> The aim would not be to protect specific manufacturing sectors or national champions but to counter the United States’ pro-consumption and antiproduction orientation. The goal of American tariffs, in other words, should be to eliminate the United States’ automatic accommodation of global trade imbalances.
Instead we got a default rate of 10%, and higher rates on (e.g.) Madagascar whose main export to the US is vanilla—which the US can't grow anyways so it's not like they they need to protect anything. Or the Falklands Islands, whose chief export is… the Patagonian toothfish. Does the US have a strategic in that? (And let's not get into the meme-worthy penguin islands.)
There are good reasons for tariffs: national security concerns, infant industry protection, national champions.
* https://www.noahpinion.blog/p/when-are-tariffs-good
But the recent policies are not that.
It's important to also consider industrial base:
> Democratic countries’ economies are mainly set up as free market economies with redistribution, because this is what maximizes living standards in peacetime. In a free market economy, if a foreign country wants to sell you cheap cars, you let them do it, and you allocate your own productive resources to something more profitable instead. If China is willing to sell you brand-new electric vehicles for $10,000, why should you turn them down? Just make B2B SaaS and advertising platforms and chat apps, sell them for a high profit margin, and drive a Chinese car.
> Except then a war comes, and suddenly you find that B2B SaaS and advertising platforms and chat apps aren’t very useful for defending your freedoms. Oops! The right time to worry about manufacturing would have been years before the war, except you weren’t able to anticipate and prepare for the future. Manufacturing doesn’t just support war — in a very real way, it’s a war in and of itself.
* https://www.noahpinion.blog/p/manufacturing-is-a-war-now
But the recent policies are also not that.
> Does the US have a strategic in that
It makes sense if you consider how Chinese companies moved factories to Mexico after the first round of tariffs. You have to treat every country consistently, all at once, or else loopholes emerge. That said, there's probably a smarter way to accomplish this, such as something like setting lower tariffs based on the first $x amount of trade deficit and increasing them by volume.
> It makes sense if you consider how Chinese companies moved factories to Mexico after the first round of tariffs.
Which benefits Mexican workers and by osmosis the US: the richer MX is, the more likely they'll become consumerist, and the US companies tend to sell a lot of consumerist goods.
Further, in the case of war, all those physical factories that are ostensibly owned by the Chinese could be nationalized by Mexico as they'd probably be more interested in being friendly with their immediate neighbour. Ditto for Canada: why is the US putting tariffs there?
Also: USMCA is only a few years old. There were already some Chinese-owned factories in Mexico at the time of its signing (which Trump at the time called "the best trade deal ever".) The Chinese factories didn't seem to have been a problem then.
> Which benefits Mexican workers and by osmosis the US: the richer MX is, the more likely they'll become consumerist, and the US companies tend to sell a lot of consumerist goods.
I was taking a specific example to illustrate why a general rule makes sense. It may be that your view of the specific example might be right, but that doesn't do anything to explain why the general rule isn't necessary. Suppose it's Vietnam instead of China. There's no similar type "osmosis" there. The particular country doesn't matter when you're trying to stop playing "whack-a-mole." At most, your argument might justify leaving very specific countries out while it still makes sense to keep the general rule for everyone else, and lo and behold Mexico wasn't on the list of new tariffs.
So the US is going to screw over every country on the planet because they might be used as loop hole? All to solve an imaginary problem?
> which the US can't grow anyways
Em. The US can and does grow vanilla commercially. It'll happily grow in USVI, Puerto Rico, Florida and Hawaii, though only Hawaii afaik has commercial growers, though Puerto Rico used to be the ninth largest vanilla producer in the world.