[BlkGS]

Originally Posted by IanH

Am I living in a parallel universe where NAFTA is still in place?

Not a single mention of the USMCA?

Man, that guy who negotiated the USMCA should get better at negotiating!

Anyway, as this is like the 4th or 5th thread on this topic, maybe someone should give the real answer and we can stop talking about it...

No the tariffs will not go into place as campaigned upon, because like most campaigns by most politicians 95% of what was promised was a lie.

People just still call it NAFTA because frankly, it's catchier and everyone knows what that is.

[mks]

This subject was recently being discussed in a tread titled, “Tariffs,” which I can’t find or has been removed (https://g87.bimmerpost.com/forums/sh...php?p=31611927 ). Lots of good, well-reasoned and informed discussion along with a lot of misinformation and lack of understanding. This topic can, I imagine, get kinda heated, but the last I read on that thread, the discussion seemed pretty civil. In any case, tariffs have a history dating back to their use in the late eighteenth-century. While successful according to the purpose back then, they’ve largely been proven ineffective today as an instrument of national power or source of significant revenue—on the scale that would matter when compared to the over $4.4T the US’s budget.

I’m not an economist but I followed this subject a bit starting back in late 2017 forward (and earlier during my career in the military), when it was first posited as an “economic plan” to somehow fix the ailing US economy. Plenty has been said about the purpose of tariffs; however, they are primarily designed to change the behavior of established trading partners. They’re a bargaining tool like any of the US’s instrument of power—but only useful to an extent and not a very great one. As predicted, those 2017/8 tariffs did provoke a behavioral change. Each country countered with retaliatory tariffs--China, Mexico, Turkey, the EU, Russia, and even Canada. The stated goals of their imposition back in 2018 has largely been characterized as a failure—producing net negative effects on manufacturing and US job creation (with some nominal, expensive, exceptions) as well as burdening to American consumer (their primary impacted demographic). Again, I’m not an economist. The facts are presented and contested in sources like CATO, Fed Reserve Board, Brookings, Oxford Eco, Carnegie, Wall Street Journal, etc.

It seems the concern, now, is the idea that tariffs will be used to pay for tax cuts. But, just as an example, a review by the WSJ found that proposed tariffs would bring in a quarter of a billion annually, an increase from $50B to ~$80B from 2018 to present (figures by Brookings). A figure which doesn’t really move the needle in the roughly $4.4 trillion revenue achieved through taxes. Aside, ~$240B merely scratches the surface of the DoD’s budget...there's no way it comes close to paying for the tax cuts being proposed. Would I appreciate lower taxes and cheaper cars...yup. Are tariffs the magic economic wand to make that happen...idk but it doesn't appear so.

Th last administration already tried threatening such tariffs on Mexico (2018/9, if I recall) to influence immigration dictates. The effort failed to produce the intended result and the tariff threat was rescinded after the administration announced Mexico had basically conceded. They called it a success but nothing appreciable happened to stem illegal entry or reduce the existing population. The numbers did rise and fall between 2019 and 2022, but depending on which set of stats and research you read, the numbers were grossly significant or nominally different given the scale being discussed at the time. As an instrument of power, tariffs were ineffective to harmful and neither the previous administration or the present did anything to fix the problem regarding immigration policy and resources. Immigration has been a problem for decades—it didn’t magically spring up 2016/7 and did magically disappear behind some wall that Mexico paid for (not with proceeds Mexico didn’t have from all the tariffs that never worked).

Again, not an expert in this field but the recent use of tariffs, ostensibly strategic and within the US national interest, doesn’t seem to be able to create the intended effect. The proposed plan to use tariffs to pay for tax cuts has long been proven to be a losing proposition (besides, POTUS cannot willy-nilly impose tariffs without a declaring a threat to national security and even then can only do so for a limited time at a limited rate). Where tariffs generated significant revenue in the late eighteenth century, declining steadily as the US economy began to actualize into what is today, they do nothing measurable on the twenty-first century scale of the US economy (or China's, Canada's, EU's etc). In general, tariffs do not generate jobs (without expense to the US consumer), do not generate significant revenue, and do not tend to move political agendas or influence foreign trade or relations in any meaningful way. In this way, tariffs are as antiquated and nearly arbitrary as concepts like the debt ceiling. Disclaimer, again, not an economist.

As for China, they are (still) winning—whatever that means as one can’t really concluded that they are losing. They (along with most other countries) routinely counter/retaliate with tariffs of their own, some other instrument, or form of legal circumvention, e.g., shifting production to Mexico, which they and other countries have already done. Yes, tariffs changed China's (and other country’s) behavior, just not in the way the US intended. There are likely many anecdotal examples of the ostensible success of a tariff (maybe not in open/global markets) within the larger practice of imposing them; however, on the whole, they tend not to be effective as an instrument of national power (diplomatic, informational, military, economic, financial, intelligence, and law enforcement (DIME-FIL) activities). Certainly not in an economy as robust/global as China's. Really, they're kinda wimpy as instrument of influence...but they can be made to sound tough.

There is a library of research on the topic…here’s a few:

Ref: https://www.cfr.org/backgrounder/wha...pter-title-0-6
Ref: https://taxpolicycenter.org/taxvox/w...nd-who-pays-it
Ref: https://www.piie.com/publications/wo...ump-presidency

[DrVenture]

There is magical thinking in the notion that one can build new factories, employ "higher-paid workers" and not sell the products at much higher prices. Places like China, Vietnam, etc have people that will work for 12 hrs a day for little pay. They are not that particular about where the wastewater or fumes ends up going, either. The land is also relatively cheap. Governments often subsidize such plants.

$2.7 trillion in tariffs are proposed. Our GDP is about $27 trillion. A simple calculation would imply a 10% tax of the entire economy, mostly centered on imports. I see no reason BMW prices would not be severely impacted, along with everything else.

That is before factoring in reciprocal tariffs and large reductions in government spending to the equation (government spending is 23% of GDP) and a further increase in import prices due to planned dollar devaluation. Meanwhile factories take years to build. The architects of this plan say to "prepare for hardship".

[DrVenture]

Originally Posted by mks

This subject was recently being discussed in a tread titled, “Tariffs,” which I can’t find or has been removed (https://g87.bimmerpost.com/forums/sh...php?p=31611927 ). Lots of good, well-reasoned and informed discussion along with a lot of misinformation and lack of understanding.
...
As for China, they are (still) winning—whatever that means as one can’t really concluded that they are losing.

First of all, well informed and well written.

As to the "lack of understanding" part, I would submit few understand trade deficits. From Brookings Institute, "The U.S. trade deficit does not reflect the U.S. “losing out” in international trade. In fact, steady economic and employment growth since the 2009 Great Recession have coincided with a 30 percent increase in the U.S. trade deficit. From an accounting perspective, the trade deficit (plus other international cash flows) reflects a lack of domestic savings to finance investment. This gap is covered (by) capital inflows from foreign countries investing in the U.S. Thus, raising tariffs on imports will not eliminate the (trade) deficit, as long as the investment and savings gap remains."

[Hit_Apex]

Originally Posted by mks

This subject was recently being discussed in a tread titled, “Tariffs,” which I can’t find or has been removed (https://g87.bimmerpost.com/forums/sh...php?p=31611927 ). Lots of good, well-reasoned and informed discussion along with a lot of misinformation and lack of understanding. This topic can, I imagine, get kinda heated, but the last I read on that thread, the discussion seemed pretty civil. In any case, tariffs have a history dating back to their use in the late eighteenth-century. While successful according to the purpose back then, they’ve largely been proven ineffective today as an instrument of national power or source of significant revenue—on the scale that would matter when compared to the over $4.4T the US’s budget.

I’m not an economist but I followed this subject a bit starting back in late 2017 forward (and earlier during my career in the military), when it was first posited as an “economic plan” to somehow fix the ailing US economy. Plenty has been said about the purpose of tariffs; however, they are primarily designed to change the behavior of established trading partners. They’re a bargaining tool like any of the US’s instrument of power—but only useful to an extent and not a very great one. As predicted, those 2017/8 tariffs did provoke a behavioral change. Each country countered with retaliatory tariffs--China, Mexico, Turkey, the EU, Russia, and even Canada. The stated goals of their imposition back in 2018 has largely been characterized as a failure—producing net negative effects on manufacturing and US job creation (with some nominal, expensive, exceptions) as well as burdening to American consumer (their primary impacted demographic). Again, I’m not an economist. The facts are presented and contested in sources like CATO, Fed Reserve Board, Brookings, Oxford Eco, Carnegie, Wall Street Journal, etc.

It seems the concern, now, is the idea that tariffs will be used to pay for tax cuts. But, just as an example, a review by the WSJ found that proposed tariffs would bring in a quarter of a billion annually, an increase from $50B to ~$80B from 2018 to present (figures by Brookings). A figure which doesn’t really move the needle in the roughly $4.4 trillion revenue achieved through taxes. Aside, ~$240B merely scratches the surface of the DoD’s budget...there's no way it comes close to paying for the tax cuts being proposed. Would I appreciate lower taxes and cheaper cars...yup. Are tariffs the magic economic wand to make that happen...idk but it doesn't appear so.

Th last administration already tried threatening such tariffs on Mexico (2018/9, if I recall) to influence immigration dictates. The effort failed to produce the intended result and the tariff threat was rescinded after the administration announced Mexico had basically conceded. They called it a success but nothing appreciable happened to stem illegal entry or reduce the existing population. The numbers did rise and fall between 2019 and 2022, but depending on which set of stats and research you read, the numbers were grossly significant or nominally different given the scale being discussed at the time. As an instrument of power, tariffs were ineffective to harmful and neither the previous administration or the present did anything to fix the problem regarding immigration policy and resources. Immigration has been a problem for decades—it didn’t magically spring up 2016/7 and did magically disappear behind some wall that Mexico paid for (not with proceeds Mexico didn’t have from all the tariffs that never worked).

Again, not an expert in this field but the recent use of tariffs, ostensibly strategic and within the US national interest, doesn’t seem to be able to create the intended effect. The proposed plan to use tariffs to pay for tax cuts has long been proven to be a losing proposition (besides, POTUS cannot willy-nilly impose tariffs without a declaring a threat to national security and even then can only do so for a limited time at a limited rate). Where tariffs generated significant revenue in the late eighteenth century, declining steadily as the US economy began to actualize into what is today, they do nothing measurable on the twenty-first century scale of the US economy (or China's, Canada's, EU's etc). In general, tariffs do not generate jobs (without expense to the US consumer), do not generate significant revenue, and do not tend to move political agendas or influence foreign trade or relations in any meaningful way. In this way, tariffs are as antiquated and nearly arbitrary as concepts like the debt ceiling. Disclaimer, again, not an economist.

As for China, they are (still) winning—whatever that means as one can’t really concluded that they are losing. They (along with most other countries) routinely counter/retaliate with tariffs of their own, some other instrument, or form of legal circumvention, e.g., shifting production to Mexico, which they and other countries have already done. Yes, tariffs changed China's (and other country’s) behavior, just not in the way the US intended. There are likely many anecdotal examples of the ostensible success of a tariff (maybe not in open/global markets) within the larger practice of imposing them; however, on the whole, they tend not to be effective as an instrument of national power (diplomatic, informational, military, economic, financial, intelligence, and law enforcement (DIME-FIL) activities). Certainly not in an economy as robust/global as China's. Really, they're kinda wimpy as instrument of influence...but they can be made to sound tough.

There is a library of research on the topic…here’s a few:

Ref: https://www.cfr.org/backgrounder/wha...pter-title-0-6
Ref: https://taxpolicycenter.org/taxvox/w...nd-who-pays-it
Ref: https://www.piie.com/publications/wo...ump-presidency

Love this - thanks you for dropping. As is the case when most policy is politicized pro/con arguments migrate to extreme scenarios. Recalibration of the various economic levers are very much needed as we have yet to dig out of COVID spending while both parties desire to spend at an unsustainable rate. As the UK recently conceded, taxes have to go up - what form that takes in the US is yet to play out. I also expect upward pressure on inflation and higher rates for longer under the new administration. So yes, everything - particularly imports - will get more expensive.

[Gemini562]

Originally Posted by mks

This subject was recently being discussed in a tread titled, “Tariffs,” which I can’t find or has been removed (https://g87.bimmerpost.com/forums/sh...php?p=31611927 ). Lots of good, well-reasoned and informed discussion along with a lot of misinformation and lack of understanding. This topic can, I imagine, get kinda heated, but the last I read on that thread, the discussion seemed pretty civil. In any case, tariffs have a history dating back to their use in the late eighteenth-century. While successful according to the purpose back then, they’ve largely been proven ineffective today as an instrument of national power or source of significant revenue—on the scale that would matter when compared to the over $4.4T the US’s budget.

I’m not an economist but I followed this subject a bit starting back in late 2017 forward (and earlier during my career in the military), when it was first posited as an “economic plan” to somehow fix the ailing US economy. Plenty has been said about the purpose of tariffs; however, they are primarily designed to change the behavior of established trading partners. They’re a bargaining tool like any of the US’s instrument of power—but only useful to an extent and not a very great one. As predicted, those 2017/8 tariffs did provoke a behavioral change. Each country countered with retaliatory tariffs--China, Mexico, Turkey, the EU, Russia, and even Canada. The stated goals of their imposition back in 2018 has largely been characterized as a failure—producing net negative effects on manufacturing and US job creation (with some nominal, expensive, exceptions) as well as burdening to American consumer (their primary impacted demographic). Again, I’m not an economist. The facts are presented and contested in sources like CATO, Fed Reserve Board, Brookings, Oxford Eco, Carnegie, Wall Street Journal, etc.

It seems the concern, now, is the idea that tariffs will be used to pay for tax cuts. But, just as an example, a review by the WSJ found that proposed tariffs would bring in a quarter of a billion annually, an increase from $50B to ~$80B from 2018 to present (figures by Brookings). A figure which doesn’t really move the needle in the roughly $4.4 trillion revenue achieved through taxes. Aside, ~$240B merely scratches the surface of the DoD’s budget...there's no way it comes close to paying for the tax cuts being proposed. Would I appreciate lower taxes and cheaper cars...yup. Are tariffs the magic economic wand to make that happen...idk but it doesn't appear so.

Th last administration already tried threatening such tariffs on Mexico (2018/9, if I recall) to influence immigration dictates. The effort failed to produce the intended result and the tariff threat was rescinded after the administration announced Mexico had basically conceded. They called it a success but nothing appreciable happened to stem illegal entry or reduce the existing population. The numbers did rise and fall between 2019 and 2022, but depending on which set of stats and research you read, the numbers were grossly significant or nominally different given the scale being discussed at the time. As an instrument of power, tariffs were ineffective to harmful and neither the previous administration or the present did anything to fix the problem regarding immigration policy and resources. Immigration has been a problem for decades—it didn’t magically spring up 2016/7 and did magically disappear behind some wall that Mexico paid for (not with proceeds Mexico didn’t have from all the tariffs that never worked).

Again, not an expert in this field but the recent use of tariffs, ostensibly strategic and within the US national interest, doesn’t seem to be able to create the intended effect. The proposed plan to use tariffs to pay for tax cuts has long been proven to be a losing proposition (besides, POTUS cannot willy-nilly impose tariffs without a declaring a threat to national security and even then can only do so for a limited time at a limited rate). Where tariffs generated significant revenue in the late eighteenth century, declining steadily as the US economy began to actualize into what is today, they do nothing measurable on the twenty-first century scale of the US economy (or China's, Canada's, EU's etc). In general, tariffs do not generate jobs (without expense to the US consumer), do not generate significant revenue, and do not tend to move political agendas or influence foreign trade or relations in any meaningful way. In this way, tariffs are as antiquated and nearly arbitrary as concepts like the debt ceiling. Disclaimer, again, not an economist.

As for China, they are (still) winning—whatever that means as one can’t really concluded that they are losing. They (along with most other countries) routinely counter/retaliate with tariffs of their own, some other instrument, or form of legal circumvention, e.g., shifting production to Mexico, which they and other countries have already done. Yes, tariffs changed China's (and other country’s) behavior, just not in the way the US intended. There are likely many anecdotal examples of the ostensible success of a tariff (maybe not in open/global markets) within the larger practice of imposing them; however, on the whole, they tend not to be effective as an instrument of national power (diplomatic, informational, military, economic, financial, intelligence, and law enforcement (DIME-FIL) activities). Certainly not in an economy as robust/global as China's. Really, they're kinda wimpy as instrument of influence...but they can be made to sound tough.

There is a library of research on the topic…here’s a few:

Ref: https://www.cfr.org/backgrounder/wha...pter-title-0-6
Ref: https://taxpolicycenter.org/taxvox/w...nd-who-pays-it
Ref: https://www.piie.com/publications/wo...ump-presidency

When we placed tariffs on Chinese goods, China retaliated by taxing American products, which especially hurt our farmers, who then needed government assistance. For consumers like us, these tariffs mean higher prices on everyday items, so any savings from tax cuts often disappear into those added costs. In the end, it’s middle- and lower-income families who pay the price, as tariffs take back any gains from the tax cuts.

[BlkGS]

Originally Posted by DrVenture

There is magical thinking in the notion that one can build new factories, employ "higher-paid workers" and not sell the products at much higher prices. Places like China, Vietnam, etc have people that will work for 12 hrs a day for little pay. They are not that particular about where the wastewater or fumes ends up going, either. The land is also relatively cheap. Governments often subsidize such plants.

$2.7 trillion in tariffs are proposed. Our GDP is about $27 trillion. A simple calculation would imply a 10% tax of the entire economy, mostly centered on imports. I see no reason BMW prices would not be severely impacted, along with everything else.

That is before factoring in reciprocal tariffs and large reductions in government spending to the equation (government spending is 23% of GDP) and a further increase in import prices due to planned dollar devaluation. Meanwhile factories take years to build. The architects of this plan say to "prepare for hardship".

I don't think you understand the intent. The intent is not to somehow make the products cheaper to buy. It's to make it such that the American products are on the same.playingnfield as the foreign ones. It's to make it so that your American made channel locks aren't twice the price of the ones made by slaves in China. Most people would buy a higher quality domestic product if offered at the same price as a lower quality import.

There's an added benefit of keeping the money domestically vs exporting it overseas.

The reality is the really commoditized products, hand soap for instance, are going to be so heavily automated process wise that it's not going to single handedly bring back the manufacturing class of they build it here, but it's a start and it creates jobs all along that process.

[BlkGS]

Originally Posted by Gemini562

When we placed tariffs on Chinese goods, China retaliated by taxing American products, which especially hurt our farmers, who then needed government assistance. For consumers like us, these tariffs mean higher prices on everyday items, so any savings from tax cuts often disappear into those added costs. In the end, it’s middle- and lower-income families who pay the price, as tariffs take back any gains from the tax cuts.

China already effectively locks out foreign products. The proposed tariffs are nothing compared to existing restrictions China has in place on foreign goods. They effectively for e you to produce there, and tondo that you have to do a JV with a Chinese company. Then you basically have to build up that business, train the whole business on how to operate, then wonder what happened when they steal your IP and processes and massively undercut you in their own market.

The CCP wants to remove the rest of the world's ability to self determine anything. They want to be the global superpower that gets to dictate how the rest of the world works. They don't care about stuff like "doing the right thing", "human rights", "protecting the future of the planet", or anything that western policies think matters. They only care about global domination.

[allwheelsdriven]

"It seems the concern, now, is the idea that tariffs will be used to pay for tax cuts. But, just as an example, a review by the WSJ found that proposed tariffs would bring in a quarter of a billion annually, an increase from $50B to ~$80B from 2018 to present (figures by Brookings). A figure which doesn’t really move the needle in the roughly $4.4 trillion revenue achieved through taxes. Aside, ~$240B merely scratches the surface of the DoD’s budget...there's no way it comes close to paying for the tax cuts being proposed. Would I appreciate lower taxes and cheaper cars...yup. Are tariffs the magic economic wand to make that happen...idk but it doesn't appear so." Well we've already ran the course of using Medicare and Social Security as a piggybank.

side note:

I always ask anyone who voted for him, " Do you have a woman or daughter you care about?"

What does that have to do with anything?! Oh, you're about to find out

[RED_Y_]

Originally Posted by BlkGS

The tariffs will be a good thing. The American middle class was built on manufacturing, and has declined on off shoring it all. It will hurt in the short term, and the countries that have enjoyed manufacturing being outsourced to them will lose in the end, but it's a good thing for Americans to have good paying jobs in manufacturing, and it's even better if the US then exports it's products globally.

To be clear, the big loser in all of this is China. They have made a consistent process out of abusing unpaid and forced labor, exporting products below cost to drive out competition, and stealing IP vs developing it for themselves. As the doors shut to Chinese exports, money stops flowing in to the country, and it becomes harder for the CCP to prop up their charade. They'll probably still stay in power through fear and brutal crackdowns on civilians, but it's a step.

There are few major flaws in this:
1. You can most certainly quickly (2-3 years) restore basic manufacturing such as toasters, blenders, home appliances, extension cords and other misc items even they would cost 3-8 times more because you should consider higher costs of labor in US ("good paying jobs in manufacturing"),benefits, cost of opening new factories and investing into equipment and everything around it.
2. To fire more advanced manufacturing like TVs, gaming consoles, network equipment, speakers, computer parts will take much longer, 5-8 years minimum to see the first product.
3. High tech component and items like microchips, semiconductors, CPUs, graphic chips, cameras, OLED and LED screens manufacturing will take few decades to fire up.
So in the end of the day your $40 toaster will cost $150, new PlayStation will hit a $1500 price tag, and it would be nearly impossible to predict price of let's say new iPhone. This was also mentioned above, but last time we were in trading war with China, first victims were US farmers who were hit very hard by retaliatory tariffs. CPUs do not grow on trees and you can not just flip the switch and start baking them. Prior to imposing tariffs we need to build factories in USA.

[tturedraider]

Originally Posted by jcracken

In terms of the cars themselves, Volvo was able to leverage a loophole in tariff law that meant for every vehicle built here and exported to another nation, they could import a vehicle made somewhere else without paying a tariff. So some of that may start to occur.

Of course, throwing a tariff on Mexico (which Trump said he would do during the campaign) would violate NAFTA, so he'd either need to have it repealed (impossible if the GOP have a small majority in the House, which is looking like they will), or get sued over it and likely have to stop.

Even vehicles built in EU and other nations that are able to enjoy that type of freedom have a good legal case that even this SCOTUS will be hard pressed to get out of.

BMW is the largest exporter of vehicles in the United States. They export 70% of the production in South Carolina. That would most likely have some kind of positive effect on their ability to import their products. IF tariffs ever actually become an issue.

Originally Posted by Chilled

As a non American watching the situation, it feels like US is now entering the Finding Out stage of Fucking around. Good Luck.

Okay, I’m going to give an answer here and hope it doesn’t completely derail this thread.

That’s because most of the country and most of the world seems to have forgotten Donald Trump has already been president for four years and is a known quantity. He talks a big game to put himself in a position to negotiate what he actually wants. He’s been doing that his entire business career. He uses the threat of higher tariffs (and a variety of other things) to get world leaders to negotiate and give him what he wants, which is virtually always to do what they should have been doing all along. No one seems to remember he used the threat of tariffs the first time around and we did not end actually having a bunch of high tariffs. He didn’t tank the economy the first time and he’s not going to this time.

People should think about Trump similarly to Teddy Roosevelt. “Walk softly and carry a big stick.”

[DrVenture]

Originally Posted by BlkGS

I don't think you understand the intent. The intent is not to somehow make the products cheaper to buy. It's to make it such that the American products are on the same.playingnfield as the foreign ones. It's to make it so that your American made channel locks aren't twice the price of the ones made by slaves in China. Most people would buy a higher quality domestic product if offered at the same price as a lower quality import.

There's an added benefit of keeping the money domestically vs exporting it overseas.

The reality is the really commoditized products, hand soap for instance, are going to be so heavily automated process wise that it's not going to single handedly bring back the manufacturing class of they build it here, but it's a start and it creates jobs all along that process.

I fully understand the intent. Who hasn't heard the rhetoric for decades? It simply doesn't stand up to macroeconomic scrutiny. Some of that has been detailed above. When tariffs start showing up in earnings reports, with misses and lowered guidance, we'll see how investors react. When prices rise significantly to accommodate tariffs, we'll see how consumers react. Neither is a patient bunch, that are prepared to wait a decade for the carrot.

I don't think forcing the economy to adapt to the current global economic climate is can effective strategy. I think enabling our workers to adapt to the dynamic economy is a far superior strategy.

Ask yourself, "What could be easier, than simply imposing tariffs on imports?'. Then ask yourself, "Why didn't someone do this sooner?". Is this a simple, elegant solution to a very complex problem? Or does it simply appeal to those who fail to comprehend the complexity?

[BlkGS]

Originally Posted by RED_Y_

There are few major flaws in this:
1. You can most certainly quickly (2-3 years) restore basic manufacturing such as toasters, blenders, home appliances, extension cords and other misc items even they would cost 3-8 times more because you should consider higher costs of labor in US ("good paying jobs in manufacturing"),benefits, cost of opening new factories and investing into equipment and everything around it.
2. To fire more advanced manufacturing like TVs, gaming consoles, network equipment, speakers, computer parts will take much longer, 5-8 years minimum to see the first product.
3. High tech component and items like microchips, semiconductors, CPUs, graphic chips, cameras, OLED and LED screens manufacturing will take few decades to fire up.
So in the end of the day your $40 toaster will cost $150, new PlayStation will hit a $1500 price tag, and it would be nearly impossible to predict price of let's say new iPhone. This was also mentioned above, but last time we were in trading war with China, first victims were US farmers who were hit very hard by retaliatory tariffs. CPUs do not grow on trees and you can not just flip the switch and start baking them. Prior to imposing tariffs we need to build factories in USA.

Honestly I think your estimates for time to spool up are optimistic.

We did t get to this point where most of our supply chains flow from china overnight, nor will we fix it overnight. It will be a decades long push, with some pain in the short and mid terms.

A lot of said that "prices will have to go up", and while overall this is true, it's highly probable they could go up by less than many think. A "we cannot economically do business with China" event would be a big driver that would allow companies to miss their margin goals set by wall st (who pushed them there in the first place to improve profits. So instead of apple.being able to make like 85% margin on an iPhone, maybe they only make 40% margin and sell it at the same price.

This would obviously have some pretty major impacts of the stock markets, but they've been propped up by the fed at unreasonable levels for years at this point.

[BlkGS]

Originally Posted by DrVenture

I fully understand the intent. Who hasn't heard the rhetoric for decades? It simply doesn't stand up to macroeconomic scrutiny. Some of that has been detailed above. When tariffs start showing up in earnings reports, with misses and lowered guidance, we'll see how investors react. When prices rise significantly to accommodate tariffs, we'll see how consumers react. Neither is a patient bunch, that are prepared to wait a decade for the carrot.

I don't think forcing the economy to adapt to the current global economic climate is can effective strategy. I think enabling our workers to adapt to the dynamic economy is a far superior strategy.

Ask yourself, "What could be easier, than simply imposing tariffs on imports?'. Then ask yourself, "Why didn't someone do this sooner?". Is this a simple, elegant solution to a very complex problem? Or does it simply appeal to those who fail to comprehend the complexity?

People have done it sooner. It just wasn't the US, at least not consistently. Our "friends" in China have huge trade barriers in place. Same with many of our biggest allies. It's only the USA (and to some extent other developed western economies) that is uniquely opposed to tariffs because our elite have made vast fortunes by selling out our middle class.

The containment of China and security of American supply chains is a hugely complex issue. There's not a "easier" solution at this stage other than either giving up and allowing China to cheat it's way to the top, or a full on apocalypse scenario where it doesn't matter any more.

The easiest solution at this point is to make Chinese imports economically unviable. Different types of goods will react in different ways. Maybe we will switch from a society obsessed with new but disposable products. Many foreign goods will just be built in other places with exceedingly low labor costs that aren't actively attempting to destroy our country. Some of our financial elite might not get to buy that second private jet per year. In the end though, our children and grandchildren will be better off for it.

[CLTMDA]

There are definitely playing fields that still are not level. If I remember correctly, Europe places an 8%-10% tariff on all imported vehicles whereas the US only charges 2.5% from Europe. Europe also adds another 15%-20% to Chinese EV's on top of that 10%.

I also agree with the above that tariffs may be a bargaining tool and not to take any politician at their word verbatim/literally. Heck, if that were the case and Kamala were the winner, we might be having the discussion of just how she was going to implement a couple of her greatest (sarcastic) ideas, taxing unrealized gains and imposing price gouging penalties on an industry that has some of the smallest margins of any. Or we might be forced to buy EV's in areas that have inadequate grid dynamics and a lack of chargers. I got rid of my EV, not because of the car itself, but because all of the billions added to get more chargers at the beginning of the Biden term has resulted in an increase of 9 locations. An EV is not practical for anyone in the southeast who travels longer distances.

This issue/discussion has gotten too political and theoretical in my opinion, especially when nothing has even been done yet other than some posturing comments, what-ifs, could and might. Heck, an asteroid might hit the moon, alter it's path and destroy the world next year.

[NYG]

Lefties are losing their minds and I'm loving every minute of it.

[CLTMDA]

Originally Posted by NYG

Lefties are losing their minds and I'm loving every minute of it.

[DrVenture]

In the scenario where AAPL (example given) cuts margins,, AAPL becomes significantly less profitable and desirable. People then dump the stock. Take a look at your portfolio. A typical S&P fund has AAPL as its top holding. Large cap funds often have as much as 10% of a single holding. If you have a $1 million dollar portfolio, all in the S&P, you have around $70K in AAPL. A drop from an 85% margin to a 40% margin is a loss to you of around $37K. And that is just one stock. P/Es mater to valuations.

While wide moat companies have pricing power, narrow and no moat companies will fail. This results in far less competition. Did companies cut margins during the inflation and supply chain disruptions of the CoVid era? Or did they raise prices? Profits and inflation strongly suggest the latter. Can we ignore that?

No way in hell, that investors, job seekers or consumers are waiting 5-10 years for the rewards that are being "promised". Not while prices are simultaneously going up. Meanwhile if they lower taxes, on the promise of replacing the lost revenue with tariff funds, and the tariffs never occur, what happens to budget deficits?

Macroeconomics need to be looked at from a holistic level, not compartmentalized. The economy has evolved over 200 years. Making massive changes should make every stakeholder extremely nervous.

[DrVenture]

It appears that several people are trying to have this thread deleted or shut down. Is it that threatening? A lot of facts are being presented and ideas exchanged. Try to contribute, not disrupt.

[DrVenture]

Originally Posted by BlkGS

People have done it sooner. It just wasn't the US, at least not consistently. Our "friends" in China have huge trade barriers in place. Same with many of our biggest allies. It's only the USA (and to some extent other developed western economies) that is uniquely opposed to tariffs because our elite have made vast fortunes by selling out our middle class.

The containment of China and security of American supply chains is a hugely complex issue. There's not a "easier" solution at this stage other than either giving up and allowing China to cheat it's way to the top, or a full on apocalypse scenario where it doesn't matter any more.

The easiest solution at this point is to make Chinese imports economically unviable. Different types of goods will react in different ways. Maybe we will switch from a society obsessed with new but disposable products. Many foreign goods will just be built in other places with exceedingly low labor costs that aren't actively attempting to destroy our country. Some of our financial elite might not get to buy that second private jet per year. In the end though, our children and grandchildren will be better off for it.

We are going to punish China at the expense of our own economy, so that our grandchildren are better off? Or simply shift trade to other countries that also employ slave labor, without actually addressing the overall trade deficit? That seems to defeat the premise of tariffs.

In the process giving up on capitalism, free trade and consumerism? And going after the "financial elite". That sounds very much like textbook communism. As the "financial elites" themselves will be the ones pulling levers and tweaking dials, why would anyone think that they were going to change the balance away from themselves?

The lowering of trade barriers coincided directly with 30 years of economic prosperity. There were winners and there were losers. Overall our economy benefitted greatly. It is also well understood that a healthy global economy is beneficial to the U.S. And that when China's economy goes badly, so does everyone elses. As our economy, and other Western economies, have always done better than many of our European allies, why would we want to emulate them?