Reminder that Ben Stein was a member of the Nixon White House. So was Diane Sawyer.
Big oof
So counterpoint, is the tariff Trump wants intended to bring money into the government? Or is it meant to promote work locally? Does it matter? I’m no economist (though I’m probably more qualified than Trump).
The actual function is that it hurts the offending country by taxing our own business for importing from them.
So let’s says I sell diamond rings in the US, but one or more parts of my supply chain are in China (most often lab grown diamonds, moissanite, sapphire etc; sometimes the gold and ring creation, and sometimes the entire manufacturing end to end). I will pay the tarriff upon import. This on its face hurts the US business as China isn’t paying.
However, the business isn’t going to eat shit and raise prices (this is the fear). They will lower the supply chain dependence on China if possible. This does reduce the net import from China for this good.
This will motivate me to switch some or all of my supply chain to Mexico, India, Taiwan, the United States (there is domestic lab stone growing operations) etc, to shed myself of the tariff.
The macro effect is that we do, on net, give less money to China by virtue of forcing our business to move to other suppliers.
In the case of some goods, this might increase costs and be inflationary (the main criticism). But it also equally possible in this example for prices to go sideways, as I can definitely make this product example competitively even if I leave China.
Interesting correlary
https://www.youtube.com/watch?v=o8hnM6xNjeU&t=0
We’ve been headed down this path a long time.
It’s just a joke, brah.
There was that whole Duck Tales episode about inflation as well…
So damn relevant today.
It will be when the Trump voters discover that they will pay for the tariffs and not China.
Every single kid in class: “…”
