From the EU: "In 2023, the US collected approximately €7 billion of tariffs on EU exports, and the EU collected approximately €3 billion on US exports." That does not indicate that the US needs to increase tariffs to balance trade. Also "EU-US goods and services trade is balanced: the difference between EU exports to the US and US exports to the EU stood at €48 billion in 2023; the equivalent of just 3% of the total trade between the EU and the US (€1.6 trillion in 2023)."
Klaus Hergersheimer
Emperor
We could try smuggling in stuff, get around those tariffs 
Hygro
soundcloud.com/hygro/
tariffs affect competition and monopoly differently. If a monopoly is tariffed, the buyers pay 100% of the immediate cost and total output declines to meet available demand. In a perfectly competitive industry, tariffed competitors are effectively slain in the tariffing country and the remaining
It gets real world complicated with growth rates, money in the macro economy, and whose input costs affect whom.
In the short run consumers and producers pay higher prices and there’s less production and total aggregate wealth to be had. In the country with the tariffs especially.
It’s a good long term strategy for an economy that has a shot at mass-exporting a certain good that it can’t yet produce competitively, but could. It requires that has enough leverage to pull it off without retaliation or exclusion.
It is a terrible plan to maintain a reserve currency. They have to get our money to “reserve” one way or another and their exports for our promises is awesome for us.
It gets real world complicated with growth rates, money in the macro economy, and whose input costs affect whom.
In the short run consumers and producers pay higher prices and there’s less production and total aggregate wealth to be had. In the country with the tariffs especially.
It’s a good long term strategy for an economy that has a shot at mass-exporting a certain good that it can’t yet produce competitively, but could. It requires that has enough leverage to pull it off without retaliation or exclusion.
It is a terrible plan to maintain a reserve currency. They have to get our money to “reserve” one way or another and their exports for our promises is awesome for us.
Klaus Hergersheimer
Emperor
ugh *rubs face*Who exactly put the tariffs idea in Trump's head?
I know he didn't come up with it himself.
it's Peter Navarro, who's been around since Trump's first term. And that I know of the only educated "economist" he really keeps around. (but don't quote me).
He's an economic protectionist, and I'll just leave it at that. You can probably guess the rest for yourself.
Moriarte
Immortal
- Joined
- May 10, 2012
- Messages
- 2,662
Balanced trade (Trump Edition) is not achieved by sum total of collected tariffs, but by equality of aggregate/specific tariff rates faced by businesses in each country. Of course USA collects more - it is a bigger economy. By your logic of "balance" Burkina Faso would need to collect the exact same amount of dollar equivalent to achieve balanced trade with USA, even though Burkina Faso is 100 times smaller economically. In Trump's mind this whole thing is not be about the exact Dollar-denominated balance of imports and exports. It's about having an equal opportunity of entry of a foreign business, no matter small or large.
We can spin the philosophies back and forth, but the point hidden in plain sight is about getting access to closed markets and competing there for profit. This point lies at the bottom of it and Trump administration is crafting justification for bringing down some aggregate rates, or specific rates. We haven't heard about it yet, but India has a problem. India runs 150% tariff on liquor and 124% tariff on cars. A country with 1.4 billion population closed itself off entirely from American cars and Kentucky bourbon. Also, when we take average figures from the WTO source in the OP, India tariffs 6.2% on average, while USA reciprocates at 2.4%.
In the end it's about finding new revenue sources, while finding justification for removing protective measures. Sometimes by extortion, other times by bribery or the promise of riches to come. Our world is only getting smaller in terms of marginal rent that can be collected.
I am no economist, but I do not get your point. From the facts that:
- The EU buys from the US about the same value of stuff as the US buys from the EU (within 3%, €1.6 trillion)
- On those purchases the US charges €7 billion in tax (~0.44%), and the EU €3 billion (~0.19%)
That means the US is charging a higher total rate of tax. Sure, there may be some "finding new revenue sources" or "finding justification" or whatever going on under the covers, but that does not change the fact that the US is charging a higher rate of tax on the stuff the US is buying from Europe than Europe is charging on the stuff it buys from the US.
If Trump is trying to suppress China, he’s going about it all wrong (Avoiding paywall)
Tariffs don’t just alter trade flows — they redirect resources and reshape industrial structures. If Trump’s goal was to curb China’s technological progress, he would keep tariffs low on the bulk of Chinese exports to the US, locking the country into low-margin basic manufacturing. He would encourage high-tech exports to China, making sure that progress in its advanced components stalls.
But this is the opposite of what’s happening. Ironically, just as the “China shock” pushed the US out of low-end manufacturing, the “Trump shock” is propelling China to reallocate resources into higher value, advanced technologies that compete directly with the US.
Beijing has drawn its conclusion: innovation and core technology control is the only sustainable defence against tariffs. Companies with proprietary technology — like Huawei and BYD — are more insulated from tariffs and supply-chain shocks. China envisions a new tech supply-chain model: regional production, tech sovereignty and global supply-chain redundancy.
Tariffs don’t just alter trade flows — they redirect resources and reshape industrial structures. If Trump’s goal was to curb China’s technological progress, he would keep tariffs low on the bulk of Chinese exports to the US, locking the country into low-margin basic manufacturing. He would encourage high-tech exports to China, making sure that progress in its advanced components stalls.
But this is the opposite of what’s happening. Ironically, just as the “China shock” pushed the US out of low-end manufacturing, the “Trump shock” is propelling China to reallocate resources into higher value, advanced technologies that compete directly with the US.
Beijing has drawn its conclusion: innovation and core technology control is the only sustainable defence against tariffs. Companies with proprietary technology — like Huawei and BYD — are more insulated from tariffs and supply-chain shocks. China envisions a new tech supply-chain model: regional production, tech sovereignty and global supply-chain redundancy.
Thorgalaeg
Deity
Funny as it wasn't Zelensky but Trump who started a war he doesn't have the cards to win. LoL.
Trade policy is a pretty regular political issue in a lot of countries.
EnglishEdward
Deity
It has been clear to me for many years that many so called free trade agreements are, if not actual barriers to trade, merely managed trade agreements.
Which is why I am not in favour of them.
Who exactly put the tariffs idea in Trump's head?
I know he didn't come up with it himself.
It goes back to the 1980s - and Trump didn't really understand tariffs and how trade works back then either.
Moriarte
Immortal
- Joined
- May 10, 2012
- Messages
- 2,662
How many of you actually want free trade, that is the question. As in: GlobalCorpX coming into your small country like a tornado, lobbying to close down local industry, eventually decimating local industry of sweets/sugar, leaving people unemployed and then start selling their own candy made abroad. Some people are naive/crooked enough to allow such "freedom", but there are some of us ready to say fudge you GlobalCorpX. And your freedom.
Case in point (one out of many):
In the 1980s and 1990s, as part of IMF and World Bank structural adjustment programs:
- Ghana opened up its markets, lowering tariffs and removing subsidies.
- Cheap, subsidized tomato paste from Europe and poultry from the U.S. flooded Ghanaian markets.
- Local producers couldn’t compete with the prices of imported goods.
- Ghana’s tomato-processing industry and poultry farming sector were decimated, leading to loss of jobs and dependence on imports.
Counterexample:
- India maintained a "license raj" (bureaucratic control and protectionism) until the early 1990s.
- It protected its pharmaceutical and IT sectors while avoiding complete foreign dominance.
- Post-1991 reforms liberalized many areas, but key sectors like retail, defense, and agriculture remain strategically protected.
- India refused to sign certain WTO agreements that could harm farmers.
Free trade isn’t inherently bad, but when it's asymmetric (e.g. GlobalCorpX with lawyers, subsidies, and lobbying vs. local mom-and-pop businesses), the playing field isn't level. Instead of “free” trade, what you often get is “corporate-favored” trade, where larger, richer entities dominate and reshape economies throwing out locals to the side of the road like trash.
Walmart’s free trade invasion of rural America is similar. They build a big store filled with imported products and destroy the local based economy.
EnglishEdward
Deity
Not me.
At the tail end of the 18th century the industrial revolution took place in England and free trade was advantageous to Britain.
However that critical mass is long gone; it is now in China and free trade is disadvantageous to the UK.
But alas the political class here still worship their free trade fetish.
This is an aside to the tariff discussions but I think a lot of people fundamentally misunderstand the success of Walmart as being fueled by cheap imports: to an extent, it has greatly benefited from reduced trade barriers, but its main strengths that brought it to prominence lie in its distribution system, adoption of computers, and competent management.
Consider that in 1990, Kmart was the largest discount retailer in the United States and second largest overall behind Sears. What prevented them, or Woolworth, from capturing that success? Even Montgomery Ward tried with its Jefferson Ward stores. Any of them were better positioned to take in cheap imports and sell them in large volumes. The problems that all of them faced were internal and from the changing economy as a whole, not from a lack of access to imports.
Sure, but it's not strictly whether the inventory is foreign and cheap for Walmart (at least to begin with), the Big Box store model is based out of squeezing competitors out of the local market with loss leaders, at which point the store can get into the black by virtue of more or less holding a local monopoly.
A loss leader is not something that is exclusive to a chain trying to monopolize a market, it’s a business strategy at getting customers in the door to spend money on other items. A good example I saw in an old retail marketing video was tortilla chips: people will buy the chips, but they will also buy the salsa and cheese dip.
I haven’t seen any evidence that Walmart, or for that matter any company, has successfully engaged in what is called predatory pricing. A German chemical cartel once tried to about a hundred years ago, but the American Dow company just kept buying up the German supply until they could no longer afford it. Interesting case in how badly it failed.
