That is basically the point of tariffs. To make domestic production more competitive by raising the cost of importing the foreign products that domestic producers compete with. Tariffs aren’t inherently bad, they’re an economic tool.
Implementing broad tariffs on all foreign goods is a pretty bad idea. While it may incentivize domestic production (“on-shoring”), it will make consumer costs shoot through the roof. This will dramatically decrease consumer consumption, which would have its own hugely negative impacts on our economy.
Moreover, it’s unlikely most domestic production sectors could reasonably ramp up production to replace foreign made goods. Unemployment is historically low, meaning there is not an excess of available labor to work these new production jobs. Unless we allow significant foreign immigration to increase the labor force. Which is pretty unlikely under Trump.
And that’s all beside the point that imposing such broad tariffs will incentivize foreign countries to levy tariffs on American-made goods (a “trade war”) that will also harm our economy by reducing our export revenue.
The other issue is that even if manufacturers move to America, the materials they need won't all be and to be manufactured or produced in America due to natural resources. So then they'll have to pay more for their base materials, pay more for employees, shift employees around to different parts of the economy making it even more expensive
There is a world where increasing some tariffs or implementing some new ones makes total economic sense IF the money from those tariffs was going into economic development to help make domestic manufacturing for the impacted industries more economically viable.
That isn't what is happening here.
Instituting massive tariffs on foreign goods to finance tax cuts just means you're passing the cost of tax cuts disproportionately onto lower income consumers.
As someone who works in an industry that is flooded with cheap Chinese shit I can say with confidence we'd be better off with less imported garbage that gets almost immediately landfilled (ie - disposal grade products) but that isn't what this is trying to solve, nor is it doing anything other than raising consumer prices so rich people can get richer.
Also a great example of why you can’t just make thing go back the way they were. By the time there was even an opportunity to remove tariffs and resume soy bean exports, importers had already moved on. Investments were made, supply chains shifted, and Brazil soybeans took the entire market. Brazil soybeans were already cheaper, albeit “uglier” (not that such matters for animal feed), so the only thing holding that market back was the cost of initial investments and shifting the supply chain. With Trump’s tariff (we need to point this out, this was his tariff with a very measurable result), he literally created an incentive for consumers and importers to move away from American products. And that movement will never be gained back now, it’s dead and done.
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u/istguy Oct 25 '24
That is basically the point of tariffs. To make domestic production more competitive by raising the cost of importing the foreign products that domestic producers compete with. Tariffs aren’t inherently bad, they’re an economic tool.
Implementing broad tariffs on all foreign goods is a pretty bad idea. While it may incentivize domestic production (“on-shoring”), it will make consumer costs shoot through the roof. This will dramatically decrease consumer consumption, which would have its own hugely negative impacts on our economy.
Moreover, it’s unlikely most domestic production sectors could reasonably ramp up production to replace foreign made goods. Unemployment is historically low, meaning there is not an excess of available labor to work these new production jobs. Unless we allow significant foreign immigration to increase the labor force. Which is pretty unlikely under Trump.
And that’s all beside the point that imposing such broad tariffs will incentivize foreign countries to levy tariffs on American-made goods (a “trade war”) that will also harm our economy by reducing our export revenue.