• Banno
    28.6k
    This ignores labour conditions, EH&S regulations, environmental regulations, etc. that are at the basis of the absence of a level playing field.Benkei

    Well, so what. Again, wouldn't you expect half of the world's population to produce half of the stuff and get half of the profits?
  • Benkei
    8.1k
    No, for the reasons outlined I don't expect that. If A produces and sells 100 widgets with a cost base of 10 EUR with a profit margin of 5% and B produces and sells 100 widgets with a cost base of 50 EUR with a profit margin of 5%, then A will have 1/5th of the profit despite producing half of the total number of widgets.
  • Banno
    28.6k
    So what. Why wouldn't you expect half of the world's population to produce half of the stuff and get half of the profits?
  • frank
    17.9k
    Why wouldn't you expect half of the world's population to produce half of the stuff and get half of the profits?Banno

    Why shouldn't we have robots produce everything and use the profits to avert climate change?
  • ChatteringMonkey
    1.5k
    This is the imbalance that needs correcting.
    — Punshhh
    Is it?
    Banno

    The imbalance being talked about is trade-surplus and trade-deficits. Those with a trade-surplus are producing more than what they can sell to their population. They have achieved that by lower wages, lower enviromental standards, lower quality requirements, direct state-aid, a strong dollar, regulatory barriers, taxes and to a lesser extend tarifs... thus undercutting other economies en forcing them to a race to the bottom in many cases.

    Tarifs are probably not going to solve it, but it is a problem for the US and Western countries, and so also for the world economy, that will eventually need some resolution. The US can't just keep loaning to buy up the worlds excess production.

    The more interesting question is what would be a solution that could work?
  • Wayfarer
    25.3k
    It turns out, that after the Laura Loomer meeting, Trump didn’t just fire the head and deputy head of the NSA. He fired four others as well.

    These tarriffs have been dictated by Trump, with neither Congressional nor Senate contribution or approval. There can be no doubt that Trump is now a dictator.
  • Metaphysician Undercover
    14.1k
    Why wouldn't you expect half of the world's population to produce half of the stuff and get half of the profits?Banno

    I think this is a misstatement. It's not those people who are represented as "half of the world's population", who are getting these profits. A company, like Tesla for example, can set up operations in a country like China, and reap huge profits. Those people working those factories, are not getting these profits. There may even be significant tax loopholes due to the international nature of the company. That is the long standing tradition of capitalism.
  • Banno
    28.6k
    Yes, all that.

    But why shouldn't half of the world's population produce half of the stuff and get half of the profits?
  • frank
    17.9k
    Your question presumes some higher law constraining the actions of the entity that's responsible for global trade in the first place. There is no such authority.
  • ChatteringMonkey
    1.5k
    I don't see why that is a relevant question, because it is subordinate to the question of how you make the world-economy work. If you don't have an economy you don't have profits to begin with... But I guess half of zero means everybody gets an equal share.
  • Banno
    28.6k
    Yep. We are being told what is the case, and perhaps not asking what ought be the case.
  • Banno
    28.6k
    Here's another analysis, of the sort perhaps not being seen in the US.

    New modelling reveals full impact of Trump’s ‘Liberation Day’ tariffs – with the US hit hardest

    The nation that suffers the greatest reduction in GDP in both scenarios is the US.

    Curiously, Australia and a few other countries - Brazil, New Zealand - receive a small benefit from the Stupidity of the Orange Emperor. So, thanks.

    Overall, the world economy will decline.

    But to this damage to the US GDP, add the breach in trust...

    ...the fanfare surrounding the announcement masks a much larger gamble. What’s really at stake is trust – America’s long-standing reputation as a stable and predictable destination for global investment. And once that trust is lost, it’s incredibly hard to win back.Trump’s ‘Liberation Day’ tariffs are the highest in decades − an economist explains how that could hurt the US
  • NOS4A2
    10k


    Not enough to offset the tax from his tariffs and the gutting of government programs from DOGE. But hey no taxes on tips... if we're lucky.

    Decreased government spending and tax cuts will certainly offset the cost of tariffs to the American public. Whether they can pass the tax bills is the problem.

    The world is flipping out with retaliatory tariffs but the tariff is a tax on Americans. So it’s odd that they spin around and tax their own citizens, and in a Trumpian way. It’s astounding.
  • Benkei
    8.1k
    Decreased government spending and tax cuts will certainly offset the cost of tariffs to the American public. Whether they can pass the tax bills is the problem.NOS4A2

    What actual tax proposals are being submitted currently? Where can we find it?

    The world is flipping out with retaliatory tariffs but the tariff is a tax on Americans. So it’s odd that they spin around and tax their own citizens, and in a Trumpian way. It’s astounding.NOS4A2

    That clearly lacks nuance. Trump is basically engaged in protectionism. Retaliatory tariffs serve as deterrents by raising the cost of protectionism for the instigating country and signaling strength in trade negotiations. By targeting politically sensitive industries and choosing goods with low domestic disruption, countries can create pressure while shielding their own economy.

    These measures are also seen as proportionate responses that uphold balance in trade relations. However, they come with clear downsides: higher consumer prices, reduced competitiveness and GDP losses on both sides.

    In short: retaliatory tariffs hurt but they’re meant to make protectionism hurt more.
  • Christoffer
    2.4k
    It turns out, that after the Laura Loomer meeting, Trump didn’t just fire the head and deputy head of the NSA. He fired four others as well.

    These tarriffs have been dictated by Trump, with neither Congressional nor Senate contribution or approval. There can be no doubt that Trump is now a dictator.
    Wayfarer

    If so, then why don't people do anything about it? Why is everyone just accepting that all of this is going on? That Trump does what he does is nothing strange, what is strange is the total apathy and inaction of others. If he is indeed breaking against the constitution and ignore rules and regulations, then do something about it.
  • Punshhh
    3.2k
    Wouldn't you expect half of the world's population to produce half of the stuff and get half of the profits?
    Yes, in an ideal world, but it is not an ideal world.
    Anyway I was talking about the imbalance that has produced the poor economic circumstances in Western countries. There are numerous other factors, but the largest one is cheap labour and remarkable efficiencies in the East undercutting labour in the West.
  • Joshs
    6.4k


    If so, then why don't people do anything about it? Why is everyone just accepting that all of this is going onChristoffer

    If you live in the U.S. , why don’t you do something? You can start by joining the nationwide protests planned for tomorrow.
    https://handsoff2025.com/
  • Joshs
    6.4k
    Yesterday was the beginning of the end for Trump. His displaying of that ridiculous chatgpt-generated chart in the Rose Garden was the moment he jumped the shark. This what’s going to happen next:

    The U.S. will fall into a deep and prolonged recession which will put many out of work, and a steep bear market will wipe out retirement portfolios. Heightened inflation will add insult to injury. Those Trump voters who thought they were getting a free-market champion will be out for blood. Congressional Republicans will remove their heads from Trump’s butt as they realize they have more to fear from their constituents than from displeasing Great Leader. By the time we get to the mid-terms, the country will look like something from a Cormac McCarthy dystopian wasteland, which will return some power to the Democrats. In 4 years, the MAGA brand will a toxic , shrunken vestige of what it once was.
  • frank
    17.9k

    Have you spoken with an expert in economics or geopolitics about these predictions? There are a number of educated opinions on Reddit, although the moderator on AskEconomics just locked the thread because it was getting too rambunctious.
  • Joshs
    6.4k
    ↪Joshs
    Have you spoken with an expert in economics or geopolitics about these predictions? There are a number of educated opinions on Reddit, although the moderator on AskEconomics just locked the thread because it was getting too rambunctious.
    frank

    I have been obsessively reading everything I can get my hands on by economists, both liberal and conservative. None of them are foolish enough to ‘declare’ a recession before it begins, but there is a consensus that what is happening now is a profound shock to the global economy the likes of which hasn’t been seen in 95 years.
  • praxis
    6.9k
    Some believe the U.S. is strategically positioned to leverage tariff-induced chaos in order to push for a "Mar-a-Lago Accord" that could simultaneously weaken the dollar and preserve its status as the world's reserve currency, ultimately leading to re-industrialization. See something like:

    https://www.nordea.com/en/news/mar-a-lago-accord-explained-a-new-era-for-the-dollar

    Seems like a good trick if you could pull it off. Any nation that kissed the ring would become a vassal state.
  • Joshs
    6.4k


    Some believe the U.S. is strategically positioned to leverage tariff-induced chaos in order to push for a "Mar-a-Lago Accord" that could simultaneously weaken the dollar and preserve its status as the world's reserve currency, ultimately leading to re-industrializationpraxis

    The article you linked to is called ‘sane-washing’, trying to to turn an utterly incoherent attempt to rationalize Trump’s
    logic-free actions into a coherent plan.

    https://www.project-syndicate.org/commentary/trump-tariffs-threats-incentive-for-canada-mexico-and-everyone-else-to-break-free-by-j-bradford-delong-2025-03

    https://www.washingtonpost.com/business/2025/03/25/trump-trade-wars-mar-a-lago-accord/
  • frank
    17.9k
    I have been obsessively reading everything I can get my hands on by economists, both liberal and conservative. None of them are foolish enough to ‘declare’ a recession before it begins, but there is a consensus that what is happening now is a profound shock to the global economy the likes of which hasn’t been seen in 95 years.Joshs

    I guess I'm looking forward to seeing how it works out. Crises can be good things, but inviting crisis is not something a wise person would do.

    That said, one expert opinion is that recession probably wouldn't be caused directly by the tariffs, but rather by the fear inspired by them. If people put off buying durable goods out of fear, that can actually bring on a recession.

    Do check out Reddit if you're looking to talk to a professional or an academic. They're usually friendly and generous with explanations.
  • praxis
    6.9k


    I just glanced the article and posted a link as a reference for the Mar-a-Lago accord. Was wondering what others thought about it.

    It seems like if that is the plan the Trump administration would be doing other things to support the industrial sector. Is that also happening?
  • Joshs
    6.4k


    That said, one expert opinion is that recession probably wouldn't be caused directly by the tariffs, but rather by the fear inspired by themfrank

    It’s not just fear. It’s impossible for a company to invest in expansion if there isn’t predictability over a 5 year horizon, which is how long it takes to build new plants, etc. Trump continually changes his mind about tariffs, wanting to subject every country to the prospect of renegotiation based on his whim. As a result, businesses are suffering from paralysis right now, which leads to a freeze on hiring and other effects which can lead to recession.
  • frank
    17.9k
    It’s impossible for a company to invest in expansion if there isn’t predictability over a 5 year horizonJoshs

    Black swan events happen often enough that every company takes risks to expand. But if anything, a lot of American companies should look for an increase in demand resulting from the tariffs. Agriculture and luxury goods are the ones likely to be hurting.
  • Joshs
    6.4k


    Black swan events happen often enough that every company takes risks to expand. But if anything, a lot of American companies should look for an increase in demand resulting from the tariffs.frank

    Natural disasters and cyclical recessions are one thing, but businesses don’t expect Black Swan events to be caused by the policy whims of a dictator, which is why there is little urge to invest in authoritarian regimes where policy changes on a dime.
    There may be a temporary increase in demand, but in the longer term American companies will not be able to compete with foreign companies who re-assemble cheaper supply chains excluding the U.S.
  • frank
    17.9k
    but businesses don’t expect Black Swan events to be caused by the policy whims of a dictator, which is why there is little urge to invest in authoritarian regimes where policy changes on a dime.Joshs

    Money is blind. It will happily take up with dictators when the bottom line says it should.

    There may be a temporary increase in demand, but in the longer term American companies will not be able to compete with foreign companies who re-assemble cheaper supply chains excluding the U.S.Joshs

    The US has a pretty big market of its own. It's well versed in automated manufacturing. It has abundant natural resources and a big ass military to protect its shores.

    I'm not predicting rosy days, I'm just saying an emotionally neutral viewpoint is not predicting disaster. Maybe a recession.
  • Joshs
    6.4k


    I'm not predicting rosy days, I'm just saying an emotionally neutral viewpoint is not predicting disaster. Maybe a recession.frank

    Voters need to feel like it’s a disaster for their quality of life. That’s the only way to be rid of Trump.
  • frank
    17.9k
    Voters need to feel like it’s a disaster. That’s the only way to be rid of Trump.Joshs

    I developed a full blown case of Stockholm syndrome when I realized Vance will be elected next. I advise you do the same.
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