AskProfWolff: Trump's Tariffs on China

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A patron of Economic Update asks: "Thom Hartman said on his show that the tariffs against China could be good for working people in the U.S. and this might help Trump get re-elected, is this true?"

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[marcietownsend]

Thank you, Professor Wolff, for your simple explanation of complex issues.

[oldschoolman]

Tariffs only hurt the everyday folks just trying to survive, it may look good on paper but in a real world application it falls flat.

[mchammer]

Another easy one to explain for the Master himself.. love these videos keep em coming Proffesor!!

[itzenormous]

Tariffs might have once been the right idea, before nearly ALL manufacturing relocated to China; but now it's a half-measure about 30 years too late.

[milestrollokopolous]

People that demand "American" made products like Harley Davidson, etc., because they're "better" really need to research where these goods are manufactured. -_-

[frankblangeard]

Let's say that something made in China costs $100. And the same thing made in the USA costs $800...

[xxWayoftheSunxx]

Also, we need to consider the fact that products made in the US are drastically more expensive and that people literally are so pressed for money right now (80% of the pop living paycheck to paycheck) that I highly doubt they will buy the more expensive American item at all. I know for myself, I'd be much more likely to just find another product entirely than try and pay for something I know I can't afford. This logic of the Trump admin is so disconnected from the working class. They show their elitism

[DiceBaseballDigest]

But doesn’t all this presuppose that the imported goods being taxed are produced domestically and at a quantity large enough to satisfy the demand of the US consumer? Our manufacturing is limited here and we don’t produce everything; it’s why we buy from China; this is all based on a lot of speculation and tariffs won’t help the economy one bit.

[googlselzmiyinfo]

There's also the problem of price increases on domestic products as well. Generally cheaper imported products increasing in value will be seen by some domestic companies as an opportunity to raise their own prices.

[josephdewuhan]

The more serious problem is that there is no domestic substitute to most Chinese products. If Trump really succeeded in getting some factories back to the US, the cost for making the same product would probably be 200% more than the import product. Another alternative would be to lower the salary of American workers to the level of $3 per hour which is unlikely to happen. Trade war will force China to close many low end factories or move them to places of even lower labor cost. The process had already been going on before the trade war started.

[dude]

You forgot to mention the economic harm done to US consumers by increasing the cost of the purchase from $100 to $110. This spreads the cost to millions while concentrating the benefits to a select few, as is always the case with state interventions in our lives.

[zhuraymond]

I’m living in Beijing, I planed to buy a Lincoln Nautilus, which is manufactured in US, but since this trade war may raise the price of its parts, I have decided to buy a Lexus RX instead.

[kodowdus]

With all due respect, that struck me as a rather superficial exposition, given that tariffs were a large part of federal revenue during much of the history of the U.S.

[davesthinktank]

I hoped you would address Trump's claim that a trade deficit means other countries are stealing from Americans!

[EnzoVecchiaio]

We'll turn to a cheaper item produced in the US? Other than oversized gas-guzzlers, what kind of domestically produced item would that be? What else do we manufacture here anymore? Sloganed T-shirts maybe?

[crouchingwombathiddenquoll]

Australian people can buy a California orange cheaper than one grown here in Australia. Our farmers are going broke due to American protectionism.

[-lv]

Another problem that I see is the tariff simply raises the price on Americans, because most competing products are substantial higher priced than Chinese goods. We need to face facts, the America industrial revolution has past. China is just hitting their stride with their industrial might, and trying to compete with them will be difficult to say the least.

[jccvoor]

The question is can Americans survive without the cheap products for a long term while sustaining high inflation?

[cchui]

Just like in the reality show Apprentice. You are fired is just a posture.

[bjlyon]

Even if a tariff should make products produced in the US more competitive, American consumers will still have to pay higher prices, else a tariff wouldn't have been needed in the first place. Plus, the US doesn't have the infrastructure to produce everything that China produces so Americans would either have to pay higher prices for imported goods or go without.