FIRE Members - Are any of you pro-tariff?

[Closet_Gamer]

So why put a tariff on the stores where the kids spend the money? shouldn't the dad control his kids spending instead? I don't think the stores took advantage of the kids if they went to the store and spend their money there.

I think in his analogy the rich Dad is the US and the kids are the foreign countries taking advantage of Dad’s largess in the form of relaxed trade policies. Dad hasn’t been paying attention to what is happening with his wealth and largess.

 

[target2019]

Based on Google's statistics, in 2018, <1% of Japan's and <12% in the EU's car sales were US made.

US-made cars may not work well for customers in Japan and Europe.

 

[Onda]

I’m skeptical of the claim that VAT is a trade barrier and rolled my eyes when I heard that.

I do have one personal experience that gives me pause however. Yes, I know this can be written off as an anecdote but it may be instructive.

When we were living in England our US family sent us a big box of Xmas stuff. Nothing crazy. T-shirts, mugs, other clothes and some really odd cookies based on a long lost family recipe (that should have stayed lost).

My brother paid the shipping and (without doing real math) just said the package was worth $800 and jotted down what was in the package.

When the box was delivered to my house, I was told I had to pay £180 to receive it. There must be a mistake I said. My brother didn’t send this to be paid on receipt.

Oh no, that’s the import duties and VAT on the goods inside. Hmmmm. So I glumly paid the cost and moved on.

Now then … my family had already paid all of the taxes related to those products creation and transport in the US. When it hit the UK border I was essentially asked to pay taxes again in the form of a VAT even though that value add (and associated societal costs) did not take place in the UK (other than port fees and the guy to drive it to my house). There were also some product-specific tariffs. We would have been much better off had my brother sent me $800 and told me to go shopping on the high street.

If this experience is representative of the broader approach then the notion that foriegn goods are taxed the same as domestic goods in VAT countries isn’t really accurate. It does, in fact, appear to the people in the transaction as a border tariff that makes the product more expensive than something produced domestically.

I think this one is very complicated.

You're spot-on that your family already paid U.S. sales taxes and any applicable manufacturing-related taxes before shipping. But when the goods crossed into the UK, the UK doesn’t care what taxes were already paid elsewhere. Instead, it charges UK VAT as if the goods were bought domestically.

That feels unfair—and in practice, it is a kind of double taxation, even if legally it's not defined that way.

I can assure you though, it’s highly unlikely that a product shipped by, say, Apple from Massachusetts would pay 6% Massachusetts sales tax and then, on top of that, be charged EU VAT. U.S. companies exporting goods to the EU typically don’t pay U.S. sales tax for international shipments, and they don’t face the same double-taxing dilemma at the border.

 

[Closet_Gamer]

You're spot-on that your family already paid U.S. sales taxes and any applicable manufacturing-related taxes before shipping. But when the goods crossed into the UK, the UK doesn’t care what taxes were already paid elsewhere. Instead, it charges UK VAT as if the goods were bought domestically.

That feels unfair—and in practice, it is a kind of double taxation, even if legally it's not defined that way.

I can assure you though, it’s highly unlikely that a product shipped by, say, Apple from Massachusetts would pay 6% Massachusetts sales tax and then, on top of that, be charged EU VAT. U.S. companies exporting goods to the EU typically don’t pay U.S. sales tax for international shipments, and they don’t face the same double-taxing dilemma at the border.

If this is the case, then the US is totally justified in putting a small package tariff in place that whacks all of the Temu and Amazon stuff coming into the country. Packages less than $600(?) in declared value currently come in for free. That’s why the battery I order via Amazon is directly shipped from China.

We don’t care what taxes have been paid elsewhere, so we’re adding a border tax because we didn’t get tax production in the US (via income, property or intermediary sales taxes).

Good for the goose is good for the gander.

 

[Midpack]

We could manufacture anything in America, but which products could we realistically bring back - at anywhere near what you’re paying today? Clothes? Shoes? TVs? Smartphones? Tablet/desktop/laptops? Coffee? Diamonds? Tools? Toys? Light bulbs? Furniture? I could go on and on…the prices for most of these wholly made in America would make your head spin. The last administration was thrown out largely (NOT entirely) because inflation was too high - about 3% at the time we all voted.

I did a deep dive on blue jeans, since that’s a staple item in America. The only (mostly) American made blue jeans are $150-300. Admittedly they are far higher quality than the basic blue jeans most of us own, but that’s only because America could never manufacture blue jeans at a remotely competitive price for the broader market. Tariffs won’t fix blue jeans, but if you have evidence to the contrary I’d be interested.

We didn’t start buying foreign made products to spite American workers. We’ve done it to save money. Companies offshored to stay competitive in response to how we actually spent our money…

 

[Amethyst]

For sure, calling any period a golden age requires some rose-colored glasses. For instance, the Fifties are often cited, but homes were 1200sf with one bath and a one-car garage. Much fun with a house full of teens! And lots of cold war, racial strife, polio, etc. Careful what you wish for.

I don't remember the 50s, but the 60's seemed scary all the time to me, and

I still recall hiding under the desk for our air-raid drill. I recall the near panic during polio epidemics and remember getting one of the first polio shots.

It was a simpler time in some ways but not without its fears and injustices.

While I concede that in some cases to shift from public assistance to a job is a net negative financially, I have to wonder how many people on public assistance think that they would be worse off if they got a job but are misjudging it because they don't have the skills to assess it correctly or they are just listening to peers who believe that is true and not looking at it critically.

I can't assess their knowledge of, and ability to add up the dollar values of public benefits accurately.
I do suspect that people have an intrinsic sense of the intangible values of "I have a job, am self-sufficient and contributing to society" versus "I have a job, now I have to get up early, make myself presentable, get my kids off to school/daycare and myself to that job, be there every day on time, put up with other people, submit to performance reviews, and have very limited leisure time."
This is not to say most people are lazy, or that public benefits should not exist. For many reasons, I am in favor of public benefits. It is just that there is a cut-off point where the available jobs are such a bother that benefits, however meager, look more attractive.

 

[Onda]

If this is the case, then the US is totally justified in putting a small package tariff in place that whacks all of the Temu and Amazon stuff coming into the country. Packages less than $600(?) in declared value currently come in for free. That’s why the battery I order via Amazon is directly shipped from China.

We don’t care what taxes have been paid elsewhere, so we’re adding a border tax because we didn’t get tax production in the US (via income, property or intermediary sales taxes).

Good for the goose is good for the gander.

I believe you're right in the case of China, where placing tariffs or taxes makes sense as a way to address the trade imbalance and protect local industries. However, placing a 20-25% tax on imports from Canada, Mexico, and EU countries, which have minimal trade barriers and strong trade relationships with the U.S., could lead to an self inflicted economic disaster.

 

[Closet_Gamer]

Please tell me which products you actually think could be manufactured in the US at anywhere near what you’re paying today. Clothes? Shoes? TVs? Smartphones? Tablet/desktop/laptops? Coffee? Diamonds? Tools? Toys? Light bulbs? Furniture? I could go on and on…

We could make all these things, but the prices for 100% American made would make your head spin.

We didn’t start buying foreign made products to spite American workers. We’ve done it to save money. Companies offshored to stay competitive in response to how we spent our money…

I shared a perspective on this in post #61 of another thread.

Tariffs! What Companies will Excel with these tariffs in the upcoming year or two?

 

[Koolau]

Had a friend who went to Japan not long ago. He expected he would see at least a few American cars. He could not recall seeing any he said. I suspect there's something going on other than tariffs but I have no insight what other trade barriers Japan may or may not not impose on American cars (or other items). I understand their tariffs on rice are ridiculous but I don't suppose that's a big deal to most American farmers, but YMMV.

 

[Midpack]

I shared a perspective on this in post #61 of another thread.

Tariffs! What Companies will Excel with these tariffs in the upcoming year or two?

I read that and you make some good points, but you didn’t provide any concrete examples? You mention “Electronics, machinery, appliances, heavy industrial precursors, and (perhaps most critically for US safety) medical things like syringes, IV bags, surgical tubing, etc.” Are you suggesting we could bring them back at competitive prices? I’d encourage you to pick one and do deeper dive to make the case - like I did with blue jeans.

Believe me I wish I believed we could bring back a significant chunk of manufacturing. There are few things we could, and some we need strategically, but not the bulk of what we consume in 2025. I support tariffs to combat dumping (artificially low prices) and for strategic industries, but blanket tariffs are stupid and destructive.

 

[dixonge]

American corporations and their politicians took us down this road in the 80s. The US has looked the other way ever since.

They installed suicide-prevention nets at their factories and we say Americans don't want the jobs? Is the US really the bully or just standing up to a bully (we made stronger) that doesn't play fair?

I guess I am in the camp that we have done great long term harm to our middle class over the last 50 years which has left us as a country very exposed, especially if some of our largest trading "partners" decide we have very limited ability to rebuild military assets lost in conflict, or that we can be harmed greatly economically by cutting off supplies of goods. I am also in the camp that we have gone so far down this road that we will be unlikely to change our destiny.

This Forbes article has great detail that backs up your points:

"Over a span of two decades, from 1998 to 2020, the American manufacturing sector witnessed a significant downturn. During this period, 646,500 high-quality manufacturing positions held by Black employees were eliminated, marking a substantial 30.4% reduction in overall Black representation in manufacturing jobs.

This loss was part of a broader erosion of the U.S. manufacturing base, which saw more than 5 million jobs and nearly 70,000 factories vanish. The primary driver of this decline was an expanding trade deficit in manufactured goods with various global economic powers, including China, Japan, Mexico and the European Union, among others, according to EPI."

The Globalization And Offshoring Of U.S. Jobs Have Hit Americans Hard

The U.S. stands as a dominant force in global outsourcing, with a significant majority of American businesses embracing this practice.

www.forbes.com

 

[Flieger]

I read that and you make some good points, but you didn’t provide any concrete examples? You mention “Electronics, machinery, appliances, heavy industrial precursors, and (perhaps most critically for US safety) medical things like syringes, IV bags, surgical tubing, etc.” Are you suggesting we could bring them back at competitive prices? I’d encourage you to pick one and do deeper dive to make the case - like I did with blue jeans.

Believe me I wish I believed we could bring back a significant chunk of manufacturing. There are few things we could, and some we need strategically, but not the bulk of what we consume in 2025. I support tariffs to combat dumping (artificially low prices) and for strategic industries, but blanket tariffs are stupid and destructive.

As I mentioned in a previous post, sometimes paying a little more, like many of the other things we do, are for the better social good. Strategic items and manufacturing should be in the US for the benefit of the US.

Flieger

 

[Winemaker]

While I concede that in some cases to shift from public assistance to a job is a net negative financially, I have to wonder how many people on public assistance think that they would be worse off if they got a job but are misjudging it because they don't have the skills to assess it correctly or they are just listening to peers who believe that is true and not looking at it critically.

She wasn't on unemployment,' she was working several afternoons/nights as a waitress in a restaurant and bartender/assistant manager at a beer tap house. She made a lot of money on tips. but because she under reported, her kid qualified for all the assistance programs..

 

[Midpack]

As I mentioned in a previous post, sometimes paying a little more, like many of the other things we do, are for the better social good. Strategic items and manufacturing should be in the US for the benefit of the US.

It’s not a little more, it’s a whole lot more in most cases - read the numerous comparisons re: actually making a smartphone in the US, it’s not a little more.

Pick a product/industry you think we could manufacture here for “a little more” - like I did for blue jeans. Take a look at the going rate for your chosen foreign made product, and then the current going rate for that product 100% US made. And then explain how you would bridge the price gap. Most Americans buy blue jeans for $50 plus/minus. Truly American made jeans are $150-300, though admittedly higher quality - and if you dig deeper you find most American made jeans source their denim from abroad. I did find an American made jeans company (Dearborn Denim) and their jeans start at $75, evidently most Americans won’t even pay that premium or they’d be more widely distributed, and their denim comes from Mexico and SC.

 

[MarieIG]

It depends on the context. Many countries are imposing tariffs, regulations favoring domestically produced products, and other denominated taxes on imported goods for various purposes, which presumably are felt to be beneficial to the country imposing said tariffs.

 

[Time2]

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.

I agree with your first sentence and would add steel, pharmaceuticals, and chips. I'm sure there are more items that have similar importance.
As to the bully, in my opinion, it has been the other countries that have bullied us with their tariffs. Previous leaders just let it happen, we could afford it, we have been a rich country. and we lived a higher standard of living on inexpensive imported products. We have just now have become brave enough to fight back. The purpose of the fight is not to bloody the bullies, it is to get them to become fair trade partners while adding protection for our strategic items. As someone else said, I'm up for the fight, I'm glad we are in the fight, but then, I can afford it.

 

[DCdave]

Had a friend who went to Japan not long ago. He expected he would see at least a few American cars. He could not recall seeing any he said. I suspect there's something going on other than tariffs but I have no insight what other trade barriers Japan may or may not not impose on American cars (or other items). I understand their tariffs on rice are ridiculous but I don't suppose that's a big deal to most American farmers, but YMMV.

The US auto industry does a fantastic job making large trucks (Ram, F150 etc). I’ve been to Japan multiple times and it is rare to see large trucks. Fuel is very expensive in Japan and Western Europe and in many places (Tokyo as an example) space is at a premium so people tend to drive small sedans/vehicles (including a lot of electric).

So….we are trying sell to populations that prefer smaller cars but only offered them a few choices, such as Malibu’s and Taurus’s (both of which have been discontinued), that were even close to meeting customers needs. We make great trucks but how many people would pick a Malibu over a Honda Accord, Toyota Camry or a Sonata?
The lack of US cars in Japan is not due to nefarious trade policy but rather the lack of producing what that particular market wants/values.
I chuckle when I read that the Japanese “need” to buy more of our vehicles because it’s not going to happen.

EDIT: I do recall seeing a few 4 door Caddy’s in Tokyo in spite of the fact that the steering wheels are on the wrong side for Japanese drivers.

 

[Onda]

I agree with your first sentence and would add steel, pharmaceuticals, and chips. I'm sure there are more items that have similar importance.
As to the bully, in my opinion, it has been the other countries that have bullied us with their tariffs. Previous leaders just let it happen, we could afford it, we have been a rich country. and we lived a higher standard of living on inexpensive imported products. We have just now have become brave enough to fight back. The purpose of the fight is not to bloody the bullies, it is to get them to become fair trade partners while adding protection for our strategic items. As someone else said, I'm up for the fight, I'm glad we are in the fight, but then, I can afford it.

I keep asking the same question: what specific tariffs or barriers are actually being imposed on U.S. goods by our major trading partners like the EU, Canada, and Mexico? So far, I haven’t received any clear examples—just broad or vague statements like yours. If we're going to justify a trade war or sweeping tariffs, we should at least be able to name the unfair practices/tariffs we're fighting against.

 

[Dtail]

I agree with your first sentence and would add steel, pharmaceuticals, and chips. I'm sure there are more items that have similar importance.
As to the bully, in my opinion, it has been the other countries that have bullied us with their tariffs. Previous leaders just let it happen, we could afford it, we have been a rich country. and we lived a higher standard of living on inexpensive imported products. We have just now have become brave enough to fight back. The purpose of the fight is not to bloody the bullies, it is to get them to become fair trade partners while adding protection for our strategic items. As someone else said, I'm up for the fight, I'm glad we are in the fight, but then, I can afford it.

Your last sentence is the key.
So what percentage of folks NOT on this forum could afford the expected reasonably higher US manufactured pricing?

 

[copyright1997reloaded]

Jarts!

I still have them! Found them in my basement while packing for my never-ending-move.

 

[Onda]

The US auto industry does a fantastic job making large trucks (Ram, F150 etc). I’ve been to Japan multiple times and it is rare to see large trucks. Fuel is very expensive in Japan and Western Europe and in many places (Tokyo as an example) space is at a premium so people tend to drive small sedans/vehicles (including a lot of electric).

So….we are trying sell to populations that prefer smaller cars but only offered them a few choices, such as Malibu’s and Taurus’s (both of which have been discontinued), that were even close to meeting customers needs. We make great trucks but how many people would pick a Malibu over a Honda Accord, Toyota Camry or a Sonata?
The lack of cars in Japan is not due to nefarious trade policy but rather the lack of producing what that particular market wants/values.
I chuckle when I read that the Japanese “need” to buy more of our vehicles because it’s not going to happen.

Interesting point—what’s often overlooked is that the U.S. light SUV and truck industry has been protected for decades by a 25% tariff on imports . This tariff makes it prohibitively expensive for foreign automakers to export comparable models to the U.S., which is a big reason why the Big Three have focused so heavily on this segment—it’s incredibly profitable and shielded from direct global competition.

In a way— the protection can indirectly make U.S.-made large trucks and SUVs less competitive or even unexportable in many foreign markets

 

[MichaelB]

I’m surprised some folks are willing to accept higher prices. Just a few years ago inflation jumped and people’s heads were exploding.

 

[copyright1997reloaded]

The US leads the world in defense material production.

How do you think we would do in rebuilding carriers and destroyers? (Yes, one could argue they are immaterial in the new world.)
The United States Must Improve Its Shipbuilding Capacity

 

[MichaelB]

How do you think we would do in rebuilding carriers and destroyers? (Yes, one could argue they are immaterial in the new world.)
The United States Must Improve Its Shipbuilding Capacity

The Jones Act is a barrier to foreign made ships and incentive to domestic production, yet ships still aren’t being made here.

 

[Dtail]

I’m surprised some folks are willing to accept higher prices. Just a few years ago inflation jumped and people’s heads were exploding.

Never ending pounding by certain media does the trick, but egg prices are fine now.