Tariffs

[EEVblog]

Pardon me for asking this, but I really do not understand:
What is so all-fired bad about discussing politics?

Because it ruins the forum.
This has been discussed time and time again, poll after poll, for the last 15 years, the majority do not want politics on this forum, just stop it.

[Analog Kid]

Pardon me for asking this, but I really do not understand:
What is so all-fired bad about discussing politics?

Because it ruins the forum.
This has been discussed time and time again, poll after poll, for the last 15 years, the majority do not want politics on this forum, just stop it.

But there's already lots of politics being discussed in threads all over the place here, apparently without any dire consequences for the health of the forum. It's inevitable; it's an inextricable part of the human experience.

Anyhow. Back to tariffs.

[Terry Bites]

Rise up, rise up and smite these fascist morons down.
I mean, you guys are armed to the teeth for just this eventuality.
Kill the king!

[tggzzz]

Let's get back on topic about tariffs. As mentioned by other users, it's just getting to get locked otherwise.

Please don't lock this thread, it keeps the trolls busy and away from the threads that do matter.

Sometimes called a "honeypot"

I used to have the same opinion of football matches. Some people want to have a dust up with another gang, and a football stadium provides[1] an opportunity. Good, because that way I know how to avoid it.

[1] much less of a problem than it used to be.

[tggzzz]

Is everyone looking to get this thread locked?
Stick to tarrif related things please.

Be patient, Dave. Give it a couple of days. There is a looming deadline, and I’d hate to start a new thread dedicated to the 90 beautiful tariff deals if this one gets locked.

And while we are waiting, does anyone dare to share their nation’s deal? I bet the deal between Australia and Trump, due this week, is being actively discussed in the local media. I’m sure it is a masterpiece of a deal. Any hint what it looks like?

Any such numbers would have to be date and time stamped

The full consequences of his actions, internal and external, won't be realised for a quite a while yet. Hence the looming deadline is not especially important.

EDIT: what was the first thing I saw in my newsfeed?

Trump and US commerce secretary say tariffs are delayed until 1 August, sparking confusion. President says team will start sending trade partners letters with new tariff rates ahead of this week’s original 90-day deadline to make deal.

With his previously announced 90-day pause on tariffs set to end on 9 July, the president was asked if the new rates would come into effect this week, or on 1 August, as some officials had suggested.

“No, they’re going to be tariffs, the tariffs, the tariffs are going to be, the tariffs,” the president began, uncertainly, “I think we’ll have most countries done by July 9, yeah. Either a letter or a deal.”

Sensing the confusion, his commerce secretary, Howard Lutnick jumped in to add: “But they go into effect on August 1. Tariffs go into effect August 1, but the president is setting the rates and the deals right now.”

Every company I have ever worked in would have declined to enter into a commercial agreement with another company that pulled such stunts.

[tggzzz]

Pardon me for asking this, but I really do not understand:
What is so all-fired bad about discussing politics?

Because it ruins the forum.
This has been discussed time and time again, poll after poll, for the last 15 years, the majority do not want politics on this forum, just stop it.

But there's already lots of politics being discussed in threads all over the place here, apparently without any dire consequences for the health of the forum. It's inevitable; it's an inextricable part of the human experience.

Politics and religion almost inevitably generate more heat than light. That's why it is regarded as impolite to discuss them with strangers.

The problem is that this round of tariffs is inextricably linked with politics. IMHO it is right to allow a small amount of directly relevant politics for that reason, but this thread has gone beyond that threshold.

[Marco]

So 3 more weeks of chicken and everyone hoping Trump drops dead.

Despite all the delays, after the 55% deal with China and the 40% transhipping deal with Vietnam it's impossible for Trump to back off now ... massive inflation of cost of non essential goods is guaranteed regardless, so why would he back off?

[vad]

So 3 more weeks of chicken and everyone hoping Trump drops dead.

Despite all the delays, after the 55% deal with China and the 40% transhipping deal with Vietnam it's impossible for Trump to back off now ... massive inflation of cost of non essential goods is guaranteed regardless, so why would he back off?

Well, I can’t get into his brain, but I can guess. Let’s say a gold-furnished wide-body Airbus jet as a gift could seal the deal for lower tariffs.

[abeyer]

So 3 more weeksyears of chicken and everyone hoping Trump drops dead.

ftfy

[vad]

New tariff deals have been announced today:

- Japan, which pillaged the US economy for decades, will pay 25% starting August 1

- South Korea will pay 25%

PS. North Korea, whose leader shook hands with President Trump, will continue to be exempt from the tariffs.

[abeyer]

I think you meant "US businesses and consumers will pay"

No matter what your opinion of the merits and need for these tariffs, we should at least be honest about who is paying. Yes, they may have high level policy impacts on these countries, but those countries are never going to be the ones paying.

[PlainName]

I think you meant "US businesses and consumers will pay"

Indeed. I sometimes wonder if Mr President remembers that.

Tariffs. What's the alternative? I think the proper purpose is to prevent cheap goods being imported and people buying those instead of home grown products, leading to the decline of local manufacturing. But it is making the products artificially expensive, and sometimes still doesn't achieve its aim.

Could an alternative be to not apply a tariff but instead just limit the number of items coming in? If there are desirable then the rarity value would cause the price to rise naturally, to a point that customers are willing to pay (as opposed to a tax they don't like, even if it's the same value). That might be an incentive for local producers to see the potential and provide local products. And if they don't... well, there will be some unlucky people about demanding someone makes the stuff.

[Analog Kid]

Tariffs. What's the alternative? I think the proper purpose is to prevent cheap goods being imported and people buying those instead of home grown products, leading to the decline of local manufacturing. But it is making the products artificially expensive, and sometimes still doesn't achieve its aim.

Excellent question.
How's this for an alternative: instead of punitive measures which probably either won't work or will backfire, how about a kind of tit-for-tat approach:
Embark on a crash program to actually bring back manufacturing to North America (substitute any country here one wants to "make great" again). Do whatever it takes to ensure that happens, including direct subsidies, reinforcing education (one of the necessary pillars for manufacturing, especially in high-technology sectors) and protecting workers.

In other words, emulate China, with some enhancements.

Well, that's what I would do if I were the Ayatollah of the US.
But of course, this is exactly what's not in the cards. Not at all.
We're fucked.

[PlainName]

Embark on a crash program to actually bring back manufacturing to North America (substitute any country here one wants to "make great" again). Do whatever it takes to ensure that happens, including direct subsidies, reinforcing education (one of the necessary pillars for manufacturing, especially in high-technology sectors) and protecting workers.

That would certainly be a good way to go, but...

* Costs upfront money. Tariffers would see that as reverse tariffs - instead of making the importers pay, the government would be paying to stop them coming in.

* Gotta convince someone to invest heavily in a market that may not be there. I think they need to see a gap and think "Gosh, we could get in there and make loadsadosh" rather than push them towards a dark alley (even one with a slight glimmer of light in the distance).

Edit:
Not saying the government shouldn't be involved. Yes, it should promote and help along education (rather than kill off the universities), make the resources available. But I don't think it should dictate where they get to be used.

[nctnico]

Tariffs. What's the alternative? I think the proper purpose is to prevent cheap goods being imported and people buying those instead of home grown products, leading to the decline of local manufacturing. But it is making the products artificially expensive, and sometimes still doesn't achieve its aim.

Excellent question.
How's this for an alternative: instead of punitive measures which probably either won't work or will backfire, how about a kind of tit-for-tat approach:
Embark on a crash program to actually bring back manufacturing to North America (substitute any country here one wants to "make great" again). Do whatever it takes to ensure that happens, including direct subsidies, reinforcing education (one of the necessary pillars for manufacturing, especially in high-technology sectors) and protecting workers.

That has been tried already. AFAIK farming is the remaining industry to receive subsidies.

In the 1970's and 1980's lots of industries received massive subsidies to keep jobs (at least in West Europe) but that only resulted in companies becoming complacent (too big to fail) and wait for the next round of subsidies instead of becoming more competitive. The companies still failed. So that doesn't work.

IMHO the way forward to boost an economy is investing in education & research and create ecosystems where new technology can be developed into viable businesses. The world changes continuously and new technology converts adaptation into cash.

[Analog Kid]

Everything I wrote about re-industrializing the USA (or any other country for that matter) would absolutely work, given the political will to do so. We (the US) have all the resources we need to make this happen. (Those that are currently restricted, like rare-earth elements from China, could easily be restored through smart diplomacy instead of saber-rattling.) A judiciously balanced mix of help from the gov't. (subsidies), incentives to the private sector (without creating "too big to fail" behemoths), and most important of all, improving education, could do the trick.

However, read that last part I wrote.
It ain't gonna happen. Not on this planet in our lifetime, anyhow.
Because it's not just the political will that's missing:
The entire ethos the global economy is currently running under is basically "every man for himself, take what you can before someone else takes it, and use force if necessary".
The good-faith discussions we're having here are totally irrelevant, because the Masters of the Universe who run our world really don't give two shits about our well-being; it's all about the bottom line, baby. So however reasonable anyone's suggestions sound here (and there can certainly be more detailed, better fleshed-out ones than what I presented), please don't delude yourself that they have a snowball's chance in hell of actually being implemented.

[nctnico]

The core problem is that manufacturing is actually where least of the profit is made. You don't want a country to depend on manufacturing at all. Development and sales is where the money is to be made.

[abeyer]

You don't want a country to depend on manufacturing at all.

Perhaps, but you also don't want to entirely depend on another country for it either.

[Analog Kid]

The core problem is that manufacturing is actually where least of the profit is made. You don't want a country to depend on manufacturing at all. Development and sales is where the money is to be made.

That's an extremely weak, and I'd say superfluous, argument against having manufacturing, if that's what that was.

Obviously, making stuff and selling it includes some ancillary functions like design and marketing. So not sure what you're trying to get at here.

If you don't make stuff, you're going to depend on others doing that, because no matter how the tech-meisters like to spin it, we still live in a real world, not a virtual one. Virtual things have their place but we still need tangible things like cars, refrigerators, heaters, trains, buses and planes.

And if you end up depending on others making your stuff--after you practically begged them to do so and then to sell it to you--you'd better not complain about the sorry state of your own economy.

[vad]

You don't want a country to depend on manufacturing at all.

Perhaps, but you also don't want to entirely depend on another country for it either.

No, not entirely.

You do not want to rely on foreign manufacturing for tanks and air defense systems. A hard lesson Ukraine is currently learning. On the other hand, there is no need to bring horse saddle manufacturing back onshore. Saddles are no longer strategic products that the armed forces depend on.

I do not care whether a BBQ grill scrubber has US-made bolts manufactured from US-made stainless steel made with locally mined chromium, nickel and molybdenum. If the scrubber costs $75, I’ll skip the grill and cook a Sous Vide steak instead.

[nctnico]

The core problem is that manufacturing is actually where least of the profit is made. You don't want a country to depend on manufacturing at all. Development and sales is where the money is to be made.

That's an extremely weak, and I'd say superfluous, argument against having manufacturing, if that's what that was.

It is not a weak argument at all. For example: it is a common rule of thumb that an electronics device may cost at most 25% of the retail price to produce. Manufacturing profit margin (when outsourced) is maybe 10% of that 25% (=2.5% of the retail price). 75% of the retail price goes into development and sales. So what is more profitable? Manufacture 10k units or sell 10k units? If you manufacture 10k units for a product which costs $100 to the final buyer, you made 25k (before costs). If you sell 10k units you made 750k (before costs). For clothes these numbers are even further apart (like 5% and 95%).

[PlainName]

The core problem is that manufacturing is actually where least of the profit is made. You don't want a country to depend on manufacturing at all. Development and sales is where the money is to be made.

That's an extremely weak, and I'd say superfluous, argument against having manufacturing, if that's what that was.

It is not a weak argument at all. For example: it is a common rule of thumb that an electronics device may cost at most 25% of the retail price to produce. Manufacturing profit margin (when outsourced) is maybe 10% of that 25% (=2.5% of the retail price). 75% of the retail price goes into development and sales. So what is more profitable? Manufacture 10k units or sell 10k units? If you manufacture 10k units for a product which costs $100 to the final buyer, you made 25k (before costs). If you sell 10k units you made 750k (before costs). For clothes these numbers are even further apart (like 5% and 95%).

Isn't that where it's going wrong - looking solely at profit.

If you sell something made somewhere else, you make a lot of money but only you make the money. If, instead, you make the thing you'll have less profit but more people will benefit through having jobs making the thing. Isn't that what's need to be done: make stuff and share the benefits with lots of people, as opposed to sell stuff and be 4th richest man in the world.

[themadhippy]

You do not want to rely on foreign manufacturing for tanks and air defense systems.

and what if your  local manufacturer is owned by a foreign corporation?

[vad]

There were (and still are) few countries that relied completely, or nearly completely, on local manufacturing. It did not work out well for the USSR. I can attest to that from personal experience. As for North Korea, I can’t say. If anyone has traveled there, please share your experience, especially how the economy is doing.

[nctnico]

You don't want a country to depend on manufacturing at all.

Perhaps, but you also don't want to entirely depend on another country for it either.

You don't have to. Apple, for example, has moved a significant amount of their manufacturing from China to Vietnam. There are plenty of low wage countries to choose from.