[HN Gopher] Tariffs in American History
___________________________________________________________________
Tariffs in American History
Author : smitty1e
Score : 68 points
Date : 2025-05-24 11:02 UTC (1 days ago)
(HTM) web link (imprimis.hillsdale.edu)
(TXT) w3m dump (imprimis.hillsdale.edu)
| crossroadsguy wrote:
| As someone from a developing economy whenever I see a new .edu
| domain or .ac.uk domain I immediately try to find the institute's
| establishment date. I rarely find anything above 1800s from these
| two countries- US, UK. I often wonder how much this aspect of a
| certain country contributes to its (sometimes meteoric) growth
| and how my own country was actually at the pinnacle once and how
| it coincided with having literally the best of the educational
| institutions of that time. But that was past -- today a 20 year
| old institute is considered "old" here.
|
| (Though I wonder how much they contribute? 30-40%? Or more? How
| does one find this out?)
|
| Anyway, I am sure there are other factors like colonialism and
| what not. But even if you manage to rob someone else and then by
| the end of next week your money is gone in the various waterholes
| of your neighbourhood then you are right where you started ready
| to rob again until you can't rob anymore. Are there other, from
| past, "robber" nations that squandered their loot in _watering
| holes_?
|
| I wonder how "meteoric" the decline would be if those same
| academic institutes are undermined and are stifled, the ones that
| contributed to the rise.
|
| PS. When I was applying to unis in mainland Europe (because US/UK
| was too costly) any place below at least a hundred year old was
| "too nuvo" for my _academic_ taste ;-)
| mustache_kimono wrote:
| > When I was applying to unis in mainland Europe (because US/UK
| was too costly) any place below at least a hundred year old was
| "too nuvo" for my academic taste ;-)
|
| Hillsdale is a college founded expressly to be a conservative
| alternative to the Ivies/older liberal arts schools. And its
| graduates have been very influential in the recent American
| conservative movement.
| crossroadsguy wrote:
| I mentioned that part about my own country. I think it was
| not clear. I'll try to edit. (Edit: it is clear)
| 0xB31B1B wrote:
| Hillsdale college is a fundamentalist Christian college.
| "Bible is the literal word of god" stuff. Many people there
| believe the world is 6000 years old and evolution didn't
| happen.
| xienze wrote:
| Source for that claim? If you had spent half a second
| researching before blindly launching into "Christians r
| dum" rhetoric you'd have noticed that they actually teach a
| course on evolution:
| https://www.hillsdale.edu/courses/evolution-biological-
| diver...
| 0xB31B1B wrote:
| My sister went there and her and her friends and their
| families believe these things.
| f30e3dfed1c9 wrote:
| It is not clear at all from the course description what
| that course teaches:
|
| "An introduction to the vast diversity of life from
| prokaryotic forms to the eukaryotic vertebrate mammals.
| This course introduces the beginning biology student to
| all the major groups of organisms and to their
| fundamental taxonomic relationships."
|
| "This vast diversity exists because that's the way God
| made them" is perfectly compatible with that description.
|
| Also, from the description of an event held April 11,
| 2025:
|
| "Are the special creation of Adam and Eve and the
| evolution of humans over millions of years compatible?
| 100 years after the Scopes Trial, the debate continues."
|
| So "they actually teach a course on evolution" seems to
| fall well short of a full description of exactly what
| they teach there.
| f30e3dfed1c9 wrote:
| For comparison's sake, here is a description of a more
| typical Evolutionary Biology course:
|
| "Emphasizes the fundamental evolutionary concepts that
| provide explanations for the diversification of life on
| Earth. Specific topics include the evidence for
| evolution, adaptation by natural selection, speciation,
| systematics, molecular and genome evolution, and
| macroevolutionary patterns and processes."
| xienze wrote:
| So once again, do you have anything to back that up other
| than assumptions?
|
| "They would never teach about evolution at a Christian
| college"
|
| "OK it says evolution but I bet they don't mention it"
|
| <- YOU ARE HERE
|
| "OK, they talk about evolution but I bet in a dismissive
| manner"
| f30e3dfed1c9 wrote:
| > do you have anything to back that up other than
| assumptions?
|
| Do you? I have obviously not taken the class. Have you?
| What exactly do they teach in it and how do you know?
| what wrote:
| >I have obviously not taken the class
|
| So how can say anything about what it teaches? How do you
| know?
| MegaButts wrote:
| You are weirdly defensive about this.
| f30e3dfed1c9 wrote:
| > Hillsdale is a college founded expressly to be a
| conservative alternative to the Ivies/older liberal arts
| schools.
|
| This is not correct. Hillsdale was founded in 1844 at a time
| when the contemporary so-called "conservative" movement in
| the US didn't even exist.
| mustache_kimono wrote:
| > This is not correct.
|
| Oops this is my mistake. I shouldn't have said founded when
| I didn't actually know. These days it is at the very least
| marketed as such. A conservative alternative to...
| f30e3dfed1c9 wrote:
| >As someone from a developing economy whenever I see a new .edu
| domain or .ac.uk domain I immediately try to find the
| institute's establishment date. I rarely find anything above
| 1800s from these two countries- US, UK.
|
| I don't really understand this comment. Are you saying that
| there are not many colleges or universities in the US founded
| in the twentieth century? That's not really true. I haven't
| done this exhaustively, but I took the lists of US colleges and
| universities for just three US states (CT, ME, MA) from
| wikipedia. 101 of the 167 listed were founded after 1900.
|
| I don't know exactly how this would work out for all 50 states
| but I am sure that we'd find many more, likely a large
| majority, founded after 1900.
|
| There are around 4,000 or so postsecondary degree-granting
| institutions in the US. I think what's going on here is that
| you never hear of the vast majority of them.
|
| Or are you saying that you rarely find US academic institutions
| founded _before_ the 1800s? In that case, well, yeah, the vast
| majority were not.
| kec wrote:
| Complete aside but I believe you meant/it is spelled "too
| nouveau" (assuming you meant more recently founded schools are
| too "new money" and lack sufficient prestige due to their young
| age).
| mystified5016 wrote:
| Well, the US is a pretty young country. It was the last
| continent to be settled (by Europeans) and the history of
| (European) civilization here is just not very long.
|
| The US _does_ have prestigious organizations from early in its
| history, but that history is still pretty recent in comparison
| to Europe. All things considered, the US has a pretty good
| amount of prestigious history and accomplishments compared to
| classical European history. It 's just hard to compare 18th
| century America to 5th century Italy. For as long as the USA
| has been a country, it's not significantly less accomplished
| than any historic European nation of the same age.
| mmastrac wrote:
| What seems to be lost in these discussions is how the American
| system rides on global respect for American IP, and that this
| respect for IP is part of the whole global trade system.
|
| With global trade falling apart, this respect for IP is in grave
| danger. Robust IP protections contributed significantly to
| America's wealth.
|
| The short-sighted focus on tariffs and re-shoring manufacturing
| completely neglects the whole balance and will damage America's
| position long-term.
| coliveira wrote:
| > Robust IP protections contributed significantly to America's
| wealth.
|
| Quite the opposite, the US didn't enforce IP protections during
| the first few years of industrialization, exactly because they
| were stealing IP from England.
| mmastrac wrote:
| I should clarify that I meant "recently". The US has exported
| extended copyright laws and other IP protections world-wide
| for their own benefit.
| John23832 wrote:
| You do realize that that was irrelevant long ago? That
| context has nothing to do with modern international trade.
| coliveira wrote:
| Ok, so when the US steals it's irrelevant, but when the
| situation is the opposite now is relevant??
| John23832 wrote:
| 200 years ago?
| mc32 wrote:
| IP conventions were not formalized and nations were not
| signatories. Back in the early colonies Britain embargoes
| tech to prevent us from leapfrogging them, there was no
| IP protection framework, so I'm not sure what you're on
| about.
|
| It was more akin to intellectual property secrets.
| poncho_romero wrote:
| Why is hypocrisy brought up here? We are talking about
| national prosperity. Obviously what was beneficial to the
| US when it was a fledgling state is different than today
| bix6 wrote:
| Will IP survive?
|
| We've all heard of IP theft from China but if Meta doesn't face
| domestic punishment for its wholesale theft I really see no
| legs left to stand on.
| ninalanyon wrote:
| > Will IP survive?
|
| I hope not, at least not in it's present form. As far as
| copyright goes a return to the Statute of Anne or something
| similar would provide time for authors to profit from their
| labours while putting them in the public domain within a
| reasonable time.
|
| https://en.wikipedia.org/wiki/Statute_of_Anne
| coliveira wrote:
| Funny how, when a policy that was considered completely crazy a
| few years ago is introduced, there will be an army of people
| trying to find every justification for that policy to become
| normalized.
| aqme28 wrote:
| A lot of people derive their politics not from principles, but
| from association. If my Team is for it and opponents are
| against it, then I am for it.
| cycomanic wrote:
| Yes and I believe this one of the most problematic aspects of
| representative democracies. Policies are often complex so
| hardly anyone has the time to educate themselves on all
| policies of a party, instead many revert to the other extreme
| and simply cheer for their team.
|
| An interesting concept to alleviate this problem has been
| pioneered in Melbourne local politics is citizen councils.
| anonfordays wrote:
| Funny how, both sides read this and think it's the other side
| you're referencing.
| roenxi wrote:
| Policies don't just appear from the aether; it takes quite a
| big push to get a government to move in one direction or
| another. They are sedentary beasts by nature. So it is a safe
| bet that every implemented policy has a number of people who
| quite like it, but the community that likes it may well be
| considered fringe up until they prove to have the numbers and
| get their preferred policy implemented.
|
| Every flavour of economics enjoys some level of widespread
| support, there are still a bunch of people who profess a
| commitment to Marxism. Nobody listens to them (hurrah!) but
| they're still there. If we had Marxists in charge their
| articles would probably get a lot more traction though because
| people want to know what is going to happen next. Ditto things
| like the gold standard, fiat currency, ultra-low taxes, ultra-
| high taxes, globalism and economic independence strategies.
|
| TLDR; there is probably a strong selection bias here.
| ajross wrote:
| This is a retcon attempt. While sure, tariffs are just a tax like
| any other and can be applied to lots of different policy aims,
| and don't have to be the end of the world...
|
| None of these arguments were presented in a reasonable way, with
| numbers, ahead of a policy decision that made a considered
| attempt to find an optimal balance.
|
| No, we elected an administration that had been shouting
| "Tariffs!" during the campaign, then enacted "Tariffs!" once in
| office, then engaged in a quite frankly pathetic flurry of
| increases/decreases/suspensions/delays to try to fix the critical
| problems being introduced by the "Tariffs!". Most of which have
| been to other nations' benefit, even.
|
| It's a bit much to look back after three months of this madness
| and try to pretend how reasonable it was all along. We're still
| in the madness (Q2/Q3 numbers haven't landed yet to show actual
| effects, it's going to be a rocky year, folks).
| matwood wrote:
| The administration still routinely presents VAT as a tariff. To
| think there is any real policy thought behind the actions is
| akin to looking for meaning in the clouds.
| nkozyra wrote:
| "Clouds are simply a negotiating tactic"
| trelane wrote:
| To some extent, they seem interchangeable.
|
| For instance, any time System76 is brought up for Europeans,
| VAT is immediately mentioned, along with why they don't have
| a European distribution center.
|
| Why would opening a European distribution center be relevant
| if you have to pay the same VAT either way?
|
| A few examples:
|
| https://ubuntuforums.org/showthread.php?t=2204089
|
| https://www.reddit.com/r/System76/comments/1c9djrj/taxes_on_.
| ..
| matwood wrote:
| The VAT is akin to a sales tax. It's paid regardless of
| where the item is manufactured or distributed from (and
| mostly regardless of the item). The US typically applies
| between 5-10% sales tax on most items. I have no idea why
| someone from System76 would think it's relevant to have an
| EU distribution center, but it wouldn't change the VAT.
|
| BTW, it's not just the EU that wants you to pay the sales
| tax when bringing items across the border, but the US also.
| It just so happens that it's rarely if ever enforced.
|
| EDIT I should add that the key difference of the VAT and
| tariff is that VAT is not made to advantage one product
| over another. It's simply a sales tax on nearly all
| products, just like the US sales taxes.
| trelane wrote:
| > have no idea why someone from System76 would think it's
| relevant to have an EU distribution center, but it
| wouldn't change the VAT.
|
| It seems to be the customers asking for one, not
| System76. They were planning to open one, though.
|
| > VAT is not made to advantage one product over another.
|
| Like sales tax, there are different (and often zero)
| rates depending on product (same link as before)
| tzs wrote:
| >> VAT is not made to advantage one product over another.
|
| > Like sales tax, there are different (and often zero)
| rates depending on product (same link as before)
|
| But those different rates depend on the product category,
| not the product manufacturer or place of origin. The
| whole point of tariffs is to base rates on place of
| origin.
| trelane wrote:
| > But those different rates depend on the product
| category, not the product manufacturer or place of
| origin.
|
| They do, though:
|
| https://stripe.com/en-ch/resources/more/import-tax-
| germany
| tzs wrote:
| No, they don't. As noted in the link you provided the VAT
| rate on an import sale is the same as the VAT rate for a
| non-import sale.
| trelane wrote:
| There is a whole table with different numbers that vary
| by EU country. Look for "List of (import) VAT rates in EU
| countries"
| detaro wrote:
| That's an overview of the VAT in different countries,
| nothing to do with origins.
| trelane wrote:
| Aaah. That makes sense. Thanks!
| orwin wrote:
| No, they don't. You have at least two VAT rates, and my
| country has four:
|
| - Staple food (rice, basically? Probably flour too) as
| well as healthcare: 0%.
|
| Food and common, staple products (soap, condoms, probably
| other), some cultural products (books, theater tickets,
| probably other), electricity, water: reduced rate (5.5%)
|
| 'vacation' rate: camping bookings, alternative
| healthcare, zoo, movies, restaurants (10%).
|
| Everything else is 20%, whatever the brand or the
| producer. I know because I actually checked my
| transaction tickets for a long time (and my first journey
| b was writing an OCR to automatically analyze those
| tickets to ask for VAT reimbursement)
| detaro wrote:
| EU distribution center is a proxy for "seller handles VAT
| and it wont be my problem as a customer to deal with the
| border authorities or the shipping company that in turn is
| dealing with the border authorities". VAT and tariffs get
| paid either way, but as a consumer I very much like it if
| its _your_ problem, not mine, and "we ship from an EU
| location" is a very obvious way of ensuring that.
| trelane wrote:
| Why does it matter if it's the same number as a line item
| on the invoice vs you pay it to UPS upon receipt? It's
| the same price.
| detaro wrote:
| > _you pay it to UPS upon receipt?_
|
| So now I gotta be home 100% to receive the package,
| instead of it getting it dropped off at a neighbors if I
| happen to be out/at work/...? And I hope they picked a
| shipping company that takes card/allows online payments
| and not someone who expects me to pay in exact cash.
|
| And that's the happy path where everything worked
| correctly, and not one where something in the paperwork
| is wrong or got messed up and now you get to try figure
| out what exact proof the shipping company wants to
| release your package/believe that they got the amount
| wrong/... Or it gets shipped in a way where it ends up
| stuck with actual customs and you get to deal with them.
| If a seller has their shit in order it's relatively
| unlikely to happen, but well, random small-ish companies
| not necessarily do, and if it goes wrong its really
| annoying.
|
| + of course if the seller has an actual legal presence
| here it makes it clear consumer rights as I expect them
| apply.
|
| I'm not someone who absolutely won't order from abroad if
| I want something, but a local source or a known
| distributor just avoids a whole category of potential
| issues. And computers are the kind of high-value item
| where people really want to avoid them (and some of the
| simplifications aren't available, e.g. I think the most
| straight-forward pre-payment mechanism for sellers is
| restricted to low-value parcels).
| trelane wrote:
| Thanks. Fair points all around.
|
| We do not have any of these considerations in the US,
| which is perhaps part of why so much stuff comes directly
| from abroad.
| detaro wrote:
| I'd guess for things like computers it actually did
| apply, because these are too expensive for the old de-
| minimus rules, but of course there's probably not that
| many small computer makers outside the US shipping there,
| and large ones either have their own infrastructure or
| have it figured out. And its certainly possible the
| overall bureaucracy was easier to deal with too (for all
| the common rules the EU has brought, fundamentally a lot
| of it is still per-country stuff and the needs of small
| sellers are often not really considered, and we also just
| have more rules in many sectors).
|
| But $800 (I think that was the value?) de-minimus indeed
| makes _a lot_ of cases easy.
| ajross wrote:
| Well, I mean, sorta? This is the point where, indeed,
| rational discussion can happen. In the real world, VATs and
| tariffs are both taxes collected at the point of trade. The
| distinction is just about what boundary constitutes a "trade"
| and what accounting is done to determine the "value" of the
| trade. But they're close cousins and do most of the same
| thing and can be used for most of the same policy purposes.
|
| But again, that's not what's happening in US policymaking
| right now. They don't want tariffs, they want "Tarrifs!", and
| splitting hairs over the precise definition isn't going to
| change their mind.
| smitty1e wrote:
| > None of these arguments were presented in a reasonable way,
| with numbers, ahead of a policy decision that made a considered
| attempt to find an optimal balance.
|
| TFA is the transcript of an historical overview lecture, not a
| formal economic thesis on the topic, much less, a journal
| article.
|
| Your point, while valid, might be enhanced by some counter-
| linking.
| watwut wrote:
| > President Trump wants to level this playing field.
|
| No. It is an attempt to sanewash conservatives, because that
| is the whole reason for being for this university.
|
| The part about Germany and cars is also crap.
| smitty1e wrote:
| > The part about Germany and cars is also crap.
|
| So, could you suggest a link to a solid refutation?
| orwin wrote:
| Anybody who understands what VAT is and how it works
| cannot take this part of the article seriously. I hate
| VAT, I think it should cease to exist (it is still
| marginally better than sale taxes) but I made the effort
| to actually try to understand how it works before writing
| bullshit about it on basically a blog post.
| watwut wrote:
| The article is lying. At this point, it is not reasonable
| to assume this is just not understanding things.
|
| People who work in these institutions lie, they are paid
| for lying and they do it to project their ideological
| agenda.
| smitty1e wrote:
| > The article is lying.
|
| A legless assertion. Could you be more specific with the
| objection, please?
| orwin wrote:
| I think you greatly overestimate the understanding of
| people working in those institutions.
|
| They have a framework and try to make everything they
| read/hear about go through that framework, even if it
| doesn't really fit. They don't really understand, but
| have strong opinions and held them at least as strongly,
| maybe more.
|
| They aren't idiots in any case, but clearly, in this
| particular case, the author doesn't know what he is
| talking about.
| watwut wrote:
| > In addition, Germany's value-added tax is remitted on
| exports but charged on imports.
|
| VAT is paid regardless of who manufactured the car. It is
| something the final customer has to pay regardless of
| whether the product was made in EU or abroad. If you are
| buying BMW, you have to pay VAT. If you are buying
| Toyota, you have to pay VAT. If you are buying an
| American car, you have to pay exactly the same VAT. It is
| sales tax, basically, just managed differently to make
| tax fraud harder.
|
| Also, Mercedes-Benz and BMW have great reputation and fit
| into European roads. Ford and General Motors do not have
| comparatively great reputation. Germans were buying
| Teslas tho, before those became associated with support
| to far right.
|
| Article author is lying, plain and simple.
| smitty1e wrote:
| The article is a recounting of historical facts. Do you
| feel that relevant facts were omitted, and if so, what?
|
| Merely asserting "lying" is unhelpful.
| watwut wrote:
| VAT is not an import tariff. That is a rather major lie.
| It is a tax applied equally to domestic and foreign
| produce. Not a mistake, because it is quite known to
| anyone who ever googled it.
|
| Given they lie about something so straightforward, I am
| not inclined to trust whatever they write about history.
| History is super easy to cherry pick and present in
| manipulative way.
| ajross wrote:
| With all respect: to pretend that a "historical overview
| lecture" delivered on 6 May 2025 by a well-known conservative
| business pundit[1], before the Heritage Foundation, on the
| subject of "Tariffs in American History" ...
|
| ... is somehow completely objective and obviously unrelated
| to the giant shitstorm of contemporary US tariff policy is
| just laughable, sorry.
|
| We both know what this is.
|
| [1] The presentation might have fooled you, but John Steel
| Gordon is absolutely not an "economist" or "historian" in any
| professional sense.
| smitty1e wrote:
| > We both know what this is.
|
| It's an historical overview. Was there a substantive
| rebuttal on offer, or just what sounds like innuendo?
| ajross wrote:
| TIL "noting the author and forum of a lecture with clear
| political relevance" == "innuendo".
|
| The point isn't that he's wrong (though multiple people
| here are indeed pointing out things that are). It's that
| (1) his not being wrong doesn't remotely justify current
| policy and (2) who he is and where he spoke was _very
| clearly_ intended to justify current policy. I mean, duh,
| as it were.
|
| I mean, please. Link me another dry historical lecture
| hosted by Heritage. I dare you. Everything they do is
| political.
| smitty1e wrote:
| I specifically quoted the component of your reply that
| seemed to qualify as innuendo...and you attempt to shift
| the focus...
| mustache_kimono wrote:
| This tariff discussion is insipid. The question is not whether
| there are some historic antecedents for tariffs. Of course there
| may be, like there are historical antecedents for slavery, but
| the question is what is the current econometric justification.
|
| Some claims are just out and out misleading, like:
|
| > One of the provisions agreed to by the U.S. in the early GATT
| negotiations following World War II was differential tariffs: the
| U.S. lowered its tariffs more than its trading partners did.
| Again, _the purpose of this was to speed the economic rebuilding
| of allies and former enemies who had suffered devastation during
| the war._
|
| Perhaps that was _a purpose_ of those tariffs, but this ignores
| the more general purpose of US policy which was, at the time, to
| reduce trade barriers, by more closely integrating all these
| economies (see European Coal and Steel Community), and creating a
| customs union (see the Paris and Rome Treaties), all in service
| of _preventing another world war_.
|
| > The U.S., for instance, has a 2.5 percent tariff on cars
| imported from Germany, while Germany has a ten percent tariff on
| American cars.
|
| Hard to believe, in the age of Trump, but tariff rates are
| generally negotiated for provisions, as part of a broader trade
| agreement. TTIP, a new EU-US agreement, was dropped by the US
| without a deal in 2016. Guess why.
|
| > As a result, while the logos of Mercedes-Benz, BMW, and
| Volkswagen are seen all over American roads, those of Ford and
| General Motors are a rare sight in Germany.
|
| MB and BMW have a long history making cars, longer in many cases
| than the American companies. That is -- this is a mature
| industry, and, in general, Ford and GM are not regarded as making
| cars of the same quality both in the US or in Germany. So -- the
| reason you don't see many Cadillacs in Germany is because MB and
| BMW and Porsche make a better alternative, and the consumers know
| it.
|
| Japan for instance has a 0% tariff rate on US cars and the
| Japanese still don't buy them.
| ninalanyon wrote:
| > Ford and General Motors are a rare sight in Germany.
|
| It's not even true that Ford is a rare sight. Ford outsells
| Toyota in Germany, employs 28 000 people in Germany, and has
| been incorporated there since 1925.
|
| US Fords are of course a rare sight but that has nothing to do
| with tariffs, it is simply that most buyers don't want them.
| orwin wrote:
| I disagree for Ford. Fords are well regarded in the EU,
| probably the US brand who sold the most car. But they do mostly
| small, efficient cars here, not the monsters they sell in the
| US.
| throw0101d wrote:
| Perhaps worth noting that there are situations that tariffs can
| be considered a good idea:
|
| * https://www.noahpinion.blog/p/when-are-tariffs-good
|
| It's just that generally speaking, most of why they're being
| implemented by the US now are not valid.
| dylan604 wrote:
| There's a difference of applying tariffs to imported goods that
| are cheaper than domestically produced goods so that their
| prices are not sold at drastically cheaper prices then making
| it impossible for imports to compete.
| fny wrote:
| I'm open to arguments that tariffs can be effective, but their
| advocates rarely seem open to the argument that the way they're
| implemented matters.
|
| To put it kindly a lot them are chaos apologists.
| SSJPython wrote:
| There's an excellent book by economist Michael Hudson called
| "America's Protectionist Takeoff" that discusses how the US used
| tariffs to promote certain industries in order to compete on the
| world stage. It was part of Alexander Hamilton's American System.
| Friedrich List, the German economist that wrote "The National
| System of Political Economy", used the American System to
| advocate for the same policies in Germany. Germany eventually
| adopted these policies and became an economic powerhouse
| themselves. Likewise, Meiji Japan went so far as to adopt the
| ideas of Friedrich List's economic policies, which resulted in
| them becoming a great power in a generation.
|
| Tariffs can work, but only if they are targeted towards certain
| industries/sectors. They can't just be slapped across the board
| and be expected to work properly. Furthermore, they must be
| attached to certain KPIs such as exports (i.e., the ability to
| effectively compete on the international market). Joe Studwell's
| "How Asia Works" argues that Japan, Korea, and Taiwan all used
| tariffs and subsidies to promote their own "national champions".
| In turn, they forced those companies export their products rather
| than just sell domestically in order to compete. If they didn't
| meet those export targets, those companies were cut off from
| state support. Ha Joon Chang, a Korean developmental economist,
| likens this to raising a child: you spend their initial formative
| years supporting them until they are able to support themselves
| without your help.
| resters wrote:
| The last thing Trump's tariffs could be described as is
| targeted industrial policy. They are intentionally a sledge-
| hammer. They are intentionally emotional. Intentionally full of
| jingoistic rhetoric and victimhood rhetoric.
|
| Sadly there has been zero discussion of doing targeted
| industrial policy (like China's) in the US. The irony is that
| Trump's approach benefits China tremendously.
| Waterluvian wrote:
| A sober approach to promoting the redevelopment of production
| industry in America would likely involve some tariffs and
| could make a lot of sense.
|
| But, yeah, the current American approach is anything but
| sober.
| maximinus_thrax wrote:
| Hillsdale College is the type of institution that propagates the
| big lie: https://dc.hillsdale.edu/News-and-Events/News/Mollie-
| Hemingw...
|
| Garbage in, garbage out.
| akaru wrote:
| They're scum. No idea why such an article was ranked here.
| xpe wrote:
| Somehow I got on Hillsdale's mailing list in college. In the
| spirit of open-mindedness, I try to read their newsletter from
| time to time without vomiting. I found it nearly impossible.
| There are much better places to find intellectually honest
| arguments in favor of libertarianism and so on.
| mindslight wrote:
| That is _a_ big lie, but it is certainly not the biggest these
| days. The Big Lie is more like that Trump is a Republican, a
| conservative, a moral person, a competent businessman, not a
| manic demented liability who would otherwise be in physical
| restraints at an understaffed nursing home where his kids don
| 't even visit, etc. And that any of these America-last policies
| make sense, and couldn't have been written by our adversaries
| seeking to paralyze, divide, and destroy us. Once you've bought
| into this alternative-facts universe where this hollow whiner
| somehow represents strength, up becomes down and black becomes
| white - there are no values or morals, just the decrees of Dear
| Leader versus those who don't fall in line.
| brightball wrote:
| That's a really good read but I can't believe they covered all of
| that history of tariffs, referenced the firing on Fort Sumter and
| never pointed out that Fort Sumter existed almost entirely
| for...tariff collection.
|
| It's an island right in the middle of the entrance to Charleston
| Harbor.
| darknavi wrote:
| A great place to visit by ferry. As is Fort Moultrie. Super
| nice rangers when we've gone in the last few years.
|
| Then again they might not work there anymore.
| resters wrote:
| Tariffs and other ideas associated with economic nationalism
| place politics ahead of the economic freedom of citizens. They
| declare that economic activity is something that must be
| stewarded and managed by politicians, and that citizens are too
| foolish to be allowed to have economic freedom, and that all
| should sacrifice for the benefit of those chosen by political
| leaders to benefit from heavy economic restrictions.
|
| For comparison, China applies the minimal amount of economic
| protectionism it deems necessary to achieve its industrial policy
| goals. The crucial fact about China's approach is that China's
| leaders do not make silly claims to sell the idea to a naive
| public, they cite specific, highly targeted industrial policy
| goals and interfere in the economy as little as possible. They
| acknowledge the sacrifice that tariffs require and assert that
| the industrial policy goals are worth it, they do not make false
| claims about who pays for tariffs.
|
| On the contrary, protectionism in the US is a blunt and
| emotionally wielded instrument that is deployed haphazardly and
| then suddenly repealed, then deployed again amid rhetoric that
| the US is a victim and has been taken advantage of, and the
| emotionally reassuring and politically priceless falsehood that
| foreign companies pay the cost of tariffs.
|
| The costs of recent tariff antics in the US is clear as the
| economy must now price in the risk of unpredictable and haphazard
| tariffs along with other systemic risks. Absent from the
| discussion of tariffs in the US is any coherent idea of
| industrial policy, any forward-looking or coherent perspective on
| what should be done to prepare for the future, etc.
|
| US tariffs are a purely emotional ploy meant to build up
| nostalgia for bygone days of US heavy manufacturing. The "us
| against them" rhetoric and the victimhood rhetoric is just a
| bonus that (sadly) sells well politically in the US these days.
|
| It is not only counter-productive and directly harmful to the US
| economy, it is also deeply embarrassing that the world has to
| witness the US self-immolating in this way, hitting our own knee-
| caps with a hammer, destroying wealth and trust that many people
| worked so hard to create.
|
| Economists don't favor tariffs for one simple reason: Economics
| is a science and there is overwhelming evidence telling us what
| will happen. Better policy ideas exist such as targeted
| industrial policy (such as that done by China) but the US ignores
| them in favor of the most emotional and reactive posturing
| imaginable.
|
| It should already be clear what happened. Trump made a lot of
| claims about "deal making" and tariffs. Many of the claims were
| contradictory from the beginning, meaning if one was true the
| other could not be true. Supporters are not bothered by that
| because the appeal is emotional rather than logical. Now we've
| seen many tariffs get deployed, we've seen markets tank,
| companies cancel orders, reverse course, hold back on investment
| decisions. Then we've seen the tariffs get walked back amid
| bluster and rhetoric. Some economic numbers improve in response
| to this but not all. It's like the last spasms of a dying
| creature -- is it an attack or a retreat? Neither or both?
|
| All this stems from a deep misunderstanding of American power and
| American greatness. Misunderstandings like this are easy in a
| society so heavily influenced by just-so stories and propaganda,
| societies like ours in which the state religion, American
| Exceptionalism, is irresistable to so many.
| tzs wrote:
| > The U.S., for instance, has a 2.5 percent tariff on cars
| imported from Germany, while Germany has a ten percent tariff on
| American cars. In addition, Germany's value-added tax is remitted
| on exports but charged on imports. As a result, while the logos
| of Mercedes-Benz, BMW, and Volkswagen are seen all over American
| roads, those of Ford and General Motors are a rare sight in
| Germany.
|
| What does that part about VAT have to do with this? VAT is
| essentially a sales tax with a more involved collection process.
|
| The big difference in collections is that VAT is collected at
| each step of the chain of manufacture and distribution but
| refunded if the next step is not to a consumer, whereas in sales
| tax it is only collected on the final sale to a consumer.
|
| As for why VAT is remitted on exports, it is the same reason why
| if GM builds a Tahoe in their factory in Arlington, Texas and
| sells it to a dealer or consumer that is not in Texas they do not
| pay Texas sales tax. Sales tax and VAT are both destination
| based. Exports, whether from Texas or Germany, are not to the
| final consumer and so VAT and sales tax are not owed.
|
| Saying that VAT has anything to do with why BMW is more common
| than GM in Germany makes as much sense as saying that sales tax
| is why GM is more common than BMW in Texas.
| bitshiftfaced wrote:
| German car makers deduct VAT on machinery, equipment, factory
| supplies, and sometimes even utilities or specific components.
| Some US states offer car manufacturers tax exceptions on things
| like raw materials, but it is by no means apples to apples.
| When BMW builds a car in Germany, it enters the show floor free
| of embedded taxes on inputs. Thats not necessarily the case for
| US cars
|
| Another important difference has to do with the size of the VAT
| tax compared to single-stage taxes. For example, in the US if
| you taxed 19% on inputs every step of the way, no one would be
| able to afford the final sticker price. Instead, the US taxes a
| much smaller amount but does not refund this like the VAT
| system, and the end consumer tax is the same small percentage.
| VAT _can_ be much higher _because_ it avoids the cascading tax
| effect. In the end maybe 19% tax was collected on the
| manufacture and sale in both the US and Germany, and all you
| changed was one having a higher tax versus cost but the sticker
| price evened out in the end.
|
| Because of this difference in the two tax systems, VAT can be,
| and is, much higher than US state/local tax. But then, this
| means that differences in tariffs creates a compounding effect.
| A German manufacturer can sell to a US end consumer on average
| about: 100% cost + 2.5% tariff + 102.5% * (8.5% consumption
| tax) = 111% after tax cost. On the other hand, if Ford builds
| in the US and sells to a German end consumer, then the
| calculation goes: 100% cost + 10% tariff +110% * (19% VAT) =
| 131% after tax cost. So while Germany's VAT is 10.5% higher
| than the average US sales tax, and equal to the VAT any German
| would pay in Germany, its actually almost double that amount
| when you take into account the compounding affect of Germany's
| higher tariffs.
|
| In short, the differences in the two tax systems result in
| systemically higher tax rates for VAT. And this means that EU
| car manufacturers do see a trade advantage in terms of selling
| to EU end consumers compared to US manufacturers selling to EU
| end consumers (when compared to either selling in the US) since
| the final after-tax cost calculation is multiplicative.
| orwin wrote:
| That's because sales taxes are even more shitty than VAT,
| it's not one of the many issues with VAT.
|
| I actually dislike all consumption taxes, but I find myself
| defending VAT way too much on this platform :/
| tpm wrote:
| > VAT can be, and is, much higher than US state/local tax.
|
| > And this means that EU car manufacturers do see a trade
| advantage in terms of selling to EU...
|
| What is never mentioned in these discussions is that high VAT
| means higher prices as a whole and that has a chilling effect
| on consumer spending. German (and all other EU) manufacturers
| have a disadvantage of a smaller home market. This is then
| compounded by having other taxes on gas (+VAT too of course),
| which is much more expensive than in the US. So it's simply
| less affordable to have a car in the EU. And as a result, a
| high VAT and other taxes are not a competitive advantage for
| any local industry. This is different to tariffs or direct
| support, which are an advantage.
| lalaland1125 wrote:
| You have a lot of words here, but it still seems like the VAT
| is irrelevant here as it applies equally to both domestic and
| foreign production.
|
| I agree the 10% tariff on US cars that is problematic, but
| that has nothing to do with the VAT
| rjsw wrote:
| There are plenty of Fords and Opels (was GM) on German roads,
| not ones built in the US though.
| lalaland1125 wrote:
| > What does that part about VAT have to do with this? VAT is
| essentially a sales tax with a more involved collection
| process.
|
| To add some further context that helped me understand VAT:
|
| Sales taxes are great, with minimal dead weight loss and
| distortion, but have the downside of encouraging black markets
| since it's easy to avoid reporting final sale transactions.
|
| VATs are designed to be mathematically the same as sales taxes,
| but robust to black markets. The sales tax is captured on the
| manufacturing end, which is much harder to avoid reporting for
| a variety of reasons.
| deeg wrote:
| I am very much an anti Trumper and went into the article with
| some trepidation but I thought it even-handed, if shallow,
| overview until the very end.
|
| The article correctly points out the disaster of Smoot Hawley and
| the effectiveness of GATT. It attributes much of the world-wide
| reduction of poverty on free trade.
|
| I think it's written from the view of traditional free-market
| conservatives unwilling to criticize trump directly.
| watwut wrote:
| They equate VAT with import tax. That is straight up lie. So, I
| would triple check any other claim they have. Someone lying
| that blatantly about something so easy to verify is going to
| lie a lot about stuff that is less known, potentially nuanced
| and harder to verify - like history.
| djeastm wrote:
| And not a reference, footnote or bibliography in sight. Just
| another business journalist with an agenda. No thank you.
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