Originally published at: https://boingboing.net/2019/01/23/donald-j-trump-is-tariff-m.html
Tom the Dancing Bug, IN WHICH Tariff Man takes money from Americans and courageously pretends that equals Mexico paying for the wall!
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There’s a missing panel showing where the U.S. businessman then turns around and fleeces his US customers to make up for his short fall.
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What? Tariffs are bad for international business, not common people. American big business depends on an unrestrained exploitative trade relationship with Mexico. “Free trade” policies like NAFTA destroyed mexico’s economy and are a major reason so many poor people are being displaced to the US in the first place. Tariffs are not the problem.
Just because Trump utters the word tariff doesn’t mean that we all have to become neoliberal shills for Walmart. I mean, I know we don’t like the guy and want to oppose him. But if we followed this logic, all Trump would have to do is suggest reducing US military involvement abroad, and democrats would respond by becoming hawks. Oh, wait…
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What the President meant to say is, “I am a Jungle Man!”
So domestic retailers just absorb the import tariffs? Or do they pass them on to the consumer?
This is clearest for where there is no domestic capacity to fulfill demand (High grade steels for one, mass market electronics for another).
Tariffs (as devised by the administration) are an additional tax burden on citizens.
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Common people can benefit from international trade too. I happen to LIKE avocados.
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Yup, it’s always been about the cruelty:
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Its absurd for you to characterize the Democratic response to this as “hawks”. It was more like being dumbfounded at the stupidity of trump to declare “victory” in a situation where terrorist organizations have a track record of re-organization and returning, if not stronger than the were before. This is obvious to everybody watching, everybody who has been an attentive adult through our embroilment in the mid-east since 911. Democrats taking opposition to an incredibly stupid move by trump is hardly “hawkish”.
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In parallel, this is true in the OP topic as well. Critics of Trump aren’t suddenly pro-NAFTA, we just know that he was elected as a supposed genius of our current exploitative model of economics. So the exasperation comes from two places:
- You assholes are still supporting him when he’s fucking up the system you like!
- It’s the system we’re currently in, and until we are able to deliberately change it to something more universally fair, our survival depends on doing it well.
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Tariffs are bad for everyone except the the government exploiting the trade. Suppliers and Purchasers usually end up meeting somewhere in the middle, depending on the power dynamic. So suppliers sell their goods for less, purchasers buy the goods for more, which pressures workers on both sides of the transaction, and usually leads to higher prices for the end product consumers. The misery gets spread around to everyone.
I’d like to see some evidence behind the statement that “NAFTA destroyed Mexico’s economy.”
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I was just reading about the impacts of the steel tariffs. US steel manufacturers raised their prices by a quarter in response (which has hit US manufacturers of steel-using products, causing job loses), and apparently they took that extra money and increased automation in their plants, because the number of US steel jobs has actually gone down compared to before the tariffs as well.
Pray tell, how are current tariffs on components (but not finished goods), which are causing US manufacturers to move their jobs overseas, bad for international business but not bad for their now unemployed workers?
Tariffs are a really dumb response to the economic issues Trump was trying to address, either missing the point entirely (jobs lost to automation), failing to address the issue entirely (IP issues with China) or actually directly making things worse. The tariffs are being implemented so poorly and so strangely that they seem to be intended to benefit international companies (e.g. the components tariffs), at the expense of workers and consumers. And this is the objection to all of Trump’s plans - they’re the completely wrong solutions, badly implemented, and everything he says about them is a lie.
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Yeah, thank god for United Fruit Company, champion of the common people and their right to avocado toast. There’s a reason avocados are grown in Mexico, and it’s not just climate. It’s because American demand for cheap commodities requires conditions which would be considered intolerable in the US. So I don’t disagree that you can benefit, but consider at whose expense.
Sure, sometimes. Or sometimes they find a different remote source to keep costs down. Or sometimes they make longer-term investments in local production in order to stabilize price. Or yes, sometimes they raise the price for the consumer. But generally speaking, importers will be forced to do their second-favorite thing (where their favorite thing is importing super cheap goods from workers with negligible labor, wage, health or environmental protections). Much of the time this is actually a positive change, even in the case where it does mean your cell phone costs 5% more.
Depending on the power dynamic indeed.
Granted, that sounds like a bad policy to me. But I highly doubt that it’s tariffs on components which are mainly responsible for the relocation of manufacturing jobs. Even if we had no tariffs on components, lack of worker and environmental protections make manufacturing abroad far more exploitable and therefore profitable. You know what would make it less profitable, though? Tariffs on importing those goods. I don’t love government intervention as a solution, but I’m just saying.
I think this is a good take. We can criticize Trump while also criticizing the Kochs of the world who hate Trump for their own reasons.
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But it literally is - they’re moving now, directly in response to the tariffs. They’re not happy about it and they’re vocal, so we know exactly why it’s happening.
Edit:
Another thing about the component tariffs, particularly with electronics, is that there are literally no other sources and no one is interested in starting a competing manufacturer. The profit margins on these basic electronic components is so razor thin, the only way to make a profit is by manufacturing them at a scale that literally only China can manage. Everyone else has made it clear, that even if the tariffs were permanent, it wouldn’t be enough to interest them in entering (or re-entering) that business. So the tariffs only function to drive assembly jobs out of the US.
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You think that anyone is making investment decisions based on a temporarily skewed market, which, with the fickleness and random nature of this administration could be gone in hours?
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Well as long as investors believe things will go back to “normal”, then I see your point. But normal is a nightmare of global sharecropping and colonialism. That’s the silver lining to the fickleness: the more unreliable global trade relationships are, the more desirable local sustainability becomes, because it’s not subject to the whims of a madman president.
a.k.a. the only way to make a profit manufacturing those goods is by mass exploitation, displacement and ecocide. Well I guess if that’s what it takes then we have no other option, eh? Better bring down those trade barriers and make with the Progress!
Yes, I’m sure there are valid complaints about tariff policies regarding electronics components. And I’m sure they’re getting way, way more attention than they’d normally warrant because of the political context surrounding them. That’s weird but fine, I guess. The thing I object to is the sweeping ideological acceptance of tariff-free trade as an obvious good, especially considering the history of merciless US exploitation of Mexico through anti-tariff trade policy.
There is more wrong here than just Trump. And once the Fool is no longer in the Oval Office and trade relations “normalize”, the problems will remain.
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There is a whole lot of just… wrong information in this thread.
Please, if you have learned about economics from popular, non-scholarly works - if you don’t have a training in economics, please consider reviewing some of these courses. They are free, and you’ll learn a whole lot about how economics works. Also - trust me, knowing how money works and how the economy works will do WONDERS for your personal finance and your understanding of how to make more money.
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You describe a phenomenon that is occurring globally, the rural-to-urban migration that is going on in the US, Mexico, everywhere. I don’t see how NAFTA has anything to do with it. Maybe I’m dense, but could you draw the dotted line for me? If anything, NAFTA should open up US and Canadian markets to Mexican corn growers.
Wow. Between Chinese electronics components and Canadian aluminum, high-value finished goods manufacturers in the US are taking a major hit. I know, because I experience it directly through work. We’re not relocating, but we’re taking a major profitability hit. I can confirm what @Shuck states below, that there are simply no alternative vendors for some components, even some high-performance ones. In addition, in highly regulated industries, you can’t just change components willy-nilly even if you want to. There’s an expensive process to qualify new components and component suppliers, as well as validating that they haven’t changed the performance of the end product.
ETA: Tariffs don’t cause exploitation. Tariffs don’t stop exploitation. At best, tariffs defray the cost of international trade (inspections, regulators, port development, security) vs. domestic trade. At worst, they exacerbate inequality by squeezing everyone but the exploiters.
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No. Jesus Christ. Don’t ignore what I said and substitute other issues. It’s entirely about the scale of the operations (and industries), supply chains, the number of engineers China can throw at any given problem, the cost of manufacturing plants, etc. The US simply can’t produce transistors, say, at sufficient scale to compete with China and disrupt existing supply chains, and they certainly don’t want to invest the enormous amount of capital needed to do so.
Look, there’s nothing wrong, in theory, with tariffs, used narrowly and carefully. But Trump’s approach isn’t just a blunt instrument - it’s taking out a splinter by hitting the patient with a car. It’s monstrously destructive to the economy as a whole and workers in particular. Trump’s operating from oligarchy-friendly policy distilled down into a single word. Because Trump is an idiot, his advisors bring up a word to encapsulate some reform that they think will be popular (e.g. immigration, trade), because that one word is all that Trump can remember. It’s supposed to act as synecdoche, but he’s an idiot, so suddenly it’s all - and only - about the wall and tariffs, and Trump pushes those as solutions for things they can’t possibly impact, uncaring about the damage he does on the way (because he doesn’t know or care about any of the issues). So sure, he ends up diverging from the oligarchy’s desired policies, not because he has different ideas, but, having latched onto that one word, he feels that in order to “win” he has to see it through, and starts ignoring advisors about anything else that doesn’t involve that word.
It’s 100% the oligarchs’ agenda, but being implemented by a shit-flinging chimp.
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But how is it that the Chinese state can do this when no other can? It’s not just because China has a big population or land mass (though those things do help somewhat). The reason the Chinese state can accomplish such feats of scale is because they are able to exploit people, communities and ecosystems to a degree that would not be possible in many other places while maintaining at least minimal social stability.
If, as you suggest, the market for certain goods is such that the only way it’s economically feasible to produce them is by having the Chinese state do it, then those goods should probably not exist. I think the reality is probably not so stark though, and there are in fact plenty of industries which could be shifted more locally through the use of tariffs.
Completely agree.
