2mo ago

Dear Americans, be prepare to get screwed!

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Brought this up to a friend who is very pro Trump and he said
"Part of trying to get industry back in the country (which we would be better off with) involves making imports less appealing."
- These people have no concept of geo politics and global trade. For example, we produce a lot of the world's soy, that's a major export, not many other countries do it on a large scale like that - so we cut the other countries some slack and tell them we won't produce this particular good so you can have a hand in the global economy. Yes having the production here would be ideal as I'm all for it, but the world is so much more than Murica and they can't see past their fucking noses.
  
  It’s way, way more than that. Specialization and comparative advantage underpins the entire globalized economy which is the only way to allow us to get more for the same amount of labor. Without it, we simply regress. US farmers grow soybeans so that Chinese manufactures can make the tractors to allow the US farmers to grow the soybeans, and that only works with free trade. And in this scenario there is no one else making a tractor for anywhere near the same cost, and no one else who can grow such a large volume of soybeans, otherwise the trade probably wouldn’t be happening in the first place. And so the alternative is that both countries have to make both independently. And that is more expensive without the efficiencies of economy of scale, more expensive because of lower supply because we don’t have the capacity to produce that many tractors and China can’t grow that many soybeans, and more expensive because of the infrastructure costs being duplicated and spread out over less units.
  And so we both end up with less tractors and less food that are more expensive. Now add in petrochemical fertilizers imported from Canada, steel and coal for the metal used in the tractor imported from Australia, all the industries that support them also getting caught into this, and where every one of those companies is tied into their regional, national, and the global economy. And that is just for tractors and soybeans.
  We trade for almost everything. And every single item that we trade, we do so because it is cheaper than making it ourselves. Tariffs are an artificial tax on efficiency, and we are literally less prosperous with them in place. Some things are a matter of national security, of not allowing a foreign government leverage over your society, but we’re talking about his genius plan to put tariffs on literally fucking everything - soybeans and tractors, but also clothing, toys, electronics, appliances, vehicles, on and on and on. And a tariff on it will increase the price, because that is just how economics works.
  
  we could have a more robust economy where we do make everything and they make everything and nothing needs to be more expensive, if we just let it be less profitable
  
  There are chinese tractor companies? I only know US, Italian, French or German tractor companies.
  
  I specifically looked it up just to be sure, John Deere does have multiple factories in China and a good amount of their website wording includes “assembled in USA”, sort of like cars and appliances and a lot of things, usually to get around existing tariffs and import duties. They do also have factories in Germany, Mexico, india, and of course multiple in the USA, but I kept it simple for the sake of the explanation, because China also does produce a lot of soybeans as well.
  
  And a tariff on it will increase the price, because that is just how economics works.
  this is not very scientific.
  
  The cost of getting the goods to consumers goes up. Does the consumer pay:
  A) More
  B) Less
  C) The same
  This election was decided by the majority of people in this country not being able to answer this very simple question
  Edit: oh shit I didn't even notice it was you lmao I see you're still roleplaying The Person With The Worst Takes
  
  why did the cost go up? what other variables are at play?
  
  Good guess, but that wasn't one of the options. Does the consumer pay:
  A) More
  B) Less
  C) The same
  I promise you, if you think about it for even a moment, this has a very intuitive answer
  
  we can't know
  
  ❌
  Sorry, the correct answer was
  A) More
  Explanation: when the cost of producing or acquiring a product increases, a business must earn more money to cover the additional expense
  
  prove it
  
  Sure thing
  If you make it cost more money for a company to provide their good or service, they must charge more for that good or service in order to break even
  
  No, but its exactly correct in a short sentence. Science wishes it could be that exact.
  Please tell me any way a tax, an additional cost added on to something could lower the price.
  
  it's not causal
- Just be sure to remind him at every opportunity that he voted for things to be more expensive.
  
  I will
- Yes it does.
  Do you know why we outsourced everything to China? Because they can do it cheaper.
  You can get it back, have it higher quality, more jobs, better control over it, all that good stuff. But it won't be cheaper.
  The US sells things they can make comparatively cheaper (not just price, its an opportunity cost) - better educated population, logistic, access to raw material, infrastructure investments. China sells things they can do cheaper - usually the fact that life is cheap in China.
  
  I agree with a lot of what you said. "Better educated population."
  Doubt
  
  While I mostly agree, but let's not underestimate Chinese education and the culture built around overachieving.
  
  Nah, I was joking about the fact I wouldn't say we are more educated than anyone ever again. After this week, I'm going to assume we are around 192nd in education, maybe 193rd. Out of the 193 members of the UN
  
  Sorry clarification.
  I listed things a country may have that can create a competition advantage. I'd also argue the better infrastructure for the US as well.
- Does he also know local companies will capitalise on the price increase?
  
  Current import price: 80
  Current USA made price: 100
  Tariff import price: 200
  Tariff USA made price: 190
- Trump is banking on foreign companies moving their operations to the US. There's also a high chance that Trump actually won't do anything. The guy talks a lot.
  
  It will take more than 4 years to move much of anything to the US. Will anyone think it's worth it?

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