Exactly. One of the first things I thought of was the supply shocks of early pandemic days ... when matched with the big fiscal spending surge of 2020-22, the result was a spike in inflation.
Don't know if and when we'll have another demand shock to meet this supply shock. But there are always those tax cuts being threatened ... to offset the tariffs ... which are merely a big tax increase.
Hanson is floundering, trying to "sanewash" the chaotic lunacy coming from the White House. Almost as soon as US manufacturing entered its golden age, in the 1910s, it became dominant because Europe was busy destroying itself in the world wars -- that *was* the Golden Age of the US colossus bestriding the world.
By 1930, when the Smoot-Hawley tariffs were enacted, the US economy was already intertwined with the rest of the world that the tariffs and the retaliation taken against them were disastrous.
Tariffs on specific products and countries makes sense especially one that steal intellectual property. The best way for America to outperform the world is through a three pronged approach that doesn’t involve tariffs. Lower energy prices, reduced regulations and licensing times and innovation. The last is built into our DNA and will take care of itself. The first two are government policies. Take care of the government side and the people will do the rest.
That makes a lot more sense. There is a problem with China, no doubt, which Trump made a big deal of (rightly) in his first term. Thus enlightened, the Biden period continued these policies targeted at China.
There are both big economic and non-economic reasons for trade restrictions on China (not just or even mainly tariffs). China practices an ever-more extreme version of mercantilism, with the Chinese workers never seeing and never able to spend the economic fruits of their large productivity, because the CCP has other plans -- it's not mutual trade to mutual benefit, which is what the system was set up for. The CCP instead promotes IP theft, ever-larger and extreme export subsidies, and desperate attempts to save their generational boom-bubble, which is now collapsing. Only great domestic consumption demand can save it and stabilize the Chinese economy at this point. But that's exactly the benefit to Chinese workers (and countries like the US that could be exporting a lot more to China) that the CCP will never allow, because it would undermine their intimidation and control over the Chinese masses. Only the well-connected and Party members benefit.
As a economics blogger, Noah Smith, likes to put it: macro will not be mocked. China can't squeeze another boom out of demand from the rest of the world, which is almost saturated. It needs domestic demand at long last.
But our tariffs on the rest of the world? Seriously? Cambodia? Mauritius? And the underlying "reasoning" for the tariffs, which has been reverse engineered, is hilarious and pathetic, a complete failure of understanding of how trade works. And it completely misses why China poses such a serious and special problem.
Regarding Cambodia, you have to realize that China’s tariff avoidance moved production there and to other countries such as Vietnam and in response to levies in Trump’s first term. That’s why a 10% across the board tariff floor and high tariffs on China production proxy venues were levied.
Exactly. One of the first things I thought of was the supply shocks of early pandemic days ... when matched with the big fiscal spending surge of 2020-22, the result was a spike in inflation.
Don't know if and when we'll have another demand shock to meet this supply shock. But there are always those tax cuts being threatened ... to offset the tariffs ... which are merely a big tax increase.
https://open.substack.com/pub/amuseonx/p/the-great-interest-reset-trumps-strategy?r=2vnoe2&utm_medium=ios
Victor Davis Hanson: Donald Trump’s Trade Parity ‘Golden Age’ Explained - YouTube
https://www.youtube.com/watch?v=JrTBU7Nsdus
Hanson is floundering, trying to "sanewash" the chaotic lunacy coming from the White House. Almost as soon as US manufacturing entered its golden age, in the 1910s, it became dominant because Europe was busy destroying itself in the world wars -- that *was* the Golden Age of the US colossus bestriding the world.
By 1930, when the Smoot-Hawley tariffs were enacted, the US economy was already intertwined with the rest of the world that the tariffs and the retaliation taken against them were disastrous.
Tariffs on specific products and countries makes sense especially one that steal intellectual property. The best way for America to outperform the world is through a three pronged approach that doesn’t involve tariffs. Lower energy prices, reduced regulations and licensing times and innovation. The last is built into our DNA and will take care of itself. The first two are government policies. Take care of the government side and the people will do the rest.
That makes a lot more sense. There is a problem with China, no doubt, which Trump made a big deal of (rightly) in his first term. Thus enlightened, the Biden period continued these policies targeted at China.
There are both big economic and non-economic reasons for trade restrictions on China (not just or even mainly tariffs). China practices an ever-more extreme version of mercantilism, with the Chinese workers never seeing and never able to spend the economic fruits of their large productivity, because the CCP has other plans -- it's not mutual trade to mutual benefit, which is what the system was set up for. The CCP instead promotes IP theft, ever-larger and extreme export subsidies, and desperate attempts to save their generational boom-bubble, which is now collapsing. Only great domestic consumption demand can save it and stabilize the Chinese economy at this point. But that's exactly the benefit to Chinese workers (and countries like the US that could be exporting a lot more to China) that the CCP will never allow, because it would undermine their intimidation and control over the Chinese masses. Only the well-connected and Party members benefit.
As a economics blogger, Noah Smith, likes to put it: macro will not be mocked. China can't squeeze another boom out of demand from the rest of the world, which is almost saturated. It needs domestic demand at long last.
But our tariffs on the rest of the world? Seriously? Cambodia? Mauritius? And the underlying "reasoning" for the tariffs, which has been reverse engineered, is hilarious and pathetic, a complete failure of understanding of how trade works. And it completely misses why China poses such a serious and special problem.
thanks for sharing your well spoken economic literacy, somewhat rare these days..
And thank you for reading.
https://substack.com/@mealsnminutes/note/c-105933539?r=2vnoe2&utm_medium=ios&utm_source=notes-share-action
Regarding Cambodia, you have to realize that China’s tariff avoidance moved production there and to other countries such as Vietnam and in response to levies in Trump’s first term. That’s why a 10% across the board tariff floor and high tariffs on China production proxy venues were levied.
https://substack.com/@brandonrichey/note/c-105898998?utm_source=notes-share-action&r=2vnoe2
Bobby Charles on tariffs: https://www.wvomfm.com/episode/rewind-04-04-bobby-charles-1530/