Well, yeah. Strategic tariffs can serve a positive function. Spraying them randomly does not.
I'm not even convinced that lowering our trade deficit with China is necessarily beneficial. But we have lowered our overall trade deficit, and that is probably good news. Except I'm a bit suspicious of that as well -- how much of it was just deciding not to import anything at all due to tariff uncertainty?
Which, as the article points out, is actually kinda perplexing. Inflation is still too high, but somehow it hasn't increased all that much despite policies designed to increase consumer prices. The article suggests it's being absorbed by the importers and exporters rather than passed on to consumers, which doesn't sound stable to me.
Something isn't adding up. And we'll see, though it's impossible to predict when. The economy can take years to show effects. It's actually kinda remarkable that the tariffs have had such an immediate effect on trade deficits.
JohnFen•3w ago
> But we have lowered our overall trade deficit, and that is probably good news.
That's neither good nor bad news. A trade deficit is not a real deficit and is not inherently problematic. I have a trade deficit with nearly every business I buy things from.
jfengel•3w ago
You presumably don't run an overall trade deficit. You have a positive balance of trade with your employer, who pays you money for your services. That is probably slightly higher than the total trade deficit you have with your purchases.
You may even have saved up enough that you could retire, and run a trade deficit for the rest of your life. Which would be fine, except that countries don't retire. They need to more or less balance their net trades, over a period of decades if not every year.
JohnFen•3w ago
> You presumably don't run an overall trade deficit.
True. But by that logic, neither does the US.
bediger4000•3w ago
The article suggests it's being absorbed by the importers and exporters rather than passed on to consumers
I've been told all my life that every jot and tittle of cost increase to firms will be passed on to The Consumers. What's different now, or was I being lied to?
willmarch•3w ago
It's a short-term strategy by businesses to try to weather the uncertainties around tariffs without losing customers, but absorbing the losses can't go on indefinitely and they absolutely will be passed on to consumers in the end.
jfengel•3w ago
I'm not even convinced that lowering our trade deficit with China is necessarily beneficial. But we have lowered our overall trade deficit, and that is probably good news. Except I'm a bit suspicious of that as well -- how much of it was just deciding not to import anything at all due to tariff uncertainty?
Which, as the article points out, is actually kinda perplexing. Inflation is still too high, but somehow it hasn't increased all that much despite policies designed to increase consumer prices. The article suggests it's being absorbed by the importers and exporters rather than passed on to consumers, which doesn't sound stable to me.
Something isn't adding up. And we'll see, though it's impossible to predict when. The economy can take years to show effects. It's actually kinda remarkable that the tariffs have had such an immediate effect on trade deficits.
JohnFen•3w ago
That's neither good nor bad news. A trade deficit is not a real deficit and is not inherently problematic. I have a trade deficit with nearly every business I buy things from.
jfengel•3w ago
You may even have saved up enough that you could retire, and run a trade deficit for the rest of your life. Which would be fine, except that countries don't retire. They need to more or less balance their net trades, over a period of decades if not every year.
JohnFen•3w ago
True. But by that logic, neither does the US.
bediger4000•3w ago
I've been told all my life that every jot and tittle of cost increase to firms will be passed on to The Consumers. What's different now, or was I being lied to?
willmarch•3w ago