Tariffs only make sense to protect a fledgling domestic industry which is already receiving investment. Even then, does anyone think that for instance US car makers will suddenly be competitive globally?
Tariffs make sense to protect industry critical to the independence of a country. Imagine how different the Ukraine war would look if the EU wasn’t dependent on Russian (or US) energy.
Yes, profits and growth may not be optimal. But it’s like complaining your 401k isn’t doing as well as it could since you’re paying for healthy food and a gym membership.
That being said the manner trump is implementing these tariffs is ridiculous. They should be slow, meticulous, and announced far ahead of time. These seem optimized for chaos and are likely aimed at political goals (see TikTok and China already) or simply crashing the market (wouldn’t be the first time Bessent has profited off a financial crash).
> They should be slow, meticulous, and announced far ahead of time.
The main lesson they learned from Trump's first term was that they were better off making big changes and fixing what they broke later. Moving slowly seemed to make it too easy for "the machine" to stop them as it were.
I don't say this as the right lesson to have learned or a good approach, just an observation.
I just think this is an unreasonably charitable way to frame the observation. "The machine" identified, in Trump's first term, that many of the policies he wanted to implement would be bad for the country or would violate the law. It's true that moving more quickly and chaotically provides fewer opportunities for people to identify and mitigate the problems in advance - but that's not good, even for someone who wants big changes, unless you view causing problems in and of itself as a good thing. (In that vein, I should note that Trump shared a video last week from a guy saying he intentionally crashed the stock market.)
OK so he and his cronies intentionally crash global economy to buy cheaply. How come absolutely nobody stands to them?
If he would be dictator in 3rd world country, half of his military or personal guard would want to kill him. Then you have lone lunatics or just very motivated people with a good rifle and scope and skill to actually use it for a precise 1km shot. I bet he already pissed off few thousands of those since he very intentionally harms USA as a country and its citizens. Yes millions in gun community, nra etc would eat their shoes before thinking negatively of him, but that's not whole armed community in USA.
Because the US has taught its military and other branches to respect the balance and rules from the constitution and precedents. Trump, like facists before him, exploit these rule followers to gain power through populous appeals, lies, and subterfuge. Then they push the boundaries to further consolidate power and accomplish their goals, however poorly thought out they may be. Take for example Trump's talk of a third term. He's already tried to start a coup when voted out the first time. He certainly won't stop if there is any chance he'll face real accountability.
Yeah that's totally reasonable. People tend to get so emotionally and politically charged today with anything that mentions Trump that I tried there to just comment on their lesson learned regardless of my opinion on it. I could definitely see that coming across as too charitable
It also seems too close to a common tactic his supporters use of pretending to be a neutral observer to preserve their own reputations while asking questions which reinforce his propaganda. “The machine” never existed except in the sense that breaking the law or bad ideas get opposition, but repeating it without acknowledging it as fictional makes it sound like you’re “just asking questions”.
I actually pulled "the machine" from University of Alabama Greek life, I haven't heard that phrase used before on the national stage or by Trump supporters. If there's an overlap there on my end its coincidence.
I will say, though, that I'm not repeating anything that needs to be acknowledged as fiction. I don't think it is a fiction that Trump and his team learned to move fast and break things because moving slowly will be stopped. That doesn't mean his lessons are learned based in fiction, only that their learning the lesson itself is not fiction.
Europeans don't tend to buy American cars because they're too big for smaller older roads and are inefficient (Europe has no domestic petroleum source, so fuel prices are much higher and volatile).
We don't live every family in a house miles away from work, schools and friends. Many of us live in cities, within flats, with lines of metro or bus close by. Our children go walking to schools. Roads are fine and maintained so regular vehicles can be used instead of 4x4, bikes are respected. Roads have sidewalks to walk.
Have you ever been in the US? The roads there are huge. Road lanes are huge. Cars are huge. Crossroads are huge. Parking spots are extremely large. European roads are fine, but they are way more narrow and tuned for smaller vehicles. It's easier to drive with a smaller car (or "normal sized" for you).
Also in Europe in the west we have narrow or paved historical roads, and in the east we have many poor quality roads. In both cases smaller (non-huge) car is beneficial.
I think the point @n3storm is making isn't about the size of the roads. It's far more radical than that. They are saying European city's haven't just ditched SUV's - they have ditched cars.
If you come from somewhere like the USA, Canada or Australia, it's hard to imagine that's even possible. Actually, it isn't possible in the suburbia's those countries have built to house their people. But it turns out it is not just possible if build your cities differently, it's better in some ways. It costs less because there are no cars, you waste far less time in commute, and its healthier because people get more exercise (they use their legs to move around).
"They have ditched cars" is an exaggeration of course. A lot of them still have cars. But most days, they won't use it. Daily commutes are done on foot, or bike. Long distance commutes have a public transport leg. It's hard to get your head around unless you live there for a few weeks.
Most of the world didn't ditch cars, exactly. They just predate them.
Car culture is recent and pretty uniquely American. I lived in a pre-car city with a lot of ~8ft lanes and "double lanes" that were converted into one-ways to accommodate modern cars and trucks.
> Most of the world didn't ditch cars, exactly. They just predate them.
It's true they predate them, but then so do most American cities. When the car arrived the American cities opted to expand their cities, giving everyone their own block of lawn to live on. The European cities could have expanded in the same way too. Utrecht went as far as to build freeways to make it possible. But in the end, they opted not to and Utrecht in particular turned their brand new freeways into canals.
> Car culture is recent and pretty uniquely American.
American certainly has it's own unique culture, but I think we are discussing a specific characteristic of that culture which it shares with other countries like Australia, Canada and New Zealand. The density of most cities in those countries is so low owning a car is mandatory. Existing without one is almost impossible. I know because live in one. Quoting a Japanese exchange student who lives with us for a while - to her surprise even with two cars getting to everywhere we had to be in an average week was a major logistical exercise. In the countries @n3storm is talking about, car ownership is completely optional.
They are huge indeed. But is not the reason we don't buy USA cars. In the countryside yes, for years, because they are useful. Transport tools, materials, dogs...
Cities center are transitioning to no-cars, so paved historical roads is not an issue.
Europe is quite a mix also, maybe is an issue in your area, not in Spain.
When I say "old", I am referring to that the layout/route was thought of centuries ago, long before the invention of the car or anything remotely close.
London is somewhat unusual in that its streets are actually rather wide for a European city, due to urban planning regulations enacted after the Great Fire and (until recently) the willingness of its inhabintants to demolish historical buildings. Paris, Vienna, or Prague, for example, are generally much denser, not to mention genuinely medieval cities like Girona.
London is not a representation of Europe, nor Madrid. Even Paris is completely differente. Germany was full rebuild after war. So, is Europe is a mix, but roads are not the reason to not buy tractors, is utility. Tractors are for country work.
There's no point in explaining that. A lot of them have never been outside the country and maybe Canada. Even if they can afford to go somewhere they don't have the time. They can only imagine the world outside as a version of what they know. And everywhere they went hasn't been very different from what they have at home. They won't be able to imagine it.
Interesting. When I visited the US in 2003, I recall the news reporting on a study showing that more than half had never been to another country, and they stressed that that included Canada and Mexico.
It became a bit of a discussion point during the ride with the those I visited.
I think US and other non-european companies can and do make cars targeted to EU market that complies with local laws and customer preference. They can make the cars smaller to fit road/lanes/parking spaces, just like they put the steering wheel on the right for UK.
Infact Tesla is (or was) best selling car in Norway and UK too.
Ironically, the one American car company that was interesting to Europeans was Tesla.
European governments may be reluctant to put a tariff on Tesla because of Elon Musk's political association with the Trump government. This is literally how fascism works, and appeasing the bully is distasteful, but that's realpolitik. It will be up to European consumers to reject Tesla because the brand is now toxic.
I keep asking 2 colleagues how their nazi car is, suffice to say they are not very happy and ashamed of owning it now. Of course both have semi-mandatory stickers with 'I bought this car before elon turned nazi' but that's a bit bullshit... he was utter piece of shit way before he entered government with his salutes. Very effective manager with a good nose on hiring actually brilliant technical people, but that's about it with his positives.
Horrible parent, horrible boss, racist spoiled nepo kid out of touch with reality with gigantic ego, who grew up in apartheid and evidently took not so good lessons from it... I could go on, it was out there for all who cared to look. Most didn't due to his stellar successes.
I imagine that being a poor Dad with a gigantic ego is pretty common amongst CEO's. Sure there were troubling signs but there were also signs of Musk working for the better good, like pulling out of Trump's advisory council in 2017 to protest pulling out of the Paris accord. It was obvious the guy was weird and a little unhinged, but many of my interesting friends are weird and a little unhinged. Buying a Tesla before 2024 was an unequivocally "left" statement.
Trunk whines that American cars aren’t bought in. Europe. Americans cars are “big as bars”, a “compact” is larger than my “big car”, let alone the small one. Their trucks literally won’t fit down the road.
I'm not in EVs, but I'm already seeing a "don't import anything to the US if you can avoid it" message at work.
Datacenter space in Canada is now suddenly very appealing, you can put machines there directly from Asia without paying tarrifs, but still get good network latency into the US
I'm not going to quibble with you on this, because I think you're right, but I can think of a secondary use. A country with weak governance could use tariffs to raise money because it's easy to manage at the point of entry, rather than requiring more sophisticated systems such as income or property value reporting.
This could explain why, for instance, poor countries use tariffs on goods that have no chance of building a local industry.
This is also why some economists like them, they're hard to cheat on. Know what's even harder to cheat on and has much less long term impact on the economy? Sales tax. A federal sales tax would have been preferable to the import tax. But there are probably other political concerns at stake here.
Tariffs will make them less competitive, mainly because the inputs are also being tariffed whereas international competitors can buy tariff-free inputs. These blanket tariffs will destroy any potential for internationally competitive manufacturing.
Is anyone expecting tariffs to improve global competitive advantage?
Tariffs may work towards an isolationist goal of producing and consuming our own goods. Tariffs are an attempt to unwind globalization though and disconnect our markets from the rest of the world.
Whether it makes us more competitive globally is really a non-goal. It could happen if our resources, labor, and manufacturing costs are lower than other countries but that's extremely complex to predict even if you wanted to try.
Free trade has its own set of negative consequences. Namely that it’s good for owners of the means of production but not for the workers.
What’s interesting to me is that tech is effectively the last “American made manufacturing”, and the relative lack of outsourcing (compared to other forms of manufacturing) has kept tech workers powerful.
The same logic of h1b workers weakening the American citizen tech worker, applies to free trade.
> tech is effectively the last “American made manufacturing”
Its at least the largest industry manufacturing here, I'd expect.
I have friends that work in manufacturing in the US though, it does happen.
One, for example, runs a family business making steel buildings and storm shelters. They use American made steel if I'm not mistaken, I'm less certain about other inputs like the paint or equipment used (certainly the welders, heavy equipment, etc are foreign).
Another works in the automotive industry. Parts come in from overseas and we largely just assemble vehicles here today, but I'm not so sure how different that is from software.
I write code on foreign hardware that runs in someone else's server farm also running foreign hardware.
Hell, when Microsoft was still shipping software on CDs you may have noticed a little fine print mentioning the Caribbean island on which the disc was technically manufactured. US employees designed the software, but for tax purposes the manufacturing technically happened offshore.
Software is a huge industry, but it is still heavily dependent on globalization.
> Hell, when Microsoft was still shipping software on CDs you may have noticed a little fine print mentioning the Caribbean island on which the disc was technically manufactured.
I don't recall this at all. What software was it?
Going through my box of ancient software, they all either say made in the US either on the CD/DVD or on the packaging, except for a copy of Office 97 and Office 2007 which says made in Puerto Rico (which is the US).
They certainly had CDs pressed in other countries for foreign markets. I imagine some foreign made laptops might have come with CD/DVDs pressed in those countries.
Oh I think that must be the case. We've spent decades profiting by externalizing many of the costs of our consumption onto other parts of the world. Isolationism means we now how to deal with those costs or change our consumption.
They can also make sense where you largely have primary industry (that is, extractive; mining and forestry and so on). There’s a reason that pretty much all high-tariff countries are low-income developing countries; it _does_ make more sense there.
In addition it’s precisely because of tariffs (of which there have been many on cars and SUVs long before all this) that we have tons and tons of foreign brands actually building cars in the US.
In practice, the only significant American brands in Europe are Ford and Tesla. Ford has long designed cars specifically for the European markets (their big sellers are very different in Europe and in the US, and many of their European big-hitters are not even available in the US), and Tesla, of course, isn’t doing so great these days.
(GM also used to have a couple of European brands, but again they were rather different to GM’s big US sellers.)
> Wait until you realize that the EU tariff on American cars has been 4x the US tariff in EU cars for awhile.
Can you share the specifics of this lets say end of 2024?
I could find for example:
EU has 10% on cars from US while US has 2.5% in general and 25% on pickup trucks. Important to note in USA the pickup trucks market is the biggest one vs mid size being the biggest one in EU.
When looking at it it seems to me that both entities wants to protect their biggest markets: EU with only 10% protecting midsize and USA with 25% their pickup trucks.
I actually live in the heart of it. Yes, there are US cars here but maybe 1 out of 10 is American in my local and wider area. People tend to buy German, Swedish or French cars here.
> Wait until you realize [...]
Well, I won't buy am american car (maybe a smaller ford, but not the typical US car) because where I live you won't bring them into most parking lots, and for sure not in parking building. Especially in cities many of them are narrow even with typical EU cars.
You have cause and effect backwards. Cars aren’t some static thing that you grow on trees and sell, where like American trees grow bigger cars.
The question you should be asking is why American manufacturers don’t target the EU market more aggressively and make cars that fit the formats Europeans buy.
It’s not the only reason but an absolutely crucial factor is that EU states protect their domestic auto industry via tariffs and industrial policies/subsidies.
> It’s not the only reason but an absolutely crucial factor is that EU states protect their domestic auto industry via tariffs and industrial policies/subsidies.
> Wait until you realize that the EU tariff on American cars has been 4x the US tariff in EU cars for awhile.
That's a simplification beyond what's truthful. Import taxes are different on different types of cars, both in the EU and the US. There's certainly some type of car where the above is true, maybe some type of gas guzzling pickup truck or something, but over the total amount of sold cars it is not. Trade-weighted differences simply aren't that great, which is not a coincidence because a) both the US and the EU are developed economies which are likely to benefit from free trade, b) taxation works in nudging the market what to buy which evens out the differences further, and c) we have had trade agreements where this was an explicit goal.
