Genuine question for those smarter than me: who exactly are these tit for tat tariff wars going to benefit.

1) Not the American consumer who’ll be paying higher prices.

2) Not the American manufacturers whose products will be taxed overseas till they become non-competitive.

3) Not the American businesses who suffer from a self inflicted recession

4) Not the American worker who lose their jobs

5) America makes enemies out of allies and loses soft power. China and Russia take advantage.

Trump and his supporters don’t understand that the reason we have a trade deficit with other countries is not because they’re fleecing us - it’s because we’re richer than them.

The American consumer can afford to buy more of everyone else’s stuff. If we were poorer, then everyone could buy our stuff and we’d have a trade surplus.

Tariffs on other countries make us unable to buy as much stuff - oil, gas and maple syrup from Canada, cars and avocados from Mexico, appliances and iPhones from China (simplified). So consumers in the US suffers.

Meanwhile reciprocal tariffs from those countries on us make our already quite-expensive exports more expensive. So manufacturing in the US suffers.

Most of the trade between US/Mexico/Canada is either 1) petroleum or 2) automobiles including parts/assemblies. The tariffs are going to crush the traditional US automakers. I wonder if there's someone in the current administration who wants to hurt traditional US automakers, who isn't hurt by rising oil/gas prices, and who doesn't have operations in Mexico/Canada but has a big operation in China that will get lower tariffs? Anyone come to mind?

I’m shocked that people at this level miss the entire point of tariffs. They’re leverage for negotiations.

Look at the EU and tariffs as leverage for LNG purchases. Mexico today.

Tariffs aren’t written in stone, they’re a hammer for negotiations.

I’m guessing, but I also believe that Trump thinks that if countries don’t fall in line fine. Prior to 1913 when income tax started, the entire country was funded by tariffs. Trump likely believes that tariffs will counter his tax reductions.

Sure but don’t underestimate the damage done to important trading relationships with these tactics. Why should anyone trust US as a partner if trade agreements and 150 years of tight integration means nothing. This zero sum approach to negotiating is doing huge damage that will be felt for decades even if it’s subtle

Nobody wins in this tariff wars.

He claims the goal is to stop illegal immigration and fentanyl imports but Canada is responsible for 1% of each of those. This definitely gives China a window to improve relationships globally.

Whoever wins is the one who is willing to subject their people to pain for the longest in order to win “concessions.” Trump doesn’t care about anyone so I back him there.

The only winner is the ego of the orange man. For the rest, it could trigger a global recession.

The idea is that it hurts China more than it hurts the US. Which it does.

The Canadian and Mexican tariffs are bargaining chips I believe and will be wound back over time.

Exactly what MD2 said. Do people really not understand this? It’s leverage for negotiations (as shown definitively yesterday), not tariffs as the permanent and desired end game.

Corporate profits in the long term. Get the population used to higher prices, wait for tariffs to go away in 4 years, bank the savings without reducing prices.

(Contd.) Really trying to understand what the end game here is?

I understand targeted sanctions against China for abusive subsidies but I don’t get the blanket tariffs

Unless long term more foreign FDI here, then could lead to jobs (or more likely more automation), further driving down manufacturing costs.

Let’s say I make shirts in Mexico for $4 each. I assume the cost to make that in the US is more than 25% fore than making it in Mexico. Why wouldn’t I move to Colombia or Costa Rica or Philippines. Unless he tariffs the entire world, this isn’t going to move many jobs back to the US. Also if the tariff only lasts 90 days for even 4 years, is it worth changing manufacturing facilities. Maybe for something simple like a shirt it would be worth changing but what about something more complex like appliances.

No one wins in a trade war in general but a drastic move like what Trump did could have some small benefits

For example - we get almost all fruits and vegetables all year in the supermarkets without a big change in price per season . That's because we import them from elsewhere. This is not the scenario in many other countries where people are happy to eat what's available seasonally. If America goes back to that model - we have a bit to gain.

Bringing manufacturing back to US is largely not going to happen in the medium period of time anyway. Advanced plants are already automated heavily and if we have to bring them to homeland, to contain the variable cost we will automate even more. On top of that - it's not easy to redesign supply chains.

If Trump presses the issue for his whole tenure and his successor does too - the world will find a new equilibrium where US will still be the unipolar power. But I doubt people will vote for GOP in legislature elections if unemployment and inflation go up.

Orange man definitely opened up Pandora's box

This is really an example of someone put an ear worm on his ear on Tariffs - he went big without, shockingly, looking at the historical impacts of trade wars hence it’s a stupid bloody idea which will hurt the consumer most, drive inflation, reduce growth to mention a few ain points

Good summary. Best case it’s all show but downside risk is real

Some great replies. Thanks for the discussion.

So it looks like Canada and Mexico tariffs were put on hold for a month today giving credence to the “negotiating tactic” theory. But the question remains - what do we want Canada to do that would appease US?

Lastly, if China is the big bad guy, why only 10% for them?

Re: the comment on manufacturing jobs not coming back. Perhaps all this is to just look tough to that voter base.

I take your tariffs and raise you the US occupying the Gaza Strip 🤦