[NA] Practical tariff impact

StraightnLevel said:
The list goes on far longer than this. For 30 years we have been living fat, dumb and happy while enjoying artificially low priced imported goods that have undercut our industrial capacity and the middle class wage base that accompanies it. It's time to pay the piper, start to restore a trade balance, and grow our middle class back to where it should be.

Are tariffs the right approach? Maybe not - what do you propose?
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The middle class has shrank since the 60s but only cause the upper class has tripled. Our inflation adjusted households under 35k shrunk from 32 to 25% our middle class 35-100k shrunk from 55% to 39%( sounds bad) but out upper class went from 12 percent to 36% So the middle class is shrinking only cause they are now upper class.
If you pull up an industrial output chart you'll see we generate more, export more and make more money in industry adjusted for inflation vs the 60s. So if undercutting our industrial capacity and middle class wage base means increasing inflation adjusted output and shrinking the middle class by moving them up out of it sign me up!

EDIT: I'd propose nothing. We are winning so hard its insane. Our poorest state is richer than the UK. Our average wage is almost 50% more than france. All our qol metrics have expanded(except lifespan cause we are eating ourselves to death+fent) .
 
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falconkidding said:
EDIT: I'd propose nothing. We are winning so hard its insane. Our poorest state is richer than the UK. Our average wage is almost 50% more than france. All our qol metrics have expanded(except lifespan cause we are eating ourselves to death.
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Obesity and drugs exist in other places.

Despite our average wage being 50% more than France they’re better educated, happier, work less hours, have better benefits, and live almost 4 years longer.


The US is however #1 in a couple pretty cool metrics; Military spending and incarcerated persons!!! Land of the free!
 
Baked Potato said:
Based on what metric?
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The only metric that matters; GDP per Capita!

Now, people in the UK live 7 years longer than MS on average. A person in the UK is on average roughly 18% more likely to have a college education. The UK is substantially higher (.94) on the Human Development Index scale than MS (.87).

However, you are nearly 5x more likely to get thrown in prison in MS (661/100k) than you are in the UK (134/100k).
 
SoonerAviator said:
. It seems like it would have been a better tactic to use local legislation to persuade US-based companies to onshore desired manufacturing and put financial constraints on foreign companies with regard to pulling out profits or obtaining capital goods (land/buildings especially).
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That's not going to be effective with imports from China and India, as it does nothing to offset the artificial cost advantages that their policies create.

From a separate perspective, how would you pay for those "incentives"? There are plenty of people in our political landscape who scream bloody murder every time a company takes advantage of the existing on-shoring incentives to lower their tax bill. Lowering their tax bill even further would be used as a political bludgeon, and that tax revenue would have to be replaced somewhere, either in spending or with other taxes.

There is a reason that all of the EU has levied a VAT. This concept (under the name "fair tax") got no traction politically in the US, so tariffs are the next option in that playbook.
 
falconkidding said:
GDP per capita, median household income.
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Other than GDP per Capita, is there any other *positive* metric that MS leads the UK?

Or does “winning so hard” only extend as far as GDP per Capita which is a very poor indicator of anything by itself.
 
falconkidding said:
GDP per capita, median household income.
EDIT also fewer people in poverty.
EDIT2. Home ownership rates.
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MS does not calculate poverty the same way the UK does.

MS does have one of the highest home ownership rates in the US.

It’s also right in between Hungary and Argentina on the HDI, which is a factor of education, life expectancy, and income. We know that the US makes substantially more than other countries, so we know we are REALLY FAR behind in Education and Life expectancy.

edit:
I was actually using old data. MS is equal to Oman on the HDI index and slightly above Turkey.
 
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StraightnLevel said:
That's not going to be effective with imports from China and India, as it does nothing to offset the artificial cost advantages that their policies create.

From a separate perspective, how would you pay for those "incentives"? There are plenty of people in our political landscape who scream bloody murder every time a company takes advantage of the existing on-shoring incentives to lower their tax bill. Lowering their tax bill even further would be used as a political bludgeon, and that tax revenue would have to be replaced somewhere, either in spending or with other taxes.

There is a reason that all of the EU has levied a VAT. This concept (under the name "fair tax") got no traction politically in the US, so tariffs are the next option in that playbook.
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Pay for incentives? The incentive would be: we're going to tax/penalize the hell out of your company if "x" percent of your global workforce isn't in the US by 2030, maybe even more required on a graduated scale. That incentive pays for itself. It has similar results as a tariff in the long term, but doesn't cause immediate short-term turmoil in the markets, and allows companies to plan/develop their business strategies over a multi-year timeline. As far as dealing with China/India, those discussions can be more dynamic with tariffs and other measures to combat currency manipulation and IP-infringement. Issuing directives to US companies and our allies abroad to begin shifting production/sourcing to other LCCs would also put the pressure on China/India as their revenue sources began to get constricted over the years. However, wholesale tariffs being applied to every country, even for products we have no intention of ever wanting back in the US is just silly and counter-productive.
 
SoonerAviator said:
Pay for incentives? The incentive would be: we're going to tax/penalize the hell out of your company if "x" percent of your global workforce isn't in the US by 2030, maybe even more required on a graduated scale.
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You've never managed a global business, have you?

If the domestic cost structure is not competitive with imports, the domestic manufacturers will cease operations.

When foreign manufacturers are being given incentives and unfair advantages (as listed above), trying to use punitive measures to forcibly repatriate domestic operations will just kill those businesses.

Customers will buy the cheapest product on the shelves. If it costs $25 to make a shirt in Malaysia and $75 to do it in the US, there is no penalty you can charge the US firm that will get customers to stop buying the Malaysian shirt.
 
StraightnLevel said:
You've never managed a global business, have you?

If the domestic cost structure is not competitive with imports, the domestic manufacturers will cease operations.

When foreign manufacturers are being given incentives and unfair advantages (as listed above), trying to use punitive measures to forcibly repatriate domestic operations will just kill those businesses.

Customers will buy the cheapest product on the shelves. If it costs $25 to make a shirt in Malaysia and $75 to do it in the US, there is no penalty you can charge the US firm that will get customers to stop buying the Malaysian shirt.
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Sigh . . . which is why you approach it from multiple angles and not just flat tariffs on anything and everything. Maybe we don't care about bringing shirt manufacturing back, so we leave it alone. However, microchip manufacturing, we force companies to start building up manufacturing in the US and all sourcing from non-US countries is phased out by a certain date. You can at least pick and choose what you want to bring back and structure the tax/levies on local and foreign companies to accomplish what you want to do. The current whipsaw tariffs aren't really forcing anything to change. We just have a 90-day relief to China after implementing tariffs for 2 weeks, lol. What did that accomplish? It's just nonsense at this point and doing little more than being a bull in a China shop, figuratively and literally. The lack of a clear path for any business, both domestic and foreign is a mistake.

If the American consumer is prevented from purchasing low-cost stuff from Malaysia, the US company will fare just fine with a more expensive shirt. It's effectively no different than putting a tariff on the Malaysia company to impart parity, but now you've incentivized a US-based company to make them in-country and provide jobs. The offshoring of American labor took the better part of 3 decades to accomplish, there's no reason to try and undo it in the span of a single Presidential term.
 
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Ah yes, I always come to the upper middle class echo chamber to know how "the majority" are doing. duh :rofl: .

You know they lost the plot when per capita gets uttered lol. What's next, U3? LOL. Save me daddy Powell. They wouldn't know how to calculate the MODE of a flippin' thing if I smacked them in the man pleaser with a TI-84+.

I always found E Pluribus Unum more of an aspirational utterance in reality; 20 years of pointedly nomadic, begrudged economic-motivated indentured servitude informs that observation mind you. People who speak of American generalized affluence are ime, chronically silo'd. In fairness to them, our residential zoning/planning writ large encourages that blind spot, but that's for another thread altogether.
 
SoonerAviator said:
I just which the tactic was more pointed scalpel rather than a broadsword,
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… I see it as more along the lines of using a Molotov cocktail against a thief in your living room… can it be effective, probably… will it cause one heck of a lot of long term collateral damage..almost certainly.
 
Tariffs are kinda like a VAT. They get paid by the consumer. Something's in Europe are vat taxed multiple times.
 
Mikey52 said:
Tariffs are kinda like a VAT. They get paid by the consumer. Some thing's in Europe are vat taxed multiple times.
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Correct - and many European companies benefit from this by paying a lower earnings tax rate.

Germany, for example, has a national business earnings tax rate of 15.825% vs. the US rate of 21%.
 
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