- I voted for Trump but do not consider myself a strong supporter (I saw it much more of a vote for who you dislike less sort of situation)
- I don't understand and am not supportive of the approach on Tariffs
- I am an active participate in what most here would consider right wing politics although I don't find myself aligning on every topic (e.g. I am supportive of the abortion laws in California) so I tend to hear a lot of the chatter "from the other side"
Some arguments that I have heard (which I mostly do not agree with) are
- When manufacturing moved out of the US to low cost of living countries, this hurt towns which relied on manufacturing (e.g. the rust belt). Cost is the primary reason why manufacturing moved. Raising the cost on overseas manufacturing may make domestic manufacturing cost competitive. Although economics tells us this will still be a net loss there may be externalities which are not priced into the trade (e.g. the towns falling apart and people becoming despondent / drug addicted might not be factored into corporate profit models)
- Being overly dependent on China or more broadly "foreign powers" for manufacturing represents a national security risk.
- In theory this could be posturing to provide an opening for the US to negotiate more favorable trade agreements. For example Israel, Vietnam, and Argentina have made some statements about reducing trade barriers on US companies.
- In theory it could be beneficial to shift the revenue model of the US towards raising revenue with tariffs while reducing interest rates and other tax rates (e.g. "no taxes on overtime and tips")
The argument in favour of free trade is that it increases the pie, so that everyone can be better off (a Pareto improvement). However, given that trade does produce winners and losers, this argument is predicated on redistribution, namely (over)compensating the losers.
That second part of the argument in favour of free trade is often conveniently forgotten. So when that redistribution doesn’t happen, then opposing free trade is quite rational for some.
I broadly agree that free trade increases the pie and is beneficial. I would still like to point out that I can think of two examples where the pie might actually decrease even while conceding in the vast majority of cases the pie does increase and that free trade is largely a good thing.
(1) The comparative advantage of a country is that they do not have strict environmental standards and becomes the low cost leader in a "dirty" industry.
(2) An individual in the rich country loses their job to an individual in the poor country who produces exactly the same level of output at lower cost and the individual in the rich country ends up having to subside on government benefits
For both of these examples, shareholders profit financially from the outsourcing (and so I would argue it is likely happen) even as the world in example 1 or the rich country in example 2 loses out.
To improve rust belt manufacturing, you would target competitors of industries in that area, not the whole global economy.
We imposed a 32% tariff on Taiwan. Simultaneously, we are making it more expensive to manufacture here in the states. We have 1/4 China's pop - why would we try to compete on raw output by ourselves, instead of strengthening ties w/ the world?
For many countries, there is nothing to negotiate since we already have free trade agreements with them. We may import a lot of goods, but we export a lot of services, like many developed nations do.
With regard to raising revenue, think of the tradeoffs. If demand is elastic (given our trade deficit, it has to be!), this will be a tax on many, many American businesses and consumers. Its just moving the taxes from income tax to a consumption tax. That's a worse deal for poorer/middle-class Americans.
> To improve rust belt manufacturing, you would target competitors of industries in that area, not the whole global economy.
If you accept as a premise that the goal is to prevent offshoring our manufacturing base THEN you may also want to develop new industry and not just protect industries in that area. Moreover the goal is presumably not restricted to just that area it is an example of a specific region which was hard hit.
> We imposed a 32% tariff on Taiwan. Simultaneously, we are making it more expensive to manufacture here in the states. We have 1/4 China's pop - why would we try to compete on raw output by ourselves, instead of strengthening ties w/ the world?
I don't immediately see how each of these statements relate to each other. I'll just reply to "We have 1/4 China's pop - why would we try to compete on raw output by ourselves" by stating that we may want to compete with China on manufacturing output because of national security implications.
> For many countries, there is nothing to negotiate since we already have free trade agreements with them. We may import a lot of goods, but we export a lot of services, like many developed nations do.
The Tariff calculations have a differential rate for each country so it appears to have taken into account to some degree that we need more negotiation with certain relationships. I won't state that this was necessarily done well...
> With regard to raising revenue, think of the tradeoffs. If demand is elastic (given our trade deficit, it has to be!), this will be a tax on many, many American businesses and consumers. Its just moving the taxes from income tax to a consumption tax. That's a worse deal for poorer/middle-class Americans.
A consumption tax is a worse deal for poorer/middle-class Americans. I agree with you. It may be the case that this functions as a consumption tax on foreign labor which could increase the negotiating power of poorer/middle-class Americans.
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I really do not mean to defend the specific actions of the sudden global Tariffs. I am attempting to explain how I believe some on the right may see things in case people find this interesting. The furthest I will go is to state that I think the fears about a new great depression may be somewhat overblown.
You could broaden beyond the rust belt: America is a rich country that manufactures fancy things. A smart trade policy would focus on these things; it would not make policies to be competitive with poor nations. We tariffed places that export commodities or low-value-add products, places that we import ingredients from to make the fancy things.
Taiwan and China are related specifically on semiconductor trade; its the hottest point in our "battle" w/ China. TSMC is really the only company in the world that can make the best chips. Losing their trust is itself a security risk.
On the last point, I agree it would increase labor competitiveness, but I don't think its smart to compete with the whole world. If we wanted to do this, we should set policies to make skilled Americans competitive in the manufacturing industries that already exist here.
It's hard to say exactly as the possibilities are endless and as I said originally I am not exactly proud of my vote to begin with. Some things that come to mind:
- Clear outperformance (in my judgment) by Canada / Europe as compared to the US (this would indicate policy failure on the part of the US to me)
- Large scale war of some sort beyond the level of carnage we are witnessing in Ukraine
