The vast majority of people talking about how big university endowments are don't care what the rules are on it. It's not that people don't know how endowments work; they just find the rules to be bullshit to justify universities continuing the status quo.
The number 39 refers to the 39% tariff rate on Switzerland.
Kind of insane that the American President just made up a lie that tariffs are paid by foreign countries and rest of the administration just went along with it. It flies in the face of any common sense.
It's even worse than that. Their argument against corporate income taxes is that any tax imposed on a corporation is just passed on to consumers.
Hard to see why companies would pass on a government imposed tax if it is an income tax but not a tariff.
If anything you'd expect it to be the other way around, because an income tax allows deductions for much of the cost of making that income which generally means the amount of tax is lower in times when the business is not making much money, whereas a tariff is on the cost if the businesses imports which can remain high even in times where the business is not making money.
Both are passed to consumers... the difference is a tariff is a point for international negotiation, there are competing options to a tariffed product, and it's a relativistic approach.
The U.S. has lost so much in terms of even being able to produce anything that it's in a weak position not just in terms of trade, but in domestic security in and of itself. The lesson from COVID should be that ensuring domestic production of at least SOME of everything that CAN be produced domestically in the US should be ensured to exist.
As examples... IMO, all prescription medications/devices should require dual sourcing and at least 50% domestic production. This ensures actual patent licensing as well as being able to ramp up from 50% in case of a need (war/pandemic). It's nearly impossible to ramp up from 0, but easy to ramp up from 50%. This can/should be extended to essential infrastructure, communications and technologies.
Most countries don't have the size/scale/scope to do this... the U.S. and a handful of other countries are and should take advantage of that and ensure it for their own critical security.
I don't say any of this from an isolationist PoV, I think trade is important... I think diplomacy is important... I just feel that a level of domestic security in terms of self-reliance at a certain level is more important.
I guess most voting Americans didn't need much to throw the country's century long superpower streak down the toilet. Or worse yet, just pretend that both sides are equally bad and not use their voice that many died to give them.
So why would the Swiss company care then? Care so much to make a special watch? It’s no skin off their back, they don’t pay the tariff right? Americans are the only ones affected right?
It obviously affects Swiss companies too, because their products become more expensive to American consumers, which makes it more unlikely they will buy them. No one said Americans are the only ones affected. But it’s Americans that pay the tariffs.
That's way too simplistic. When a tariff raises the price of competition, everyone else raises their prices too. It just increases costs to consumers, and raises government revenues.
You have to look at the elasticity of demand across every component to determine the correct ratio.
What i can tell you, as a GSM, from a CapEx perspective, sensors, motors, cables, and batterys made in the US just got significantly more competitive. It was already trending that way due to JIT demands and rapid factory buildouts, but the tarrifs were a huge marketing boon for american supply chains.
And i can tell you for the first time as someone in the supply chain business i can confidently ask the question "Should we be buying this bolt from Insert country here?".
It's almost like i've been given the authority to source products from the United States even if we are paying some percent higher.
You'd be correct in an economy not tumbling towards recesssion due to said tarrifs being universal, and not just focusing on specific industries to make american ones more competitive.
As it is, American spending is way down and hurts everyone. A small stock crash (the thing propping the US up as of now) would truly hit with a 2nd depression at this point.
The very short of it is that a lot of bus bull market is propped up by AI. To such an extent that the top 10 companies of the S&P 500 have half the value right now.
Combine this knowledge with some maneuvers as of late that reflect the Dotcom bubble and we're rife for a crash that will take the world economy with it once the bubble pops. Its a bull asset market right now, but its certainly not a healthy one
And that's just the economic side of it.When you consider the history of such extreme wealth inequality, ignoring rising unemployment and disresr among the working class can get ugly quickly. That can also go down an expensive route if taken to the extreme.
These companies are absolutely money printing machines at the scale we have never seen.
Some of the individual standout figures:
Apple’s trailing 12-month net income is around US$99 billion.
Microsoft’s trailing 12-month net income is about US$101 billion.
Alphabet (Google) is estimated around US$111 billion net income.
On revenue, one list shows: Amazon ~$670 billion, Apple ~$408 billion, Alphabet ~$371 billion, Microsoft ~$281.7 billion.
Have you ever read the soverign individual? He kinda predicted this. Tech companies will rise into unfathomably rich while the countries inability to tax foreign revenues will lead to the collapse of the nationstate.
This assumes there are competitive domestic alternatives. For the vast majority of tariffed products, there are not.
For one example, the domestic PCB manufacturing industry is a joke. Even with tariffs, China is literally ten times cheaper than domestic. I recently sent an order to both, and the China fab had my boards in production inside a week. The US fab took three weeks to give us a quote, which was five times higher than China for half the quantity, in twice the time.
The US is not independent. We don't have a domestic industry competing on the global market. We make very little and rely very heavily on imports. What we do make is heinously expensive and not any higher quality than the much cheaper imported goods.
The current trade war also doesn't spur domestic industry growth because all the materials and equipment to build out industry.... is tariffed. Plus the tariffs change too frequently for any sane person to make any kind of long term investment.
Industry will wait to scale until economic forces stabilize.
I don't know how this tariff stuff works, so for my own understanding, how come countries retaliate to US tariffs by imposing retaliatory tariffs? Are they punishing their own nationals?
In a sense you can think of it that way, as a Canadian we counter-tariff the US and that can be considered punishing us; however the US is only one country and it encouraged more free trade with every other one of our trading partners so in a game theory sense it's affecting Canadian trade negatively with one country and affecting US trade negatively with you know.. every country.
Exactly right. There are trade deals forming between countries that in unprecedented ways to avoid dealing with the constantly changing tariffs while one country says they'll take their ball and play alone.
But the US is the bigger country just next to it, also the most practical to trade with. Trading with country further appart means less efficient in transport. Is it not still self inflicted harm?
The Econ 101 view would say yes, note most countries haven't imposed 1:1 retaliatory tariffs.
But economic considerations are not the only ones. Opposition to the American Revolution is a fundamental theme in Canadian history. People shouldn't be surprised when Canada acts accordingly.
What options do Canadians have? Deal with the wildly capricious economic policies of the US president, or go seeking other, more stable opportunities elsewhere? Almost all countertariffs we have in place are targeted as opposed to the sweeping tariffs Trump is implementing.
They could seek other opportunities elsewhere without adding tariff themselves: continue to import from the US and other countries like before. They may indeed export less to the US due to reduced demand from the US, but reciprocating the tariff won't help with that.
It's not practical when Trump sees a TV ad that enrages him and then cancels all negotiations, how are Canadian leaders supposed to proceed? There's no good faith whatsoever from him.
In the same way that Trump is punishing Americans with the import tariffs, yes. However that is just the primary effect, not the goal.
If you eat less you might go hungry, but that doesn't mean the goal was to go hungry. Rather it was to lose weight, and going hungry is just the direct effect.
Part of the goal of retaliatory tariffs is symbolic, part is to indirectly put pressure on Trump by affecting US export industry.
Tariffs are taxes on exports and like every tax tool it has its specific purpose.
Lets say US for example has surplus diary. It can export the surplus to other countries. Without tariff the only barrier is the exchange rate. If the diary prices are cheaper than local produce, US diary takes over the market and the US farmers make bank.
Canadian government might want to protect local diary industry. Or Canadians might have concerns about the chemicals in US diary. They have more stringent requirements from their farmers. Either way they raise tariffs for US diary products so that is on par or costlier than local produce.
Tariffs are normally a precision tool. Countries target specific goods and industries.
Now what Trump has done is taken a blunt hammer to it and said all goods from all countries will have tariffs. But if you look at retaliatory tariffs, imposed by other countries, it is precise and meant to hurt very specific industries.
For example, China has raised tariffs on US soyabean. In way it is targeted at US rust belt farmers. The idea being that farmers are a politically active class and if tariffs cause them pain, maybe Trump will come to the table. But that has happened yet. Maybe US farmers just don't care as they are winning too much.
An import tax works just like any other tax. You decide a law that "import of fresh fruit from Mexico is as of (date) subject to a 10% tax" together with details about exactly what fruit is considered fresh, how to calculate the tax, and where to pay.
Punishing their own nationals is very explicitly how this is sold to the voter base. "Prices are going to go up for you but unfortunately we have to do this to try to stop our neighbor from raising their import tax explicitly on goods from us".
Taxes are not a problem if everyone plays by the same rules. The problem for the economy is that some imports are subject to tax and others aren't, or when domestic goods aren't subject to the same tax. Picking winners and losers in an economy by political has never before in history turned out a winning concept.
I wish there was simple three strike policy on any elected official. Three proven lies and they are remove from office for life. And these can be anything. And not knowing at time does not change it.
Only silence or absolute truth should be accepted.
That's how it works right now. Besides Trump, the US's last presidental impeachment was over a sex scandal. They "say" it was because he lied about it, but I think we know better at this point. It's just really hard to impeach because you need 66 or 67 of the Senate to agree on something, not the usual 51.
But yes, we'd need some truly neutral Ombudsmen to back up such a system. And they themselves would need to be accountable should they corrupt. I don't think it's impossible, but hard to do with the current power structures.
"absolute truth" doesn't exist. I understand what you're saying, but the question of when a lie should then disqualify you from office must itself be a political question.
Absolute truth exists, and a claim that it doesn't is self-contradictory. The difficulty is in determining what is or isn't true, especially for empirical matters. (In math and logic the difficulty can vary. And some statements are true by definition, e.g., all unmarried men are bachelors.)
P.S. I'm not confusing anything and not forgetting any context, and then I get slammed with an absurd strawman, "politics should be based on mathematical axiomatic truth"--not remotely anything I said. Gawd but some people are rude.
The fact remains that absolute truth exists ... "delusional" seems to have no idea what the word "truth" even means.
You're confusing logical/mathematic "truth" with philosophical/scientific "truth". While "politics should be based on scientific truth" is an opinion I have some sympathy for, even if it immediately falls apart under any scrutiny. "politics should be based on mathematical axiomatic truth" is a statement so laughable I can only imagine you forgot the context we were talking about.
It was a common argument that ultimately all of the constitutional protections, balance of powers and all that were protected by the Second Amendment - that in the face of losing their liberty, Americans would rise up against an authoritarian government.
Within this administration, a lot of people feel that there has been an assault on constitutional protections, but the people who trumpeted the Second Amendment as being fundamental to protecting American liberty and democracy have largely been silent in the face of it.
It was always BS .. the Founders never intended the 2nd Amendment as a means to overthrow the government they created--the Constitution explicitly says that treason can be punished by death. And the people making that argument were always hypocritical about how they would apply it.
It brought to mind the Four Boxes of Liberty[1]. It used to be toted out by conservatives during the gun control debates, but I haven't seen it used by anyone recently until now.
They did, although back then when votes were public, accusations of bribes for votes were the most common thing, followed by accusations of attempting to rig votes to ostracise someone from Athens.
To be fair, a lie is when some knows the truth but says the not-truth.
Trump may (a) actually believe the things he is saying (i.e., has no firm grasp on reality), or (b) doesn't care enough to actually find out what is true and just says whatever enters his mind to try to get to the destination he wants:
> On Bullshit is a 1986 essay and 2005 book by the American philosopher Harry G. Frankfurt which presents a theory of bullshit that defines the concept and analyzes the applications of bullshit in the context of communication. Frankfurt determines that bullshit is speech intended to persuade without regard for truth. The liar cares about the truth and attempts to hide it; the bullshitter doesn't care whether what they say is true or false.[1]:61
You'll never make me believe he doesn't do it on purpose. He thrives on it. There's no reason for him to stop lying before he's dead. Again, just like Cohn.
Sadly a lie travels the world by the time the truth can put on its pants. If Trump did rig any polls, we're still here a year in just trying to get such a court case off the ground. And that year was more than enough to do decades worth of damage.
it's funny you'd ask because it's litterally the first time out of three that he got more votes than his opponent ; and he got more votes thanks to lying, inclusive lying about having won the 2 precedent ones
The consumer paying the tariff is merely an optimization over the exporter paying the tariff such that the tariff money passes through one less hand. Practically they seem pretty similar.
Let's imagine, hypothetically speaking, that demand is perfectly inelastic. The price of a good is $10, and buyers will absolutely refuse to pay more than $10 under any circumstances.
Before a tariff is imposed, the seller sells the good for $10 and keeps $10 in revenue.
If a tariff of $1 is imposed under these hypothetical circumstances, does the buyer pay more? Does the exporter get paid the same as before?
Clearly, it's neither guaranteed that the buyer will "pay more" nor that the export will "get paid the same as before". In reality because demand is neither 100% elastic nor 100% inelastic, what tends to happen is that the cost of the tariff is split in some ratio between the buyer and seller.
I find it mildly amusing that there are so many people claiming that it's 100% on one side or other, when it's trivially easy to see why that can't be GUARANTEED TO BE the case.
You can go into hypotheticals, but unfortunately for you the data exists.
And the data shows that American buyers are not paying their international supplies less for goods than they were before. In fact, if anything, they are paying slightly more, which maj be explained by general inflation and the fact that tariffs mean American buyers are placing smaller orders and therefore getting smaller percentage volume discounts.
That opens up greater margin for local production. Not everything is elastic, but as long as the producer side cheats in term of local subsidies, less regulation, slave labor etc, implementing tariffs seem a good choice.
you cannot just carbon tax everything locally and then let the other corner of the word produce at a fractional price polluting the same world, exploiting worker etc, without wrecking your internal labor market.
What you see as customer paying more is cause by government letting this shit go on for too long, and now the correction is ugly. But it not like its not needed, and at some point needs to happen before it reaches the breaking point.
I'm not in favor of the current round of tariffs as used by current administration which seem a baseless negotiating tactic, but the effect of outsourcing to bad faith actors has pushed the working class out of balance, they simply have no way of competing internationally unless by accepting a step downgrade in working and living conditions
> That opens up greater margin for local production
My country mostly produce pine wood (and other soft wood). I like hardwood furniture, but its only imported stuff because we have very few producers. Putting a tariff on hardwood furniture could be a good idea to increase local production, as long as hardwood is not tariffed. If both hardwood and hardwood furniture get taxed, i will have to pay more, and local production will never have greater margin, as those will be hit by base material tariffs.
(To be clear: I live near on of the biggest hardwood harbour in Europe, and buy my wood directly out of the sawmill, but my point stands)
Yeah and thats where I was going with the last point about tariff needing to be integrated with the rest of the economic system as a tool and not arbitrarily as a tool for negotiation. Tariff are a damper to any economic system and reduce efficiency, they need to be proportional, predictable and non escalatory (well, as much as possible)
> That opens up greater margin for local production.
It opens up a larger profit margin for local producers for sure. Production? Maybe. Maybe not. Because there is no incentive to produce more or better. Because the cheap bad faith actor is gone and prices can now match the export price or be just slightly below it.
>but the effect of outsourcing to bad faith actors has pushed the working class out of balance, they simply have no way of competing internationally unless by accepting a step downgrade in working and living conditions
> What you see as customer paying more is cause by government letting this shit go on for too long, and now the correction is ugly. But it not like its not needed, and at some point needs to happen before it reaches the breaking point.
You don't seem to see the contradictions in both these statements. If the prices go up and working class isn't paid as much for their effort then it is for naught. The failure hasn't been to continue outsourcing, failure has been to improve wage conditions - because market was supposed to correct it or worst case it is "socialism" to even try and raise wages.
But as always people want to test economic theories for themselves and they should. See if their lives improve under a capitalist government which is going to trample on their rights.
The exporter may sell less to the US, but typically they will then sell the difference into non-US markets, reducing the impost. This is exactly what happened in a lot of (not all) markets a few years ago, when China tried to intimidate Australia with trade restrictions [1]. When Chine dropped the restrictions, they found that they were now competing with more buyers and so paying higher prices.
Losing sales isn't the same as paying the tariff. The person importing the item pays the tariff. Their item won't be released from customs if they don't pay. They pay to the US government.
The correct thing to say is that the tariff has an effect on demand because of the impact of adding a tariff on top of the price.
The one importing pays the tariffs. If that is a person, say buying directly from AliExpress or some other site, then that person pays.
If it's a company, the company pays and might pass it on.
Edit: to be accurate, the importer is legally responsible for the customs declaration and the tariffs, regardless of who does the declaration and who pays. Typically someone else does the declaration on your behalf, and typically they forward any tariffs to you.
> In reality because demand is neither 100% elastic nor 100% inelastic, what tends to happen is that the cost of the tariff is split in some ratio between the buyer and seller.
That is the argument of the Administration:
>> Kevin Hassett's theory of tariffs: "China has got to sell a lot of stuff to us to maintain political stability. And so if we put a tariff on their stuff, then they cut the price so that our consumer is basically still able to demand as much stuff as they need to sell to be politically stable."
> If he were right, the import price index (which measures pre-tariff prices) would have fallen by enough to offset the sharp tariff hike. It didn't.
This is all true, but in practice end consumer demand tends to be much more elastic for almost everything else in the chain. You don't get to decide not to buy toothpaste for more then $2.50 when you run out, you need a new phone when your old one breaks (and not when the price goes back down), etc... Consumers buy products to fill needs, and *needs* are the inelastic part.
In particular your "Let's imagine" case is sort of ridiculous. There are no such goods, nor anything even comparable. The very existence of inflation disproves the idea (since if those inelastic goods existed, they'd see demand drop to zero if the price needed to inflate).
>I find it mildly amusing that there are so many people claiming that it's 100% on one side or other, when it's trivially easy to see why that can't be GUARANTEED TO BE the case.
Yup. And it can't be guaranteed that the sun will rise tomorrow.
Finally. It’s not a cut and dry as one side or the other. People have lost their minds. It’s case by case for every product and every consumer.
Some companies might chose to loose the margin (few but still passable ). Some might try to pass some or all to the sale price (which creates all sorts another dynamics) and finally the customer does not have to buy that product. There are many note breakdowns that all adjust who pays and when they pay.
>I find it mildly amusing that there are so many people claiming that it's 100% on one side or other, when it's trivially easy to see why that can't be GUARANTEED TO BE the case.
To be fair most people on one side think they know better than Adam Smith and the people on the other side usually never opened a book, so it's a tough bargain.
Would it have been better if I had asked for sources instead? How backed up was the talking about reality? What you agree with is reality and what you don't is out of people's ass when everyone was just sharing opinions!
It's pretty clear who pays the tariffs. the buyer pays the manufacturer. the manufacturer ships the product. the product gets held in customs until the buyer pays the tariff.
Yeah we can literally see it happening in real time. If you have a product with competitors in the market and you are a foreign entity you will eat some of the cost to try to stay competitive in the market. Your only other option is to leave the market. A good example of this is Brasil who tariffs a ton of stuff.
Isn't your example actually perfectly elastic? It does not change the conclusion at all, of course.
One problem with this analysis is that I can't imagine Trump doing it, or even understanding it. Well, it's not a problem with the analysis, but with the overall situation.
This isn’t actually how it works though. Who pays the tariff is the same as who pays a tax: it depends on the price elasticity of supply and demand.
If the demand curve is very price sensitive - like people might stop buying wool blankets if the price went up 50%, and buy cotton blankets instead - then the tariff will be paid by the suppliers, because they must lower their prices to make the final price the same.
And similarly, if the buyers are inelastic, they will pay the tariff. Like for baby formula, maybe parents are willing to stomach significant price hikes without changing how much they buy.
> If the demand curve is very price sensitive - like people might stop buying wool blankets if the price went up 50%, and buy cotton blankets instead - then the tariff will be paid by the suppliers, because they must lower their prices to make the final price the same.
And the people buying cotton blankets are materially worse off than they were before the tariffs were imposed. They have to accept an inferior product until the wool supplier’s prices have adjusted. Or the wool supplier folds and not nobody can buy wool blankets anymore.
As with many things in economics the effect of a measure often depends on the timeframe one considers. Honestly, anything could be true if one just chooses the appropriate timeframe. However, the tariffs clearly introduce an inefficiency which - globally speaking - will be net negative. Locally speaking, though, who knows …
Tariffs existed before Trump, and existed by other countries against the US.
Did those not introduce inefficiency? Actually, it probably produced more inefficiency because most people were probably under thr impression most of the world was under free trade, hence the existence of the WTC.
Not knowing a tax is much more inefficient than knowing a tax.
Exporter pays: Consumer ends up paying price + tariff, then seller pays the tariff to the shipping company, which pays it to the government.
Importer pays: Consumer pays price, then later pays the tariff to the shipping company, which pays it to the government.
In both cases the consumer is paying price + tariff. A small difference is that some consumers could be psychologically tricked by the lower price tag in the importer pays model. Note that what I'm saying doesn't concern itself with changes in pricing due to this.
To simplify: if the exporter lowers their price, the consumer pays the same, the exporter gets less, and the consumer pays the tariff to the government.
If the exporter charges the same price, the consumer pays more, the exporter get the same as before, and the consumer pays the tariff to the government.
The consumer always pays the tariff. The exporter never pays the tariff.
Sure but what actually matters is the consumer's value received vs value earned. In the end it isn't "who" pays, but who gains and who loses value in the net. NOTE: This includes government spending from the tariff.
If the foreign supplier pays the tariff the country COULD be better off in net terms when you add the consumer + government together assuming the government spends all it takes which in a deficit situation is a reasonable assumption.
They are not equivalent. What usually happens isn't that people buy less foreign and more local, but that local sellers take advantage and raise their prices to be just below the foreign+tariff.
the fact is that IRS is collecting money from the suckers who voted for this and you're desperately trying to make it sound like the exporters are paying for it.
> Note that what I'm saying doesn't concern itself with changes in pricing due to this.
That's the problem with your semantics then. If the manufacturer no longer makes the same income because they can't increase the final price, in effect the consumer didn't pay the tariff.
what happens in practise is that local sellers also increase their prices so that the customer still pays more, but the exporter isn't paying any tariff.
if exporters paid tariffs, every country would put tariffs on things that they didn't make themselves. they only do it for things they're trying to compete in making. can you figure out why?
> In both cases the consumer is paying price + tariff.
Consumers pay all of the operating costs and taxes of a company. That's not the debate.
With tariffs, the cost of an imported product becomes higher than a domestically produced product, making consumers purchase the domestically produced product. This is the purpose.
The long-term purpose is that foreign companies start making their products in your country to avoid tariffs and be able to compete.
The discussion about if the buyer or seller pays the tariffs or taxes is non-sensical and a distraction.
No other country flip flops like he does - nobody will make any long term plans when they don't know if the tariffs will be there Tuesday, much less in 3.5 years. Business and investment need stability, not histrionic outbursts and foreign policy at 3am.
The buyer might pay more. If the importer (which is often a foreign institution) tries to pass the cost along to the customer. And the customer looks at the product group and decides to buy the higher priced item. But on average the tariff is doing what it was meant to do.
Promote the consumption products provided by a different vendor. Namely ones that tariffs don’t apply to.
It’s not a hard concept to understand, and talking about who pays is a distraction. Namely because it will be case by case involving 3 or more parties who won’t all chose the same choices they have every time.
The shipment won't be released by customs until the buyer pays the tariff. I can tell who's paying. It's impressive how so many are contorting their minds trying to make this seem uncertain.
> At least partly because the Democrats have totally abandoned being the party of the working class.
What would it take for the Democrats to become the party of the working class? Do you think raising the minimum wage, universal pre-k and childcare, paid family and medical leave, ACA expansion, etc. are working class policies?
Either Republicans must be the party of the working class or being "pro working class" isn't necessary to win the elections. Which one is it?
> A bunch of those people voted for Trump (or didn't vote at all), knowing what Trump was. They voted for the guy who at least pretended to care about them.
Tons of farmers, small business owners, federal workers, women who believed IVF would be free would disagree with you on the first part. And for the "pretend" part, you mean lie, right? So do you think Democrats need to start outright lying?
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