Imagine a scenario where Trump applies all those tariffs, like the 100% ones against the BRICS countries that have been looking to introduce their own trade currency. Let's say that this effectively forced China out of the US market. But, since the demand for products is still there, the manufacturing returned to the US and lots of jobs were created.
Is it a good thing for the average American?
Trade tariffs aren't another country like China paying the US money to sell into the country, it is a tax on the goods that are sold from that country in the US this means for instance, something that is a hundred dollars today under a 25% tariff would be 125 dollars tomorrow. The logic is that this will mean that less will be bought, and China in this case would sell less, and make less, as they would be making the same per unit, even though the price is 25% higher.
So, who benefits?
Well, the logic is that domestic producers will benefit because they are more attractive price-wise, and can capture more of the market. And of course, governments benefit because they are raising tax revenue. But, if the country in question isn't paying, there is only one group left who covers this cost - consumers. And, even if the production did move back to the US, it would likely mean inferior products for a while at least, but also less efficiency, because there will be less external competition, so they will bloat.
Who were the tariffs meant to punish again?
At this point, it is good to give the reminder that no government cares about what is best for the wellbeing of the citizens that vote them in. They only care about generating wealth into the 0.1% and a little overspill for the rest. The majority of people are there as the livestock to be milked of value, and then slaughtered when no longer producing efficiently enough.
So prices rise, but that is okay, because as production returns to the country, more people will be employed and that means more money being made, right? Quick question, what happens when all the salaries increase? Ah, that's right, prices increase too, because demand increases on all goods and services. And this is the price of everything, like housing and healthcare.
The cheap goods coming into the US from outside the country, are actually subsidising the costs of living. Take them away, and the costs go up significantly. Not only that, if trade barriers were set up, people would end up paying more for less - a situation I haven't really heard of anyone being happy with - except in regards to lingerie.
Trade wars cost consumers.
But at the same time, the economy is very ill and the US is patient zero. As they say, When the US sneezes, the whole world catches a cold. Perhaps it is time to quarantine the US from the global economy. It would be disruptive, but there is a lot of opportunity and therefore value in disruption of industry and economy. Lots of innovation could happen, for instance, in clean tech and healthier technology that is more about wellbeing, than wealthbeing.
You know, the US exports stuff too, with the largest industry being crude oil and petroleum products. Yet, they are also the largest consumer of oil on the plant by far, so it is very possible that the rest of the world can do without their oil, if redistributing the trade routes. Not only this, motor vehicles are their second largest export, but again, the world doesn't necessarily need any of the cars from the US and in many cases, it would be far better off without them - like those stupid pickup trucks that don't fit into normal carparks. As for electric vehicles, there are more options than Tesla now. Interestingly, weapons was mentioned on the list of major exports - but I am pretty sure they are up the top, especially at the moment.
The US is the largest consumer, which makes it the largest economy in the world. It isn't the largest because it is the most awesome producer. All of that US consumption allows the government and the corporations to generate a lot of wealth and power for themselves, that they can then use to manipulate and control other economies. However, what happens if the US consumer market is cut off from the rest of the world? What does it look like if the US became a hermit nation like North Korea?
Too big to fail?
Everything fails. And the things that fail the hardest, are the centralized entities with a lot of control and power, because they affect everyone involved. Every empire has fallen, but the places those empires ruled live on, like the city of Rome, despite the Roman empire falling some 1700 years ago.
Maybe this is what the world needs.
Do you remember when the WEF talked about the "Great Reset" back in 2020? AS s reminder, it had three core parts to it.
1. creating conditions for a stakeholder economy;
2. building in a more resilient, equitable, and sustainable way, utilising environmental, social, and governance (ESG) metrics;
3. and harnessing the innovations of the Fourth Industrial Revolution.
Let's not worry about the WEF, because they are dodgy as fuck, but the core components of the great reset are okay. However, utilising only one of them doesn't work. For a quick catchup, a stakeholder economy is an economic system where business decisions benefit all people and the planet. The second is about building sustainably using data to make the decisions. and the third is about utilising latest tech, like blockchain and AI.
If all three worked together, it would be development using latest data and tech in order to improve human wellbeing.
That is okay.
This breaks away from the "profit at all cost" approach which is looking to always maximize monetary wealth, even if it costs human and environmental health. The US is very good at maximising wealth, and due to this, they are able to control well beyond their borders. But what happens if that same mentality exists largely within the US' own borders only?
Capitalist economics is an endless growth system and will eat until there is nothing left. It will consume itself, like a snake eating its own tail, the ring getting ever smaller, until it closes completely into a monopoly of the most hideous form. That is, if it doesn't get destroyed from the inside first, where the people within the snake rip it apart and then cut off the head.
Let them eat cake.
It is an interesting thought experiment, isn't it? We are so afraid of disrupting our local economy by upsetting the US government, that we enslave ourselves to their will, because Americans buy what the rest of the world make more than others. It is a lucrative market, because there is a high concentration of extreme consumers, compared to the rest of the world, which means more can be made in the US than elsewhere. But it is good to remember, that the economy adjusts as demands shift, or markets are lost. Innovation happens when there are gaps in the market and demand. And, revolutions happen when people are unhappy enough and are willing to do something about it.
Like taxes on tea.
The economy is complicated because of the governance structures in place, and the power struggles and wars they use to impose controls over others. At the core though, it is all pretty simple and just a tracking system for our interactions with each other. Take away those centralised control points and it doesn't get rid of all the issues, but it lowers the impact of failures. At the same time, connect wealth creation possibility to the data of wellbeing creation, and things would start to look pretty good.
Tariffs are not going to be the solution many in the US seem to think they'll be and if they are used too heavy-handedly, they could well and truly backfire and catalyse a resistance that turns into a revolution.
How much punishment before cowardice turns to courage?
Taraz
[ Gen1: Hive ]
Posted Using INLEO
I think what blows my mind the most about this is the number of people who just blindly think this is all going to work out okay. I think for a proper economy to work it requires a synergy between all parties involved. I don't see that happening anytime soon. I'm actually going to stop before I go off on a rant and alienate more than half the people on here. I'm honestly trying to see the point of view of the other side and how they think this is normal and good, but man it's hard.
You can rant, it is okay :)
This article is my kind of rant. I know nothing will come of economic change fast, because people prefer the safety of the status quo, the devil known. We talk about wanting better, but don't want to move from worse.
One day, maybe we will grow up and realise there isn't another side at our level, we are all screwed over together.
Nah, I gotta be careful. I was already muted on here by some big accounts from expressing my point of view! It's actually interesting how many people outside of the US I know who are just as on board with all of this as the folks here. I agree with you though, there is no perfect solution. Just some that are better than others.
It is interesting to get the different views of it. I have US friends here with family who are on both sides of the spectrum. The "international" Americans are generally a skewed view of the average, but their families are representative in some way.
Tariffs on goods and products are beneficial for the country and it's citizen, the ordinary Joe and Jane. The bad, this tariffs will charge to ordinary citizens through the product price tag. And the ugly, the economy, the purchasing power and the buying activities will suffer. It's like a movie. The Good, the Bad and the Ugly.
And for the idea quarantine and self sufficient. China already practice that long time ago. Maybe, that's the secret of there massive progress. I don't think it'll work in a democratic country where it's citizen has a problem of self entitlement.
How are tariffs beneficial for the citizens?
But yes, it is all like a bad movie these days, played by poor actors following a terrible script.
I don't think any of the countries are truly democratic, considering that opinion is so easily manipulated these days. Are people really making their own decisions?
No, absolutely not. The desicions we made is pre program. Government is always there to decide.
I read somewhere US citizens patronize Chinese and Japanese tech products more than homemade ones. I guess it's because of their superior quality. I see the trade tarrifs taking a nasty angle, because if the prices are raised but the quality of homemade products can't match the quality of imported products the masses will put pressure on the government. If that doesn't work Brics nations can reply with their own tarrifs on American products like iPhones and the rest. Trump better be sure where he places his feet.
There are 7.7B people outside of the US. At the moment, they aren't consuming as much per capita, nor at as high price, but that could change.
Trump saw how powerful China is and how it has the potential to be dangerous to them. He wanted to take these measures. He wants to slow down China's growth, but as they ban China, China becomes even stronger. Trump doesn't care if the US consumer suffers.
No government cares about their people, which is an opportunity missed. If the other countries started caring about their people instead of competing with a rigged financial economy, they would "win".
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I think some people are just going to die deluded or cowards or both. Maybe we're the ones that will die deluded but at least not as cowards I guess?
A good analysis ! An underlying issue is that US consumers can only afford all these cheap imported goods because the dollar is currently the global reserve currency.
It allows the US government (via delegating to a private company, the Federal Reserve) to print as much money as it wants. So the difference between revenue from oil, LPG and weapons and consumer spending is covered by money produced out of thin air. The price paid is ever-increasing levels of sovereign debt, and one day that'll come home to roost in a big way.
well, i think NOT getting so much from China and other countries is good, but I HATE getting milked!! 👊😁🤙
China will find a way to sell its products eventually.
Like importing goods and exporting freshly printed dollars and bonds, i.e. inflation? It has been working fine for the last seven or so decades. Until BS is called. I think somebody's late to the party. But it could still go on for a couple of years.
On the other hand, it seems to me that all of this Trump's aggressive foreign policy of trying to impose high tariffs on the products of everyone in the world. It comes and is also part of the economic measures package of his MAGA plan (Make America Great Again) to obtain the necessary financing for the state and its governments much more through tariffs without it having to be necessarily paid only and directly by its citizens through income tax.
Since he is also soon about to introduce and establish his plan to significantly reduce, end or eliminate altogether Income Tax For Americans. And with these new economic measures he will try to encourage, propel or attract by force to all these foreign companies abroad to produce their products on American soil. In a kind of acrobatic maneuver to attempt to get back the US of A to some sort of the 19th century Gilded Age through the latest tech like blockchain, quantum computing and AI.