Reminds me of a friend’s defense of the service focused economy: “I’ve got a PhD in economics”.
Sure services may be great when things are going well, but you can’t ONLY have services, and then go and blow up international trade and expect to have a good time.
> Manufacturing constitutes 27 percent of China’s overall national output, which accounts for 20 percent of the world’s manufacturing output. In the United States, it represents 12 percent of the nation’s output and 18 percent of the world’s capacity. In Japan, manufacturing is 19 percent of the country’s national output and 10 percent of the world total. Overall, China, the United States, and Japan comprise 48 percent of the world’s manufacturing output.
Where is the disconnect between the US being the #2 manufacturer in the world and my sense of doom and gloom about Trumps trade-war attack on our trading partners?
I suspect it's this:
> Advanced manufacturing technology development can be found throughout the United States. In Indiana for example, Rolls Royce, which makes jet engines, employs thousands of engineers. Zimmer Biomet makes surgical products in Warsaw, Indiana, a city that has become a national hub for orthopedic products.
So much of what I buy as an individual is imported. My fruit comes from South America, my electronics come from Asia, my outdoor equipment comes from Canada (and the raw fabrics probably sourced from China).
thank you. the catastrophizing that makes up so much of this site is such a dead-end. seems people rather engage in sensational fantasy instead of understanding. cheers
Because a rising power (China) backed a country (Russia) which didn’t bow to the dominant power (USA) that enables international trade, and intentionally blowing up international trade agreements now allows the USA more time to rebuild strategic supply chains to counter further violations of the international order.
If the USA doesn’t have a secure industrial base and can’t reliably enforce the international order then there is no international trade.
> intentionally blowing up international trade agreements now allows the USA more time to rebuild strategic supply chains to counter further violations of the international order.
Sources?
>If the USA doesn’t have a secure industrial base and can’t reliably enforce the international order then there is no international trade.
The US reliably enforces international order and global trade now. Source where this is an issue?
> The US reliably enforces international order and global trade now
Yes, which is why many believe now is the time to revamp our industrial capacity while we still have strategic dominance.
The war in Ukraine has illustrated the importance of mass drone production, and we currently lack a lot of the direct capacity to make them. A lot of our military supply chains are also based too heavily on components assembled and manufactured in China and in parts of east Asia that could easily be disrupted and cripple our ability to project power and play the role we currently play.
You can improve all those things, even fast, without doing… this.
Tariffing close allies at the same time as likely or actual foes especially doesn’t make sense. And rather than this weird roundabout approach, the government can just… pay for things to happen. Like, they used to run weapons factories. If that’s the actual reason for this, it would have been a ton cheaper to just fire up a few government factories, continue and expand the chips act, and maybe ramp up some targeted tariffs and other controls, which would have been way more effective with allies on board. Or, they can start placing drone orders and handing out r&d contracts with specifications that they be entirely made in the USA.
You may be presenting a real perspective, and it could be entirely correct, and this still would be extremely stupid.
Yes, this is a real perspective. Again, I’m not endorsing the approach they’re taking, I’m simply explaining it.
I also don’t think even a moderate introduction of tariffs would have been viewed favorably. Reindustrialization is I think necessary/I agree with the desire to ramp up domestic production and secure supply chains in both America and Europe, but we haven’t done it yet because it’s going to be painful to reverse the current trajectory.
This could very well be a part of a kind of shock deal to get allies to know we’re serious as we negotiate down.
I’m not saying I agree with that tactic, either, and the complaints about the damage in trust are extremely valid.
That's... not how things will roll out. Sure it looks nice on some paper diagram my 5 year old son could pop out, but reality is way, way more complex.
Also, here its US who is doing massive 'violations of international order'. You know which order I talk about? WTO for example, US is founding member, an org specifically designed and accepted to handle this. Various international agreements between close allies. And so on, news are full of whims of one bipolar old man stomping left and right.
What is actually and already happening is that US will lose a lot of customers world wide. That Amazon cloud or tesla car or weapons (machinists heh) or literally any other US product ain't so cool or even acceptable anymore. What will happen actually that rest of the world will replace US products. Not just government, but regular people. Nobody wants to drink US whiskey or wine anymore. Nobody wants any US product or service anymore.
If you think 4% of global population (and just 26% of global GDP) can on whims dictate lives of 96% of mankind by force, well, that's like your opinion man.
The USA already dictates the direction of much of the world economy through its position in the WTO, and you are correct that the tariffs will cause more independent production. That’s part of the intention. Europe specifically is underproductive and the hope is that these tariffs and the change of tone for defense agreements will bolster Europes domestic industrial and defensive capabilities.
I also realize how incredibly complex modern supply chains are and how disruptive these tariffs are. While it seems clear to me the previous trade situation was unsustainable and going to break down without some sort of change of course, that doesn’t mean I’m in favor of the blanket tariffs or the way this was executed, and I don’t know whether it will work. I’m simply explaining the logic behind it, which is also more complex than just “a bipolar old man stomping left and right”.
> That’s part of the intention. Europe specifically is underproductive and the hope is that these tariffs and the change of tone for defense agreements will bolster Europes domestic industrial and defensive capabilities
So, rather than sell Europe weapons that we create in the United States, part of the “intention” of this policy is to cut off the European demand for our weapons systems and cause them to manufacture their own? How is that helpful to the United States and our bottom line? How is that at all in the US interests?
I agree that’s what is going to happen, but I see no evidence that it was part of the intention.
> So, rather than sell Europe weapons that we create in the United States, part of the “intention” of this policy is to cut off the European demand for our weapons systems and cause them to manufacture their own? How is that helpful to the United States and our bottom line? How is that at all in the US interests?
Are you asking why a single point of failure is a bad thing?
To restate what you asked: “if the USA weapons manufacturing capability is compromised and cannot sell weapons to approved parties, and said parties also cannot manufacture their own weapons, how is this in the interest of the US?”
> Are you asking why a single point of failure is a bad thing?
>To restate what you asked: “if the USA weapons manufacturing capability is compromised and cannot sell weapons to approved parties, and said parties also cannot manufacture their own weapons, how is this in the interest of the US?”
You can't equate weapons manufacturing to server uptime or data center diversity -- it's fundamentally different.
In terms of what is in the best interests of the United States -- yes, having a single point of weapons manufacture and having that be the United States would very much be in the US interests. It would allow the US to dictate, even more than we do today, how the rest of the world operates. Although we have not been a single source for weapons (Europe does make their own), our role as primary supplier would be (and has been) very profitable.
How is it that we can afford to create the advanced weapons that we do? F-35, Patriot, etc? It's because we can spread that research and development cost across other (allied) countries, because they buy our gear instead of developing their own. Reduce the market for our weapons, and you're going to reduce the quality of our weapons and increase their per-unit cost -- both things that are very much not in the interests of the United States.
This was sparked by the remark that this was all part of the "intention" of the policy. Since that intention would by definition be very contrary to US interests, both financial and strategic, it seems dubious that this was the intention.
> and you are correct that the tariffs will cause more independent production. That’s part of the intention. Europe specifically is underproductive and the hope is that these tariffs and the change of tone for defense agreements will bolster Europes domestic industrial and defensive capabilities.
> I’m simply explaining the logic behind it
I really disagree most strongly that this is the logic behind it. You genuinely think Trump and his base want these tariff wars to encourage more manufacturing in Europe?
As a foreigner, the message that comes across loud and clear from the US is "America first".
I can't speculate what is really going on inside Trump's head or inside his administration, but one thing I'm 100% sure of, they really don't care in the slightest about Europe or any other country in the world for that matter.
The message is absolutely America first, and the motivation to boost the middle class through reindustrialization is a huge factor.
The desire to eventually back out of defense commitments in Europe is not in contradiction to that.
The political will to commit troops and to defend Ukraine simply isn’t there, especially not while Taiwan is looming. Wanting Europe to reindustrialize and handle it’s own defense allows America to focus more domestically and on potential wars more aligned with American interests (disruption of chip manufacturing affects America much more than Russian occupation of Ukraine).
I linked to a hoover institute interview with Niall Ferguson explaining a lot of the thinking. You can also just listen to what the administration has been saying themselves. You don’t have to agree with it, but the goal is reindustrialization of both America and Europe so America doesn’t lose it’s defense capabilities and so Europe can defend itself without relying on American support.
Ok, I did watch the video. He does make a lot of points which sound plausible to a casual like myself.
I'm still sceptical. It's pretty clear that there is real distaste for Europe in the MAGA sphere. I really find it hard to believe that this is all an act, a ploy, to boost Europe's own economy. Everything I've witnessed about MAGA suggests this type of long range thinking is just a coping wish. I think it's much simpler than that. I think they have a real distaste for Europe, for a variety of reasons.
You are correct that there is a lot of distaste for Europe within the MAGA base. Although it’s important to note most of the distaste is about subsidizing their defense so they can have welfare states at the expense of US taxpayers, and a distaste for EU leadership. A lot of MAGA are friendly with other populist movements in Europe.
Again, I don’t think it’s an either or, and I don’t believe this is a ploy. The desire to reduce commitments in Europe and to have long term changes in trade is genuine.
The core motivation of the base is simple: middle America wants their industrial jobs back.
The motivation of advisors like the people at Hoover, military strategists and other intelligent higher ups is to deal with the weaknesses (present and future) that both Covid and Ukraine made obvious.
These are in alignment.
And yes, the MAGA base desire for a return of manufacturing came before the understanding of strategic weakness. That doesn’t mean the strategic motivations are a cope: I don’t think it’s a coincidence the bureaucracy were only willing to go along with this after both Covid and Ukraine discredited a lot of previously held beliefs about the state of the global order and the need for a course correction.
It’s also important to note politics and “cope” are basically the same thing. Everything is compromise.
The US didn't get to be the worlds global superpower out of nowhere. You formed alliances in the west and have pushed your global economic agenda for what, seven decades, with Europe going along with it (along with many other countries), including fighting in wars the US pushed for. That is what you got in return for your military backing. The US also didn't get into the cold war because of Europe,.
MAGA won't sell that though, it needs a different narrative. And this is the narrative it feels like this little exchange is pushing too, though forgive me if I'm misinterpreting you.
MAGA is acting as though the world isn't buying trillions of dollars worth of its services every year, that it hasn't controlled the global economic policy for decades, enriching itself in the process. Nope, MAGA is now claiming victim status.
I believe the reason it feels like I'm pushing is that in a sense, I am: I'm not adding any caveats or disclaimers to that narrative or explaining why other narratives do or don't matter. I think counter narratives to the ones supporting these tariffs are already well understood by most people here. The original person I was responding to was asking why this happened (presumably because it seemed irrationally stupid, as I think it does to most people here), and what I'm pushing for is an understanding of the point of view which explains it. If you understand the concerns of MAGA and the strategic concerns of the US Military the tariffs make sense. They might not make sense in relation to other concerns, and maybe it's wrong to be so focused on those concerns at the expense of other concerns like relationships with allies. But they do make sense from that point of view.
In order to repair international relations with allies, the root causes of these tariffs first needs to be understood and addressed. If this is simply viewed as a madman irrationally leading a horde of rednecks to punish allies, and the other strategic concerns are just considered window dressing to excuse that madness, the grievances of those who empowered Trump will remain and the strategic weaknesses will continue to be an anchor weighing the US down and interfering with our capacity to maintain relationships and enforce international law.
The narrative of the MAGA base is that middle America and the rust belt was in fact victimized by global economic policy. The benefits you mention about the world buying American services and getting into foreign wars didn't benefit the MAGA constituency, it hurt them. Yes, everyone benefits from cheaper goods and America in particular is able to buy more of them due to the fact we issue the global reserve currency, but on net the average middle class American family in an industrial town lost more than they gained.
That narrative is not the whole narrative. I am well aware that there are more people in the world than just MAGA that are feeling the opposite about all of these tariffs, and they have legitimate grievances. But the MAGA narrative is not false. Just like the narrative about betrayal on the part of allies and economic partners is not false. Just like the narrative I presented about domestic supply chains and strategic weakness is also not false (and is the narrative I'm most biased towards/what I care about most). In order to look for a balance point that maximally benefits everyone, all of the different narrative threads need to be understood.
In order to prevent a repeat of this situation in the future (if any semblance of the previous order can be re-established after the US secures it's domestic supply chains and repairs it's middle class, and I have no idea what the likelihood of that is), any re-establishment of global supply chains needs to ensure it doesn't erode domestic capacity and that there's an actual plan for how to maintain the middle class through either some degree of protections for domestic industry or a more effective plan to transition the middle class into services.
I'm actually appreciating this discourse, thank you.
For what it's worth, being an immigrant to the UK, I've watched kind of from the sidelines as similar events unfolded here around brexit. I tried very hard to have sympathy for the views of brexit voters. The problem I have, and I have the same problem with MAGA, is despite having real grievances, is the overall narrative is just lie after lie. The MAGA administration lied to the whole world about "trade deficits", completely ignoring services. Maybe the story rings true for a particular voter, but it is a misrepresentation of the whole truth, or more bluntly, is a lie.
I understand very well that certain people have not felt the benefit of deindustrialisation. I do get it.
You say this:
> The original person I was responding to was asking why this happened (presumably because it seemed irrationally stupid, as I think it does to most people here), and what I'm pushing for is an understanding of the point of view which explains it. If you understand the concerns of MAGA and the strategic concerns of the US Military the tariffs make sense.
No. I just don't agree. They make sense if Europe wasn't consuming billions of USD a year of US services, and the US wasn't growing increasingly wealthier than Europe each year.
Trump is pandering to his base. That makes sense. But the tariffs are just a means to that end, and trying to ratonalise the tariffs in other terms, I just don't agree with.
In any case, I have learned stuff from this conversation. I'm not even saying I am definitely correct, there is a chance I'm wrong and you're correct, and I will keep an open mind about that. Thank you.
Likewise. I enjoy commenting here because it’s one of the few places online where there’s actually discourse, and I like to think conversations like these have trickle effects/lead to more cross pollination and rational outcomes. Your pushback is valid; there’s a very real danger of getting too much in bed with Trump’s base and letting dumb populism overrule any need for strategic pivots if this doesn’t end up working. There was also some interesting pushback about European market demand for US weapons being more important than supply chain security which I hadn’t considered from the strategic angle; I don’t think I agree that it’s more important than eliminating foreign chokepoints in US military supply chains, but that’s a point in favor of these tariffs being too blunt and extreme an instrument for addressing the need to boost domestic industrial capacity for the defense industry.
I’ll keep an open mind as well. I hope things eventually work out for the best, but we’ll see what happens.
> The political will to commit troops and to defend Ukraine simply isn’t there, especially not while Taiwan is looming. Wanting Europe to reindustrialize and handle it’s own defense allows America to focus more domestically and on potential wars more aligned with American interests (disruption of chip manufacturing affects America much more than Russian occupation of Ukraine).
This seems like a coping narrative. The unwillingness to stand by commitments, groveling before Putin without receiving anything in return, threatening long-standing allies with annexation, and now the utterly moronic trade war (which is not based on any economic plan but apparently on chatbot output) are all weakening the US politically, economically and militarily, and giving countries like China a window of opportunity to act against it.
China has no strong allies, and its long-term goal has therefore been to isolate the US from its own allies in order to level the playing field. With each passing day, the US under Trump can indeed expect less and less support from its allies in the event of a Chinese invasion of Taiwan. Despite all the hollow rhetoric against China, Trump is setting the stage for the invasion.
Had the US played its cards better, it could have had a booming economy, motivated allies across the globe, and tens of thousands of highly experienced soldiers from Ukraine's battlefields willing to return the favor in the war with China. Ideally, that would've led to China shelving the invasion plans. Instead, we see an embarrasing clown show, which serves as an open invitation to invade Taiwan.
Dictated, past tense. As a result of these tariffs. And that part's not coming back even if everything got magically reversed tomorrow. That level of trust is gone, forever.
If capital doesn't get very mad and do something fix the fallout immediately, it will get very bad. You can't wait for things to work themselves out; they will not. It's as stupid as it appears on the surface. These people are sociopathic, vengeful idiots, they're mad at anyone smarter than they are, and they're going to destroy everything that's good and replace it with much, much worse.
There is no logic behind it, no matter how badly everybody wants there to be. Trump's brain is stuck in the early 1980's when he first had a subliterate fixation on tariffs, and he's never let go of the idea. I'm sorry that's it not more complex than that -- it would be reassuring if there was an actual plan that anyone not MAGA-infected would thought would work! But there isn't. This is them destroying America and taking down as much of the global economy as America can reach.
Sure services may be great when things are going well, but you can’t ONLY have services, and then go and blow up international trade and expect to have a good time.