Can Tariffs Actually Work?
Вставка
- Опубліковано 8 лют 2025
- ⚡Sign up and upgrade to Grammarly Pro to level up your productivity: grammarly.com/ee01
Are tariffs just sneaky taxes, or can they actually help economies grow? From washing machines to national security, we break down the real impact of tariffs, why they once worked for the U.S., and whether they still make sense today. Join us as we explore the trade-offs, history, and hidden costs of tariffs in a globalized world!
This video was made possible by our Patreon community! ❤️
See new videos early, participate in exclusive Q&As, and more!
➡️ / economicsexplained
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
Check out our other channels ▶️
Context Matters @Context.Matters
Writer Credits: Hugh O'Reilly
And our Language Channels →
WirtschaftsWissen (GER) - / @wirtschafts-wissen
L'Économie Expliquée (FRE) - / @economie-expliquee
Business Enquiries → hello@economicsexplained.com
Listen to EE on Spotify! 👉 open.spotify.c...
Also on Apple Podcasts or anywhere else you listen!
#EconomicsExplained #Grammarly #GlobalTrade
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
THANK YOU TO OUR PATREON COMMUNITY 👊🙏
👑 ROYALTY CLASS 👑
Juan Benet
UPPER CLASS
Valkmit, Randall, Charles Youngs, Jeromy Johnson
UPPER MIDDLE CLASS
jenni himelic, Tarun B, Ernest Hua, Michael Wakim, Pineapples&bricks, Robert Abraham, Peter Wesselius, Michael Ling, Frank Soltero, Jay Eno, Grégoire Duchéne, Sophie G, Brett Jubinville, Anthony Roberts, Nathan Ngumi, JKH, Post Apocalyptic In Missouri, Laor Glukhovsky, Forodon, Paul Ashworth, Wendover Productions, Andrew Harrison, Shane Wailes, Igor Bazarny
MIDDLE CLASS
Julian Gilyadov, Eric, Larry Brown, Rudy Salazar, Bill Calkins, Per von Zweigbergk, Malleus Flavus, Backartoffel, Andy Giesen, Christopher Kastensn, Aryan, William Sherlock, Gerhardus, URtheOneNemo, Chris, Brian, Vladimir Zotov, Seth, Jason, Jamie Costello, Leah Klearman, PsOFa, Abel, Randall Sylvia, Eric Slimko, Empyre18, Kieran VR, Thomas Davenport, Kim Brand, Ted Marcy, Joe Ryan, Wees Kendall, Shane Guthrie, Karan Mehta, ToGER, Randy Cleary, Arjan, Liubov Zvereva, Michael D. Hall, Long Phan, Craig Mews, Kent Klatchuk, Roman~1, Wesley Fite, David Mcllveen, Anthony, Daniel Alberto VAjzqu, Kamil Sicinski, Dodd Willingham, Leo Vassershteyn, Michael KAYarbis, Hugh Harris, David W., DarH, will, Kheng Lai Tan, David Taylor, Scott Greenwood, Jane Walerud, Zachary Demko, Michael Wolff, Siegfried Eggt, PM, michael, Franklin, Trevor, Marcel Roquette, Daniel Hall, Connor Costello, Kevin Macintyre, Travis Thompson, Matthew Eggleston, Kenneth Lum, Zachary Kasow, Reuben Field, Nigel Pauli, Jacob, ABS, Matt McKee, Victor T., John c, Rimvydas, John Downie, Donald Wedington, Demo sthenes, Ed
The Economic Explained team uses Statista for conducting our research. Check out their UA-cam channel: / @statistaofficial
🥳 Thank you for watching! Sign up and upgrade to Grammarly Pro to level up your productivity: grammarly.com/ee01
Tariffs are used if a government is subsidizing a product and making so that a sector cannot compete within your own country. They are also used if one of your company's leave, to try to avoid taxes, you can slowly make them lose their market share and other players take their place. Effectively using tariffs to destroy consolidation.
There is really no reason to ever use tariffs unless it is to normalize a price discrepancy which is generally caused you government subsidies, or over consolidation, or to punish those who need punishment. Otherwise tariffs always fail.
Any broad-based tariff will fail. Teddy Roosevelt was the one who started the tariffs and he only used them for the purposes I just listed.
I like the video that you covered most of the good points. I don't understand how people have such a poor understanding of the logic of it.
I mean even if China were to pay the tariff, they would just pass it on to our companies and then on to our customers.
So I don't even get how the logic of even if China pays it, and they don't, then it would have made no difference either way. People are so gullible.
I have come to realize that most people unfortunately just give no thought to anything. Stay intellectual my friend.
@@TheChurchOfEl Business never pay taxes or tariffs, its always passed to the consumers. If you learn the basics of how prices are set you understand that tax/tariffs are basically just the "cost of doing business", like raw resources, and even labor. You just sum all up, put the amount of profit you want to take on top and that's the price the customer will pay for the product. price = tax + tariffs + fixed_costs + production costs + salaries , to simplify it.
Its even funnier when people (stupid socialists that don't understand anything about economy) think they're going to solve all problems (like expensive rents) by just increasing the minimum wage. Business are like fine, they just pass all the salary cost to the consumer, which is the one using the minimum wage to buy the very same things. That just creates inflation.
The truth is very simple, the consumer always pays, there's only even one true tariff/tax, its called income tax.
The only way you can escape that is if you stop selling your time for money, you have finite limited time, you have to have economies of scale. But thinking that way requires more brain power than the average human has.
Fyi I just double checked ur videos don't show up in mu notifications even though I have them on
Please email youtube
This is something youtube has done to some channels and when u complain they fix it
Why have you increased your spoken pace so much? You're no longer enjoyable to listen to - it's 'work' now. You have a strong accent (to most) and I know I could use settings to slow it down - but I didn't have to in the past. It just means that I'll watch something else instead - I watch your material out of interest - not required-reading. So if it stays this fast - I'm gone.
6:40 this is the critical bit. The tariffs establish a new price baseline, even for domestic goods in that category. Even if the tariff goes away, the price has been permanently raised.
@Bern_il_Cinq Yes but the goods are not non-essential in this case. Fertilizer, vegetables, grain, lumber. All will impact housing and food prices.
@@Bern_il_Cinq Often times it won't. Unless the buyers are well informed and know the price no longer applies, and / or is able to purchase this elsewhere for cheaper abroad it won't. Sellers won't sell at a lower cost if they don't have strong reason to believe it will increase the amount they will sell. As long as they don't think people are informed enough / able enough to choose the price won't be lowered.
Note: this is just my layman's interpretation of this.
@@Bern_il_Cinq Never in the history of inflation prices or tariffs have price hikes ever returned to previous rates. It also won't sure hope a lot of domestic markets since so much US industry is reliant on partial assembly or resources from outside the US. If anything companies not affected by tariffs are likely to raise their prices despite there being no real hit to them. Just like has happened in the recent past.
@@Zyphent and the world doesn’t trust us to go off our rocker, so they’ll turn to other countries for products
@@hungrymusicwolfit makes sense. You don’t have to be an economist to figure that companies generally don’t lower prices on things unless they have a reason. They’re going to charge as much money for something as they think they can get away with.
Small business owner here: Tariffs on the things I buy (my cookbooks, and a few other things) are printed in China through a Chicago based company.
When I looked locally for printing services, the price was 3x. If the price had been 1.5x I would have considered it, but 3x is too much. Most people won't pay $50 for a cook book and I don't want to charge that.
I just got a notice from the company we work with that I'm being charged another 10% on my next shipment as a "just in case". I don't have a choice here, I just have to eat the cost.
I'm not raising my price on goods, just eating the cost. This hurts small businesses.
Don't get me started on groceries and cost of foods. Chef friends I know are incredibly worries.
But now someone will come to lecture you: "yeah your Business and many other businesses like this will die and you may die too but in a very very long term maybe it will be beneficial for someone in some way"
i cant speak for equipment but if you want books search the internet for the book names and websites to download for free.
Well, the whole idea is to back American business. But they failed to mention the hit on profits
Making America Great Again!
Why not raise prices?
The last Circuit board I designed has 480 parts. This goes in a product with 300 parts. There is no way every single component is getting made in the US.
It's going to be repatriated so fast, so fast, you won't believe how fast you can re establish global supply chains with tariffs. Nobody knows more about the complex system of harmonized codes, supply chains, logistics, manufacturing, assembling, finishing, & market driven supply & demand than dear leader Trump.
Why not? Virtually all of those parts are being made in a single country on the other side of the planet?
the USA doesn't have the technology experience Taiwan does, the us has amazing technology but Taiwan is just a hundred times more efficient@@trekrl2327
@@trekrl2327you didn’t check your facts did you?
Try at least four countries for the parts. And that doesn’t include the raw materials which were outsourced since three of those countries are not rich in raw materials.
And we can’t just start doing it here because the American workforce lacks the education and expertise in the vast majority of markets and in tbe handful that has the education and expertise the labor and real estate prices are sky high.
So the tariffs won’t come close to creating enough incentive to move the production of parts to the US. Especially 480 different components.
And we still have a materials issue. The dimwit you are defending is putting tariffs on raw materials as well.
Which is just asinine.
But you are here simping for him anyway.
Making a fool of yourself.
@@misterfunnybones this was good satire
Getting an ad for Economics Explained before an Economics Explained video was wild lol
Edit: make that the midroll ad too
Targeted tariffs on things you manufacture domestically? Potentially Good.
Blanket tariffs, allies or supply chains be damned? Always Bad.
well its a good thing thats not what hes doing.
@@andrewprindiville119 Potentially, mostly for national security reasons. The end result will be that goods will increase in price.
@@digjayd eh, it'll bounce back and finally fix the issue
A countries only allies are its citizens. Everyone else is there for their own benefit 🤡
@@PietroRusso-s8i ya in the next 20 to 30 years (of poverty) maybe
One point you forgot is that global markets don't like uncertainty (which includes the USA).
As the British Columbia premier said: no matter if these tariffs are lifted, they are doing everything possible so that B.C. is never finding itself again in the current situation. (meaning decoupling from the US economy)
It is impossible for Canada to decouple from the US economy.
Along with any other nation which knows that the US is no longer a lawfully run country which can be trusted
@@JohnBrowningsGhost Dumb people said that about Europe decoupling from the Russian economy. Do you know what happened?
@@JohnBrowningsGhost Why? The only resource we cannot easily put on open market is electricity...
@@Luke-GOeconomic stagnation and not really decoupling. Eastern Europe still uses Russian gas.
This channel is set for the next 4 years
The orange dude is the meme that keeps giving
Two years. He'll lose the senate and congress because of this move in the next cycle
Also, he has 4 years to make sure he dosen't leave when his term is over.
@@thierry1026 people forget he left the last term at 32% favorability... at the end of this term i guarantee it will be lower.
you beat me to it in the comments:)
I am grateful for a dispassionate, empirical discussion of tariffs.
There is no such thing. Everyone has an agenda, and the softest, least passionate voices are usually the biggest liars.
As an Argentinian, you are doing the same errors we did for a century. Bread for today, hunger for tomorrow
You would think that Americans of all people understand the problems with economic protectionism.
China prevented foreign companies from importing goods and they didn’t go hungry as you did. Japan did the same thing. The difference is they used made up regulations to block imports to not trigger retaliation tariffs.
Americans have become sadly complacent and ignorant.
Well, we tried being rich for a while. I guess now we'll try being poor.
@@IZn0g0uDatAll
Where are you going after you die?
What happens next? Have you ever thought about that?
Repent today and give your life to Jesus Christ to obtain eternal salvation. Tomorrow may be too late my brethen😢.
Hebrews 9:27 says "And as it is appointed unto man once to die, but after that the judgement
@@Nitroscion Japan is still suffering from the lost decade... For 5 decades now...
China was a massive net exporter, so no one really cared about any tariffs they put in.
Very different circumstances from the #1 consumer screaming it from the rooftops. Even if you wanted to De-escalate, politics will force your hand to escalate in the name of national pride.
Yeah, it's not exactly helpful for consumers to force the price of foreign goods to rise if the domestic companies are just gonna jack up the domestic good prices too for more profit.
But THAT's the AMERICAN WAY ...
@@capnkirk5528 that's the same in every capitalist country. Which business would want to make less money when they can make more? You want more profit? Start your own business.
@@Peter-je6tdthe regulators Trump is trying to get rid of.
@@Peter-je6tdyeah that's not happening , we live in a capitalist economy
If Tariffs didnt work then every country in the world wouldnt have them. Cope harder
8:46 Plates, sheets, strips, beams, bars, rods, pipes, billets, blooms and slabs
WE NEED A REMIX OF THIS!
I’ll get venjent…
I got you bro ua-cam.com/video/M0seAM9ajpk/v-deo.html
@@andylowemusic This slabs sooo hard! :D
@user-zp8xi7bv6s thanks!
@user-zp8xi7bv6s 😂😂😂
This was a level headed and nuanced analysis of what tariffs are and what their affects can be. KUDOS
If Trump is advocating for economic chaos, it could be part of a strategy in which market crashes are perceived as chances for the ultra-rich to acquire assets at reduced prices. Annually, those with substantial capital tend to benefit disproportionately during periods of volatility
The market's rise after Trump's win is surprising given the economic uncertainty. While some stocks, like AI-focused ones, look strong long-term, the volatility makes me cautious. Even Bitcoin is seeing a boost, but it's tough to predict where things are heading with inflation and interest rates. Staying cautious but watching for opportunities.
I agree. Even with great opportunities, we should proceed cautiously. Seeking market analysis or advice from certified market strategists is important.
Absolutely, having a solid plan is crucial. My portfolio has doubled since early last year. My financial advisor and I are working towards a seven-figure goal, though it might take until Q2 2025.
@@PatrickLloyd- this is awesome! can you please leave the info of your advsor here? i’m in dire need of financial advisory
Sure! ‘’Sophie Lynn Carrabus” is the US based CFA I use and her performance has been consistently impressive. She’s quite known in her field, look her up.
Go ahead and list all the "Made in USA" Alternatives.
Now, list all the "Made in USA" items that are only made from 100% American parts.
Now you can see how expensive everything is about to get, and thought COVIDS inflation was bad.
Not to mention plastic materials in general
SHEER incompetence in US government is staggering.
Economics students are looking at this in wided eye disbelief.
@@maximmeThis isn’t incompetence. This is sheer malice.
Guess y'all better figure out how to produce in America again.
Oh no!
The horror!
@@mitchellterry4961 Do you live in America?
Avocado trees grown from seed can take anywhere from 5 to 15 years-or even longer-to bear fruit, while grafted trees typically produce fruit within 2 to 3 years. However, some trees may never produce fruit at all. So, if you’re planning to grow your own, good luck with that.
Now, let’s talk about something even more essential-coffee. The U.S. consumes a staggering 54 billion tons of coffee per year but produces only 11.2 billion tons, leaving a massive gap that must be filled through imports. The U.S. sources coffee from countries like Canada, Honduras, Guatemala, Nicaragua, Vietnam, and Indonesia. I’m all for strengthening American industries, but we’re stepping into an economic battle without the necessary resources. In the short term, this is going to hurt-a lot. Hopefully, your job isn’t on the chopping block when the dust settles.
Will this strategy pay off in the long run? That’s a tough call. Look at North Korea-we forced them into self-reliance, but at what cost? Russia tried to isolate itself from the global economy, yet after three years, they still haven’t managed to take over a much smaller neighboring country. And then there’s the UK-ask them how Brexit is going. The results of economic isolation aren’t exactly promising. Maybe this will work out, but we’re taking a huge gamble.
Launching an economic war without the proper preparation-without the "armor and weapons," so to speak-was reckless. There had to be a smarter way to approach this.
The U.S. relies heavily on imports for essential goods, including fruits and vegetables. Mexico, for example, supplies a significant portion of our tomatoes, berries, and avocados. It’s easy to say, “We’ll just grow it ourselves,” but reality isn’t that simple. Growing food at scale requires the right climate, soil conditions, labor force, and infrastructure. Certain crops, like coffee and avocados, thrive in specific environments that the U.S. simply doesn’t have in abundance. Even if we could expand domestic production, the costs would be much higher, and the supply wouldn’t be able to meet demand overnight.
It’s not just about whether we *can* grow it-it’s about whether we can do so efficiently, affordably, and at the scale needed to sustain the economy.
You will be ok champ
"The U.S. sources coffee from countries like Canada..." you are describing useless rent seeking middlemen, of which Canada has far, far too many. The prices of things like books, printed on paper from Canada being more expensive, and any other number of things because of bullshit distribution deals and artificial tariffs like language laws or NAFTA have been terrible for Canadian consumers.
It's also about the quality let's not forget that
Coffee is not a necessity.
Making America healthier may reduce this over consunption of coffee in line with what it produces.
Just be positive
It's like the proverb my teacher taught me in high school "if you fail to plan, you plan to fail." Absolutely no thought in Donald Trump's mind. He is a failed businessman and a liar.
If groceries keep going up, I will apply for Gov food assistance. If I can't get it, I try the Food Banks. If that fails, I guess I will be homeless just to buy food. Many like me are already on the edge. This is insanity.
Trump just destroyed all fed funding for food stamps.
or cheat the food market, eat less, eat foods that is cheap that can be streteched over a long period, stop eating full meals, eat snacks while eating less
I hear you. The last four years have been a nightmare.
@@questcore636this is not an excuse you shouldn’t have to eat snacks and eat less food and not eat full meals just to get by I understand that it may come to this but no one should have to live like that
Trump is going to ruin the world economy if someone doesn’t stop his bullshit
Tariffs only work when the domestic labor is cheap and there is a need to protect developing domestic manufacturer. That is how South Korea, Taiwan, and Japan developed their industry. But, the U.S. labor is expensive and there is no need to protect already competitive American manufacturers. The tariff will worsen the inflation and hurt the American people.
if taxes decrease and tariffs increase then no inflation
@@afreire239and if pigs had wings they would fly
@@afreire239Stinky is increasing taxes on everyone making less than $350k per year.
It's expensive if you don't consider prison slave labor. I have a feeling that will explode very shortly.
The Americans are already hurting if their is nowhere to work, thank Biden for that.
Once prices go up manufacturers and corporations selling the goods rarely lower them.
There was a time you can walk into a store and see everything made in the USA, you won’t find that today, American’s are more than willing to have a temporary increase in prices to guarantee a future for our children
@@HowlingWo1fI agree
You do realize people are gonna buy less of their products if raised too much, it will force them to lower the price .
@@HowlingWo1f Are they? You know what will actually happen? Majority of your workforce in secondary sector are immigrants, most without papers and they're paid nothing because they're treated like modern slaves. So what do you think will happen when majority of the industry sector is sent off the US. White people don't constitute enough to replace what there is now. You will become more dependent on imports as a results and tariffs will rise their prices: result? Majority of the US will be highly dependent on other countries and salaries won't raise that much to keep up with the increased cost which also will raise inflation. A perfect concoction for disaster.
@@HowlingWo1fif you were a betting man you’d also be a broke one
The biggest issue that wasn't addressed is that companies need to believe that the tariffs will be stable long term.
No one is going to spend five years building a factory if they think the tariffs will go away in two to four years.
True. One thing that will last years after Trump is dead, is Canada's mistrust of Americans. Never again pal. That's a done deal.
But making that factory has gotten more expensive.
There are two problems here:
. Companies will only build facoties if the government gives them the money and the land to do so. Capitalist companies depend on the government for this kind of thing (capitalism is just communism, but for the elites). Will Trump do that?
. To build factories you're gonna need materials and equipment... And many of them you're gonna have to import. But how you're gonna import them if Trump is going crazy with his tariffs?
The situation is 100% and not planned. Trump is just going to crazy.
I think he's back off and just go: "Tariffs? Me? I never did that, the midia is crazy" - He does that kinda of thing all the time.
Thissss
Tell that to the foreign auto makers.
This is exactly what I have been saying, and I've never taken an Econ class in my life. How a government could get it so wrong is just astounding.
This leads me to the conclusion of an ulterior motive. What exactly that is though is speculation. However some options are politics/controlling culture, generating wealth for certain people, greater control of the masses through buying power, militaristic expansion.
As a Brazilian, I must say tarifs haven't worked here to develop our economy and they just made everything more expensive and our productivity worse. In other words, tarifs are one of the key factors that maintained us poor.
Also, last year, our government indirectly increased taxes on small consumer internet stuff, like Shein and Aliexpress (we pay around 90% taxes). It hasn't created new jobs or developed the industry, and the amount the government got from it was inferior to how much our national shipping company ended up loosing from it. In addition, local companies haven't increased their sales or production in a significant amount. So, it was politically impopular, economically negative, and there was no real benefit from it.
We also have tax cuts for a region in the Amazon forest, and industries everywhere else pay more taxes to keep those industries far from where suppliers and consumer demand are. The number of jobs created does not compensate for all the inefficiency of assembling goods in the middle of nowhere and shipping it back. However, once you give those benefits and create these bad incentives, it's almost impossible to to stop them, even if you measure and see it doesn't make sense.
Our productivity hasn't increased since the 90s, which is ridiculous, and it's explained by the government protecting inefficient and pointless companies that should have developed or go bankrupt. So all workers end up working and producing more to pay for it.
I know Brazil is not very interesting or important. But people should pay attention to us, because we are a very good example of what not to do with your economy.
I feel bad for Americans going the path my country has taken...
Thats because your country is run by a literal communist. And isnt the worlds economic hub.
Price increases, brought to you by the people who said prices were too high.
Im confused… if tariffs are so bad, as the media told us during trumps first term, then why did Biden keep all of his tariffs and even expand on them?
It seems that tariffs are only bad if Trump does it. If a Democrat does it… they just don’t talk about it.
I’m very confused.
@@chingron Bidens tariffs were to protect domestic markets that are absolutely crucial being car manufacturing. Also biden did not expand on all of trumps tariffs this is objectively a lie.
@@chingronthat’s a great point. I just looked it up and found the same thing! Wild that both parties’ candidates were advocating for tariffs when economists know that it’s bad for the country. Did these politicians never take an economics class? We learned about all of this in my Principles of Economics class 🙁
@@marciavox8105 You had to look it up because your media is propaganda and didn’t tell you that Biden kept all the tariffs.
I guess they weren’t so bad after all. Maybe the course you took miseducated you…
@@marciavox8105 Biden didn’t advocate for tariffs. He just quietly kept them and the media was silent. They told everyone that Trumps tariffs would destroy the country… so how were they supposed to tell everyone that they didn’t destroy the country and Biden chose to keep them?
We get 1.8 million tons of tomatoes from Mexico. We don’t have the infrastructure or labor to fill that gap our selves. So it’s not driving production anywhere. Just prices up. Substitute tomatoes for coffee or any number of things.
Since mexicans make the tomatos let them pay the tariffs and lower taxes for americans
You can domestically grow replacements for Canadian Lumber.
Those trees will be ready for harvest... in forty years, when a good portion of us will have simply passed away from old age.
You will soon see Costa Rican, Peruvian or Chilean tomatoes in the US market. Guess where they have actually been grown.
Also we're deporting the labor necessary to grow more tomatoes.
🤦
@@haykk5375 Maybe. Depends upon how farsighted the world is. Fight now, or fight latter. Either way fascism doesn't just "go away". WW-II amply demonstrated that.
This is the kind of information the public needs. Objective education by educators with no political bias or skin in the game
There's also this naive belief that large scale manufacturing in the U.S will create a bunch of new jobs. The reality is when building new facilities in the U.S the cost of labor makes mass automation far more attractive and the desire to make energy prices cheaper only motivates this even more.
Fine. Even better.
Yep, especially in the age of AI.
Or that lack of jobs is even the issue. It's not the labour market it's the cost of living that's the problem people are having. A lot are starting to need TWO jobs just to even get by
Even if not automation, the cost of US labour would have to be less than the cost of the tariff, otherwise it's more financially sensible to just eat the tariff, especially if you reckon the next government is going to reverse it or you don't want to also pay the setting up costs.
learn productive skills then
The problem is the economic effect is not the goal, the threats are geopolitical leverage meant to force concessions.
Using coercion tactics on your allies is bad negotiation strategy.
Stated as a person who negotiates for a living.
The claim about the 1890s cuts against the grain of research on those tariffs. They benefited a few industries that were already doing well, but were incredibly harmful to consumers.
Yes, exactly. They sneak an exceptionally bold implication in here: that the tariffs were integral in the flourishing of domestic industry, so it could be "worth it" in the end. Worth it for WHO?
The 1890s were a time of incredible wealth inequality and lack of economic rights for the vast majority of Americans. It was NOT a good time to be alive for 80%+ of the population
@@bsadewitz Well obviously for the Capitalists owning those industries who get to extract even more profits from a captive market
The income tax is far more harmful to consumers than tariffs.
@@Kyle-ij9zv welcome to the new 1890s then. because that is exactly the purpose of this administration.
Great video! As an economics professor here in Brazil, I'm very familiarized with those consequences of tariffs. It's hard to impose a developmental program on tariffs these days, Brazil has many examples where it didn't work AND nowadays, we are suffering from one of those old days protections: coffee inflation, we are used to coffee surplus but last year we have a dramatic reduction in coffee production to internal market and import it is expensive because tariffs. Brazilians can't dispense coffee from our routine consumption (it is very inelastic), even breakfast here is called: "café da manhã" ("coffee of the morning" in a literal translation).
Remember that the subsidies to 'farmers' that cost as much as the tariffs were bringing in went overwhelmingly to big agribusiness -- not to family farms. It effectively taxed all Americans, resulting in higher consumer prices, while paying out billions to the richest Americans. This was the plan all along -- tax all Americans and funnel that money to the richest Americans.
Yep. The billionaires behind Trump will be robbing people blind.
when a bunch of countries focus another and put tariff on it? yes, it works
when your country starts aiming at every other country and apply tariff to them... isn't then YOUR country the one being aimed by the others?
Wow, very nice way of putting it.
We run the world goofball
Mexico already caved in their negotiations so now it's just china and canada.
@@routermaja Military doesn't mean anything when all of the parts and resources for it come from other countries.
@@EnoughSaid-dr9cu we have literally all those parts here we just need to entrepreneurs back
He slapped blanket tariffs (excluding oil) of 25% on two countries we import a ton of basic necessities from. 2024 will be a terrible year for consumers.
That is right. Most people have no clue 60% of heavy crude oil imports come from Canada. This type of crude can't be easily replaced within USA oil fields.
All those people cheering for tariffs are in for some painful lesson.
@@SimpMcSimpy Precisely. Today I decided to cut monthly spending by over 50% and see how this plays out. No restaurants, no shopping for non-necessities.
Haha, I also forget it's already 2025.
Oh thank God. Good to know 2024 was the worst of it and its behind us. Nothing but up from here.
If you think 2024 will be bad, just wait till 2025....
Thanks for the ad in the middle.
no. there are some cases where it can be good but like... a raw 25% increase across the board? that just incentivizes bad business
True but last I checked no one has asked for these
@@ghosttheprogram6973they were already passed by trump idiot
Or incentivizes domestic production
@@ghosttheprogram6973Trump literally did it. Keep up.
@@teshy2 did you read the order?
Or you're just here to say things you think happened
I absolutely the shift in rhetoric from his voters. Going from "everything's expensive, we want lower grocery bills" to "we'll happily pay way more for the stuff we buy for the off chance that our grandkids can work in a factory in the future where they'll still be unable to afford those now American-made goods."
The Chinese are loving this.
They are simply aping his latest talking points. It's a cult, not a political movement.
i voted for immigration reform and i grow 90% of my food lol Ppl who will get hurt by this are the people in big cities who allowed this to happen lol
@@1234airows please learn to have empathy for your fellow man. i believe that you can become a better person and outgrow this mindset.
@@1234airows you might grow 90% of your food but can't 'produce' 90% of goods you need in your life
@@1234airows this is the stereotypical short sightedness that characterises not only trump but his uneducated cult like supporters,which I used to be one of until it became blindingly obvious these people were much worse than the radical left, the people they spend 99% of their time complaining about.
Its not an economic tool when you put 25% on all import from one country.
It's a (domestic) political tool used by a political tool
As a Canadian, the desire to divert our resources to be sent to the east coast or a west coast will remain for my entire life, instead of sending them south. Profits be damned. We need more ports, pipelines and railways
There is the possibility that this is not about economics exactly, but about destabilizing Canada for a possible takeover. Trump has never stopped talking about annexing Canada. He may think that if he can cripple us economically, then some or all of our provinces will opt to join the U.S. I don't see Canadians doing this, but that doesn't keep Trump from believing it might work. He isn't the sharpest tool in the shed. He thought ingesting a cleansing caustic soap would help with Covid-19.
@@massimoscognamiglio7369Your own government is against pipelines.
@@frankstrawnation We'll have a change in government next election.
Missed the part where Dryer prices rose ~12 percent, and they weren't included in any tariffs.
There is a pattern to isolationist countries in contemporary times: they get poorer, sometimes much poorer. The age of mercantilism is long gone: we don't have the stomach or means to take and control enormous blocks of territory to make it work.
Which isolationists countries are poor?
neoliberal excuses
@@honestfriend767 ... north korea
@@480darkshadowlet’s see how well your GLoUrIOuS leader does by the end of this year.
@@honestfriend767South American countries like Brazil.
it’s like watching a slow-motion car crash where half the passengers are cheering it on because they think the wreckage will somehow only hit other people
Reminds me of a 007 Bond film 'Goldeneye' . Bond is in a Russian tank blocking a rail line. As a Russian train speeds toward Bond the female villan Onatop, who is on the train, realizes Bond is in the tank. Just before Bond fires at the train, Onatop smiles orgasmically, and approvingly exclaims, "He's going to derail the train!"
This joy for self-destruction is duplicated in the folks approving of Trump Tarrifs.
Eh, it’s more like half the people are cheering because we finally have an administration who recognizes this car is heading towards a cliff.
@@20twenty_sti40Biden realized the same thing which is why he tried to create blue collar jobs with the CHIPS act and the infrastructure bill. But you people hated those because 'biden bad' or whatever.
Perfect analogy!
No, half the passengers are cheering it on because they voted to the have car speed towards a wall.
Tariff is an economic tool that is used to protect a sector which is important to national security of the country. Trump is betting that Canada and Mexico will capitulate under pressure from American tariff. Problem is that tariff will impact American consumers and industry as well. If Canada and Mexico resolve is strong and want to stand against America then Trump will taste a bitter defeat as his campaign promise was reduction of inflation.
That's cool. Except for that fact Trudeau (Canada's political embarrassment) already backed down.
Columbia is also backing down as well given were not playing around.
And Mexico ban on Americans entering the country is a joke.
Inflation is only going to increase even more with tariffs. Yes, 🇨🇦 just slapped 25% retaliatory tariffs on hundreds of goods from the US. The next few years going to be ugly.
@@austinfreyrikrw6651 It will not be easy for Mexico and Canada to stand against US. US can always import products from another country that they used to get from CA or Mexico. But I will bet that Mexico has better chance as president(Sheninbaum) had a good mandate. Canada is a mess, Trudeau has thoroughly F*&ked up Canadian economy and its international relationship. And he is on the way out and an interim PM will take leadership who will not have mandate to bring strong policy.
I cant see trump actually following through with the 25% tarrifs on canada and mexico when his tarrifs on china was a mere 10%....
Its a mere bluff.
Problem is for MEX and CAN is that there is no real resolve.
Trump is riding high on a decisive election win and has control of every government body. He has 2 years before needing to worry about the Midterms.
Canada? They have a broken minority government and are entering an election within months which will effectively destroy any remaining LPC power remaining.
Mexico is Mexico. Cartels have more say than the government in that regard so who really knows how they’ll adjust.
Combine that with the U.S. is tens of times stronger than either nation and it’s pretty obvious that MEX/CAN will call chicken first.
What struck me about this is that timing and context means everything, tariffs worked when there was little industry in the country and it worked again when we had few competitors after WW2. So how do we get better higher paying jobs back in the country, when cheap manufacturing has become so dominant in other parts of the world? In this current context?
One thing that never seems to be mentioned: soft power. All these tariffs, deportations, hissy fit withdrawal from international institutions and economic sabre rattling just introduces uncertainty, confusion and international enmity towards the U.S
Yeah it's called gaslighting. Trump is gaslighting the America people and the world. That's why you're confused
Very well-put.
Are deportations a bad thing, in your eyes?
How about poor economic deals? Maybe not contributing to institutions that do not favor the average American?
Sit down and understand the average American, outside of your bubble.
These tariffs will all be gone (sans China) in under a month.
@@PancakeProductExactly, these people will make excuse after excuse for Obama & Biden but rake Trump under the coals for making sound foreign/economic policy. Make it make sense.
let me introduce you to the iphone 18
cost:$5000
made in USA by a minimum wage worker who was forced to work in a sweat shop for 14hours a day
Made in a private prison that had lobbied the state legislators to make traffic infractions imprisonable offenses.
And no American will take the job and all the migrants who would take that job have been deported so...
The iPhones just do an interface redesign every year with little in the face of actual improvements. Cheap foreign labor has backed the excessive consumption of goods designed to fail. Apple has admitted to planned obsolescence.
And increased surveillance, now that we're talking about it.
Couldn't possibly be worse conditions that the Chinese guy at Foxconn, but I guess out of sight out of mind - right?
I could go back to expensive goods if they lasted. Unfortunately, goods such as furniture, and so many household appliances, don't hold up over time.
Making durable goods is viable with a rapidly growing population and/or advances in the product technology - There is no washing machine likely to be produced that is enough of an improvement to ever make someone replace a working machine and it takes 10 years to find out whether or not a new machine will last 10 years.
What has durability of consumer goods got anything to do with tariffs
Devils advocate here: products used to last when they were made domestically. It’s cheap Chinese imports that don’t last
Obviously tariffs won't improve quality. You'll just get more expensive goods and nothing else.
Amish my boy 💪
thanks for the economics and history conversation on tariffs
Classical economists figured this out since Ricardo. Tariffs only hurt consumers. Ricardo, Keynes, Friedman, and basically all other economists agree. This isn't a debate among economists.
So you say there isn't a well respected economist arguing for tariffs?anywhere? Or are you peddling the ol' no true Scotsman fallacy?
@@TheGahta Yes, that's basically it. There isn't a well respected economist arguing for tariffs.
@siaj92 ifo press release, 3rd July 24
Seems you just aren't good enough to look stuff up or you can't see your own true Scotsman fallacy
Which is it?
@@TheGahta The german institute? Which release are you talking about?
@@TheGahta You can probably find somebody who can argue anything. To even care what the majority consensus is is an appeal to authority. The important part is that the fact of the matter is that tariffs hurt all domestic consumer and producers except for a select few producers. It doesn't matter who you find claiming otherwise. Some people are simply wrong.
As a South American. NOOOOO, THEY DONT WORK.
Every south american country followed the "Industrialization by Substitution of Imports (ISI)" system between the 50's and the 60's (basically puting tarifs on a lot of imported goods, with the objetive of growing our local industries)
To finish my story: Every country got poorer, THE END
To be fair, such tariffs led to the Mexican Miracle, the only time in Mexican history that economic growth outpaced population growth. However, like the video said, Mexico has cheap labor and the US does not, so it won’t work for the US.
Every country got poorer are because of corrupt government
Look at Argentina ! Yes they make cars. But by hand. For rich Americans. See pursang
South America got poor because they adopted socialism.
Lol
Tariffs will make life more expensive for americans
not if taxes go down by the same amount
@@afreire239 But they won't.
Hopefully no more shutdowns of government spending otherwise it's rock (no income) and hard place (unmet wants and needs). So well see if Musk control gives us the same fate as Twitter.
@@afreire239 the tax which would most likely get axed is income tax...which is a progressive tax. Effectively you'd have a giant tax break for rich people while middle and lower class get saddled with most of the burden since a lot of their consumption isn't optional
@@afreire239and you believe that? 🤣🤣🤣🤣
Honestly, where tariffs become most enticing is the idea that the income tax could be significantly reduced or eliminated at the federal level.
Tariffs are by their nature for the average citizen a tax on how they want to live, you can avoid a tariff by not buying the product. Or (In some cases) buying domestic. A tax on income is a tax on producing something in the economy and is unavoidable, what's more, funding the government on tariffs would eliminates the need for income tax returns.
Also worth noting that the chips act and tariffs placed on China last time around meant that they had to be more innovative and resourceful which lead to Deepseek and $1 trillion getting ripped off the stock market.
Still the US is growing faster than China since the tariffs entered the scene.
Oh, you mean that policies don't just have the effects we want? Who would have guessed. It's almost as if you have to put a lot of thought into it.
so blame Trump for china scamming the world with deepseek.
So what? Now the American companies know it can be done for cheaper, and we will innovate the same. The stock market goes up and down. Wall Street will be fine 🙄
"More innovative" you mean better at espionage and stealing our tech right? Lol there is a 0% chance Deepseek was not stolen.
Being an American that actually understands tariffs and some impacts on prices we pay and back and forth cost with foreign tariffs, I still learned so much from your presentation. Especially why tariffs appeared to work more than a century ago and even in the 60's but possibly questionable now and the way in which they are being implemented. Unfortunately, we have elected a president with hammer. God bless all the screws that suffer!
Hammers don’t work on screws, which is a great analogy as well.
@@emclaire18 We're certainly going to get "screw"ed.
American news should just use the word "import tax" or "duty". That's what it is and that is how the foreign news are reporting on the so called "tariffs". Trump is using a word people don't know for obfuscation. Or because he doesn't understand it himself either.
The dictionary defines "tariff" as: "a tax or duty to be paid on a particular class of imports or exports". That's all there is to it.
@@kke Absolutely and some used to say that. However, since the November 5th election and the January 20 transition of power, all the major news organizations who would say that have lined up to kiss the ring, substitute body part, of the current president. If not, they would excluded from Whitehouse briefings and other invited engagements by a vindictive. Just like Meta just did, ABC paid to settle a frivolous lawsuit for millions to Trump. They are businesses after all. They don't want to suffer from a vindictive old man who lies literally for a living.
The tariffs placed on Mexico and Canada are foolish at best.
You reminded me of Emerson, “Foolish consistency is a hobgoblin of little minds.”
Check the news today, goofball
Many people here have a lot of complaints about Tariffs before we even see what effects they have. Since many other countries use Tariffs we cannot complain that they extreme or somehow unfair. It is also glaringly clear that no one else has any plan of a better way to either repatriate industry or to ensure that companies that sell products in the US to follow US labor and environmental laws. I don't know if Tariffs will work but I see nothing from anyone else here. Saying it can't be done is defeatist and unhelpful. Come up with an alternative plan.
My company recently built a factory in Mexico. Consequently all US manufacturing was shut down. During a town hall meeting someone asked the CEO if Biden's chips acts will reindustrialize America and he said until the govt can bridge the labor gap it will never be economical to manufacture in the US when it costs 6x less in other countries.
If I was making computer chips I'd rather have 1000 Americans than 6000 Mexicans
600% tarrif 😂
This applies all across the developed world. Capitalists will always move to where cheaper workers are found and non union workers are easy to exploit - but Americans hate socialism- so that’s what you are doing to yourselves. America is now a nation of obese, gun loving so called Christian’s who wallow in their lack of education, the result is Trump and his idiotic tariffs.
Questions need to be answered:
Why can’t US get that investment a new plant? If we can resolve some of those issues we will be more competitive. My issue is human rights much of that cost comes from protections that Americans enjoy. Can’t just fire someone after they lose an arm in a machine etc.
The only way for an industry to be competitive in the US is for its products to be built almost entirely with automation. We literally cannot make cheap goods here. The cost of healthcare insurance, the cost of labor, the cost of general issuance, the cost of litigation, its all too much. I hate that we have empty heads in the government who literally have zero idea how the world works making these decisions.
I've seen what this type of blanket tariffs do to the market, consumers will be worse off. This protection causes the locals to be complacent and we ended with expensive quality import or marginally negligibly cheaper but worse local products.
You’ve “seen”? In what way?
When did you see it? Back in the 1930? Or was it 1812?
@@slugoo6474argentina for example had them and consumer goods quality went down
I mean it's literally blanket tariffs thought up overnight, there's zero plan or motivation beyond screwing over everyone but yourself and friends who invested properly ahead of time.
@@slugoo6474Personally the License Raj in India.
Tariffs are an import tax paid by the importer when goods arrive at the port. Blanket tariffs do nothing but raise prices and, in turn, increase inflation. This will do the exact opposite of lowering prices for us as consumers.
"Look, they got them up [grocery prices]. I’d like to bring them down. It’s hard to bring things down once they’re up. You know, it’s very hard,"
@@Edax_Royeauxaccording to yall they were never high to begin with
@ I remember when grocery stores ran out of meat and people fought over toilet paper under Trump's administration. Kind of hard to forget.
It’s funny cus people voted for trump cus he promised to drop grocery prices and two weeks in he’s already pumping it 😂
@@Edax_Royeaux Blame the pandemic over Trump. The President can't control mass hysteria.
There’s no need to overcomplicate things. The simplest explanation is that the cost of maintaining a global empire has begun to outweigh its benefits for the U.S., prompting it to retract its sphere of influence. To preserve as much of its original interests as possible during this retraction, it has resorted to imposing tariffs and maintaining the dollar’s dominance. In the foreseeable future, however, the era of dollar hegemony will inevitably end, and the U.S. will transition into a continental empire in the Americas.
The question to ask is: who are these tariffs intended to benefit? The answer is not the american public
The question to answer is why has inequality risen so much at same time industry collapsed and services became the largest share of America's economy? The answer is the wealth is in industry and services are just a large con to swindle the american public out of their purchasing power.
Not necessary true, if tariffs is a replacement for income tax then it helps the American public more then it harms
They're not intended to benefit anyone except Trump
@@TUGG75 You've been misled.
@TUGG75 At best you're uniformed. At worst delusional and potentially sociopathic. There is no going back to the "good old days." The world is different now. American domestic products will be lower quality and more expensive.
This went right over the most important thing. After WWI, in 1929, the Smoot-Hawley tariff act, preciptated the great depression, which lasted up to the rearmament for WWII.
Smoot-Hawley did not cause the great depression, the Dust Bowl, and over speculation on Wall St. might have been much bigger contributing factors.
@@rRobertSmith That's true, but depending on who you ask there is a lot of speculation in the markets currently. Many areas of the market are very expensive.
That was the margin calls in the stock market which dried up liquidity and caused bank runs. IT was a meltdown, but the tariffs didn't cause those things to happen. It just didn't help in those particular circimstances because a liquidity tapped market couldn't function. Tariff or not we would have had great depression. They don't allow margin calls anymore.
@@rRobertSmith Global GDP dropped 15%, can't just blame the Dust Bowl on that.
@@Edax_RoyeauxDid you not read what he said? If you did, you cherry picked for your straw man argument.
Imagine my shock over a complex subject with much nuance is boiled down to one-sentence insults on social media.
I bet nobody saw that coming.
If our population was well-educated enough to understand tariffs, we'd never be in this mess to begin with.
Because that's what it boils down to when it comes to Trump. Tariffs are complex, but Trump doesn't understand what they do.
@ …and there it is. Proof of the uselessness of social media.
There are plenty of economists (probably a majority) who would confidently make the blanket statement that all tariffs are bad. Some might walk that back a bit and say there are sometimes exceptional circumstances in which they don't do more harm than good.
Dunno if this says more about tariffs or economists, though.
Here's a list of U.S. products that Canada has placed tariffs on, based on the information available:
Dairy Products:
Milk: 270%
Cheese: 245%
Butter: 298%
Yogurt: Included but percentage not specified
Sausages: 69.9%
Poultry:
Chicken: 238%
US has similar tariffs on Canadian products.
So nothing important got it. But you know what if trump wanted to place his own on Canada on those specific categories that would be fine!
That's only a tiny portion of the products. The full list has those and includes everything from firearms to motorcycles to cosmetics, farm equipment, tools and appliances. Those are also things that we can buy elsewhere.
I’ll never forget the baby formula smuggling rings.
The reason many nations have tariffs on a lot of American food is the same reason RFK wants to MAHA.
Yeah man, who can forget that Trump's tariffs worked so well last time, he had to bail out farmers.
Edit: Seems like people don't know the difference between a subsidy and a bailout.
Farmers are always getting bailed out? Literally every year the only reason farms survive is through significant government support for decades now
@@roy6907 That's not the same thing. The farmers needed to be bailed out in addition to the normal subsidies they get.
@@roy6907 Well win win nobody gets what they want in the interest of hurting the other person.
Now farms are gonna rot now. They won't have the fertilizer that only Canada can provide and they don't have the labor only migrants can provide. Add in challenges with bird flu and the US is actually heading towards food shortages.
The EE chart shows that tariff inflow exceeded the farmer bailouts lol
Tariffs only make sense to protect strategic industries like food or defense production. For everything else, they're nonesense.
They don't even make sense for food for most countries. If the rest of the world wont sell you food it's because you are a pariah state and are therefore f*****d however much food you produce. (China and India may be exceptions - They are so big that the rest of the world cannot produce enough to feed all the Chinese even if they wanted to. )
They made sense 150 years ago when it was the only income the government had.
Economic security is also a very strategic concern but tariffs are like peeing into headwind, even for food and defense.
Why raising taxes on the rich is not an option?
Neither Democrats nor Republicans try.
Short answer: Yes
Well, first things first. Putting tariffs on your political and economical allies is just dumb.
The tariffs on computer chips from Taiwan (TSMC) without having a comparable chip manufacturing here in the states is just suicide.
Intel sucks. They sucked so much in their own fabs, they started to outsource to TSMC. And TSMC has plants being built in AZ, but they won't even be staffed until mid 2025 and won't start to produce until 2026. And even then, the fab is a fraction of what exists in Taiwan.
It's like quitting a job with no unemployment and no job lined up. It's just stupid. These tariffs are dumb but man, if you're gonna do it, you could at least wait to do it until we have it stateside.
The irony here is that TSMC only exists because they lobbied for Taiwanese protectionist government policies.
They have no incentive to manufacture here. Maybe tariffs will be that incentive but I do agree there at least needs to be better communication on the details. The only thing communicated so far is the 500 bln stargate deal which would end up replacing jobs eventually. Not good optics.
🤓
Canada under Trudeau and his cronies isn't an American ally. Maybe a Democrat Party ally.
That point about income tax not existing until 1910 has A LOT MORE to do with the fact that US gov did not provide most services we associate it with today, they did a lot less so they needed a lot less hence no need for income tax. Nowadays tariffs could never be enough to provide everything you are used to, from public weather forecast, skilled firefighting and police forces, and the large subsidies on everything from corn, beef, apples to automotive industry. They sure did not have public airports and metro (first NYC metro actually opened in 1904 but it was private at the time) and they sure did not bail out their banks and carmakers time and time again. THAT is the real reson.
Kudos on navigating a neutral tone for this topic by optimistically framing the fact that tariffs might benefit decades down the road if done strategically and effectively. That being said...the pros/cons side of things for this move is heavy on the cons side.
Especially for anyone needing to live today... and not... decades later.
Tariffs only work in very selective industries provided that you have significant domestic industry functional.
Trump tariffs will cause recession like inflation.
This depends what the goal is. Tariffs do not work if the goal is to grow the economy and to make people richer. If the goal is national security with local supply chains, then they can work for that purpose.
If tariffs cause potential rivals to create their own versions of industries they relied on you for that removes another barrier to conflict, increasing risks of conflict.
I got an ad for your documentary on this video haha
Same
No politics. Just economics. All it takes is an Aussie to give you real unbiased solid information. I loved my semester abroad studying business there!
I think you've missed a major economic factor of unemployment rate. With the current US very low unemployment rate of 4.1% tariffs are more likely to backfire since there is very few people available to increase production, thus already high labor costs are likely to only increase. Tariffs make much more sense in an economy where there is lots of people looking for work.
Another thing to consider is that now manufacturing in first world economies is much more automated than it was when manufacturing left the US so even if tariffs brought back all of the production that has been sent offshore it will only benefit a relatively small portion of the population.
The unemployment rate is 4% and boomers are retiring we don't need tens of millions of jobs
Average pay for a car assembly line worker in the US is $18 an hour, that's not really such a great job worth protecting during record low unemployment.
@Edax_Royeaux UAW just negotiated a significant contract so I doubt your numbers
@ I'm citing the Average Assembly Line Worker, Automotive Hourly Pay Median for 2025 from payscale.
if someone in the admin would have a little education on the past history of such things, as the hawley-smoot act, they wouldn't have to be going thru this...
If someone in the admin had a little education, rather than a lot of dis-education ... I can't compute how different the world would be, aside from "very".
I'm curious how much of the incompetency in the current American administration is just from being malicious or if its just humans being poorly education and stupid. I use to think Trump lied about as much stuff as he does because it benefited him in getting votes but I'm genuinely starting to change my mind on it and thinking that he may actually just be delusionally narcissistic.
They do have the education, they know that tariffs will benefit them specifically, not the average citizen
@@AschKris Market collapse isn't much of a "benefit".
If the people who voted then in had a little education....😅
O thank you, ive been waiting for this one, was searching your channel for it yesterday actually. Youre on of the only economists I trust. None of these politisized, big media companies.
Don't be naive. All information is politicized, either explicitely (by the topics and perspectives it includes) or implicitely (by those which it silences)
You should read information across the board (specially of sources you aren't totally keen on) and use your own judgement to reach a conclusion, not trust "a few economists"
I work in a medical manufacturing and we import most of our things, recently we have started processes that would cause us to produce more of our imported parts in-house. We are prepping to manufacture our own PCBA boards. Thus creating new jobs. The downside I can see from this is that since it will cost us more to build these parts it will absolutely raise the prices of the finished goods.
What was the root cause of all the tarrifs you mentioned? Looks like lobbyists were holding down industry in areas we see for profits in areas we don't see.
Blaming external actors for internal problems, which is the easiest way to achieve consensus for politicians.
It's by design people should wake up
So far every country caved in days at most. Works great, used for negotiations.
That's fine for Canada, Mexico, china and other hostile countries, but if you simply use this tactic to get what you want, whenever you want, from whoever you want - then America is going to find itself at war with every country all at the same time - and I am sure China and Russia take great interest that. Right now, Americans are fed up with America making other countries great, but if you use these tariffs to force other countries into making America great, they will also get fed up making other countries great and form alliances against the US.
Americans need to make America great. Australians need to make Australia great. The English need to make England great. Africa needs to make Africa great. Etc. But if while America is making America great again, they start co-orsing Australia, England, Africa, Sweden, Poland, etc, into making America great as well - there will eventually be problems. Unfortunately, this is precisely the mindset American exceptionalism often slips into.
Except they didnt, nothing changed.
And now both Canada and Mexico is looking for other closer allies, as Trump and his cultists cant be trusted...
tRump was the only one who caved... Canada and Mexico upped their boarder coverage in December. When tRump started talking tariffs to Canada in January, they turned around and said we can do that too, plus increase the price of oil that they export to the US by 10%. tRump folded like origami.
A topic not covered, but extremely important is that the impact (the pain) on consumers is inversely proportional to their wealth. Meaning, the poorer will become poorer, and the increased price on the usual goods won't impact that much the rich => more inequality, more civil unrest, and just more overall unhappiness. It's yet another "tax on the poor" ...
Tariffs primarily impact consumers by leading to higher prices on imported goods, as companies often pass increased costs down the supply chain. While this can create financial strain for consumers in the short term, it may also encourage more mindful spending habits. The high rate of consumerism in the U.S., characterized by frequent purchases of items like new cars and smartphones, contributes to resource overuse and economic dependence on foreign manufacturing. Tariffs could potentially reduce this overconsumption by making imported goods more expensive, thereby promoting longer product lifecycles and supporting domestic industries.
This was an informative and fair video! I live in Canada so it will be interesting to see how things go. I'm predicting poorly for all involved.
If there's the commensurate incentive to redevelop local industry to replace prohibitively expensive imports? Yes.
If it's still too hard to build local sourcing, no.
I would also include in that a base level of quality of life for workers in that economy. Changing the rules so you produce locally but employees are paid minimal wages and work so many hours they can't enjoy their families... bad.
No one can be sure what industry is what and certainly the government can't mandate it top-down. Entrepreneurial individuals will have to roll the dice on the free market. Either that or we continue to get the same stuff from the same places for moderately higher prices in exchange for government inflow. In my eyes this is similar to a consumption tax that people can choose to pay or not and therefore is, at least morally, a superior system to income tax - and if it "fails" healthy American businesses will grow. Mild targeted tariffs and mild decreases in income tax may be the optimal route for an improvement in the lifestyle of the average American. Stronger tariffs can be used to strongarm geopolitical adversaries in the same ilk as a sanction or embargo without the complete shutting down of supply chains.
Tariffs will be an incentive to improve local regulations and reduce taxes in order for industries to start producing domestically
@@afreire239 Labor is the main cost of almost all goods. Tariffs don't address labor rate discrepancy. Companies aren't going to move operations to save 30% on a tariff when they lose 80% in labor cost.
China also has industrial centers to make stuff. In the US we ship parts back and forth all over the place which isn’t competitive..
For a long time, the U.S. got most of its money from tariffs, but as the country grew and needed more cash for things like infrastructure and social programs, tariffs weren’t cutting it anymore. By 1913, with the 16th Amendment, they introduced income tax, which made raising money way simpler and fairer-especially since it could target higher earners more. This move basically ended America’s heavy reliance on tariffs and opened up the door to a bigger government role in the economy. Going back to tariffs ONLY suits the richer people and would require a massive cut in government spending. Tariffs swapped in against lower progressive income tax are a flat tax rate which is particularly rough on the lower 80% of earners suiting only at best the top 20% and more likely the top 5% of earners.
Why then is there such a huge inequality problem today compared to before 1913
Why not cut income taxes and subsidize the loss with tariffs on non-essential goods like luxury items or goods that can be produced domestically? It would be the same as a consumption tax except foreign goods are footing the bill before any increase passed on to US citizens? The result could be a freer society with a stronger domestic outlook.
@@afreire239rich people got smart and they figured out they do not get taxed on unrealized gains. So rich are paid in stock which is not taxed like money.... then they get loans agaibst their stock to buy atuff and they still do not get taxed.
@@Bern_il_Cinq Basically there are so many get around from tariffs that mostly they just get in the way, drive up ALL prices even domestic goods and once removed the prices stay high and the importers keep the profits. Tariffs are useful but using them like a sledgehammer is not.
@@afreire239it’s not about tariffs. That’s a separate issue due to wage inequality drift since Reagan and trickle down economics. Here in the UK if ordinary worker wages had kept step with inflation the shop floor wage would be about 30% to 40% higher than now while the worker to ceo ratio is 5x of that in the 1960’s. The rich are getting richer while the middle class and working class are getting poorer.
People need to understand the difference between short term impact and long term benefit.
True - but to be fair, if the cost of living diminishes people's quality of life too much - or too many incompetent bureaucrats fk things up (as they often do), many people may never see that long-term benefit you speak of.
Tariffs would only work if we are putting them on goods/services where we have a comparetive advantage in making
As it turns out the primary effect of a tariff is leverage.
Certainly with our current administration.
And it's working.
This.
There is no leverage, it's just a tax on consumers lol
Write your congressman to rescind the International Emergency Economic Powers Act. The founding fathers kept the power to tax with congress for a good reason, they shouldn't have given it away.
Looks like we got the answer to this one pretty quickly. Yes, tariffs apparently work as a political bargaining chip to bring a foreign country to the table. I would say they work effectively, given that it took all of one day for Canada and Mexico to come to the table and agree to Trump's initial terms in order to get a temporary stay on the tariffs.
From the future here, they worked
How did the whole thing go then if it was successful?
What about imposing tariffs that don't start for years to come in order to encourage long term divestment?
No inflows in that case
@@Bern_il_Cinq Yeah, but you don't risk destroying the lives of hundreds of millions of people as they struggle to afford necessities like food and housing.
very timely video, but it's gonna be hard to follow stories with the frequency they are currently happening
Customs professional here - regarding the 25% steel imports. Whilst its true a company simply importing steel (to for example sell) would be subject to 25% duty, most large corporations would take advantage of inward processing procedures, which would drastically reduce the tax burden of the finished product
So far every tariff has lasted an average of 9 minutes before the imposed country caves so... I'm gonna go with yes.
Nothing changed though...
@@zaarkeru3391 I know right!
Well, I mean, the Houthis attacks on our shipping lanes in the Red Sea have died out... but that's just coincidence. And, uh, there's the ceasefire WITH Hezbollah handing over their hostages per Trump's command but that's also coincidence. The 95% reduction in illegal border crossing & deportation of criminals by the 1000's is also coincidence. Obviously, the identification of billions in waste of our tax dollars through the USAID program is also coincidence. Reclaiming the Panama Canal to expel Chinese control... Oh, I think you know that's coincidence.
It's been over a week now and all we have is nothing. Just a pile of coincidence. If only the President would take some action, you know?
10:54 ahh, the chicken tax - the reason why we're stuck with shitty trucks while the rest of the world can enjoy the immortal Hilux.
Toyota already builds trucks in the US. They could easily build the Hilux here if they wanted to. They probably figure that Americans simply wouldn't buy it. And they'd be right. They also already sell the Tacoma, which is a Hilux but faster and more comfortable.
It's just increased taxes "Trump sales Tax" was a good slogan
If the Democrats are smart, they'll take that phrase and run with it.
If the DNC is smart, they'll take that phrase and run with it.
Running an appliance repair business. Those 2018 tariffs hurt our industry pretty bad.
It wasn’t just China. South Korea as well. I’ve makers for LG frenchdoor fridges went from $60 to $240 in like one day. If those tariffs worked then lg would have seen a smaller market share in appliances, but their market share grew in the period following those tariffs. It did nothing, because we produce nothing to little to satisfy demand.
Mercedes doesn't have a plant in South Carolina. BMW has one there. The Mercedes plant is in Alabama.
I went there for a brand immersion when I used to sell their vehicles. I took the CLA 45 and GLA 45 around their track too. Awesome facility. I was surprised though how many pre-fabricated parts were Chinese and Mexican. The Chinese BAIC Group currently holds 9.98 % of the company's voting rights, making it Mercedes-Benz Group AG's largest individual shareholder. While working there I was told it was actually higher than this number closer to 33%...
Definitely worked as a negotiation tool
That is true, but you can only use it so many times before people get fed up with being 'bullied'
Negotiations usually need more than just one party. A lone negotiating tool is just that. A tool.
Elon's tool to be more specific.
The rising rates can be attributed to increasing imports and decreasing exports, largely due to the Trump-era tariffs, which triggered retaliatory measures. The Federal Reserve also plays a role in the banking crisis, given its policies of quantitative tightening and higher interest rates. If these conditions persist, something will eventually give. With this in mind, is it really a good time to have savings invested in stocks?
Consider buying stocks when the economy is not doing well, like during a recession. It could be a chance to buy them at a lower price and sell later when prices go up. Just keep in mind, this isn't financial advice, but sometimes it's better than keeping a lot of cash.
Having an investment advisor is the best way to go about the stock market right now. I used to depend on UA-cam videos but it wasn't working. I’ve been in touch with an advisor for a while now, and just last year, I made over 80% capital growth minus dividends.
Could you recommend your advisor? I'd appreciate some help.
My CFA Melissa Terri Swayne , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Thanks a lot for this suggestion. I needed this myself, I looked her up on google, and I have sent her an email. I hope she gets back to me soon.