this post was submitted on 03 Apr 2025
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Summary

Global leaders criticized Trump’s new tariffs, which range from 10% to 49%, warning of trade wars and economic fallout.

The UK and Italy urged negotiation, while Brazil passed a reciprocity bill. China and South Korea vowed countermeasures.

Australia and New Zealand rejected Trump’s logic, citing existing trade deals and low tariffs. Norfolk Island was baffled by a 29% duty despite having no exports.

Financial markets dropped, oil and bitcoin sank, and leaders warned of inflation. Analysts say Trump risks fracturing global trade with little to gain economically.

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[–] [email protected] 4 points 1 month ago (11 children)

Well just to be fair - and i know people like shitting on Trump but hear me out - the complaints from workers against out-shoring labor to other countries has been very loud for many years.

Everytime the newspaper reports "Company X has moved its factory to China" you can be sure that lots of people are gonna complain about it. But tariffs are the only thing that actually forces companies to put the factories back to the USA. Or do you have a better idea?

[–] [email protected] 4 points 1 month ago

I think you're kind of being unfairly downvoted because it's definitely underappreciated how much tariffs are used in modern trade deals.

Putting selective import tariffs on certain goods (like say car manufacturing) might be a wise move if you want to encourage the US to develop a manufacturing base. It's worth noting that the US, and most other countries have been doing this selectively for years.

This is reeeaally far from the tariffs that have actually been anounced though, which are the highest rate the US has had in around 100 years, and applied pretty indescriminately. There are some goods that the US just can't produce itself (like certain rare earth minerals that aren't in the USA) but even worse, because of the insane logic of applying them to countries as they have been done, it opens up this type of event:

  • A comany like Apple might assemble laptops in the US, but import parts like chips from, say, China.
  • They now have around a 40% tariff on all chips, which is really going to drive up cost, and leaves them with two options.
  • Option one, they bring all manufacturing into the US, which would take a long time to build up the infrastructure, and still really ramp up the price because wages in the US are so much higher than they are in China
  • Option two, they outsource everything to say Mexico or Canada who don't pay the tariffs on Chinese chips, and just pay the wholesale import tariffs are needed to bring things from Mexico/Canada to the US. They also get to skip out all the reciprocal tariffs that other countries are placing on the US in retaliation for the recently announces ones when they import out to, say, Europe.

Even option one is bad, because Apple might sell laptops internally, but the newly increased price makes them super uncompetitive with rival firms overseas, so it might still lead to a loss in overall jobs for US workers.

I'm not pretending this doesn't suck - but US based international companies like Apple have a clear incentive to just forgoe the US as much as possible now. This kind of risk is why countries have traditionally been very conservative with changing tariffs.

I think you're probably right that there might be an argument for countries to be less conservative than they have been, but the US government just cranked up the dial from 0 to 11 and we're all about to find out what that might look like in real time.

[–] [email protected] 4 points 1 month ago (1 children)

You need to have a plan in place before doing this to even think about bringing manufacturing back here. And tariffs need to be like the last part of the plan

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[–] [email protected] 3 points 1 month ago

U.S. factories in most cases cannot produce goods that are competitive in a global market. Our labor costs are too high.

This idea that we can revive American traditional manufacturing of basic goods is a complete fantasy. The factories in Vietnam aren't going anywhere, because they will still be selling to the other 95% of the globe outside the U.S. Even if factories are stood up in the U.S., they will be constrained to producing higher-priced goods exclusively for the domestic market, with all the attendant inflationary impacts from start-up costs and higher labor costs.

Meanwhile, retaliatory tariffs from other countries will cause the collapse of U.S. exports. We'll lose markets for the sectors where the U.S. is still competitive, like agriculture, advanced manufacturing, and even services.

Trump's approach is similar to the failed development strategy of import substitution industrialization, except in this case he thinks it will cause the U.S. to reindustrialize. In any case, it will fail for the same reasons ISI failed in Latin America.

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[–] [email protected] 3 points 1 month ago

Ooh boy, does my retirement account feel liberated.

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