Magox Posted April 7 Posted April 7 (edited) Of course Milton Friedman and Thomas Sowell are against tariffs. The world is so intertwined that often times what happens in one country will have a direct impact on another. It appears that many righties have abandoned their long held principles of free markets because Trump now says that they should. Trump is typically a very pragmatic person, he's transactional and honestly I think that is one of his best traits. However, if there is one thing that he harbors ideological beliefs it's on trade and it goes back 40 years. He thinks that globalization has hollowed out many middle class manufacturing jobs and while that was most certainly true in the Midwest, the decline in manufacturing decline for those jobs since the 1950's. It's a myth that NAFTA was a big contributor to the decline, the numbers speak for themselves. Even though globalization did cost some manufacturing jobs it did allow people to buy products at a considerably cheaper price. That helps the consumer and when the consumer is able to buy products that are cheaper that means they have more money to be able to buy more things, which increases economic activity. It's a multiplier effect, and people having more disposable income that often times is spent on goods which means that there are more companies that supply that demand which in turns means more hiring for those companies to satisfy that. Cheaper goods is a good thing, it lowers inflation. Trump's and specifically Navarro's thinking is outdated. Manufacturing jobs will never come back in a meaningful way to the US. - There are a multitude of reasons as to why: - it’s not as if these manufacturers have factories ready to go here in the US. Even if a company were to make the decision to do so it would take years for them to repatriate them to the US - Many manufacturers are working off thin margins, they went abroad to increase those margins. For many it would no longer be viable. And even with the companies that have better margins they would lose tons of profitability and would have to make a huge investment to open up a new factory. - As of right now the odds of a recession are at 60% if we go through with this plan and not remove most of these countries tariffs not only will it be a 100% chance of a recession but inflation will go higher which was one of Trump’s reasons why he was voted in. Not to mention peoples 401ks are getting destroyed - The reason I bring up the recession and inflation is because in about a year the house and some senate members will begin hardcore campaigning , midterms are always challenging for the party in power, if we have a slowing economy or worse yet a recession then Republicans who already have a razor thin majority will lose that majority. Democrats will run attack ads all day long. It will be 2010 Obamacare midterms redux all over again. - Republican leaders now won’t speak out publicly, not too many but they will be forced to speak out about them come the midterms and have to answer these attack ads . The cracks and fissures will emerge within the party and the pressure to speak out against Trump’s policies will be deafening similar to how Obama had to regarding Obamacare. You are already seeing Ackman and Musk speak out against these tariffs. - No big businesses right now are going to reinvest money at this point. Too much uncertainty. Which means economic stagnation. Businesses want certainty, they want to know the economic landscape before they reinvest. - Most of these overseas manufacturers know that Republicans are going to get killed politically for this, they will just wait it out and wait for the next administration to come in. If the purpose of the Tariffs was meant as the stick and it was to renegotiate better deals then that would make a lot more sense. Even so, the haphazard way it was implemented and executed is a complete self-own. With that said, I agree that the deals in place are unfair to the US, many countries have closed off certain products to their countries and a renegotiated deal is a win for the country. If the purpose is to fulfil Trump's and Navarro's long-held beliefs and is not meant as a negotiation ploy but to completely attempt to restructure the US economy (which is a pipe dream not based on reality that would be undone) then this is going to be a very painful 3 years until it is largely undone. Long-term tariffs that are above 10% should only be for need-to-have products such as pharmaceuticals and computer chips and other products that should be created here for our own national best interests. But things like sneakers and $6 t shirts for children at Target and Walmart are being made right where they should be made. The White House economic advisors are at odds with each other, some of you may not know that but they are. On one side you have more of the sober-minded guys like Bessent and on the other you have the evangelists such as Navarro then of course in the middle you have a moron like Lutnick who praises Trump like a sycophant who has lost all credibility. The Trillion dollar question is who will win out? Is this a long-term plan to try to fix the trade deficit and bring back a manufacturing renaissance to the US (lol) or a negotiating ploy to get better restructured trade deals? Edited April 7 by Magox 1
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