Tariffs make us all poorer in the long run. Did we learn nothing in the 20th century?
One of the lessons we are learning the hardest way possible is that moving all your industrial base over seas to a country with autocratic tendencies makes you dependent on them, while also removing skill and knoedge from your country resulting in long term risk and damage.
Capital moves easily, supply lines do not. The 0 covid policy showed that this dependence on only china is dangerous for companies. And since companies are generally risk averse they will start spreading across more countries.
Tariffs make us all poorer in the long run. Did we learn nothing in the 20th century?
A bold statement without any economic or political context. It is Tthngs like that which make the foundation of misinformation and disinformation imo, and, in that case, play into the hands of Chinese disinformation campaigns.
It is impossible to compete when the playing field is not level. If state subsidies, energy production, co2 impact (not bullshit certificates and offsetting) could be equalized, then tariffs wouldn’t be so badly needed.
I too would like to have no VAT, import tax etc, and for everyone to get along nicely. The reality is, that we live in a highly competitive world where major powers are fighting for control over critical industries and raw resources.
So let them compete, isn’t that the idea? Countries and economies can compete with each other just like companies do. China can subsidize their EVs, America can subsidize its defense industry and corn, Europe can subsidize cheese and wine or whatever it is they make, each country specializes and offers the best product at the cheapest prices for consumers. Or make WTO have more ‘stick’ and less carrot so we can make countries stop subsidizing their own industries.
Either way, a return to trade tariffs and isolationism doesn’t sound great to me. It sounds like everything getting more expensive and less efficient (and therefore, more environmentally wasteful). It also sounds like countries being less dependent on each other, which means less reason to not go to war. We live in a very rare, peaceful time in human history. International trade (and massive technological/scientific breakthroughs) are a major part of that.
@makeasnek, this may be fine if and when all countries apply to the same rules, but this is not the case. China is heavily protecting its market, and they do so much more than the EU or the US. In China, foreign companies can’t even run a subsidiary in the country, they need a Chinese parther firm to create a joint venture. Recent Chinese ‘security laws’ even make simple market research almost impossible as it may be seen as ‘espionage’ by China, which made many consulting firms close their Chinese offices. And these are just two examples.
I’m not convinced this is true. At least in part.
I get the theory. But recent history seems to tell a different story. Lots of people are unemployed or working crappier jobs than what (usually) their father did in the same hometown. GDP might be higher but I’m not convinced large amounts of people are better off.
But the really issue is paychecks going to land and housing. If that got drastically fixed I think the world would be different.
Lots of people are unemployed or working crappier jobs than what (usually) their father did in the same hometown. GDP might be higher but I’m not convinced large amounts of people are better off.
Idk where you live, but it certainly can appear this way in the US and Europe. However, living standards have still increased no matter how you measure them. Consumer goods are vastly cheaper than they used to be relative to a person’s wage. Everybody has electricity and internet and a microwave and cell phone. That didn’t exist 75 years ago. Boomers grew up during an economic miracle where we were the only industrial power on the planet (since the other ones blew each other up during WW2 or were agrarian economies with even less access to healthcare than Americans have), so all manufactured and valued-added goods were made in the US. And during WW2 reconstruction we loaned those countries money to rebuild and they paid us interest for decades. And once Europe got on their feet, they joined in the “only people capable of making complex manufactured goods” club. That doesn’t last forever though.
No matter how you slice it, on a global scale wealth inequality has decreased and will continue to do, just as abject poverty continues to decrease and life expectancy increase (outside of the brief intermission for COVID and the next pandemic). Wealth inequality has increased in the richer countries.
I agree with everything you said.
But what I am saying is there are towns that were industrial powerhouses that now is full of unemployment. Things like microwaves and TV are going to be cheaper now whether they were made in country or out. I’m not saying that everything needs to be made in the country I’m just saying you aren’t going to convert an entire workforce to do finance. I’m not convinced completely free any open trade is right.
There are some people out there that are best off doing factory work, or whatever, and then could be better for the country to have workers being paid 1100 (100 more than in other countries) but that person has in income of 1100 and isn’t taking let’s say 500 from the government.
From a business point of view going from wages of 1100 to 1000 is better. But from a country point of view 100 saved to wages isn’t worth the 1000 in salary and GDP loss and the extra cost of the 500.
