[analog31]

It would also involve support for science research and reasonable immigration, plus widespread acceptance for moderately higher consumer prices. People should have a real conversation about what it means to make clothing in the US instead of in Bangladesh (just for example). While the "zero sum game" is generally considered to be a sign of ignorance when discussing economics, in the short term the number of available workers is a zero sum game, and unemployment is relatively low right now.

[b112]

One thing it means is local polluting. We'll have to turn of EPA regs for some industries, or re-engineer to how-to, if they return home.

The methods used 30 years ago won't work.

[Waterluvian]

In a way it de-NIMBYizes Americans, forcing them to face the environmental costs of their consumer behaviours. The re-engineering part is the opportunity I see in all this. How do you make manufacturing cleaner and more worker-friendly (or even better: don’t even require human labour).

[Yeul]

There is nothing rational or sober about wanting manufacturing back.

Factories are bad for the environment and provide shitty jobs.

[Qwertious]

People who downvote the above comment: please provide an actual response.

The comment isn't wrong about factories. Factories are far less productive than providing services (e.g. software), and per comparative advantage the US should be importing manufactured stuff and exporting highly labor-efficient services.

If the US expands its manufacturing without it being profitable to do so (profitable without state subsidies, I mean), that will be bad for the economy , because it will drive up the cost of labor for other stuff without an accompanying flow of profit into the economy to stimulate the demand to match said higher costs.

[AdieuToLogic]

> A sober approach to promoting the redevelopment of production industry in America would likely involve some tariffs and could make a lot of sense.

If American production was optimal, or even economically feasible, it would already be in place. Take, for example, textiles.

Why would an American business go through the hassle of getting a foreign company to make textile products, get them shipped across vast oceans, taking weeks if not months to do so, only to have them in stores in relatively close proximity?

We all wear clothes and purchase them regularly. So why are they not now largely made in the US?

[Qwertious]

I think people are downvoting you because it sounds like you're advocating textiles be produced in the US (I know you're not).

[AdieuToLogic]

> I think people are downvoting you because it sounds like you're advocating textiles be produced in the US (I know you're not).

Probably.

Sometimes exploring the implications of an ill thought position leads to an unpopular conclusion. If the worst result is a few people hit a down arrow and others contemplate the exploration, so be it.

There are many worse things in life.

[wyldfire]

> They are intentionally a sledge-hammer. They are intentionally emotional. Intentionally full of jingoistic rhetoric and victimhood rhetoric.

A sledgehammer sounds almost like an instrument of precision relative to the Trump administration tariffs. If they're applied and reversed on a whim, US companies would be fools to invest in building fabrication capability domestically only for the rug to be pulled out from under them tomorrow.

And apparently Trump doesn't want the prices on imports to rise [1]? So, if importers and retailers eat the costs of the new tariffs, how can domestic production compete any easier than it could with the baseline conditions?

It's not jingoism or victimhood, it's just ineptitude writ large. Trump can't achieve his own policy goals because he's standing in his own way.

[1] https://truthsocial.com/@realDonaldTrump/posts/1145236386231...

[pfannkuchen]

A more generous interpretation might be that he doesn’t expect anyone to retool until things settle down, and he is actually implementing tariffs as a shock tactic to force negotiations starting on strong terms. I haven’t read his book but my understanding is that this is an instantiating of the abstract negotiation pattern he endorses in the art of the deal.

The alternative would be to negotiate quietly in back rooms before announcing, which is what is usually done. Would that be less chaotic? Definitely. Would it result in equally good or better trade deals as the shock method? Unclear, it’s not obvious that it would.

He also likes dramatic optics.

I don’t agree with the guy on most things, but I really think many people mischaracterize him pretty severely.

[Animats]

> A more generous interpretation might be that he doesn’t expect anyone to retool until things settle down.

A sizable "retooling" already took place with Canadian oil. As of last month, Canada is now exporting more oil to China than to the US. US oil exports to China have stopped.[1] This is not projected. This has already happened.

This is a win for China. Getting oil from Canada reduces China's dependence on the Middle East. Getting tankers across the Pacific is a straight run in open water. No bottlenecks at the Straits of Hormutz, no Suez Canal, no war zones.

Expect West Coast gasoline prices to go up.

(Much of this is related to where pipeline are. Pipeline connections to the Western US from Texas barely exist. Meanwhile, in 2024, a major pipeline between the Alberta oil fields and the Vancouver region ports was completed and is in operation.)

[Animats]

Forgot the link: [1]

[1] https://www.reuters.com/markets/commodities/canadas-crude-oi...

[StackRanker3000]

> I don’t agree with the guy on most things, but I really think many people mischaracterize him pretty severely.

How? What do you think people think of him that’s untrue?

Since he first got seriously involved into politics I haven’t seen any evidence that he has a sophisticated understanding of anything, except two things: how to negotiate when he’s in a strong position to bully his counterparty, and pandering to his base.

Like a sibling comment points out, you refer to The Art of the Deal, but that was written entirely by his ghostwriter Tony Schwartz (according to both the author and the publisher). Schwartz has even said he thinks it should be recategorized as fiction.

[nickpsecurity]

Watch the Joe Rogan interview with Trump to see what he's really like:

https://youtu.be/hBMoPUAeLnY?si=IJxxRE-RuL9FHKpE

What we normally see is a stage persona. He also speaks differently when dealing with hostiles vs people acting like he's a human being. Rogan's style brings out people's real personalities better.

[StackRanker3000]

Is there any particular segment of this chat where he said something you found insightful or thought showed his deep understanding of some complex topic? I don’t doubt that he can be pleasant and charismatic when shooting the breeze with people in a friendly atmosphere, that’s not the critique I have of him.

[sjsdaiuasgdia]

> he endorses in the art of the deal.

https://archive.is/jbYoN

[watwut]

Well, gigantic tariffs with china were dropped to just huge ... and he got nothing for it. Asian counties that were willing to do deals have none, because Trump administration frustrates them by not knowing wtf they want.Talks with EU are stalled and UK deal amounts to not much.

It is easy to argue normal negotiations work better.

[nwienert]

> he got nothing for it

bias talking, it's impossible to know what he got since he's actively negotiating behind the scenes

[vannevar]

A less generous---and probably more accurate, given Trump's business and legal history---interpretation is that the tariffs are not for any legitimate public policy reason at all, but are simply to give Trump personal leverage to extort foreign nations for the gain of himself and his family.

[whattheheckheck]

Most things Many people Really think Pretty severely

Those are the biggest weasel words anyone has ever seen before

[resters]

Thank you for articulating this. I think it's what a lot of his supporters think is happening. What perplexes me are the following:

1) Is "The Art of the Deal" respected among actual business leaders and negotiators as a substantive contribution to negotiation tactics?

2) If what Trump is doing is in fact a highly effective tactic, how is it possible that so many people who are skilled at negotiation, skilled a business, far more wealthy and successful than Trump, etc., etc., fail to see the genius of it? I'm pretty sure that if there were actually something to it, at least some of those types of people would "come around" to supporting it and they would explain what he's doing to the American people (if it's right out of "The Art of the Deal" then clearly any negotiating adversary would be familiar with the tactic since the book is a short, quick read).

3) How would the negotiation tactics Trump is using be described/framed by traditional game theorists and tacticians? Suppose Trump is actually highly disciplined in the execution of a grand strategy, what would there be to object to, the tactic of acting unpredictably? Or would there be criticism of the downside risk of the strategy being unacceptable?

4) What has Trump or the US gained in the past from these kind of tactics? I'm serious when I say that I don't think Trump has improved the US negotiated position in any of the domains he's promised to. His revisions to NAFTA were trivial, his revisions to the Iran deal resulted in the US having a far weaker hand, his negotiations with N. Korea were inconsequential, and his negotiations (so far) with Mexico and Canada have seemingly harmed all parties and reduced trust, thus reducing the chances for a better outcome in the future. on Ukraine/Russia there is not really any negotiating to be done, it's more of a question of whether the US wants to keep spending money on an expensive and risky war that we are losing while pretending we are not actually in one.

5) In trade negotiations, what is the "back room"? I realize the US is opaque domestically and internationally about what is US "national interest", but typically with trade the incentives are extremely clear -- there are always domestic factions on both sides who are the relative winners or losers of any change to tariffs or trade policy, etc.

[wyldfire]

> I don’t agree with the guy on most things, but I really think many people mischaracterize him pretty severely.

I'm not so sure you're right about that. He's dishonest, corrupt, and vain. So a lot of the disgust that is directed his way seems well-deserved.

I would believe it if you told me that if he somehow proposed a policy that was for the genuine benefit of all of his constituents that some would knee-jerk oppose it. But -- due to his vanity and corruption - we'll never see that come to pass.

[martythemaniak]

There's been tons of discussion and several actual laws - IRA, CHIPS etc.

A large part of why you're seeing the Trump insanity is because there's increasingly little connection between reality (ie CHIPS, IRA) and people's perception (ie your comment)

[hshdhdhj4444]

> Sadly there has been zero discussion of doing targeted industrial policy (like China's) in the US

The CHIPS act is exactly this.

Of course Trump is killing the CHIPS act.

[rayiner]

It’s interesting that you don’t see the cause in your second paragraph being what leads to the effect in your first paragraph. We got Trump because of the bipartisan consensus on free trade that wouldn’t admit any sort of industrial policy.

Now that Trump has blown the Overton window open, someone should offer the alternative of smarter tariffs.

[watwut]

USA had tariffs prior. It had CHIPS act which worked. Dont blame imaginary bipartisan consensus.

[hshdhdhj4444]

Plus EV tariffs + banning of TikTok unless sold to a U.S. firm.

The Biden administration had already taken several targeted measures to defend local industry from China.

One can argue whether this was good policy or not, but it’s hilariously wrong to argue that Trump was the first person to recognize the threat of China.

In fact, Trump has been extraordinarily useful to China. One of the first steps he took in his first term was to withdraw from the TPP.

Again, one can legitimately argue whether the TPP was good or not, but the entire purpose of the TPP was to reduce dependence on and create alternatives to China, which is why the trans Pacific partnership did not include the second largest world economy despite it lying on the Pacific Ocean.

[Gareth321]

> USA had tariffs prior.

Clearly insufficient to prevent the destruction of major sectors and industries over decades. The neoliberals argued this was a normal and good thing for the country. The voters appear to disagree.

[watwut]

It is kind of impossible for 2022 legislation to prevent something that was happening decades ago. Tho, America is actually producing more then ever.

Republican voters did not cared about any of that. They wanted to own the libs, they wanted the destruction of project 2025 and wanted to harm the people they look down at. They did not wanted to work in factories, they did not want industrial policy and they do not want USA to be a tech leader anymore. Conservatives are not making economical choice, they are just throwing concerns around when they want to bear democrats. They dont care a put putcomes when Republicans rule.

You complaining that legislature from 2022 did not traveled back in time to change something in 2010 is quite on point here. This is not about strategy, law nor economics.

[sandra_vu]

this is a very good answer. I'd like to point that often great tariff policies are work of technocrats, not a performative administration.

[guestbest]

What is a performative administration and how is it different than a technocracy?