Tariffs are one thing that Republicans and Democrats, agree on. It’s economic madness. 
Tariffs Are for Losers
Andy Kessler at the Wall Streety Journal accurately sums things up on four words, Tariffs Are for Losers
Who said this? “To really rebuild the industrial heartland of America, you need a committed national policy of tariffs, of protecting American industries.” It was J.D. Vance during his successful 2022 campaign for U.S. Senate. This thinking is dangerous and pervasive—bipartisan battiness. In reality, tariffs impose costs on all Americans to subsidize a few jobs.
Missouri Sen. Josh Hawley, also a Republican, has proposed the Raising Tariffs on Imports from China Act. All he’s missing is a colleague named Smoot to reprise the Smoot-Hawley Tariff Act and cause a market crash and depression. Mr. Hawley said in June that “in the last 20 years in the state of Missouri, we have lost 60,000 jobs to the People’s Republic of China—that number nationwide is almost four million.” No mention of the better jobs that were created. There were 130 million nonfarm payroll jobs in 2003 vs. 156 million today.
You’re going to hear a lot about tariffs this election cycle. President Trump’s tariff triplets—Steven Mnuchin, Peter Navarro and Robert Lighthizer—whispered populist gobbledygook in his ear that he was Tariff Man. Now Mr. Trump has proposed 10% tariffs on all imports. That sounds strong but it’s actually a weakling move, especially with U.S. industrial capacity already near an all-time high.
In October, the Journal ran an article by Oren Cass of American Compass titled, “Why Trump Is Right About Tariffs.” It’s filled with dime-store economic thinking, claiming that tariffs are for raising government revenue and that our service economy is about “cutting hair” and “serving fast food.”
Mr. Cass completely ignores that phones, medical equipment and other imports are often designed in the U.S. Sure, they are assembled overseas, but their value, usually software, is created here. Should we put tariffs on search engines and social networks? Of course not. China blocks ours to force its citizens to use inferior products. Tariffs denote weakness, not strength.
With tariffs, you get false price signals and less innovation. They misallocate capital and human resources by having entrepreneurs chase fake opportunities. Domestic manufacturers love tariffs, which allow them to raise prices, but the rest of us have to overpay for goods while manufacturers become lazy. The largest and lowest-cost electric-vehicle manufacturer in the world, China’s BYD, is effectively kept out of the U.S. by Trump and Biden tariffs, and we now have a glut of unprofitable and expensive domestic EVs.
If all the chips in an iPhone were made in the U.S., I calculate we would be paying close to $2,000 for one and unit sales would decline 50%. Would you upgrade at that price?
Fair Trade is Free Trade
Kessler is correct on all points but he even misses a key point. There is a constant whine in all corners that we want “fair trade not free trade”.
Sorry everyone, the only fair trade is free trade.
Assume China is unfairly subsidizing solar panels or anything else. What that means in practice is China is subsidizing US consumers at the expense of Chinese consumers.
Yet we bitch about that, like candlemakers bitching about the free light of the sun.
Bastiat’s Candlestick Makers’ Petition
What’s happening now is very much like French economist Claude-Frédéric Bastiat’s famous Candlestick Makers’ Petition written in 1845. His petition was sarcastic.
Bastiat said that sunlight was unfair to the candlemakers. He proposed a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds in which the light of the sun would enter houses.
Banning sunlight would increase the need for more oil from whales to make lamps. There would be more whaling jobs and more candle making jobs too.
Solar Panels a Perfect Modern Example
For some of the same reasons and one different one, the Biden administration and the Trump administration both want solar panels to be made here.
The result is we do not use them on roofs and other places to the extent we could because they are too expensive.
Made in the USA effectively means made nowhere (a relative statement not an absolute one).
Along with the solar panels not made here or there, we are killing part of our own climate push, and one that actually makes some sense.
In the process, we are also losing out on specialized roofers to install the tiles, batteries needed to store the energy etc.
Oranges and the Sun
In his petition, Bastiat wrote about oranges and the sun.
If an orange from Lisbon sells for half the price of an orange from Paris, it is because the natural heat of the sun, which is, of course, free of charge, does for the former what the latter owes to artificial heating, which necessarily has to be paid for in the market.
How can French labour withstand the competition of foreign labour when the former has to do all the work, whereas the latter has to do only half, the sun taking care of the rest?
Those paragraphs apply not only to solar panels but the sugar lobby, ethanol imports, and everything else, especially cars and batteries.
Ethanol is better produced from sugar in Brazil than corn in the US, but Trump and Biden both want the ethanol produced here despite the fact it is environmentally damaging, raises the price of corn and corn-fed animals, and puts small refiners out of business.
If China offered us free solar panels we should gladly take them, but we wouldn’t. Instead, we would bitch about getting something for free.
We cannot sell our own EVs because they are too expensive. So we block China’s EVs that are much cheaper.
Whether you agree with his policy or not, Biden’s goal is to speed up conversion to EVs. Yet, he stupidly blocks imports that might do just that.
I do not know how many US consumers would buy China’s BYD, but some would.
That would translate to more demand for EV chargers and more EV-related infrastructure at a faster pace. There would be more EVs on the road and more curiosity about them.
It would literally speed up everything EV related.
But, the UAW does not want that, Biden does not want that, Trump does not want that, Republicans don’t want that, and Democrats don’t want that.
Are you Willing to Pay and Do Your “Fair Share” to Address Climate Change?
Yesterday, I asked Are you Willing to Pay and Do Your “Fair Share” to Address Climate Change?
Fair Trade and Fair Share go together.
It’s only fair to US unions if everything is made here. Otherwise the candlemaker’s union known today as the UAW will bitch about it. And Biden is on the picket line demanding it.
In How Many Ways are President Biden and Trump Alike?
Yesterday, I also asked In How Many Ways are President Biden and Trump Alike?
More than most care to admit, Trump stands with Biden in many ways. I count 18 similarities. How many can you name?
My #1 point was tariffs: “Trump and Biden are the two biggest protectionists in history. Biden kept all of Trumps tariffs and added to them. Trump recently Leapfrogged Biden proposing a 10 percent tariff on all imports.”
Damn It All, Ban Free Stuff and Good Deals
Damn cheap EVs. Damn batteries from China. More accurately, damn that sun.
Nobody really wants free sun unless it comes with the tag, “Sun Made in the USA by US Unions”.
Transitory Inflation
The yield curve went from steeply inverted to nearly flat and is now becoming more steeply inverted. If inflation is transitory, then transitory to what?
For discussion, please see Huge Moves in the Yield Curve This Year, What’s Going On?
Regarding the huge inversion between 1 month and five years then strongly steepening: Could it be the bond market smells a short quick recession followed by a big inflation problem coming down the pike?
Due to the rate cut headwinds listed above (inflationary tail winds if you prefer), I question the widespread hopium that the Fed has inflation fixed.
Tariffs are one of the reasons I expect a decline in inflation to be transitory. Economic madness is everywhere.
Mish is right here. Tariffs are just plain stupid and bad. I live in Canada, and we have had tariffs and taxes since our country was founded. Everything coming in was (and now again, is) taxed. This drives up local costs of EVERYTHING. It means local distributers and manufacturers get a massive free benefit, that is paid for by every single consumer who has to buy anything. Tariffs do NOT protect jobs. Tariffs protect PROFITS.
When I moved from being a software designer and consulting economist – to being a farmer, I saw first hand, the extreme benefits of “free trade”. A domestic made generator was over $2000, a new Chinese-made generator was less than $800, for the same wattage output. I still have and use the Chinese-made generator, 20 years later. See, we had this little window, where free-trade was implemented, on many products. Free-trade with Asia and with USA. It gave a HUGE uplift to the Canadian economy, and although it blew up a few of our inefficient industries (the local “branch plants” and high-margin distributers, who benefited from tariffs), it opened up whole sections of new businesses – and allowed US companies to expand here and offer massive efficiencies to us. We got Walmart and CostCO. We got Home Depot, which sold lumber at fair prices – instead of “Beaver Lumber”, which sold crappy lumber at high-prices.
We lived thru this. I lived thru this. As a result of NAFTA, (North American Free Trade Act), we also got labour-market mobility. During my time working as an independent computer-consultant/economist, I got work in New York, and made a real difference for me. (Needed the cash!).
Mr. Trump called NAFTA a bad deal, and I know that assertion was wrong.
EVERYONE got major benefits from NAFTA. See, we’ve had “free trade” in auto-parts since 1965. What are the biggest and best businesses in Canada and nearby US States? CAR MAKING! We have Honda, Toyota, General Motors and Ford factories – all cranking out cars. I run a Ford F-150 that was made in Michigan, a Honda CRV that was made in Ontario, and an old Nissan Murano that was made in Japan. And I have an old Pontiac Firebird in the garage. Our tractor is a Kubota, made in Japan, came in here tariff-free. If tariffs were put on this stuff, we probably would not have been able to afford it. (Farmers just barely turn a profit. It’s a tough business, but a great lifestyle. Tariff-free trade lets farmers and other marginal producers survive and prosper.)
NAFTA was unwound by Trump. That was a stupid and bad decision. Both sides lose.
Here is what has happened: I needed to by a part for an old boat I have. Part is $10 US. I ordered it online, and after shipping costs and exchange conversion, it’s $20 Canadian. Double. Ok, fine. I pay for it. But all the new border-restrictions, taxes and tariffs come into play. Seller (a major US vendor, based in Kentucky), sends me note saying for Canadians – another $25 US in shipping is needed – NAFTA no longer applies, even though the item is a simple machine part.
That extra $25 will be added to cost, and taxed at 13%, plus the $25 US becomes $35 Cdn, so the $10 item now will cost me $60. I cancel the purchase because a SIX TIMES price increase is just insane. US seller loses business, and I have to make the part myself. Both sides lose.
Famous economist David Ricardo wrote against stupid English tariffs in the early 1800’s – the awful, stupid “Corn Laws”, which made UK folks poor and more hungry than they needed to be. One thing we KNOW about tariffs, is that they simply RAISE COSTS and DO NOT WORK to offer local economic benefit. And all of Canada’s history shows this truth – again and again and again. We have had tariffs here since the beginning. It meant we had reduced opportunity and higher costs. And a few fat-boys could get local deals that gave them benefits – at the expense of EVERYONE else. This is simply insane.
Tariff-driven trade is economic FAILURE. Manufacturing moves to China, because Chinese labour costs are so much lower. We design and engineer, they manufacture, everyone gets good product at good prices. (eg. the HP computer I am using to type this note.) Tariffs just block this economic-uplift process from working. Tariffs protect local profits, but spread economic costs to everyone. Few gain, but most lose. Less business gets done. Tariffs suck away prosperity. Please know this.
Well stated – Thanks
“Mish has never had to worry about his job being offshored to Bangladesh or Vietnam.”
So we should act like candlemakers and petition the sun to stop free sunlight?
Would that stop the problem or would it actually decrease jobs as my examples show?
By the way, the alleged “jobs” we lost to Vietnam and Bangladesh are now clothes made by machine.
Should we ban or tax machines too?
By the way, I lost my computer contractor job after 911. I was out of work for years. Countrywide Financial had an opening. The requirements were such that very few people in the country had the required skills and I was one of them, only miles away. I could not get an interview there or anywhere. At the time if you had a job in bank, finance, or computers, it was safe. But no one was hiring.
CalculatedRisk started this blog for me in March of 2003 and I have been doing this ever since. The first two years I did not make a dime. Then With the help of CR and Bary Ritholtz I was discovered and finally started getting income from ad revenue.
If you told me in 2000 that I would be making a living writing and not in computers I would have thought you were nuts.
I believe I have written at least one post every day since March of 2003. I mean every day 265 days or 366 days a year. Christmas may have been Merry Christmas. But it was something. Some posts may have vanished in moves from one place or another but nearly all as still there.
Good for you, Mish; honestly I mean that!
Just stop acting like free trade is the answer to all of our problems.
It’s NOT!
“Just stop acting like free trade is the answer to all of our problems.”
FREEDOM is the answer to all our problems. Definitionally. Since; paraphrasing Sex Pistols; if you’ve got a problem [with freedom], the problem is you.
Merely free trade won’t solve all of them. But free trade is a necessary component of freedom. No different from free speech, free assembly etc.
Less freedom is never an improvement on more freedom. No matter what the totalitarian dregs whining about “fake news” are told to mindlessly regurgitate: you’re not made better off by having to ask Dear Leader for permission to open your mouth. Nor by being barred from meeting up with whomever you want to. Nor from trading with whomever you want to. etc., etc.
There’s no such thing as “free trade”. Every country does everything they can to protect their economy. Your tangent has nothing to do with what I’m talking about.
Rather, Mish has this naive concept about trade. He acts like all tariffs & sanctions are bad. Anybody can rail against these economic policies, but once you’re president, they quickly become reality. Not once has he accepted my challenge to lay out an implementable “free trade” plan.
Name me a president in the last 50 years who didn’t use either of these polices?
Yes, in general, freedom is always better.
“He acts like all tariffs & sanctions are bad.”
They are. By onvious necessity, since any government unlimited enough to arbitrarily enact them, are necessarily bad.
“Name me a president in the last 50 years who didn’t use either of these polices?”
The last 50 years, is the age of completely unconstrained debasement theft, and nothing but. Nothing, absolutely nothing, any President, nor any other politician in power, has done during that period, has had any merit. Nothing at all. Every President has been nothing but dead, completely wrong about every single thing. Period.
That aside: A real 10% tax on everything; key being everything; crosing the border inbound, is not a bad way to fund government. Or, at least not a straight up illegitimate way. IOW, it’s miles ahead of any activity tax, whether one on sales or on “income.” As long as there is NO, ZERO discretion; such obvious basics as “everyone created equal”, nor no spying, nor no arbitrariness of government actions, is not trivially violated.
Operating the border controls required to minimize the chance of too many nuclear warheads being imported into US urban centers for detonation, is not cost free. Someone has to pay. That someone being whomever is moving goods across the border, is the only efficient, likely even the only legitimate, way to fund such border controls. It’s the arbitrariness of “tarriffs” which are the issue. Not the use of “transiting border inbound” as a trigger for requiring payment. The latter being one of the very few perfectly efficient and legitimate such triggers available to a legitimate state.
If everyone does tariffs, then you can’t say they’re bad. You can say you wished no one did them, but that’s simply not going to happen.
Again, my problem with Mish is all he does is lambast tariffs & sanctions without offering a comprehensive “Well, here’s what I would do if I was The Man.”
It’s easy to throw darts, but it’s much harder to actually hit dead center with a real plan.
You and I would agree on a lot of stuff. We’re just a loggerhead over the fact that tariffs & sanctions have to be part of the equation. You yourself are okay with a 10% tariff on everything which I think is a great idea. The problem with tariffs is that they’re never universal. It’s all about give & take. And our politicians are doing a hell of a lot more taking (bribes) than giving (tariffs).
Yes, pie in the sky free trade is a great idea, but it’s just not happening, and the way things are heading with deglobalization, BRICS, inflation, social unrest, military conflicts, etc, we’re never going to get to free trade.
Just my $0.02.
Mish I am not that different from you. Worked my way into computers and programming. Got laid off in 2008 from AMD due to the GFC and decided to just relax for 2.5 years. Nobody starved. Nobody had to go on food stamps. I had savings and I used the time productively on personal learning.
Since then I have worked for N-trig, a touch screen startup which essentially went under after 4 years there and the pieces were bought by MSFT, Synaptics where I was laid off after 4 years and now working remotely from the Bahamas for another Austin area capacitive touch tech startup. They will lay me off at some point as well but I was paid well enough as things went along that I could not only plan for, but profit from some of the layoffs.
But not everyone has that level of intelligence. Just because you or I did this or that means little to tens of millions of people who were not gifted the intellect, vision, imagination or work ethic to just confidently navigate a turbulent system. By definition, half the people in the USA have an IQ of less than 100. And at least 15% of have an IQ of less than 85. Do the math. If we have ~350 mn people in the US you are looking at 52 million with an M people with a G_d given IQ that is so low that even the current level of unreleased Tesla Optimus robot could probably replace them in the workforce.
What ever people have, we did not earn it. No, this is not Obama saying that government gave us everything this is me saying G_d gave us everything we needed to achieve what has been achieved. And without those initial gifts, nothing would have been achieved. An 85 IQ person with super strong work ethic going super human 16 hours a day 7 days a week could not accomplish what you or I or many others have achieved.
I suggest that you recognize these truths in your analyses. But for the grace of G_d you might also need government dole in order to survive.
When on my Bloomberg screen on September 28 2008, a day that will live in Infamy, it popped up that Goldman Sachs has just been accorded a banking license. Disgusted, I decided to retire. I had made well enough that I could so I did.
I hope most of us here understand that not everyone is going to be an engineer or entrepreneur or doctor or lawyer or business owner etc.
Government dole is something different though. It’s essentially paying people not to work (they get dole and are not required to work) so all they do is consume but produce nothing. Instead we should be requiring some work for that dole. That goes for pure welfare cases as well as giving benefits for low paying jobs. For example if there was no min wage and say grocery baggers earned 5/hr I’d have no problem with them also getting 10/hr in government benefits to get them to 15/hr because now instead of them getting 15/hr on dole they get 10/hr on dole and we get productive work (groceries bagged).
The welfare recipient should only do the work robots are too smart to do, or would you like to move to a house built by typical welfare recipient?
Dotcom bust was hard for me, and I wasn’t one who went into computer programming because it was hip at the time. I scraped by doing jobs I didn’t like, but started to learn about finance. Listened to online courses by Robert Schiller, but that went out of the window with GFC and central bankers printing money like drunken sailors. Never again would I care what an certified economist has to say about anything.
NONE OF THIS MATTERS.
The “EV” is DOA. There aren’t enough resources/material to produce even 1/10,000th of the battery capacity needed for mass/popular EV adoption.
REPEAT: the “EV” is DOA.
Battery tech. cannot & will not “improve”… not even marginally. Never has, never will.
Further, batteries have a very short lifespan, quickly becoming non-recyclable toxic waste akin to spent nuclear fuel-rods. Yeah, let’s direct our fossil fuel energy output into into terminally insufficeint+inefficient battery capacity, all of which expires & needs wholesale replacement every 7-8 years… while poisoning the planet along the way.
Great idea. /sarc
The people still talking/pushing EV tech should be summarily EXCLUDED from all political & tech policy discourse. Idiots.
Last I looked, a “free market” non government subsidized 18th century New Orleans candle provided light at night for a room in the House Of The Rising Sun during the age of tariffs and sales taxes, unlike a 21st century solar panel mandated by the best “democracy” oligarchy can buy while Musk enjoys income taxes to game as well as tariffs while killing birds with wind farms to light up the Mustang Ranch for night time romps but requiring oil and hydro based energy backups to provide illumination at night.
Just wait until the Tesla Optimus Prime robots rip thru the unskilled labourer class.
They’ll want tariff walls (literally) around Tesla plants to try & protect MAGA from the future.
A difficult and complex topic.
No doubt about it. Free trade is great in an ideal world.
But that isn’t what we have. So we will never get to complete free trade. But we can work at getting closer to it.
When it comes to trading and moving physical goods throughout the world, most are shipped at sea. Including oil and LNG.
Due to Houthi rebels firing missiles at ships in the Red Sea, 5 large shippers are temporarily avoiding the Suez canal, where 12% of all shipping goes through. In the short term this is another blow to global free trade and supply chain efficiencies.
respectfully partially disagree.
That jobs are replaced by better ones, makes sense.
That EVs in the West are “too expensive” does not.
These are priced as they should be – distorded of course by a strangle hold of materials by others and the statesubsidies doled out in china using ample available funds which we built up by buying (mostly) unnecessary rubbish.
In the case of EV, it is only healthy that we see the true costs as it will help us understand the wider ecosystem that needs to change needed to ensure the transistion to electric. The general public is presented with far too rosy “costs”for solar and wind, for example but few acknowledge taht there are many otehr ocosts which ought to be accounted for. (grid, baseload adjustments needed at other power sources to allow for the variability of wind and solar etc etc.
The public need to be more aware of TRUE costs, only then we can sensibly think about transitioning.
Perhaps, in addition to some targetted tariffs to discourage blatant free market violations, we ought to subsidise some processes to ensure we do not become hostage to one country for basic materials.
We may not need huge amounts of materials for the transisition but nevertheless, enabling processing on our own turf, maybe economically not viable, avoid us being held hostage when the time comes.
Although, in principle I agree with “free” above all else, there are nuances where deviation from that path are needed.
Tariffs are taxes on Americans, and they are some of the dumbest taxes one can come up with. That there is now bipartisan agreement that tariffs are good taxes because they are paid by the Chinese or the EU will be one of Trump‘s most toxic legacies.
The best way to get a mule’s attention is to whack him along side the head with a two by four. Export dependent economies like Germany and Bangladesh are not as smart as a mule.
Good news for Tesla. Bad news for consumers.
None of the domestic EV offerings are competitive in the US or EU.
China EVs are very competitive, including big off-road SUVs with onboard generators like the Bao Bao 5. Zero emissions daily driving up to ~100mi and no need to worry charging on long trips. Ridiculously quick and sold in China for $40k.
Given the pace of development, it might be a decade before incumbent manufacturers figure out how to make competitive EVs at reasonable cost and create the manufacturing capacity to do so.
It’s important that your partner understands finance too.
link to twitter.com
It’s not madness since national security and foreign trade as presently practiced are opposing forces. No nation is free if it depends on a foreign entity for parts or technology that go into military equipment. A nation is militarily vulnerable when it decreases manufacturing since it then has fewer people and factories to make military equipment in the time of war. Offshoring manufacturing gives potential enemies a chance to grow their engineering skills that could then be used against us in time of war. Crime went up as manufacturing jobs were sent overseas. The real madness is destroying one’s country in the name of free trade.
Might as well have zero Tarrifs.
If the US can not afford it, we will just make more free money. Debt matters not. The world continues to accept our uranium backed Fiat.
Free money = Free Trade or Else!!!!
Forget the tariffs and reduce the federal government by 99.999999%. Let the Brits fight the wars they laid the groundwork for over the last 500 years. Degenerates like Tony Blair, Prince Andrew and Boris Johnson leading the charge.
But the Chinese playbook is to subsidise industries while they build scale for their own supply then once they’re done building out, export the surplus to the world.
The issue is security of supply for those other countries importing. If we’re really moving to large scale solar, how can that be reliant on imported capacity? EVs maybe similar.
The US is blessed in many ways that China isn’t – oil and food security for starters. Dealing with Russia has shown what happens when a country relies on a regime like that for imported energy and basics.
Alas, tariffs are the very definition of populist policy and populism is rife around the world. I would wager we will see far more tariffs, here and abroad, before we see a reduction, which may not come until the next 1st turning!
Yep
The reality : tariffs impose cost on all Americans, constricting consumption, subsidizing high paying jobs, causing inflation. Later on, Gen-Z and new immigrants will compete for those high paying jobs causing deflation. Over capacity will lead to deflation, securing our needs, reducing cost, cutting shipping time and cost,
avoiding naval choke points, as we witness today.
As a populist party, Democrats were never sold on the free trade idea. Once Trump‘s ignorance of basic economics dominated the Republican Party, the battle for sensible trade policies was lost for good.
Yes, here in the U.S. we are missing out on inexpensive Chinese electric cars. Looking at the Chinese e-bike imports is mind blowing seeing how fast the competitive market is improving the e-bikes available and lowering prices.
Agree
America gives lip service to “Free Trade”.
Your examples are limited and simplistic. Sure free trade works well in text books. But during the scamdemic do you recall a Chinese official indicating they may not send drugs to the US. China has too much control of drug ingredients. The US does not produce enough to satisfy demand. They might be cheaper from China than the US when you can get them. Fine. Tell that to the person who needs them now. There are issues of national security you don’t mention. In addition, it is not free trade with China or a number of other countries. It is not black and white. There are more issues at stake than merely cheaper toys at walmart.
Are EVs a matter of nation security, solar panels, bicycles, toys?
The irony of your silly e3xamples is China may indeed strike back at the US over stupid stuff like those with export bans on crucial minerals.
Yeah, perhaps we should do our own rate earths, but the Greens who are cramming EVs and batteries down our throats don’t want any new mines here.
No EV’s are not a matter of national security. Rare earths are not rare. They just require a lot of earthmoving and hence disruption to recover them. This administration recently refused a permit in Wyoming for a rare earths project. The transition to more self sufficiency and security will be painful and inflationary but in a world where we are now courting trade wars it is foolhardy to ignore the risks. The supply chains need to be more secure and that is what corporations are doing now. It will take a long time. It will be expensive, but the benefit of favoring labour over capital will increase the wealth of the middle class, contribute to a reduction of the gap between capital and labour and contribute to ameliorating the risk ever present in a fourth turning of social disruption.
There’s been a significant onshoring of manufacturing over the last two years. There are, of course, several reasons, but let’s NOT act like tariffs have NOTHING to do with trend. Oh no, that doesn’t fit the narrative, Mish, now does it?
There’s ZERO possibility of free trade with China.
Free trade IS good (whatever that means).
Tariffs (China) & sanctions (Iran & Russia) are bad.
And to be clear, the near-term answer to lowering fossil fuel consumption as it relates to transportation is not a hog-wild push to BEVs. It’s hybrids. We’ve literally put the cart before the horse with mandating ICEs out of existence. It will take us two decades to get the infrastructure ready for a swift switchover.
And, no, the answer is not creating anymore dependence on China that there already is. What’s needed is massive investment by Ford & GM. A good start would be for Congress to ban any company for 15 years from doing stock buybacks. Lower your prices, invest in R&D / manufacturing and, or your people. The investors should be last for a while.
I bet you’re fat, dumb & happy that we’re SO dependent on China for pharma manufacturing? No?
Agree on PHEVs.
“Bastiat said that sunlight was unfair to the candlemakers. He proposed a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds in which the light of the sun would enter houses.”
This is a parody meant to highlight an absurd situation and was never meant to be a rule although some see it as such. It is like Jonathan Swift’s “A Modest Proposal” as a solution to the Irish famine. Even Adam Smith wrote that certain industries should be protected for national security reasons because it is just common sense. In a perfect world without strife, you could do it but the world is not perfect and strife is ubiquitous. unless you can impose a World Government and suppress all rebellions, protecting certain industries and keeping your intellectual property is a matter of survival and not simply an economic choice.
Yep.
The fine print on those “Free Trade” deals is an appalling giveaway of American jobs and businesses. In fact, “Free Trade” deals are polluted with the exact opposite of “free trade,” and are specifically designed with conditionality to destroy American jobs and industries. It’s long past time to call these sham agreements out for what they are; a deliberate plot to destroy America’s standard of living from within by unelected bureaucrats. “Free Trade” “deals” are a reprehensible euphemism for selling out Americans while pretending to do them a favor. Tariffs are NOT the enemy here; phony “Free Trade” deals are.
You gotta love conservative American “logic”–they are all about “capitalism” except for when it hurts them or the things they care about, then they want “government protection” aka “welfare.”
So true.
It’s not about consumption, it’s about the industrial production. The industrial
production chart looks like 2000/2009. In the long run it will grow, financed by
the banks.
Gravity between US10Y and the German 10Y pulls them together. It’s time to buy the long duration.When “held to maturity” turns green the banks will sell them,
sending rates even lower. The spread between EFFR and the long duration will grow. The banks will finance the industrial base, not the drunken sailors.
“In reality, tariffs impose costs on all Americans to subsidize a few jobs.”
That’s the key statement in the article. It’s the one that everyone misses when they talk about saving Union (eg UAW) jobs.
Politicians always sell the tariffs as saving middle class jobs at the expense of the rich (ie ownership). In reality it’s the poor that are being asked to prop up the middle class because it’s the guy working the drive through or the clerk at 7-11 etc who has to buy the more expensive products to subsidize those union jobs, not the rich because comparatively they buy hardly anything.
“The Wall Streety Journal”? I never heard of that one but it would be a great name for a parody of the Wall Street Journal.
I’d go with ‘Wall-E Street Journal’ as a parody (Wall-E could comment on the state of the environment from a street level point of view).
Or ‘Wally-World Street Journal’ as another parody (Walmart could comment on customer buying trends).
Mish has never had to worry about his job being offshored to Bangladesh or Vietnam.
Technically every day Mish has to worry about that. You think bloggers there couldn’t get access to the same stats he does or publish a blog like his from there?
It’s his work that makes this site a success, not being located in the USA.
Thanks TexasTime
I have been told countless times I will be replaced by a news bot.
He should be worried that he will be replaced by AI as are all those who write for a living and many more. Should we legislate Human Only rights or let the market rip?