RE: Could Tariffs Be A Good Thing ?
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Tariffs can work if it's planned well in advance, with well-communicated planned reductions over time, and is for very specific industries.
It could work for, say, encouraging investment in microchip factories from Taiwan to the US... but offering subsidies also works really well.
The Trump tariffs aren't designed to bring manufacturing to the US. If that's what they wanted to do, there is a ton of infrastructure work to do beforehand (like building out transmission lines to power factories) and you'd want to be really stable and predictable so companies would make the billions of dollars of investment... especially since overseas workers get paid a fraction of what US workers get paid.
The chaos behind Trump's tariff is intentional, he's using them as a negotiating tactic against other countries. He's betting that other countries will make deals with him because the US imports so much. He wants other countries to peg their currency to the USD so that the US stays the reserve currency... so that he can devalue it to make US exports more attractive.
Whether other countries trust Trump enough to make new deals with him, or just make deals with each other and avoid the US remains to be seen.
(A side effect of the tariff chaos is that Trump insiders will be able to short the markets, buy up all the assets cheaply and then long the markets when he tells them he'll cancel the tariffs - increasing wealth inequality).
Thanks for your reply - some good points I hadn't considered ! Something else that just occurred to me is that the tariffs will inevitably create a spike in inflation, which could be quite convenient as the US government tries to get a handle on it's insane levels of sovereign debt.
!BBH
Absolutely! Inflation is absolutely going to rise. There's no way around it.
Even goods & services that are wholly American made use materials that are imported, so pretty much everything will rise in price... and... workers will be struggling to make ends meet so they'll be asking for wage raises where possible, so prices will increase more.
If a company somehow has no materials or anything imported, then they'll probably increase their prices too and make a little extra profit.
Inflation is going to get very nasty in the US.
The sovereign debt is an interesting point... what is to stop China, Japan, etc threatening to call in their USD debts as part of their own negotiating tactics?