this post was submitted on 07 Nov 2024
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So I feel like I'm probably missing something or am not understanding how Tariffs work.
Tariffs would increase the price of foreign goods and commodities and those increases would be passed on to consumers, but isn't the goal not to get more tax money for the government but to disincentivize the purchase of those foreign goods at all thus fueling domestic manufacturing and economy?
It seems like tariffs aren't great short term but if we have the ability to manufacture domestically and are not doing so due to costs, then it may be good in the longer term. Especially because if we rely on those countries now, they have control over those goods and can end them whenever they want. At least this way we can ramp up US manufacturing without a disruption to the existing supply chain, it just costs more.
You're understanding tariffs correctly, but the conclusion is off. I'll give an example driving tariffs to the extreme to explain:
Imagine tariffs are so high, the US can't economically import anymore. This is effectively the same as very tight sanctions, aka like North Korea.
Everything in North Korea is manufactured locally, and it doesn't scale. Doing things locally works great, but you focus on a couple things and trade for the rest.
Can some tariffs help the economy? Definitely, it's a bit of a catalyst. Will a lot of tariffs hurt the economy? Also definitely.
Maybe Trump has mathed out the exact level of tariffs to boost the economy. If, however, that is the case, he hasn't shown his work on it.
Edit: I will caveat it is clear most people in this thread saying "even I know what a tariff is!" Are mostly wrong. So if that's why you're feeling crazy, it's because you're in a thread full of people who aren't as smart as they think they are.
Thanks that seems reasonable and makes me feel a little less crazy. i can't imagine Trump knows how Tariffs work or what they would actually be useful for, much less what the best levels are.