Imagine a scenario where Trump applies all those tariffs, like the 100% ones against the BRICS countries that have been looking to introduce their own trade currency. Let's say that this effectively forced China out of the US market. But, since the demand for products is still there, the manufacturing returned to the US and lots of jobs were created.
Is it a good thing for the average American?
Trade tariffs aren't another country like China paying the US money to sell into the country, it is a tax on the goods that are sold from that country in the US this means for instance, something that is a hundred dollars today under a 25% tariff would be 125 dollars tomorrow. The logic is that this will mean that less will be bought, and China in this case would sell less, and make less, as they would be making the same per unit, even though the price is 25% higher.
So, who benefits?
Well, the logic is that domestic producers will benefit because they are more attractive price-wise, and can capture more of the market. And of course, governments benefit because they are raising tax revenue. But, if the country in question isn't paying, there is only one group left who covers this cost - consumers. And, even if the production did move back to the US, it would likely mean inferior products for a while at least, but also less efficiency, because there will be less external competition, so they will bloat.
Who were the tariffs meant to punish again?
At this point, it is good to give the reminder that no government cares about what is best for the wellbeing of the citizens that vote them in. They only care about generating wealth into the 0.1% and a little overspill for the rest. The majority of people are there as the livestock to be milked of value, and then slaughtered when no longer producing efficiently enough.
So prices rise, but that is okay, because as production returns to the country, more people will be employed and that means more money being made, right? Quick question, what happens when all the salaries increase? Ah, that's right, prices increase too, because demand increases on all goods and services. And this is the price of everything, like housing and healthcare.
The cheap goods coming into the US from outside the country, are actually subsidising the costs of living. Take them away, and the costs go up significantly. Not only that, if trade barriers were set up, people would end up paying more for less - a situation I haven't really heard of anyone being happy with - except in regards to lingerie.
Trade wars cost consumers.
But at the same time, the economy is very ill and the US is patient zero. As they say, When the US sneezes, the whole world catches a cold. Perhaps it is time to quarantine the US from the global economy. It would be disruptive, but there is a lot of opportunity and therefore value in disruption of industry and economy. Lots of innovation could happen, for instance, in clean tech and healthier technology that is more about wellbeing, than wealthbeing.
You know, the US exports stuff too, with the largest industry being crude oil and petroleum products. Yet, they are also the largest consumer of oil on the plant by far, so it is very possible that the rest of the world can do without their oil, if redistributing the trade routes. Not only this, motor vehicles are their second largest export, but again, the world doesn't necessarily need any of the cars from the US and in many cases, it would be far better off without them - like those stupid pickup trucks that don't fit into normal carparks. As for electric vehicles, there are more options than Tesla now. Interestingly, weapons was mentioned on the list of major exports - but I am pretty sure they are up the top, especially at the moment.
The US is the largest consumer, which makes it the largest economy in the world. It isn't the largest because it is the most awesome producer. All of that US consumption allows the government and the corporations to generate a lot of wealth and power for themselves, that they can then use to manipulate and control other economies. However, what happens if the US consumer market is cut off from the rest of the world? What does it look like if the US became a hermit nation like North Korea?
Too big to fail?
Everything fails. And the things that fail the hardest, are the centralized entities with a lot of control and power, because they affect everyone involved. Every empire has fallen, but the places those empires ruled live on, like the city of Rome, despite the Roman empire falling some 1700 years ago.
Maybe this is what the world needs.
Do you remember when the WEF talked about the "Great Reset" back in 2020? AS s reminder, it had three core parts to it.
1. creating conditions for a stakeholder economy;
2. building in a more resilient, equitable, and sustainable way, utilising environmental, social, and governance (ESG) metrics;
3. and harnessing the innovations of the Fourth Industrial Revolution.
Let's not worry about the WEF, because they are dodgy as fuck, but the core components of the great reset are okay. However, utilising only one of them doesn't work. For a quick catchup, a stakeholder economy is an economic system where business decisions benefit all people and the planet. The second is about building sustainably using data to make the decisions. and the third is about utilising latest tech, like blockchain and AI.
If all three worked together, it would be development using latest data and tech in order to improve human wellbeing.
That is okay.
This breaks away from the "profit at all cost" approach which is looking to always maximize monetary wealth, even if it costs human and environmental health. The US is very good at maximising wealth, and due to this, they are able to control well beyond their borders. But what happens if that same mentality exists largely within the US' own borders only?
Capitalist economics is an endless growth system and will eat until there is nothing left. It will consume itself, like a snake eating its own tail, the ring getting ever smaller, until it closes completely into a monopoly of the most hideous form. That is, if it doesn't get destroyed from the inside first, where the people within the snake rip it apart and then cut off the head.
Let them eat cake.
It is an interesting thought experiment, isn't it? We are so afraid of disrupting our local economy by upsetting the US government, that we enslave ourselves to their will, because Americans buy what the rest of the world make more than others. It is a lucrative market, because there is a high concentration of extreme consumers, compared to the rest of the world, which means more can be made in the US than elsewhere. But it is good to remember, that the economy adjusts as demands shift, or markets are lost. Innovation happens when there are gaps in the market and demand. And, revolutions happen when people are unhappy enough and are willing to do something about it.
Like taxes on tea.
The economy is complicated because of the governance structures in place, and the power struggles and wars they use to impose controls over others. At the core though, it is all pretty simple and just a tracking system for our interactions with each other. Take away those centralised control points and it doesn't get rid of all the issues, but it lowers the impact of failures. At the same time, connect wealth creation possibility to the data of wellbeing creation, and things would start to look pretty good.
Tariffs are not going to be the solution many in the US seem to think they'll be and if they are used too heavy-handedly, they could well and truly backfire and catalyse a resistance that turns into a revolution.
How much punishment before cowardice turns to courage?
Taraz
[ Gen1: Hive ]
