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

I’d like to lay out an argument about why tariffs are good.

The only businesses that are derailing with tariffs issues are those that import goods to sell. The argument against tariffs is that they make goods more expensive.

Of course, this argument is true. But that’s not the end of the story.

Because prices are higher for imported goods, demand for domestically produced goods increases. This increase in demand leads to increased demand for labor, which can increase wages. Additionally, the money multiplier effect is higher when money is kept domestically vs paid to offshore parties.

Finally, I think it’s ridiculous to expect that this nation can maintain its wealth without producing anything. We act as if the producers of food are fungible cogs that businesses can swap out. But I think we’ll find that management is the fungible part. Anyone can sell a quality good. Knowing how to make it is what’s important. I’m surprised that mindset doesn’t resonate more with software engineers.

Except for one little thing: countries have comparative advantage in the production of different goods and services. Boeing is great at turning aluminum and steel (low in the value chain) into jetliners (at the top of the value chain).

Because of this, Boeing gets to make thousands of jetliners and sell them all across the world and America gets to be one of very few places that can do this.

I think you'll find that steel and aluminum are a lot more fungible than jetliner factories. Why are we kneecapping what we're good at for the sake of things that China will ALWAYS be better than us at?

> Finally, I think it’s ridiculous to expect that this nation can maintain its wealth without producing anything.

The total value of US exports has only ever gone up (see above).

I do get the argument for moving manufacturing expertise back onshore, I really do. But tariffs are not gonna lower the minimum wage and if manufacturing is gonna come back to the US, it'll come back in a highly automated form with a boatload of government support.

>China will ALWAYS be better than us

Comparative advantage is not innate. China was a rural country and didn't have a comparative advantage in manufacturing, they developed it and are now a powerhouse.

Nothing worth doing is easy. I don't know why Americans think that if its not easy, it's not worth doing. Americans 80 years ago would hate us for what we have become today.

China had a comparative advantage in labor costs that they have turned into an advantage in manufacturing.

Plenty of Americans want factory jobs to exist - almost no Americans want to work them. Sure, nothing worth doing is easy, but not everything hard is a good use of time and resources.

I’m sure plenty of Americans would love to work a factory job if it meant they could provide a comfortable life for their family. Unfortunately, due to decades of anti-labor practices, that isn’t possible anymore. But that doesn’t mean we shouldn’t attempt to rectify the situation.