If that's the goal, one might wonder why are tariffs implemented in such a static way. Why not having your own tariffs importing from XYZ be updated on a monthly basis based on what XYZ imported from you last month.
I’m guessing multiple governments are trying to come up with some sort of a deal that resembles it. It just feels like China is going to be the sole winner in the end, as that’s they’re the only partner that is strong enough against US when it comes to trade.
The US trade more with the EU (both exports and imports) than with China, and it is fairly balanced. So actually this is the trade war nobody wants.
On the other hand the US import a lot from China but export much less so they can hurt China more (but balanced with the fact that this would probably hurt US consumers more as well). Hence we've seen that the Chinese response to Trump has been minimal.
I've thought about that too, but of course reality is a bit more complicated. For example, the EU has a pretty large (and somewhat struggling) automotive industry that could be pretty negatively impacted by Chinese imports.
I'd wager there are other areas though that could be mutually beneficial though.
That would seriously undermine the existence of the EU as a whole. Bear in mind, it justifies the very steep membership fees (for the countries that have high enough GDP to pay) by tying membership to free trade. The EU keeps quite high external tariffs on a lot of things, especially in order to protect French agriculture. Thus the primary argument Remainers presented for staying in the EU was that if Britain left the EU would levy new trade barriers and tariffs on its exports.
The EU has many members who are in it primarily for the transactional benefits. If the EU eliminated external tariffs not only would the French be out on the streets again immediately, but one of the primary motivations for membership would evaporate and the EU would lose a lot of leverage over member states.
The EU is a lot broader than just a tariff agreement; even just the "four freedoms" of the EU are goods, capital, labour, and services, and keeping with the Brexit theme, the trade barriers that Remain was talking about also included "no you can't just do your trade across the border now, we no longer recognise your qualifications" and "we need to inspect the goods crossing this border to make sure they're complying with our legal requirements; yes, we know you didn't change your own, but now there's nothing stopping you from having imported something from somewhere else that didn't follow our rules, and we need to check".
(Also, I said "lower" not "eliminate"; I was thinking more of Chinese PV, and perhaps cars, though cars would have a different group protesting).
> Bear in mind, it justifies the very steep membership fees (for the countries that have high enough GDP to pay) by tying membership to free trade. The EU keeps quite high external tariffs on a lot of things, especially in order to protect French agriculture
The EU justifies the high membership fees for the rich members by the benefits those rich members get - the poorer EU countries get invested in, get developed, some of their people go live in the richer countries and contribute there, but in the end, the country evolves a lot and becomes a significant market for EU goods and contributor. Point in case, Poland, the Baltics, Spain, Romania. France has benefited from Romanian development a lot, and from Romanians when Romania was less developed. It's literally a win win win win.
When your model is that he is a decapitation strike (https://archive.is/1xkxK) against the US, everything makes perfect sense.
Blockcades are an act of war. They are strategically useful to disable a foreign military through robbing it of supplies it needs.
These tariffs are having a blockade like effect by cutting off trade. Does it matter that much whether trading is ceased due to foreign ships blocking trade routes or a foreign backed coup making us do it to ourselves "willingly?"
Our military is absolutely failing to live up to their oath to defend us against enemies foreign and domestic.
> Our military is absolutely failing to live up to their oath to defend us against enemies foreign and domestic.
You guys voted to have the republican being the majority in both the house and the senate, get the presidency and also, indirectly, the supreme court.
That is democracy in action. If the military intervened right now it would just look like a coup. You can't really be surprised that the people you put in power do what they say they were going to do.
Now if they try to do something like the January 6 again, that is something else.
> You can't really be surprised that the people you put in power do what they say they were going to do.
This is exactly what was happening and precisely one of the reasons Trump got elected.
His electorate might not be surprised, but the anti-Trump (those who are so by emotion, not because they understand) are completely shocked he is doing exactly what he said he would.
It's like to them the principle of how democracy is actually supposed to work is very novel.
> Our military is absolutely failing to live up to their oath to defend us against enemies foreign and domestic.
A good portion of them are probably cheering.
That being said, even for those with humanity, empathy and a conscience, a coup against the elected president is quite a serious thing to do, even if he is treasonous and obviously trampling human rights, constitution, separation of powers and being allowed to do so by the other branches of government that are supposed to be the checks and balances.
> These tariffs are having a blockade like effect by cutting off trade. Does it matter that much whether trading is ceased due to foreign ships blocking trade routes or a foreign backed coup making us do it to ourselves "willingly?"
Well, yes. It's the difference between me boycotting Walmart by not shopping there, and me using physical force to prevent other people from shopping at Walmart.
Its only a matter of time for EU, Canada, Mexico, Australia, China, basically everyone to sit together at a table and harmonize counter tariffs in a collective action. 20% more on Canadian steel? everyone else bumps all tariffs in unison.
It will be interesting to compare the UK and EU cases, as well as China. EU responded immediately with counter-tarriffs on goods worth about as much as those taxed by the US. UK and China grumbled but said they don't want to escalate. These are both in different ways similar to the EU case (China because it's big, UK because it's a European "ally", whatever this means nowadays).
The very limited evidence so far, from Canada, seems to suggest that immediate retaliation works better.
> UK and China grumbled but said they don't want to escalate.
Do you have a source on China saying they're not escalating any more? Because they just applied a pile of farm tariffs two days ago in response to the 10% US tariffs.
> China, the world’s largest steelmaker and exporter, warned it would “take all necessary measures to safeguard its legitimate rights and interests” but did not immediately announce retaliatory tariffs.
I'm so glad that a spat at the upper echelons of governments are going to cause untold misery for millions across the world for... no discernable benefit? Wonderful news.
Why the plural? This is something that was very much US made and other countries have no choice but to react. This is not something caused by multiple "upper echelons of governments".
This is something caused by exactly one government - US one. What did you expect, other countries to instantly give up their economy and soverenity the moment Trump said "I hate you and seek to harm you economically"? Especially since he added multiple times "and I want to annex you, take away pieces of your territory" and then added completely baseless accusations as a reason for it?
Personally I didn't expect anything, I'm British. My point is more that it's economic ping-pong beyond the control of almost everyone except governments.
The US government is specifically to blame here though, of course.
No discernable benefit to you maybe, but every crisis ends up benefiting those at the top as it always leads to a wealth transfer either during the crash phase, or the recovery phase, or both. See 2009 crash, Covid, etc.
Your leadership doesn't work to serve you, they work to serve themselves and the elite. People keep calling Trump a stupid bafoon but how come this stupid bafoon keeps getting richer and richer all the time if he's as stupid as people think him to be?
To whit, how much are you willing to bet that after Trump's mandate is over in 4 years time, both Trump, Elon and all his other cronies, will walk away with a bigger net worth than the one they came in? So no, what you see as stupidity now on the news is actually a carefully orchestrated multi year enrichment plan for the elite covered in bread and circus to distract the plebs, that will become evident as time goes on and events unfold.
Tangent, but I think from a certain level onwards, money keeps multiplying itself. You’ve got people working for you that take care of the smart decisions and investments, and people like trump are way too busy with their schemes and bullshit to care about the „boring“ parts of tending to their wealth.
1. Launch TRUMP and MELANIA cryptocurrencies to get a few hundred millions of dollars of cash. (and possibly also get some cash from the "First Buddy" Elon Musk)
2. Announce tariffs, and in general cause chaos, crashing the stock market.
That a country whose currency is world's reserve currency somehow concluded that they're cheated on, wow. By the time the FED balance sheet will reach pre March 2020 levels, we will be living in Back to the Future II.
> Thankfully there are alternative currencies that can be used for that nowadays.
Iraq and Libya have tried, and look what's happened to them ...
The main reason countries are using the USD as the reserve currency is because if they don't, the "Free World TM" will bomb them back to the stone age.
Not really. You have seen what the US (under multiple administrations) does to countries that try to switch away from the dollar. Even China and Russia have issues trading in their own currencies with each other - to name the top two "enemies" of the US. What options do you think smaller countries have?
Other countries stashing dollars is basically pure seignorage profits for the US. And these countries using the dollar as a long term storage of value is geopolitical insurance. This makes no sense unless you read it as the Trump administration sabotaging US interests.
This isn't aiming to be overdramatic, but still there's interesting comparisons with the arch-populist, Hitler. His main quality was really that he captivated crowds, his resentments resonated with his voters, and he had no inhibitions to do the unthinkable. Without in any way comparing Trump to Hitler in other ways, in these three specific things they are alike.
Reading about Hitler's rise to power, it's obvious he kind of bumbled his way into it. There were many people for whom it was convenient, he did many random reckless things that should have been disastrous but somehow he made them into success - for example rearming the Ruhr, or frankly invading Poland with the French army right on its western border.
Hitler was incredibly lucky for a long time, and that's why he managed to do so much damage. But there wasn't really a clever master plan to it. He had hateful ramblings in his head and acted rashly on them. It was sheer luck and shock effect that he wasn't spat out after just a few heads in politics.
I suspect this is also what Trump is doing. And as in 1930s, for a while, everyone else has too much to lose to stand up to it. But unless he will have Hitler's luck for just as long, eventually the random lashings will end badly for him.
Of course Hitler's luck ran out in the end too, with him dead, Germany on its knees and split into two, and German imperialism more or less dead.
Isn’t this what trump wants? He’s already delayed twice and he always talks about a “deal” but he starts with a shock strategy. Someone told me he wrote this in his book
>The proposed target products include industrial and agricultural products, such as steel and aluminium, textiles, home appliances, plastics, poultry, beef, eggs, dairy, sugar and vegetables.
Why tariff such low margin US goods and not high margin US services like software? US doesn't export much goods, as most of the bulk of their economy is tech, finance and services not exporting cheap merch in shipping crates like Asia. How about a 100% tariff on Office 365, Windows, AWS, Azure, etc?
How is a tarif on US textiles or eggs supposed to be a deterrent? When was the last time you saw US eggs or clothes in the EU shelves? Even in the US, less than 10% of the textiles are domestically made.
Edit: a skim of the list suggests it's pretty broad. Agricultural products, wood, clothing, wine, polythene. There's an insane number of very slightly different product categories, no wonder compliance is so expensive.
> How about a 100% tariff on Office 365, Windows, AWS, Azure, etc?
What would be the plan exactly here? These services are being sold by European-based companies and being served from European territory (eg AWS Frankfurt). There’s no import happening here.
In general it makes sense to tariff something that you can replace. E.g. tariff American eggs, so suddenly it makes more sense to import them from Peru.
If you put a 100% import tax on Windows license, the only result is that the EU customers are now paying double the price for Windows. It’s very unlikely it’ll result in people switching to an alternative system.
Same with AWS - even if you’d tariff all American cloud companies, what result would you expect? Sure, in X years maybe you’d grow an EU cloud company, but until then you’d make every European business using cloud very uncompetitive globally.
You use tariffs to prop up the companies you already have. You could put “tariffs” on Apple Music, so people would move to European Spotify.
> You use tariffs to prop up the companies you already have. You could put “tariffs” on Apple Music, so people would move to European Spotify.
Not just the music providers, you could go after American IP and effectively stop international payments to American movie/music/film providers. You could bootstrap the music part from Spotify - i.e. just prohibit Spotify from remitting any licensing fees for American-owned IP. Like when Antigua had the WTO ruling around piracy: https://torrentfreak.com/antiguas-legal-pirate-site-authoriz...
How do you tariff a software service ? Tariffs are applied at import ? Are you paying US software if its hosted in EU datacenter by EU subsidiary ? Or if software licence is sold by EU subsidiary ? The concept makes no sense to me.
something I learned recently: payments to foreign bank accounts in Brazil have an automatic 25% tax imposed regardless of the purpose of the transfer. This seems to applied to companies of a certain size, or moving certain volume of transfer, but still.
1) Because the purpose is not really to make money from tariffs (only trump think that is a thing). The purpose is to encourage people to buy replacements from other countries/your own country/union. People arent going to switch from AWS to Hetzner just because a temporary tariff. But they could easily buy steel/corn/etc from another place while tariffs are in place
2)Software is very hard to tariff because often you can set up a company inside the other country and sell the software from there. And then it never crosses the border. Same can't be done with beef. It has to cross a border.
The US is a massive meat exporter [0] and has put a lot of energy into getting import deals etc. with partner countries. The most famous one is with Japan, but the EU probably has it's range of agreements.
Taxing US meat is hitting right where it needs to, with very limited impact on he local population. France for instance will just increase it's domestic sales, and other EU countries can also turn to neighbor to get their meat.
Software and electronics are a different beast and a lot more impacting in that regard.
Tariffs on products and services with no realistic alternatives in the short term would simply be a tax on your own businesses and citizens. You don't want to do that. It's better to impose tariffs on something inconsequential. Something where alternatives exist and you wouldn't mind if that part of trade just stopped completely.
Also afaik the only way to implement tariffs on packets is through lawyers attacking an arbitrary set of big enough players that aren't sufficiently globalized that they would be taxing the EU's own productivity, and any attempt to levy that inherently appears selective and thus resembles cronyism.
That said, now that I've explained how irrational it is, I could totally see trump doing that as he will seemingly take any form of pretext to enact cronyism.
It's also because it's low impact. How much textile or eggs are really getting exported from the US to the EU? The EU isn't dumb, they don't want to sabotage their economy just to retaliate.
"Tariff" is probably not quite the right mechanism because there's no importer to really pay at the time the good is imported.
But the government in Canada passed a federal sales tax holiday that applied to a very arbitrary selection of products for a couple months here.
It was kind of a nightmare for small businesses, but I expect a similar legal framework would work for software. If you sell software, you're now obligated to remit 25% of the sales revenue to the gov unless the software is on a list of "Canadian software" as determined by some team of bureaucrats.
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If the US doesn't want to buy Chinese or EU or Canadian etc., make it cheaper for China, the EU, Canada, etc. to replace the US with each other.
The problem with anti-import schemes is that they inevitably hit exports. Trade has to have something in both directions, eventually.
Here an example with my limited understanding:
Chinese steel is super expensive in the US now, so US manufacturers buy less of it raising the cost of US products.
This makes Chinese steel more available on the world market and it becomes cheaper for everyone else.
Due to the increased cost of steel US stuff made out of said steel, is generally more expensive while everyone else's become cheaper.
So products not made in the US become cheaper in comparison and thus sell better for more profit.
Oddly enough the EU imposed counter Tariffs on some weird stuff like Alcohol and Motorcycles...
Europeans can easily replace Jim Beam in their Cola.
And Harley Davidson is insanely expensive anyway with the usual customers being by MC-Members or dentist in their midlife crisis.
Red state tariffs.
NB the US tariffs apply to EU steel and steel products, not just Chinese ones, which is why this whole thing is happening.
From Wikipedia:
EU: $20T nominal, $29T PPP
China: $19.5T nominal, $39.4T PPP
US: $30.3T (nominal == PPP by definition)
On the other hand the US import a lot from China but export much less so they can hurt China more (but balanced with the fact that this would probably hurt US consumers more as well). Hence we've seen that the Chinese response to Trump has been minimal.
I'd wager there are other areas though that could be mutually beneficial though.
The EU has many members who are in it primarily for the transactional benefits. If the EU eliminated external tariffs not only would the French be out on the streets again immediately, but one of the primary motivations for membership would evaporate and the EU would lose a lot of leverage over member states.
(Also, I said "lower" not "eliminate"; I was thinking more of Chinese PV, and perhaps cars, though cars would have a different group protesting).
You're wrong: https://policy.trade.ec.europa.eu/eu-trade-relationships-cou...
The EU justifies the high membership fees for the rich members by the benefits those rich members get - the poorer EU countries get invested in, get developed, some of their people go live in the richer countries and contribute there, but in the end, the country evolves a lot and becomes a significant market for EU goods and contributor. Point in case, Poland, the Baltics, Spain, Romania. France has benefited from Romanian development a lot, and from Romanians when Romania was less developed. It's literally a win win win win.
Blockcades are an act of war. They are strategically useful to disable a foreign military through robbing it of supplies it needs.
These tariffs are having a blockade like effect by cutting off trade. Does it matter that much whether trading is ceased due to foreign ships blocking trade routes or a foreign backed coup making us do it to ourselves "willingly?"
Our military is absolutely failing to live up to their oath to defend us against enemies foreign and domestic.
You guys voted to have the republican being the majority in both the house and the senate, get the presidency and also, indirectly, the supreme court. That is democracy in action. If the military intervened right now it would just look like a coup. You can't really be surprised that the people you put in power do what they say they were going to do.
Now if they try to do something like the January 6 again, that is something else.
This is exactly what was happening and precisely one of the reasons Trump got elected. His electorate might not be surprised, but the anti-Trump (those who are so by emotion, not because they understand) are completely shocked he is doing exactly what he said he would.
It's like to them the principle of how democracy is actually supposed to work is very novel.
Dead Comment
A good portion of them are probably cheering.
That being said, even for those with humanity, empathy and a conscience, a coup against the elected president is quite a serious thing to do, even if he is treasonous and obviously trampling human rights, constitution, separation of powers and being allowed to do so by the other branches of government that are supposed to be the checks and balances.
Well, yes. It's the difference between me boycotting Walmart by not shopping there, and me using physical force to prevent other people from shopping at Walmart.
The very limited evidence so far, from Canada, seems to suggest that immediate retaliation works better.
If we wander through a typical supermarket, there'll be very little produce (if any) from the U.S. - most if it will be from europe or asia.
Do you have a source on China saying they're not escalating any more? Because they just applied a pile of farm tariffs two days ago in response to the 10% US tariffs.
> China, the world’s largest steelmaker and exporter, warned it would “take all necessary measures to safeguard its legitimate rights and interests” but did not immediately announce retaliatory tariffs.
Why the plural? This is something that was very much US made and other countries have no choice but to react. This is not something caused by multiple "upper echelons of governments".
This is something caused by exactly one government - US one. What did you expect, other countries to instantly give up their economy and soverenity the moment Trump said "I hate you and seek to harm you economically"? Especially since he added multiple times "and I want to annex you, take away pieces of your territory" and then added completely baseless accusations as a reason for it?
The US government is specifically to blame here though, of course.
No discernable benefit to you maybe, but every crisis ends up benefiting those at the top as it always leads to a wealth transfer either during the crash phase, or the recovery phase, or both. See 2009 crash, Covid, etc.
Your leadership doesn't work to serve you, they work to serve themselves and the elite. People keep calling Trump a stupid bafoon but how come this stupid bafoon keeps getting richer and richer all the time if he's as stupid as people think him to be?
To whit, how much are you willing to bet that after Trump's mandate is over in 4 years time, both Trump, Elon and all his other cronies, will walk away with a bigger net worth than the one they came in? So no, what you see as stupidity now on the news is actually a carefully orchestrated multi year enrichment plan for the elite covered in bread and circus to distract the plebs, that will become evident as time goes on and events unfold.
1. Launch TRUMP and MELANIA cryptocurrencies to get a few hundred millions of dollars of cash. (and possibly also get some cash from the "First Buddy" Elon Musk)
2. Announce tariffs, and in general cause chaos, crashing the stock market.
3. Buy the dip.
4. Revoke all tariffs.
5. Profit.
Thankfully there are alternative currencies that can be used for that nowadays.
Iraq and Libya have tried, and look what's happened to them ...
The main reason countries are using the USD as the reserve currency is because if they don't, the "Free World TM" will bomb them back to the stone age.
Occam's razor - they are all morons.
Reading about Hitler's rise to power, it's obvious he kind of bumbled his way into it. There were many people for whom it was convenient, he did many random reckless things that should have been disastrous but somehow he made them into success - for example rearming the Ruhr, or frankly invading Poland with the French army right on its western border.
Hitler was incredibly lucky for a long time, and that's why he managed to do so much damage. But there wasn't really a clever master plan to it. He had hateful ramblings in his head and acted rashly on them. It was sheer luck and shock effect that he wasn't spat out after just a few heads in politics.
I suspect this is also what Trump is doing. And as in 1930s, for a while, everyone else has too much to lose to stand up to it. But unless he will have Hitler's luck for just as long, eventually the random lashings will end badly for him.
Of course Hitler's luck ran out in the end too, with him dead, Germany on its knees and split into two, and German imperialism more or less dead.
From what I could find, the modern example is the EU tariffs on Chinese solar panels. The outcome was negotiation.
I think trade negotiation is the best outcome we can hope for. Tariffs are going to really hurt jobs if they persist.
Why tariff such low margin US goods and not high margin US services like software? US doesn't export much goods, as most of the bulk of their economy is tech, finance and services not exporting cheap merch in shipping crates like Asia. How about a 100% tariff on Office 365, Windows, AWS, Azure, etc?
How is a tarif on US textiles or eggs supposed to be a deterrent? When was the last time you saw US eggs or clothes in the EU shelves? Even in the US, less than 10% of the textiles are domestically made.
Original press release: https://ec.europa.eu/commission/presscorner/detail/en/qanda_...
This seems to be the list: https://circabc.europa.eu/ui/group/e9d50ad8-e41f-4379-839a-f...
Edit: a skim of the list suggests it's pretty broad. Agricultural products, wood, clothing, wine, polythene. There's an insane number of very slightly different product categories, no wonder compliance is so expensive.
Them being red state products is a weak argument that sees no base of argument or success.
What would be the plan exactly here? These services are being sold by European-based companies and being served from European territory (eg AWS Frankfurt). There’s no import happening here.
In general it makes sense to tariff something that you can replace. E.g. tariff American eggs, so suddenly it makes more sense to import them from Peru.
If you put a 100% import tax on Windows license, the only result is that the EU customers are now paying double the price for Windows. It’s very unlikely it’ll result in people switching to an alternative system.
Same with AWS - even if you’d tariff all American cloud companies, what result would you expect? Sure, in X years maybe you’d grow an EU cloud company, but until then you’d make every European business using cloud very uncompetitive globally.
You use tariffs to prop up the companies you already have. You could put “tariffs” on Apple Music, so people would move to European Spotify.
Not just the music providers, you could go after American IP and effectively stop international payments to American movie/music/film providers. You could bootstrap the music part from Spotify - i.e. just prohibit Spotify from remitting any licensing fees for American-owned IP. Like when Antigua had the WTO ruling around piracy: https://torrentfreak.com/antiguas-legal-pirate-site-authoriz...
If there's a political will and your position is strong enough, a scheme / legal formula is trivial to find.
Even something like "5% of what you make off showing ads to European users" would be enough.
Can add any arbitrary qualifier like "if your main base of operations is outside the EU" - which could hold whether you're a EU subsidiary or not.
2)Software is very hard to tariff because often you can set up a company inside the other country and sell the software from there. And then it never crosses the border. Same can't be done with beef. It has to cross a border.
Taxing US meat is hitting right where it needs to, with very limited impact on he local population. France for instance will just increase it's domestic sales, and other EU countries can also turn to neighbor to get their meat.
Software and electronics are a different beast and a lot more impacting in that regard.
[0] https://www.mda.state.mn.us/sites/default/files/inline-files...
Microsoft, Apple and Amazon all sell from EU countries, not US. My AWS and Azure Bills are EU based, not US based...
When AWS has its HQ and development in the EU it's another matter, but so far it's just a bunch of salespeople.
There is a lot of political posturing but it happens precisely because there not much to be done without hurting EU citizens tremendously.
The EU is way too dependent on everyone else and is now going to pay the price. Maybe we will get rid of the bureaucrats.
Also afaik the only way to implement tariffs on packets is through lawyers attacking an arbitrary set of big enough players that aren't sufficiently globalized that they would be taxing the EU's own productivity, and any attempt to levy that inherently appears selective and thus resembles cronyism.
+ Apple products, + google (& their ads), + Facebook (& their ads), + Netflix, + all Hollywood film and television output.
Funnily enough all the money everyone outside the US spends on these things is not included in the "trade deficit" that is "the problem".
Which would effectively have to be implemented as a tariff on products manufactured in China and Taiwan and imported and sold by an Irish company.
It’s impossible to do that without some massive legal changes which are politically infeasible and would also hurt European economy.
How do you determine where exactly is software “manufactured”?
But the government in Canada passed a federal sales tax holiday that applied to a very arbitrary selection of products for a couple months here.
It was kind of a nightmare for small businesses, but I expect a similar legal framework would work for software. If you sell software, you're now obligated to remit 25% of the sales revenue to the gov unless the software is on a list of "Canadian software" as determined by some team of bureaucrats.
/s