US President Donald Trump told world business leaders on Thursday to manufacture in the United States or face tariffs, in his first major speech to global leaders since returning to the White House this week. … “Come make your product in America and we will give you among the lowest taxes of any nation on earth,” Trump said today, speaking remotely to the World Economic Forum (WEF) in Davos, Switzerland.
“But if you don’t make your product in America, which is your prerogative, then very simply you will have to pay a tariff,” he added.
So he really has no idea how tariffs work
Yup
Make your products in the USA or force my constituents to pay inflated prices for everything.
… wait
Either he’s an idiot or he thinks everyone listening to him are idiots and I can’t decide what’s worse.
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Trump’s degree is in economics.
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A lot of people who support Trump are worried about having low-skill jobs in areas that the US is not competitive in that pay well in the US, which is hard if they have to compete with the rest of the world.
You may come to your own conclusions.
Hey, there is another option. Corporations could illegally decide to absorb the cost of the labour and tank their share prices.
I’m not quite sure which option would implode the economy faster, but it would be a neat experiment.
Which in turn stimulates local production, which in turn leads to economic growth…
Seriously people, Protectionism is a tried and tested method. In the right circumstances it is a powerful tool. The question is, whether these circumstances apply in the current US, but look at all industrialized nations. They used protectionism to grow their industries and now they oppose other countries protectionism to keep them small.
from your own source
There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on economic growth.
A 2016 study found that “trade typically favors the poor”, as they spend a greater share of their earnings on goods, as free trade reduces the costs of goods
So to reduce costs of goods we will make cheap items from China cost more so USA made can compete at a higher price. why doesn’t the math work here? how does this result in a better economy?
It’s unlikely most manufacturers will make that investment, since they’ll have to deal with a significant upfront cost, increased running costs and likely counter-tarriffs, all for an ordeal that may well be completely undone in 2 to 4 years. In the meantime US inflation will grow again.
Protectionism is not the main tool that helped countries industrialize, the creation of global trade and particularly deficit spending are to be credited for that. Protectionism is, particularly in the modern age, next to useless.
The people selling the goods never pay the tariff
They will sell less or none if they have to compete with products made in USA sold without the tariff. That’s the idea.
But manufacturing in USA will also increase prices, so yeah, Americans will pay more.
Except we don’t manufacture alternatives to the goods we’re doubling the price of. And there’s no possible way for those massive supply chains to grow anytime soon domestically.
They’re not going to sell at a loss so they will tack the tarrifs onto the price.
This is intro to economics shit. Not something our leaders should be allowed to try gor funsies.
Someone should tell him who actually pays the fucking tariffs. I kinda get the feeling that nobody around the motherfucker even tells this dipshit things he clearly has wrong because they’re afraid of losing their status if they call him out for being a dumbass.
Maybe in some cases the price increase will stop sales (if it doesn’t, yea, it’s extra sales tax), which if there is no investment in expansion of local replacement capacity (of course not, trump and his toadies can’t think that far ahead) will lead to shortages in the US and less revenue for the exporter. Either way, it is a lose-lose situation, but trump will be happy to have hurt the exporter (or they lower the export value to absorb the tariff)…
I also think part of the plan is that voters will cyclically vote in Democrats after things really hit the fan and then they’ll be able to fix large portions of the mess that have been made before people get too comfortable and vote Republican again and they can fuck everything up.
Yes, the consumer pays the tariff, but it does impact the seller as their products will now be more expensive which will potentialy drive down demand and/or eat into profits.
I’d rather we make our own products and stop trading with the US altogether.
So where are those factories gonna come from, and whose gonna work in them? He’s also saying he’s going to get rid of all the immigrants and we only have so many people being released from prison that are willing to do non-union factory work.
And he also still thinks that a tariff is paid by the exporter and not the importer.
Tariffs affect both sides, but the side with the protectionism can build up a local industry thanks to the tariffs. (Assuming access to the relevant resources)
That is why all industrialized nations used high tariffs to protect their emerging industries and once they were established demanded low tariffs from other countries to keep their industries small and the markets dependent.
While in the short run this means a price increase for the consumer, in the long run the local employment and production increase the wealth to offset the initial price increase. That is why “free trade agreements” by industrialized nations often hav devastating effects on the developing nations they push them on. Western “free trade” has ravaged farmers and small business producers in Africa, Asia, South America…
Finally the government can spend the money it raised through the tariffs to stimulate further growth with spending, or by lowering taxes in other fields.
Trump understands very well what he does there, and it is not like the economic theory behind it is complicated. The question is, whether this strategy makes sense for the US when there is retaliatory measures taken by the affected countries seeking to export to the US.
It is the same principle like carbon taxes btw. if you oppose tariffs solely based on the notion that they are “paid by the importer and not the exporter”, you would need to reject carbon taxes, as they are “paid by the consumer, not the company.”
Funny that, I do oppose carbon taxes that are not the sole responsibility of the company PRODUCING the emissions.
