FIRE Members - Are any of you pro-tariff?

[tenant13]

It’s hard to have an opinion about tariffs if we don’t understand their purpose. Are they a negotiating tactic, an attempt to close trade deficit, a revolution in taxation or a way to re-industrialize US? I’m cautiously for all these goals but have no clue if tariffs are in fact going to help with any of them. I’d be interested in revisiting this thread in two years/

 

[HFWR]

I tend to be in agreement, but I also think they are a temporary tool to get the changes we want. I think it is very important that we get our chips produced at home, preferably the majority of them, but at least the chips used by our defense department. Steel production should also be on the list.

There was legislation to begin this process, though more with carrot than stick. And there are several new fabs in the works.

 

[Fermion]

I actually think tariffs are good if we are going to put a lot of regulations on companies for environmental and workplace safety/compensation. It is hypocritical and unfair to make a company in the USA abide by strict rules but then buy your stuff from another company in XYZ country that doesn't follow similar rules.

To me it is similar to saying "I am a good person, I don't rob houses, I just hire someone to rob them for me"

 

[Koolau]

I tend to be in agreement, but I also think they are a temporary tool to get the changes we want. I think it is very important that we get our chips produced at home, preferably the majority of them, but at least the chips used by our defense department. Steel production should also be on the list.

Yes. Anything "strategic" should be made at home - even though that likely means strategic items will be more expensive.

 

[jollystomper]

I would not say that I am pro-tariff. But I am patient enough to not rush to judgement and am willing to see how things play out. I may be biased, as I can afford to be patient. But I can cite many examples of situations that cause early "pain", but in the long run there was benefit. I can also cite many examples of quick fixes that seemed to beneficial quickly, but in the long run turned out to have been the wrong thing to do. Perhaps it is the "exercise and watch what you eat" vs. "take a drug for faster results" mentalities, and in my view the latter seems more prevalent these days. But I will just leave it at that .

 

[Dtail]

I'm in favor tariffs to reset trade barriers, whether they are a traditional tariff or another form of trade barrier that limit imports. Look at the EU for ready examples of non-tariff barriers to trade.

There's also a concern about being self-sufficient, or at least dependent upon reliable, long-standing partners, for critical needs.

If the recent announcements bring >50 countries to the table (or is it 70?), and we stay the tariffs during negotiations in order to reset the relationship, IMO that's not a bad outcome.

But I should upgrade my iPhone 11 in the next few days

You don't want to pay 1,500 for a new iphone?

 

[HarveyS]

I think that any opinion needs to take into account what the global tariff landscape looked like 1, 3, 5, 7, 9, etc. years ago. Tariffs did not just start in the recent past. For example, 20 years ago Brazil was a powerhouse economy based partly on duties that had to be paid on imported capital equipment. Tremendous incentive to build product in-country. Were those duties tariffs by another name, or actual tariffs? In either case, the result was a boom in Brazilian manufacturing.

 

[Dtail]

I think that any opinion needs to take into account what the global tariff landscape looked like 1, 3, 5, 7, 9, etc. years ago. Tariffs did not just start in the recent past. For example, 20 years ago Brazil was a powerhouse economy based partly on duties that had to be paid on imported capital equipment. Tremendous incentive to build product in-country. Were those duties tariffs by another name, or actual tariffs? In either case, the result was a boom in Brazilian manufacturing.

Do you really feel that manufacturing will go back to the 50's/60's concept? It will be more expensive and more robotic supported.

 

[Trailwalker]

I'm not pro or anti-tariff. It's a tool. A hammer is an excellent choice in some cases but a terrible choice in others. That's all I have to say about that in this forum.

 

[HarveyS]

What I really feel is that tariffs did not just start in the recent past. Any opinions should take that into account, and not just the news feed of the last 4 weeks. Not sure where you pulled "50's/60's concept" from?

 

[pb4uski]

I prefer free trade Tariffs should be used sparingly to protect production essential to national security. For example, ship building.

Not sure if any of you had a bully in school. Nobody liked him and avoided dealing with him unless it was unavoidable. Not what I want us to be on the world stage.

P.S. Even as is, the United States is second in the world in manufacturing output, contrary to many who think we don't manufacture things anymore. That and a lot of the manufacturing job losses recently have been due to productivity improvements and that is likely to accelerate with further automation bolstered by AI.

 

[Midpack]

There are many good articles online to inform us all. Beats uninformed opinions. Blanket tariffs are stupid, but there are situations where targeted tariffs are a necessary tool (other countries subsidizing specific industries, eg dumping, or strategic industries domestically). For example: Tariffs—Everything you need to know but were afraid to ask

 

[pb4uski]

....I think the trade deficit and associated debt is not a good thing for any country. ...

The trade deficit and the national debt have nothing to do with each other. Nada. The national debt arises because the federal government spends more than it takes in so it has to borrow to fund the annual deficits. The trade deficit arises because we collectively buy more foreign goods and services than we sell to others. Two totally different things.

And the trade deficit isn't bad. Individually, we all have trade deficits. We "sell" goods and services to a handful of entities but buy from others so each entity that we deal with we have a trade surplus or deficit. Nothing wrong with that.

 

[YellowSubmarine]

I stand with Ronald Reagan on tariffs. If you want inefficiency and poor management...tariffs are the way to go. His speech in 1987 is relevant today just as much as then.

Google Search

 

[frayne]

Global trade is the lubricant that keeps the world’s economies moving and growing. Tariffs are sometimes necessary to protect key industries and ensure national security, but beyond that, they function as a regressive tax—borne by the supplier, the importer, or ultimately, the consumer. Pro free trader here.

 

[donheff]

I am not knowledgeable on tariffs beyond reading the daily papers. The impression I have long gotten is that they may have some strategic value but are rarely used to good effect. Blunderbuss use with no articulated intent doesn't make any sense.

Edit: I see that an attempt to enact Buffet's proposal was introduced as the "Balanced Trade Restoration Act of 2006." Sounds complex to set up such a market but I guess no more complex than enforcing multitudes of tariffs.

 

[Gumby]

The trade deficit and the national debt have nothing to do with each other. Nada. The national debt arises because the federal government spends more than it takes in so it has to borrow to fund the annual deficits. The trade deficit arises because we collectively buy more foreign goods and services than we sell to others. Two totally different things.

And the trade deficit isn't bad. Individually, we all have trade deficits. We "sell" goods and services to a handful of entities but buy from others so each entity that we deal with we have a trade surplus or deficit. Nothing wrong with that.

No necessarily so. You might want to read economist James K. Galbraith about the fact that we will have a budget deficit so long as we have a trade deficit. It was once discussed at length in this forum - here Understanding the relation between Trade Deficits and Budget Deficits

 

[NameTaken2]

Scrolled this thread expecting to see it go off the rails -
Pleasantly surprised -may be first tariff-related thread I've seen anywhere that didn't!

IDK if Shock and Awe Tariffs make sense, because I don't know the End Game/deal-making plan.
Guess I'm a Tariff Agnostic -along for the ride while believing something had to be done.
Main hoped result: for U.S. security, many critical products/industries return production here.

Regarding "mind-numbing work": Assume that robotics and AI will continue to eliminate need for many Americans to do mind-numbing work.

 

[MichaelB]

Tariffs are a policy tool and can be useful or harmful, depending on how they are used.

 

[MichaelB]

Tariffs are a generic term. I would challenge advocates to express 1) tariffs on what / who, 2) how much, and 3) what is the quantifiable expected outcome?

Likewise, for advocates of producing strategic goods in the US, 1) what goods, and 2) how is that accomplished?

 

[MichaelB]

No necessarily so. You might want to read economist James K. Galbraith about the fact that will will have a budget deficit so long as we have a trade deficit. It was once discussed at length in this forum - here Understanding the relation between Trade Deficits and Budget Deficits

Right.

Another way to look at the debt is we consumed more than we produced and that difference was paid for by government debt. If the government had not taken on that debt consumers would have. The debt was needed to pay for all the stuff. So, if public debt was lower, private debt would be higher, but the total outstanding debt would be the same.

 

[Onda]

Another way to look at the debt is we consumed more than we produced and that difference was paid for by government debt. If the government had not taken on that debt consumers would have. The debt was needed to pay for all the stuff. So, if public debt was lower, private debt would be higher, but the total outstanding debt would be the same.

French officials in the 1960s called this the U.S.'s "exorbitant privilege": the U.S. can borrow in its own reserve currency, unlike many other countries. If a country like Argentina borrows in dollars, it risks default if it can't earn enough dollars. But the U.S. can just issue more.

 

[Onda]

I don't support tariffs because I believe in the principles of American exceptionalism—a system that has driven unparalleled growth in GDP, earnings, income, and market returns. We've thrived under a global economic framework that rewards innovation, openness, and competitiveness, not protectionism.

 

[MichaelB]

<mod note> Let’s all remember to leave the politics out of the discussion

 

[dobig]

Seems like a question better suited for Reddit or Debate Politics than for our purposes here.

I'd rather see no heated arguments beyond if dividend or total return investing is the best investment strategy. So far pretty mild discussion but these topics tend to degenerate and leave long lasting hard feelings.