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Six months into tariffs, businesses have no idea how to price anything

(www.wsj.com)
462 points JumpCrisscross | 3 comments | 30 Aug 25 20:56 UTC | HN request time: 0.01s | source
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haunter ◴[30 Aug 25 22:47 UTC] No.45078660[source]▶
In the end it's the biggest leopard ate my face moment ever:

China has very high growth momentum that surpasses American living standards soon, and not long before it will surpass American security standards too. China's purchasing power is probably more comfortable than most western countries, with extensive housing and high speed rail and electric cars etc. When a country becomes rich, inevitably other countries ask for their help. That's why China's growth must be curbed, fast > tariff them to their death or so. But I really don't think it will work at all. And personally I don't even think it's a good idea at all to begin with.

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platevoltage ◴[30 Aug 25 22:55 UTC] No.45078714[source]▶
See this is what I don't understand. Everything you just said about China is a positive. Everything you said about China is achievable in the USA, and we at least HAD a head start on soft-power influence.

Instead we should just have tariffs instead of actually making the lives of Americans better while FIGHTING affordable housing, high speed rail, and EVs.

We've got an entire team of goons who would rather rack up penalty minutes than score goals. These freaks think we are competing with China in an MMA fight instead of a Hockey game.

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pydry ◴[30 Aug 25 23:08 UTC] No.45078802[source]▶
The ironic thing is that tariffs are the right tool to reindustrialize America (over the period of ~a decade) but theyre being wielded with the skill and grace of a crack addled ferret by somebody who thinks it's a magic wand.
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seadan83 ◴[31 Aug 25 05:07 UTC] No.45080522[source]▶
Tariffs are protectionist, does not boost competitiveness. Tends to be the wrong tool, there are better.

Tax breaks, grants, physical infrastructure, creation of entire markets - those are better tools.

The issue with tariffs is non-competetive companies aren't required to become more competitive.

I mean consider it, a tariff is a tax on those buying a specific competitors goods. Even if tariffs were done surgically, still it seams like a tax benefit is a better tool

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1. pydry ◴[31 Aug 25 15:31 UTC] No.45083958[source]▶
>The issue with tariffs is non-competetive companies aren't required to become more competitive.

Yes they are. They are required to compete on a level playing field domestically and they still have to compete with marked up foreign goods.

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2. simonh ◴[31 Aug 25 16:47 UTC] No.45084628[source]▶
Unfortunately it’s more complicated than that. Take car manufacturing in the US. The country doesn’t make enough steel, copper, etc to supply the industry, so domestic production depends on tariffed imports of these and various specialist components. Plus many parts cross the borders to and from Canada and Mexico for various stages of the manufacturing and testing process, incurring a tariff every time.

This means domestic cars and many other goods will get a tariff markup on a large proportion of their parts anyway. In many cases it will be cheaper or roughly equivalent to pay a single tariff on a finished product from abroad.

In theory it should be possible to bring in staged tarrifs, and use tax breaks and subsidies on on-shore necessary domestic production over time to transition the industry, but that’s not happening and there’s no sign it will happen. The administration doesn’t seem to be aware this is even an option.

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3. pydry ◴[01 Sep 25 16:12 UTC] No.45093951[source]▶
>Unfortunately it’s more complicated than that. Take car manufacturing in the US. The country doesn’t make enough steel, copper, etc to supply the industry, so domestic production depends on tariffed imports

No, it's not. The US making not enough steel is not an immutable law of the universe. It is a result of the same kind of industrial decline which tariffs would reverse by making it more economic to produce steel locally.

It only wouldn't work on products which the US has no fundamental ability to make like bananas (which yes, Trump did...).

>This means domestic cars and many other goods will get a tariff markup

Yeah, that's kind of how tariffs work - there's always a markup.

>In many cases it will be cheaper or roughly equivalent to pay a single tariff on a finished product from abroad.

That depends entirely on how you structure your tariffs. If it is the case you've structured them incredibly poorly.

>In theory it should be possible to bring in staged tarrifs, and use tax breaks and subsidies on on-shore necessary domestic production over time to transition the industry, but that’s not happening

I believe I covered that when I said that the tariffs were "being wielded with the skill and grace of a crack addled ferret".