[seadan83]

Tariffs are protectionist, does not boost competitiveness. Tends to be the wrong tool, there are better.

Tax breaks, grants, physical infrastructure, creation of entire markets - those are better tools.

The issue with tariffs is non-competetive companies aren't required to become more competitive.

I mean consider it, a tariff is a tax on those buying a specific competitors goods. Even if tariffs were done surgically, still it seams like a tax benefit is a better tool

[9dev]

I doubt explaining economic basics to an administration that seems incapable of understanding what a value-added tax is will be very fruitful

[pydry]

>The issue with tariffs is non-competetive companies aren't required to become more competitive.

Yes they are. They are required to compete on a level playing field domestically and they still have to compete with marked up foreign goods.

[seadan83]

> Yes they are. They are required to compete on a level playing field domestically and they still have to compete with marked up foreign goods.

Well, nu-uh! The "level" playing field concept is flawed here. Second, if everyone else becomes less competitive, that does not mean you are 'more competitive'. In a relative sense yes, but in an absolute sense no. A tariff is like a track meet where your competitors get whacked in the knees.

Now, I did say "tend" to be the wrong tool. If another country is actually flooding your market with cheap products (at a loss), in order to drive you out of business, tariffs make sense there. So, tariffs can be good against government subsidized industries. Tariffs countering other tariffs is simplistic, there are other countries in the world and global markets are large and well.. global.

[simonh]

Unfortunately it’s more complicated than that. Take car manufacturing in the US. The country doesn’t make enough steel, copper, etc to supply the industry, so domestic production depends on tariffed imports of these and various specialist components. Plus many parts cross the borders to and from Canada and Mexico for various stages of the manufacturing and testing process, incurring a tariff every time.

This means domestic cars and many other goods will get a tariff markup on a large proportion of their parts anyway. In many cases it will be cheaper or roughly equivalent to pay a single tariff on a finished product from abroad.

In theory it should be possible to bring in staged tarrifs, and use tax breaks and subsidies on on-shore necessary domestic production over time to transition the industry, but that’s not happening and there’s no sign it will happen. The administration doesn’t seem to be aware this is even an option.

[pydry]

>Unfortunately it’s more complicated than that. Take car manufacturing in the US. The country doesn’t make enough steel, copper, etc to supply the industry, so domestic production depends on tariffed imports

No, it's not. The US making not enough steel is not an immutable law of the universe. It is a result of the same kind of industrial decline which tariffs would reverse by making it more economic to produce steel locally.

It only wouldn't work on products which the US has no fundamental ability to make like bananas (which yes, Trump did...).

>This means domestic cars and many other goods will get a tariff markup

Yeah, that's kind of how tariffs work - there's always a markup.

>In many cases it will be cheaper or roughly equivalent to pay a single tariff on a finished product from abroad.

That depends entirely on how you structure your tariffs. If it is the case you've structured them incredibly poorly.

>In theory it should be possible to bring in staged tarrifs, and use tax breaks and subsidies on on-shore necessary domestic production over time to transition the industry, but that’s not happening

I believe I covered that when I said that the tariffs were "being wielded with the skill and grace of a crack addled ferret".

[mensetmanusman]

Tariffs are reactionary to China’s explicit mercantilism. There is a reason we have a word for what is going on, it’s common human behavior.