2w ago

this tariff pause is going to be very bad for the factory I started building last week

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Yeah, it would be a hard sell making that kind of commitment when they may get trashed in four years, never mind next week.
- Forget four years. When Trump just turns around and lowers almost all the tariffs just because bond markets "got yippy" it makes it very clear that these are not a permanent thing even within this administration (assuming it does only last four years).
  This has been their problem from the start. If the goal of tariffs is to encourage domestic production, then it needs to be clear that they are a permanent thing, not some momentary whim. Companies need to know that it's worth making four year, five year, ten year investments under this new regime.
  But Trump and his mouthpieces keep talking about making deals. They describe the tariffs as a negotiating tactic, which means they're only intended to stick around as long as it takes to get that deal. So if you're investing in a new factory, the message is to wait until the deal happens.
  Tariffs cannot be both a tool for encouraging domestic growth and a tool for negotiating better trade. Those two goals are mutually exclusive. But pretty much no one in the white house understands that.
  
  The tariffs are also supposed to generate revenue that will offset Trump's tax cuts, which is also incompatible with those two already mutually exclusive goals
  
  And that's the real reason for the tariffs - creating the illusion that we can afford to cut taxes for billionaires.
  It was never going to work to increase domestic production for the reason in OP's meme.
  Tariffs can be a component of a plan, but not the full plan itself. Direct subsidies and grants to businesses willing to take a risk on expanding will get new factories built in the States - pay them to build the factories.
  Reliable, stable, predictable and ongoing tariffs would then keep those factories open sustainably even when they're competing against factories in countries with worse labor laws, less regulation and concomitantly poorer citizens.
  
  Tariffs can be a component of a plan, but not the full plan itself. Direct subsidies and grants to businesses willing to take a risk on expanding will get new factories built in the States - pay them to build the factories.
  Which is exactly what Biden was doing with the CHIPS act, which Trump immediately undid.
  
  These tariffs are used as a political whip, snapped loudly in front of the opponent's faces, trying to scare everyone in behaving.
- It's not even that they'd get trashed in 4 years, it's just that in 4 years we'd get someone who would actually enforce our labor laws, and they don't want to have to pay for their employees.

17 comments