Yes, I'm sure Trump expects the world to come cowering for his mercy. In the meantime, the damage to the U.S. and world economy, to world order and to faith in the safety of U.S. markets (that made the dollar the world's reserve currency) may be irreparable. - ThreadSky

chitobandito.bsky.social • 72 days ago

Yes, I'm sure Trump expects the world to come cowering for his mercy. In the meantime, the damage to the U.S. and world economy, to world order and to faith in the safety of U.S. markets (that made the dollar the world's reserve currency) may be irreparable.

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bracy.dev•72 days ago

There are evidence that directly correlate low tariff rates with a decline in U.S. trade balance (image pulled from Wikipedia)

I believe the ostensible goal of the current administration is to re-shore a lot of industrial capacity that China provides to increase domestic production and job growth

chitobandito.bsky.social•72 days ago

This admin views trade balance as a zero sum game with a winner and a loser. In fact, in U.S. we are bigger consumers than most countries, so we import more goods. So the trade imbalance doesn't indicate that we're being cheated, it indicates that we are more prosperous.

bracy.dev•72 days ago

And fwiw, in 2022 the Economic Policy Institute contended that "Tariff increases did not cause inflation, and their removal would undermine domestic supply chains"

The EPI is heavily backed by a plethora of labor unions, including the United Auto Workers, United Steel workers.

art256.bsky.social•72 days ago

My question for you: who do you think will work on these factories (assuming us is able to build them)? US currently at 4.1% unemployment. There’s just not enough people to work on those factories/land.

bracy.dev•72 days ago

Supply/demand take a while to catch up but economically an imbalance in one always results in a movement in the other.

In the short term, wages would rise as labor becomes a scarcity, while longer term I believe there would be openings for an increased robotics/automation sector to play a big role.

bracy.dev•72 days ago

The primary reason China is able to export and ship items from across the world at a lower cost than domestic production is a combination of their 996 (12hr, 6 day/wk) working program, which is arguably an exploitation of their working class. It's not due to economic specialization or advantage.

art256.bsky.social•72 days ago

I agree. More than that, China subsidizes American consumers. That comes with a cost of deindustrialization in US. But a normal way to get around that is to have diversified allies that can supply various goods. Not something the current admin is doing…

art256.bsky.social•72 days ago

Yea, I thought about automation. And this is the only thing that is a wildcard here. So, in an imaginary scenario where we are able to automate majority of the labor, we’re good.
But how realistic is that?
It will take 5-7 years to build a new factory. It is far beyond the Trump term. Realistically,

art256.bsky.social•72 days ago

The tariffs will be cancelled by the next admin. And in reality we will have 4 years of misery. Don’t you agree with that?

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