The Upside of Tariffs

The MSM and its corporate masters are running a massive anti-tariff campaign whose goal is to eliminate Trump's tariffs, particularly those in place against China. Here's an example published by CNBC today:

‘China is not paying for it’: Trump tariff hike hits everyone from beer brewers to book publishers

They brew beer, make musical instruments, publish children’s books and design headphones.

Their industries are diverse, but they all have something in common: They represent American small and medium-sized businesses that rely on China either for production or essential equipment.

It’s this latest round that could impact everything from the craft beer you drink on the weekend to the musical instrument you play or the book your kid reads.

Source: CNBC, 8/24/19

While tariffs do have a downside, it's disingenuous to present the issue as one-sidedly as articles like that one does. Here are things where tariffs can have a positive effect:

  • Less broken and obsolete consumer junk overflowing landfills
  • Less profit for Walmart and its fellow travelers
  • Substitution of American-made goods for Chinese goods
  • Reduction in the number of outsourced American jobs
  • Positive impact on climate change as fewer ships traverse the seas (each round trip between China and the US burns $3.4 million of fuel)
  • Less money for China's military buildup
  • Less money for China to suppress democracy in Hong Kong

I'm sure there are other positive effects I haven't listed. As usual, there are two (or more) sides to every story. What's sad is that the corporate media is only presenting one side -- that of the globalist cabal that loves to put profits before people and consumption before conservation.

Edited to add...

I fetched a cup from the cupboard and poured myself a dollop of soda. Upon bringing the cup to my lips to take a drink, I encountered a putrid odor. It turns out the Made In China shelf liner my wife recently put in transfers a sour chemical smell to anything that comes into contact with it. This reminded me that China doesn't have the same Federal regulations in place that help protect us from dangerous and/or cancerous substances. As they say, caveat emptor.

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thanatokephaloides's picture

Here are things where tariffs can have a positive effect:

Less broken and obsolete consumer junk overflowing landfills

Less profit for Walmart and its fellow travelers

Substitution of American-made goods for Chinese goods

Reduction in the number of outsourced American jobs

Positive impact on climate change as fewer ships traverse the seas (each round trip between China and the US burns $3.4 million of fuel)

Less money for China's military buildup

Less money for China to suppress democracy in Hong Kong

This is, of course, assuming that American manufacturers return to the American manufacturing traditions of yesteryear, rather than becoming just a local form of China.

But it is time to cease subsidizing our own competition......

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"I say enough! If Israel wants to be the only superpower in the Middle East then they can put their own asses on the line and do it themselves. I want to continue to eat."
-- snoopydawg

Just not the stupid way that Trump is going about it.

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edg's picture

@gjohnsit

Trump sometimes has good ideas but always implements them badly.

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travelerxxx's picture

China is just one nation offering corporations a cheap labor source. There are many, many more waiting in the wings. The dike has a lot of holes, even if China is the largest one.

The offshoring problem started long ago and is not a bug; it's the natural progression of capitalism. To me, capitalism is the most destructive force on the planet; even more powerful than nuclear weapons.

Something tells me Trump's crew are more worried about the rise of China militarily (think John Bolton) than they are of the return of jobs to Americans.

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Not Henry Kissinger's picture

@travelerxxx

Something tells me Trump's crew are more worried about the rise of China militarily (think John Bolton) than they are of the return of jobs to Americans

In Big Power competition, everybody's always looking for asymetrical responses.

Right now Trump is weaponizing the countries' trade inbalance and China is responding by weaponizing its currency valuation.

Bottom line: This will not end well.

Trade Wars never do.

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Peace Sells

You mean like the democracy we have here, that one where the rich rule and the poor can fuck off? Less money for China's militarization but certainly not our own aggression towards China? Less profits for Wal Mart, you mean Wal Mart is going to suck up the tariff cost and not pass that on to consumers? Substitution of American made products for Chinese when we no longer have a viable manufacturing capacity since we offshored it to China and God knows where else? Reduction in offshored jobs, so maybe if we give up all those pesky regulations on American corps they'll rush right back to manufacture in the US and they'll pay a living wage to American workers again? Sure, that $15 per hour should do it, YAY!

Sorry, but I don't get it. While it sounds nice, like most of the steaming pile of shit we are fed daily by the MSM, will anything truly positive for ordinary people in this country come to pass? I guess my negative nelly thing is going off and I just don't get it. And while it may be a nice thought to reduce consumption in this country who decides who reduces and who does not? One could almost say there's a touch of elitism in shaming consumers who want, or NEED, cheap stuff since those living wage jobs are gone, but then again, I'm just a dumb ass bleeding heart who'll never get it. Apparently everything bad that has happened to the good old USA is really ALL China's fault? Russia too, don't forget. USA, USA, USA!!!

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k9disc's picture

There are two sides to each coin as your comment laid out.

I do have a problem with the "passing costs on to the consumer", though. It's always delivered as a maxim, but I do not believe it is true. It's a supportive meme that is used to try to make sense of a senseless situation and keep the long con running.

"Passing it on to the consumer" runs afoul of the much stronger and more established maxim of capitalism: "charge what the market will bear".

At this late stage of capitalism, I find it hard to believe that prices or savings are ever being passed on to the consumer. Today, I think prices are based on what the market will bear, and nothing less.
@lizzyh7

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“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

@k9disc primed by our MSM to expect to pay more. Corporations may operate on what the market will bear but that market also has a herd like tendency. Not that it matters but I used to work in a Corporate tax department and any thing tax like that can be passed through will be. All it takes is a consumer base that has no real choice but to either accept it or substitute. I'm not sure viable substitute supply sources are readily available to really substitute, particularly not made in America ones, if that is also part of the goal. Blaming China for the shitty economy in this country is just passing the buck, either way. IMHO.

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k9disc's picture

products and services.

And those itemized Taxes are always listed in the bill or on the pump. You were breaking things out to inform the populace as to why the product was at the top of what can be borne by the consumer. And, please keep in mind, the American consumer has not been able to bear what the market demands for almost 2 decades now. We've made up for it by going into debt.

Again, the maxim of "what the market will bear" runs afoul of "pass it on to the consumer" - it's not a 1:1 and it's not a simple this to that relationship, but I do believe they are at odds, foundationally in economics, and I believe it is used to get people to believe that any policy that increases costs affects consumer's cost. I do not think that is true in the least.

I also think it's going to break our populace, much on the lines of "no alternative" that you mentioned above.

Anyway, it's a pet peeve of mine. Tax and regulate them and they'll continue to charge us the maximum we will accept and still pay for. Same as it ever was.
@lizzyh7

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“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

edg's picture

@lizzyh7

I didn't mean to trigger you. Walmart profits are hurt if people buy less stuff. Therefore, there is a limit to how much cost they can pass on. Substitution of American products already occurs to some extent.

Your last two sentences are kinda over the top and unrelated to anything I wrote, so I guess you just wanted to hear yourself rant.

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I will point out that the reasons the companies cited by CNBC are dependent on Chinese companies is that the US companies that once provided the same goods are no longer in existence or have simply off-shored production. In principle tariffs might provide protection for rebuilding of the American industrial base although I doubt it will happen.

Tariffs were once seen as a source of protection for American workers, agriculture and essential industries. In a nut shell, if we were going to fight a war we did not want to have to buy food or steel from our enemies. With the end of the first cold war, at Wall Street's behest this notion was abandoned. Trade treaties could have been negotiated to guarantee workers' rights and environmental responsibility. Instead, Clinton and his successors have written a race to the bottom into trade treaties such that foreign workers have no real protections and there is downward pressure on US workers' wages and environmental standards because of the offshoring of jobs and the constant threat of offshoring. Wall Street, of course has profited, as have some US companies. Trump sees the problem, but he is a con-man who will only pretend to help American workers. On top of that he is ignorant and only marginally stable so it is not clear that Trump's action will help American workers.

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Big Al's picture

wishful thinking or perhaps ruling class propaganda, particularly the parts about China's "military buildup" and "suppressing democracy in Hong Kong". The tariffs clearly hurt the poor the most. It's not going to cut in the profits of Walmart, it's going to cut into the pocketbooks of ordinary Americans because everything will cost more. The idea that manufacturing like it was will return to this country is a fantasy and current stats prove that.

This is all part of an agenda to paint China as the enemy, and the problem, to allow for more transfer of wealth to the upper class and more austerity for the masses and make China the scapegoat for the bottom 70% woes.

Here's Michael Hudson:

"basically what he’s trying to do is blame China and blame the foreigners for the fact that a lot of Americans are really hurting. They’re not doing better. They’re not earning enough to break even. They’re going further in debt. And Trump is really saying, it’s not our fault. It’s China’s fault. Don’t blame the financial mismanagement. Don’t blame the corporations. Blame China."

He explains one of the goals,

"And that is that the American budget, government budget is running up deeper and deeper debt as a result of Trump’s tax giveaway to the 1%. And so he says, how am I going to shrink the budget deficit? He says, I know I’ll make my constituency pay. That is, the people that voted for me. I’ll make labor pay. If I can raise taxes on 300 billion of Chinese imports by another 10%, that’ll be all together I think a 20%. That’ll yield $60 billion to help us solve the budget deficit that I might give away to Wall Street and the wealthy corporations he’s created. So it’s all a diversion so that people won’t look at what’s really happening. But they’ll look at what Trump is saying. As people find that they have to pay higher prices, I don’t think they’ll believe Trump. I think he’s lost all credibility. That’s why the stock market’s collapsing. They’re aghast. They think even Trump can’t get away with this big a lie when it’s so obviously false."

https://therealnews.com/stories/trumps-new-tariffs-on-china-help-pay-for...

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edg's picture

@Big Al

I disagree that it won't hurt Walmart profits. Walmart profit relies on selling boatloads of cheap and shoddy Chinese products that last 3 to 6 months and then require replacement. If they try to pass too much of the tariff to consumers, people will buy less of those items.

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Not Henry Kissinger's picture

I thought Conservatives were against that sort of Commie thinking?

I also like how Trump is trying to soften the blow for soy farmers in Trumpville (who will be bankrupt long before those unicorn rustbelt manufacturing jobs ever magically reappear) by giving them a taste of the proceeds from the tariffs.

So instead of, you know, just selling the soy to the Chinese directly. Trump will give them back some of the money they would have made, except in the form of government handouts that buy their votes until 2020.

If a Democrat tried that, every conservative in the country would be howling like capitalist banshees until the corpse of Ronald Reagan woke zombiefied from its grave.

But nooooo... when it comes to Trump's nationalistic form of socialism: IOKIYAMAGA.

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Peace Sells

edg's picture

@Not Henry Kissinger

Reagan still holds the post-WW2 record by nearly tripling the national debt. Bush the Lesser takes 2nd place by merely doubling it.

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