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xkcd #3290: Trade
(lemmy.nz)
Title text:
"You legs may have a comparative advantage at running, but we arms have a competitive advantage at swinging hammers, so unless you accept that we're the dominant limbs and stop hogging the oxygen, that running advantage won't be around for long."
Transcript:
Transcript will show once it’s been added to explainxkcd.com
Source: https://xkcd.com/3290/
I came here to start with the exact same first sentence. There is a use case for tariffs: when another country's prices on a specific item are lower because they pay their people slave wages, a tariff can make the prices on the US version more competitive and encourage people to buy domestically. But Trump is raising prices on things we don't make or materials we don't have enough of, and - like the cartoon says - he's acting like he's punishing the other countries when he's only punishing Americans.
And I don't think it works at all for manufactured goods.
For example, in the 70's or 80's Yamaha came out with their Virago line of motorcycles. They were American style teardrop tank cruisers set to compete directly with Harley-Davidson, except with objectively better engines and lower prices. The only thing Harley had going for it was their trademark engineering mistake. of a single pin crankshaft.
Harley asked the government to step in, the government applied a tariff to motorcycles over...some engine displacement, I think it was 1200ccs or so. Yamaha responded by slightly reducing the cylinder bore to bring it down to 1150cc and made a range of lower end models all the way down to 250cc, none of which qualified for the tariff, and Yamaha is still selling cruisers in the US to this day, meanwhile Harley-Davidson is a popular designer clothing label with a small vestigial powersports division.
That's sort of different. In that case, the tariffs were being used to protect a specific company's product, so it had to be narrowly worded, and that's just not going to work. If they had applied it to, say, all two-wheeled motorized vehicles, Yamaha wouldn't have had a way around it. Of course, in that case it wasn't that Japan had lower prices because of poor wages, it's that they had a better product.
It was both better AND cheaper.
I've seen similar tariffs circumnavigated by putting cheap crappy seats in the bed of the Subaru BRAT or selling a Japanese truck as a "Ford Ranger." Or importing parts and assembling them in America rather than just importing the whole truck.
Tariffs are politics, politics is bullshit, therefore tariffs are bullshit.
Eh, I still say there are cases to be made for times when another country puts their thumb on the scale. It's not a perfect solution, but it has it's place. Still, what's happening now is complete bullshit.
The United States was at one point a manufacturing powerhouse. We built the materiel to fight our own two front war and a lot of the kit used by our allies. Our solution to any other nation on Earth trying to put the thumb on the scale should be to shrug our shoulders and just fucking win. We've got manpower, energy and resources falling out of our ears.
And you would introduce those tariffs gradually. Just start with 0.1% and increase at a regular interval over several years so everybody has time to adjust and build out local production financed by investors that know exactly what's coming down the pipeline. No, instead you get wild swings, on and off again and a complete chaos where building and investing becomes a huge risk.
It's almost like he's trying to destabilize the country.
Because they let him while in the background the richest folks try to buy everything for pennies on the dollar and turn the country in a cyberpunk dystopia.
There are other cases to be made. There are things of stretegic importance you want produced domestically. Trump complains about Canada having tariffs on dairy. Obviously he mischaracterizes it, but there are indeed limitations of the amount of food Canada imports from the US.
We don't want to become dependent on the US for food. Because we don't trust the US. For obvious reasons.
I don't trust the US, and I'm American
As someone who works directly in the Canadian dairy industry (not a farmer), there are very specific reasons we don't want your dairy ANYWHERE in our country.
As a Canadian who consumes dairy products, I completely agree.
If Dairy Farmers of Canada allowed half of what American dairy allows on their farms, I would reject them at the farm level tomorrow.
Shit, I had a positive bacterial test at a production facility. Half of the trailer was contaminated and threw a positive. It's so rare QA at that plant didn't know what to do. Multiple tests, a rejected half tank, and after finding out... A small farm of about 2000L accidentally milked one cow on antibiotics. They milk 4-5 times between farm pickup days. So one cow, one time, over 4-5 herd milking, for around 2000L of milk, was enough to flag an antibiotics test of nearly 16000 litres of milk in half of a tanker. That single cow may have produced 8-13 litres of milk in that 2000L pickup, which was enough to flag a test on 16000L.
For comparison sake, American milk allows antibiotics in their milk. They can milk cows on antibiotics and keep them in the main herd.
Or they're if cheaper because of subsidies, for example China's cars.
The only thing that would punish other countries there is that higher prices here means less people here buy it, which means less sold there.
But it also means less logistics workers and such as well. It's just a bad deal all around.