Trumps Tariffs. An idiots guide?

[CosyNavyLeader]

Can someone try and explain it to me in an easy to read, simplistic version?

Please no nasty comments. I have ADHD and I struggle to read large news articles. And there are so many of them. But I want to understand.

Thankyou in advance.

The Idiots Guide to Trump Tariffs is that Trump is an idiot who does not understand tariffs.

I get that tariffs reduce global trade and are inflationary but I would genuinely like to understand from posters what are the other economic policies that the US could use instead to reduce their 918 billion trade deficit in goods and services.

They could invest in domestic infrastructure and rebuild industry in a more strategic way, focus on their strengths (tech eg) and grow the economy that way, all the while accepting that trade with nations who can produce stuff more cheaply is inevitable and not necessarily a bad thing.

Biden tried that with the inflation reduction act and a drive towards clean energy but it had limited success for a lot of money.
The other issue is as the UK (and Liz Truss in particular) is also finding out, it is now very difficult to raise further Government debt without increasing interest rates.

Increasing taxes to grow the economy also doesn't work.

I agree with you that importing cheap manufactured goods is not always a bad thing for consumers as it keeps inflation down. But it is a bad thing for blue collar workers who lose their jobs.

i just saw a helpful video on you x (taken from american tv) that explained that Trump basically does't understand how global trade works. Specifially, he seems to find it insulting that many countries run a trade deficit with the US (eg a tiny place like Lesoto imports more than they export). There's nothing inherently wrong with a trade deficit, eg in the UK we have a massive trade deficit with China as they don't buy any of our stuf and we buy enormous amounts of theirs. But that's ok because we have trade surpluses with other countries (including the US). It all sort of balances out overall, thats the point!

Consumers benefit enormously from globalisation. Yes it means we end up buying far more stuff from China than what is locally produced and there is definitely a valid argument against that. But it also means that we can get a wider variety of stuff (they don't grow bananas in the UK!) and ultimately keeps costs lower for consumers.

A trade war between China and the US will particuarly affect the Americans because it will make stuff made in China (that's a lot!) prohibitely expensive for Americans. But a tradde war between the two largest economies, if it persists, will likely tip us all into recession. In the meantime the whole world will end up with higher prices on some products as a lot of stuff has a supply chain that goes through botth the US and China - tariffs affect components for eg. cars that get made globally, regardless of where the final product is assembled.

@VanCleefArpelswould automation help lessen the cheap labour issue?

What would be less possible whilst the west are up again sweat shop conditions become more so as people are replaced by automation

You do see on other threads posts on Temu and cheap stuff ruining say the high st or off shoring as a negative.

On tariff threads the reverse. I‘m not sure people do want long term increasing reliance on China but they don’t particularly want what will change that either.

I completely agree that voters in the West don't want ever increasing reliance on Chinese manufactured goods, they want manufacturing jobs to return, they want to reduce Government debt and they want to reduce the trade deficit.

But they don't want higher prices due to tariffs and they don't want to compete with China by having extremely low wages, sweat shop working conditions, low safety standards, low environmental standards and cheap polluting electricity.

Could it be possible that this could lead to consumers buying fewer products of higher quality and price? Might this be better for the planet?

If only consumers were that altruistic/civic minded. We've just had a whole other thread about how great Shein is and 'slave labour, who cares?'

That’s the sort of ethical choice you get to make when you have money though. I’m not sure it will happen in the current economic crisis.

would automation help lessen the cheap labour issue?

I'm increasingly seeing pundits, media and even politicians in US start to acknowledge that it's not China taken the jobs so much as manufactoring done same as agriculture sector in 18th century and mechanize/automate.

I saw Obama being cautious about self drive cars when he was in office- as one of the few blue collar well paying jobs was long haul trucking in US and it was more that the tech companies were looking at that than day to day driving with automation. As it is Saying John Oliver piece which say they've manged to shove costs and risk onto drivers much more so than in past when it was companies so many just leave.

So there's increasing talk if they do get factories back - and investment into USA looking less not more likely - there won't be the huge number of well paid blue collar jobs.

Also seeing USA farmers moaning about lack of workers - as ICE crack downs happen - because the poorly paid hard work is generally not wanted by most US born workers.

DH said he saw peice saying most major laptop sellers were stopping selling in USA for a bit.

On plus side for US

Australia declines China's offer to 'join hands' on Trump tariffs

That might be a more convincing argument if people were buying genuine essentials from Shein and Temu and not just tat, or excessive amounts of clothes.

I was going to recommend a listen to this as well, it was very good.

Yes, they’ve basically screwed up the calculations (apart from the fact that the whole idea is beyond crazy anyway).

Let’s not forget we’re talking about a man who went bankrupt several times. A man who inherited enormous wealth rather than made any of it from scratch. And owned a casino - how many casino-owners go bankrupt?

(Of course, he wouldn’t personally have gone bankrupt in the sense that his lavish standard of living suffered, but I guess various of his many companies did, and people who worked for him probably lost their jobs and had to bear the consequences)

Sad but true - I remember years ago Jamie Oliver doing a programme about showing the conditions that battery farm chickens were raised in and how shoppers should buy free range chickens.

They all agree it was horrific but many soon went back to cheap battery farm chickens because they were cheaper.

The US are better off having automated factories than not still, due to taxes. Nike for example is an American brand but barely pays anything to US. So much is made in cheaper countries.

Good on Australia. I don’t dislike China particularly, they’re good at investing and selling and we find it hard to not rely on that, but I think it’s madness for another country to invite mass Chinese goods and building similar issues again.

As for pp on price it’s the main way to change behaviour. Look at anything from small fry plastic bag use to big stuff and it’s price / cost that changes things.

Well MAGA hats will become way more expensive, so I suppose that's good.😃

Are there signs that investment is rolling into the USA?

All I've heard is pauses and less enthusiasm for investments so far - plus bond market interest rate increases meaning borrowing will cost more.

I saw a clip of a farmer who'd invested in solar pannels with governemnet scheme they had to pay upfront then get 80% back month later but scheme had been stopped by doge - and they were worried they weren't going to get money back as planned badly affecting rest of their bussiness. Also saw clip of a small sports clothes retailer - she was explaining all manufactring for clothes is done in Vietnam or China for past decvades and they'd just done a massive order and it was being shipped out to them - and now they were facing due to tariffs doubling of the price - she was asking how that was legal to double their costs overnight - and would massively impact rest of their companies spending they'd planned.

They were USA citizens with business being badly affected by all the uncertainty. I get why any country would want to bring back jobs and big factories to tax but I'm not sure this will work and US consumers won't just end up paying more import taxes rather than getting factories back.

Also if it is about work - tourism brings in roughly 2.5 trillion dollars every year into USA and employs around 11% of their workforce - and it's been badly hit by government policy.

I haven’t checked on the first question. But generally if US can’t reshore production as one of the biggest markets then it seems we are all tied to China and cheap production. If markets too fight against any change on that, I’d question where we’ll be in a few decades.

If they were really serious about re-shoring it would be stablity- rule of law stablity as well as money - and tax cuts or other incentives for investments and possibly slow raising of tarrifs making it very clear it was long term plan possibly heavily singnalled with long run up dates so US companies could plan - not tariff on and off and on again and undermining trust in US government.

From bbc site Before the tariff war kicked in, China did have a massive volume of sales to America but, to put it into context, this only amounted to 2% of its GDP. USA is a big market and clearly has a massive world wide impact but I'm not sure China will do what they want - and rest of the world well have to wait and see.

Here’s a Republican farmer totally shafted by Trump. Tarrifs on his imported packaging and machinery AND he sold most of his honey to Gov food programmes that have now been stopped or cut back. But at least the farmer understands what is happening. A couple of other interviewees seem utterly clueless about economics and globalisation.

https://www.cnn.com/2025/04/09/business/video/north-carolina-trump-voter-tariffs-beekeeper-kaye-pkg-ac360-digvid?cid=ios_app