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639 points CTOSian | 1 comments | | HN request time: 0.21s | source
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zaptheimpaler ◴[] No.45029926[source]
> importers must declare the exact amount of steel, copper, and aluminum in products, with a 100% tariff applied to these materials. This makes little sense—PCBs, for instance, contain copper traces, but the quantity is nearly impossible to estimate.

Wow this administration is f**ing batshit insane. I thought the tariffs would be on raw metals, not anything at all that happens to contain them.

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elbasti ◴[] No.45030605[source]
I manufacture steel/aluminum goods for the US and I have direct experience with these tariffs. Let me explain why it must be this way and how it's actually supposed to work. This is not a defense of the tariffs, just an explanation.

First of all, if you want to use tariffs to boost domestic manufacturing, you must also tax the steel/al content of finished (or intermediate) goods. Otherwise, you put your local producers at a disadvantage, making the tariffs worse.

If you only tariff raw materials, then an american manufacturer has to pay either US steel prices or imported steel + tariff to manufacture, but a company overseas can use the cheaper foreign steel.

So if you want to tax raw materials, then you also want to tax those goods where raw materials are an important part of the cost.

The US has a catalog called the "Harmonized Tariff Schedule" (HTS) which is a catalog of basically everything under the sun [0]. When the steel & AL tariffs were announced, they also published a list of all the HTS codes where the steel/al content would also be taxed.

Last week the US published a revised list of HTS codes to which these tariffs apply, and they added about 400 items to them. For example, the aluminum content of cans is now taxed when it wasn't before.

Flexport has a very cool (and useful!) tariff simulator where you can look up any item and it will tell you if the steel/al content will be subject to these tariffs: https://tariffs.flexport.com

[0]: https://hts.usitc.gov/

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danielvf ◴[] No.45030665[source]
Yes, it's a very logical part of a tariff regime, and tariffs penalize domestic manufacturers without it.

But wow, are tariffs (and other micro taxes) disruptive on getting things done efficiently.

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1. spwa4 ◴[] No.45032239[source]
You mean this fixes the first order effect that penalizes domestic manufacturers, assuming correct information. It does not solve it, there's second, third, fourth, ... order effects. And there's no rule those are smaller than first order, in fact, they're almost universally more.

Domestic manufacturers are still disadvantaged by having to pay tariffs for materials used for the product, but not present in the final product. And foreign manufacturers still don't. If used in machines (and used up), used in mining (and used up), used in transport, used in energy production, ...

These costs are very large, especially because specific materials are often not available worldwide, or have large differences in quality due to availability of tiny amounts of additives for alloys or compounds. These things do lead to very large differences in quality, and thus in value. You can't model that as a government, it's just not going to happen.

There's no way to fully analyze an entire economic chain (especially when almost everyone involved has a financial incentive to sabotage you doing that correctly, and that includes foreign governments). You'd think this wouldn't have to be explained to either Americans or especially a supposed "defender of capitalism", but here we are.