A place to continue discussions or post stories about economic developments or issues.
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An interesting look at farm subsidies and who benefits from them:
A similar issue was covered in this report on Last Week Tonight with John Oliver:
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I posted this in old place but I think it’s so funny it needs to be here too.
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Belle discusses the stock market, and what we might expect soon:
Belle talks about tariffs…
…and responds to folks who believe GOP talking points from social media:
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smh
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Canadian auto companies have been sounding the alarm about Chinese investments in Mexico and the potential political blowback in the U.S.
“The premier is hitting an important note that’s been making the rounds in Washington for some time,” Flavio Volpe, the head of Canada’s auto-parts lobby, tweeted Tuesday.
“The Chinese are relentless in their strategies to access the North American market and all partners have a share in the responsibility to protect it.”
Part of the blowback from the failure of neo-liberalism to create broadly based economic prosperity is going to be this type of retrenchment. For jurisdictions like ours, the economic prosperity gets a little better spread around. For 
workers, this is going to compound the disaster.
Now, the next question will be: can we trust a word set down on paper by the T—p government?
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Belle discusses moves made by Warren Buffett:
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One of the big problems with tariffs is that they are almost always met with tariffs from the other side. The result is that complex goods - think pacemakers and defibrillators - get hit with tariffs many times as they go from component materials to components to subassemblies to finished goods. Materials from Asia get shipped to the US or EU to be turned into precision components, which in turn get turned into subassemblies back in Asia, then bounced back and forth and so on. So that 0,5% tariff gets applied 5 or six times until it’s 2.5-3%.
Then there is the need to exclude finished goods where there is only one global source for the specialized component or where there is a regulatory restriction on changing suppliers or production methods. That often gets overlooked, but it effectively blocks reshoring production for those goods.
ETA: Oh, and I forgot another trick that can make tariffs work to hurt the tariff-charging country. Let’s say you have a US company selling products with components from China. They compete with a similar company in Japan that also sells products with components from China. The US introduces a 60% tariff on Chinese goods. The US company has to raise prices or find another supplier (if they can). Meanwhile, the Japanese company eats their lunch because their costs basis hasn’t changed - even if they are using the exact same components.
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So, like most things, it’s way more complicated than it seems from the outside. And for every complex problem, there is a simple, obvious solution. It’s wrong, and will make things much worse, but it is simple and obvious. Of course, it’s the solution the idiots will go for.
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The back and forth is
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not usually necessary
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not applicable when your factory is one of those virtual zones (can’t think of the term) where customs are not applied to components “going through” for reexport. What you’re talking about isn’t a thing.
Like I said, the backandforth is already not applicable.
I wasn’t pulling those examples out of my ass. They are real world examples of how tariffs affect supply chains.
We’re also talking about a hypothetical future state where T**** breaks those free trade zones by applying tariffs which then become reciprocated. Remember his first term when he applied tariffs on Canadian aluminum?
Tantalum gets mined in China and tariffs applied when it is imported in bulk to the US, where it is refined and turned into compact, high-performance capacitors. Those capacitors get shipped to the EU where they are incorporated into implantable defibrillators, along with electronic subassemblies from the US assembled with Chinese electronic components, then packaged inside Brazilian sheet titanium. The finished devices are labeled “Made in Germany” and sold globally, but the biggest market is the US.
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Must be nice. Most other companies aren’t vertically-integrated and so the tariffs DO apply, since the international trade isn’t happening within a conglomerate but from independent company to other independent company.
If anything, that kind of vertical integration is extremely rare. Calling it a “strawman” is pure bullshit.
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Not vertically integrated at all. Kind of the opposite Just a special warehouse it goes to.
The paperwork is a bear though. Violations are considered smuggling so it’s not optimal.
Look, if it feels better I think we need to start with 0.5% or less on everything. Then we could just let it stack without the FTZ warehouses. Something has to be done about transoceanic shipping, given the carbon load to the atmosphere and the soot and sulfur around the ports.
The supposed efficiency of global supply chains is leaning on bunker fuel and systemic fragility. I don’t see the upside except to the middlemen selling the same old waste and inefficiency.
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Write if you find work!
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