I've never thought America could ever experience lack of goods. "Deficit" was a very well known term during the Soviet times and it was one of the reasons the Soviet Union collapsed. If Trump wants to destroy the United States, he is acting very efficiently by repeating the same mistake the Soviet leaders were making.
How are tariffs (and now basically significant tariffs on only China now) in any way similar to a centrally planned economy? Tariffs have existed in every country capable of enforcing them for all of human history, and they existed in the US prior to Trump, and will continue to exist after Trump. Even countries we have supposed "free trade" agreements with still get tariffed (and impose tariffs on our goods).
They're taxing certain things and then carving out exemptions for other things. Personal favors and political ideology driving the economy instead of market forces.
That's how "free trade" agreements have worked for decades too. Look at the specific categories Canada puts protective tariffs on despite our trade agreements with them (in particular their agricultural goods which have quotas after which massive tariffs are applied). Governments worldwide have been subsidizing and otherwise favoring specific companies and industries for as long as civilization has existed. I don't like it when Trump does it too, but I don't understand the people acting like this is somehow a new and unprecedented thing.
>I don't like it when Trump does it too, but I don't understand the people acting like this is somehow a new and unprecedented thing.
Sans near-total embargoes on goods from a country, have we ever imposed sweeping tariffs of 145% on all goods coming from one of our most-imported trade partners?
No, no we have not. Certain tariffs were very targeted for specific reasons, you are correct. But those were not blanket-applied haphazardly at such high levels. Hence, "unprecedented".
Those are broader economic embargoes, not tariffs. A lot more is involved in that situation and it's much more nuanced than what's happening with tariffs today. Hence my comment, "sans near-total embargoes on a country". Tariffs are taxes on goods allowed to enter the country - embargoes are a total elimination of trade (meaning we can't receive and we can't ship to) with a country.
Many counties manage agriculture by having quotas for farm products and some price regulation. If you don't do that in good years the crop price plummets, farmers go broke and then in poor years there are shortages because of that.
Canada or the EU doing that and sorting their own food isn't the huge conspiracy against America that Trump seems to think it is.
Others have responded more eloquently than I to this, so I won't. All I will say is I never equated tariffs with central planning, but I can see how from context you drew that conclusion. Tariffs aren't the only thing the republicans are doing under Trump, and taken as a whole the current administration smells – to me at least – a lot more politburo than the free trade champions of yesteryear. (Well, more like decade at this point.)
>Tariffs have existed in every country capable of enforcing them for all of human history, and they existed in the US prior to Trump, and will continue to exist after Trump. Even countries we have supposed "free trade" agreements with still get tariffed (and impose tariffs on our goods).
To what degree relative to what we're seeing now, though?
Much, much more than what we're seeing now, historically. Including outright banning all or nearly all foreign trade. See Japan under the Tokugawa Shogunate for one of the more extreme examples.
He cares about it insofar as it’s a tool he can use and abuse to make money. Obviously he has no interest in or understanding of blockchains.
When the stock market (and confidence in the U.S.) falls, people typically flock to gold and bonds. If the U.S. is seen as unstable and at risk of not making debt payments, bonds are a bad place to move money into. That leaves gold (and to a lesser extent foreign stock markets).
With crypto though- that’s a con man’s wet dream. Volatile. No government oversight. Crypto pump and dumps are literally legal (though come close to being fraud, as people like Du Kwon have learned).
well the goods are there, its not like they stop flowing or something just need 30% tax on top of it
edit: ok, I didnt know that bussiness stop buying, but they must buy somethings in the future right either buy from other tax exempt or buy thing with add value tax
Supply and demand shocks echo for a while. How long did it take for toilet paper to be stocked normally during the pandemic in the US?
Edit to add:
Better example for me was the semiconductor industry. It was hard for years to design hardware because key ICs would disappear. You needed to buy the ICs the moment you thought you might use them, a form of stockpiling that had no winner - it's very expensive to buy stock that you potentially never use, and it deprives the rest of the market simultaneously.
They absolutely do. Tarrifs are paid at point of import not point of sale, and who the heck wants to put something on a container ship for a month of transit not knowing if you can even afford the customs charges at the end before you sell it, or won't take a loss because surprise a week after paying tarrifs are now cancelled.
Underrated comment. People don’t understand global trade and logistics (understandably so- it’s all very complicated and there are multiple middlemen involved between the factory in China and the company in the U.S. buying the goods to resell - they of course being yet another middleman).
Assuming it's not wildly different over there in the US, goods must be declared when the goods is at the border if you wish to use or transfer the goods, and tariffs must be paid. For a ship this will be the port, at least that's how it is here.
Alternatively you can put the goods in a bonded warehouse[1], and leave it there until you wish to use it or transfer it to someone else. It's not free, but it allows you to postpone the declaration, and hence payment of tariffs, until you take the goods out of the bonded warehouse.
Typically a bonded warehouse requires physical security, paperwork and a bank guarantee to prevent goods disappearing, so it isn't free to keep goods there.
That's the same thing. When you want to import goods, you provide information to the customs officials at the location those goods enter the country saying:
* Here's what I'm importing
* Here's where I'm importing it from
* Here's the value
Then you pay a bill based on that value and the tariff, and they let your goods clear customs and get loaded onto a truck to go wherever you want them to go in the US.
If you're shipping something by boat (like most goods), the "point of import" is the port.
Note: this is all actually much more complicated and individualized than I described because of networks of middlemen, logistics companies, distributors, manufacturers and lawyers.
The goods are not there. Shipping volumes from China to the US are down I think by 40% right now, and shipping companies are outright canceling berthing in US ports right now due to the low shipping flows.
We're about 1 or 2 months right now from some goods not being available in the US at any price. If people lost their mind over that happening during COVID, well, this is going to be just as bad.
There’s a bill[1] sitting in the House of Representatives that would abolish the IRS and replace all tax code with a consumption tax. In typical fashion they’ve written it so it seems like the flat consumption tax will be something like 24% but it’s actually 30% (they word it as something like “24% of the total is tax” which really means “the tax is 30%”).
I’m curious when they plan on deploying this. It specifies a 3-year schedule so you think okay is this to be signed into law in 2025 so that the IRS is abolished during the next election year, or are they going to wait a year or two and have the IRS abolishment only “trigger” if Republicans continue to control the government beyond 2028? Or perhaps they will push it through if/when Democrats retake some or all of Congress in 2026?
One thing’s for sure though, the 1% will use cryptocurrency to dodge this consumption tax and it will (as usual) disproportionately affect the lower and middle classes, who aren’t as savvy in tax fraud/evasion/“loopholes”.
> FairTax is a fixed rate sales tax proposal introduced as bill H.R. 25 in the United States Congress every year since 2005.
An R-GA sponsors it every year and it never gets further than "introduced", with fewer co-sponsors on it now than ever AFAIK. Technically, if it did get into law, it could create greater chaos, it has a provision to terminate itself if the 16th Amendment isn't repealed, so enough incompetence could eliminate taxes entirely.
Either a Democratic Congress or president would prevent such a bill from passing. Sales taxes are inherently flat, which to them means regressive.
The idea that we would give up progressive taxes is pretty antithetical to their platform, given how many campaign on raising taxes on high income earners.
Given how slow even a single-party-controlled Congress is, I sincerely doubt such a bill would ever see the light of day.
> Either a Democratic Congress or president would prevent such a bill from passing
The Senate still has the filibuster, as well. This will not pass in the current Congress either.
The filibuster rule is vulnerable, but I don't think there's enough support from Senate Republicans to do so. If I'm wrong, it would be an escalation which would add more fuel to the 2026 fire.
I’m always hazy on how exactly that works. I know some bills require a supermajority (66) and I know filibuster can block some bills with fewer votes than that… but it doesn’t always work, because the 2017 tax reform bill was passed.
Also, I remember there being talk when the DINOs were voting with the Republicans of ending the filibuster…. So… I mean the current admin just ignores rules, why wouldn’t this be the Congress that ends the filibuster? This could be their one shot to implement the “Final Solution” (Project 2025).
I believe very few votes require a supermajority in the Senate -- impeachment votes definitely do, and also votes to override a Presidential veto.
All ordinary votes just require a simple majority, but the filibuster is sort of a special-case that can be invoked any time, requiring 60 votes to bring the vote to the table at all.
You're right -- if this Senate abolishes the filibuster, it will likely be for "budget votes only" or somesuch. The Senate isn't quite as full of short-term thinkers as the House is though. I don't think the Senate Rs will go for it, because it's the only thing stopping a future D majority from doing what majorities do, and smart Rs know they are a minority party under ordinary circumstances.
But if I'm wrong, it will mean that the Senate Rs are going for broke on a short-term play, and may be discounting future risks. That would be the behaviour of the very desperate, or of the very powerful.
If the Senate Rs believe they are one of those two things -- either one -- the consequences could be enormous.
This is all very dramatic of course. Normally I'd dismiss such ideas. But the temperature is very high right now, and this time might actually be different, this time...
It’s optimistic of you to think we’ll have a Democratic anything for the foreseeable future. In 2016 we could say “well a lot of people are tired of the status quo” but after 2024… Nah, this what America wants. This is what the people who couldn’t bother to vote, voted for when they chose to stay home.
Given that the lower and middle classes pay a disproportionate amount of income tax, with no mechanisms to avoid a tax before the paycheque even arrives, I think this is a net win.
Given that the lower and middle classes pay a disproportionate amount of income tax…
Not only is that not a “given”, I’d argue that you’re completely wrong. One doesn’t have to look very hard to find out how much income tax is paid by lower class: effectively zero.
A consumption tax would affect the lower class more than the 1% for two main reasons:
1. Non-discretionary spending as a percentage of income is much larger for the lower (and middle) classes, who spend 100% or near 100% of their income on “essentials” like food and shelter.
2. The tax itself is obscene- 30% or thereabouts. As others have pointed out, the poorest of the poor don’t pay any income tax, and many essentials (like unprepared food) are not currently taxed. I don’t recall if the bill would add a tax on unprepared food. I wouldn’t be surprised if it does.
There are about 10 that still charge taxes on groceries, but are considering phasing them out.
Shelter is always tax exempt. There is no tax on rent. Mortgages, if anything, come with a tax rebate, as amounts paid can be claimed against collected income taxes.
You did not read your own linked page: food that are already heated-up and ready to eat are taxable, but most foods are not. Whether it is a whole food or a processed food products with many ingredients does not matter. Also, NY taxes soft drinks and other unhealthy foods (but most states do not).
Also, you are wrong when you wrote, "Given that the lower and middle classes pay a disproportionate amount of income tax".
In fact, most Americans who earn under about $40,000 a year pay no federal income tax. I believe the vehicle that effects this outcome is mainly the earned income tax credit.
- Clothes
- Shoes
- Plumber/Electrician/Handyman
- School supplies (though some states have tax holidays)
- Gas/public transit
- Car maintenance
- Utility bills
Have you seen the news at the ports? less containers coming in. the goods will not necessarily keep flowing if the price goes up and their margin goes away
The tax is 145% on Chinese imports. To preserve relative margins companies need to increase prices by 145%. Obviously, you are not going to buy the extra yard camera that was 100 dollars last week but will soon be 250.
The tariffs are effectively a 30-150% price increase on all retail products, along with some marginal price increase on all manufactured goods. Given the nearly assured recession, it is unclear how willing American consumers and corporations are to eat this tax. Some businesses will take it out of the margin, others will pass it along.
> To preserve relative margins companies need to increase prices by 145%.
Not true. If you have watched Shark Tank you have seen that products cost, as an example, $6 landed, but retail for $24. Tariffs are 145% of $6, so around $9. So they only have to increate the retail price from $24 to $33 to keep the same profit margin. In this example that's a 37% increase, not 145%.
_relative_ margins as in percent, $6 with 145% tariff is $14.7 which means to maintain the 75% margin you'd have to jack the price up to nearly $60. I agree that you don't necessarily need a 75% margin to do business, but it can't stay flat either because you're floating more than double the money on inventory. In reality prices for cheap crap with huge margins will probably only go up let's say 50% but items that have thin margins will definitely more than double.
And tariffs are collected at arrival, so companies can be obligated to pay double to receive goods they already purchased when huge tariffs suddenly appear. That can mean spending a significant amount of extra money on goods they may not be able to sell profitability.
