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6 comments

[–] ScorpioGlitch 1 points (+1|-0)

I'm pretty sure that this is the intended effect. I see this as marginally reasonable since it would prevent US companies from sending their goods to China to be processed and shipped back.

[–] CDanger 1 points (+1|-0)

It's probably a negotiating position. Nobody believes adding tariffs will lead to economic growth, but that doesn't mean bend over to whatever terms other countries want.

[–] ScorpioGlitch 0 points (+0|-0)

Why wouldn't it? If it's more expensive to bring in product that we can produce, it would shift supply and demand back to domestic producers.

[–] CDanger 1 points (+1|-0)

The simple answer is it incentivizes the domestic economy to produce goods that wouldn't otherwise be competetive without the distortionary policy and consumers will have to pay more for goods, reducing quality of life.

As a thought experiment, imagine tariffs are 10,000% so that effectively we kill all imports. Other countries can produce some items much better but the domestic market will have to supply everything. Similarly, workers in the domestic market will be producing goods that they really aren't suited for and have lower productivity. Free trade makes everyone more wealthy (but some people very, very wealthy).