[reliabilityguy]

> Trump is out there creating the most regressive tax system via tariffs

Tariffs incentivize domestic production. See the case of chicken tax and pickup trucks. While we do pay for tariffs now, later down the road we should not as more things would be made domestically. If you don’t do tariffs, there is no way to force producers to onshore.

[toast0]

The chicken tax encourages creative workarounds more than domestic production. Importing all the parts and putting them together in the US is production work, so fine. Importing chassis cab and putting a bed on in the US is silly, importing with seats discarded in the US is wasteful (Ford got dinged, but I don't think others did?)

Who's making small cargo vans domestically? Nobody. So they're all 25% more expensive, so you might as well buy a big cargo van when a small one would do.

Honestly, governments buy enough light trucks, that 'buy american' requirements would likely keep at least one company making them here.

[reliabilityguy]

Chicken tax was introduced earlier than all the “relaxation” of what is considered “American”. The definition of “made in USA” became more flexible for products to be considered domestic while de facto being made somewhere else, hurting domestic manufacturing.

So, it’s not that the tax doesn’t work, the issue is all the things around it that made it less effective.

[toast0]

Chicken tax was enacted in 1964; Ford and Chevy were tariff engineering in 1972, importing trucks without beds and putting beds on in the US.

Finding loopholes and driving trucks through them is what's considered American. It's not a relaxation.

At the end of the day, the chicken tax reduces our options in the vehicle market as it was designed to do, and it's one thing if we want to exclude WV vans and trucks when we have plenty of nice options at home, but now that we don't have nice options at home, it would be nice to be able to import them without a punative tariff.

[JumpCrisscross]

> Tariffs incentivize domestic production

Stable, long term tariffs. We’re seeing historic falls in manufacturing employment for a reason.

[reliabilityguy]

> Stable, long term tariffs.

Well, you have to start somewhere.

> We’re seeing historic falls in manufacturing employment for a reason.

In your opinion, what is this reason?

[JumpCrisscross]

> you have to start somewhere

There has been no start. You don’t build a factory because the President announced a tariff that he is also negotiating a trade deal around.

> what is this reason?

I’m remodelling my deck. I had orders into a steel mill in Utah. Tariffs mean their steel inputs are pricer than competitors in Vietnam. So I switched the order. And I paid with a cheque—if I paid cash I could skip taxes altogether. That wasn’t a thing six months ago.

Meanwhile, software and services aren’t tariffed. Just goods. Guess whose cost of capital has sunk.

[reliabilityguy]

> There has been no start. You don’t build a factory because the President announced a tariff that he is also negotiating a trade deal around.

You absolutely do once the math of tariffs makes your manufacturing abroad not competitive with onshored one. Will it apply for all categories of products? Probably not. However, it will definitely apply for many.

I am not sure I understood your reply about the reasons.

[JumpCrisscross]

> absolutely do once the math of tariffs makes your manufacturing abroad not competitive with onshored one

If someone bet on e.g. our Japan tariffs three months ago, they lost money. (Nobody did. The types that take Trump at his word on tariffs aren’t making economically significant decisions.)

[reliabilityguy]

I do not know why anyone would bet that the executive order defined tariffs would stay. It was and still clear as a day that Trump uses them to force people to the negotiation table. Obviously, negotiated deal may look different.

Regardless, tariffs as an instrument have their merit with Trump or without Trump. Strategically, US has to bring manufacturing (and as much of a supply chains) back, there is no way around it.

[Hikikomori]

Long term stable tariffs yes. But you can't pretend like trumps tariffs were not done in the worst way possible?

[reliabilityguy]

Trump uses wild % amounts as a negotiation tactic. Is it the best way to do it? I don’t know. You can’t argue though that it does force the other side to come quickly to negotiation table to talk about the deal. So, if the goal is to get the deal now, then it’s effective. If the goal is something else, then it’s not a good tactic.

I do not have enough information to definitely say whether it’s good or bad. Most of the things in life are neither because they have good side effects, and bad side effects to them. So, I think looking for a “good only” solution is a loosing strategy.

[amanaplanacanal]

I'm confused. Is the goal the get manufacturing back in the US, or to make new trade deals? I've heard both things. Oh, and something about fentanyl coming in from Canada? Alright I'm not sure how tariffs would stop that.

[agent_turtle]

> I do not have enough information to definitely say whether it’s good or bad.

Usually when I don't have enough information on an issue, I take it upon myself to learn more about it before stating an opinion.

> Most of the things in life are neither because they have good side effects, and bad side effects to them.

You don't have to be a doctor to understand that the downside of cancer probably outweighs the upside of not having to save for retirement. Economic instability is the cancer in this metaphor, and the cause of it is Trump changing his mind on tariff rates every other day. Economists, like doctors, are trained on how to treat this illness, and all of them are saying "stop doing that". Trump can either listen to the experts or continue on his path, destroying the American economy in the process.

[fireflash38]

You're talking out of both sides of your mouth.

You say we need tariffs to bring manufacturing back. Then you turn around and say the tariffs aren't the point, it's the deal. You even said it was silly to bet on announced tariffs elsewhere.

If the tariffs are necessary to bring manufacturing back full stop, then you don't need to "make a deal". If it's just a tool to make a deal, then they're not necessary!

You just keep moving those goalposts.

[Hikikomori]

Negotiate what? You realize they can just set it right?

If it was a long term strategy they would just set a fixed % and leave it at that, otherwise companies cannot make any plans.

[wat10000]

When tariffs are imposed by the other side, they’re called “sanctions” and are considered one step short of declaring war. If they’re so great then they wouldn’t be used as punishment.

Economists pretty much universally agree that tariffs are bad for both sides. It can make sense to use them to preserve strategic industries even if it’s less efficient economically. For example, tariffs on food could make sense to ensure an enemy can’t starve you with a blockade. But as a blanket policy it’s just bad.

[dgb23]

Only sector targeted tariffs paired with long term investment and commitment do that.

[watwut]

That particular outcome is possible when you make tariffs in a smart and predictable way. Trumps tariffs are unpredictable and also make local producers pay more for raw material they need.

[reliabilityguy]

> That particular outcome is possible when you make tariffs in a smart and predictable way.

You would have to prove that claim. There is more than one way to achieve a specific goal.

> Trumps tariffs are unpredictable and also make local producers pay more for raw material they need.

It’s one of the consequences. There are other ones. Is your only objective is to ensure that local manufacturers pay the least amount possible for their raw materials? This is very simplistic view of things.

[amanaplanacanal]

This isn't rocket science. If you want somebody to spend a lot of money and time setting up production in the US, tariffs have to be stable and predictable. If that doesn't make sense to you, I didn't know what to say.

[reliabilityguy]

And they are after the deals are signed, no?

[notahacker]

A lot of deals got ripped up on "Liberation Day", including some Trump was extremely proud of when he announced them in his last term. He's changed his mind several times in six months already, dropping deadlines and tariffs when the market gets itchy feet, imposing higher tariffs due to disputes with governments completely unrelated to trade. He loves to make grand gestures to distract from domestic issues, and his administration showed so little basic competency they actually publicly announced tariffs on uninhabited territories full of penguins. Why would anybody assume stability?

To echo a comment made in a parallel thread, decisions made to invest in US manufacturing don't get made by people dumb enough to take Trump at his word.

And even if he wasn't tariffs are unlikely to persist at those levels under the next President, regardless of who that is, and that's the sort of timeline you pay back your investment in US manufacturing over...

[watwut]

You are the one who is making the claim that goes both against what historical data show and against what economists say.

So, yeah, predictability matter. Institution do not want to invest based on something that goes up and down randomly.

> Is your only objective is to ensure that local manufacturers pay the least amount possible for their raw materials? This is very simplistic view of things.

Well, yeah, them paying more is rather massive obstacle. You know what is simplistic view of things? Belief that Trump will make economy better, because you like his fraudster personality and would like to be like him.