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genxlib

(5,926 posts)
Fri Apr 4, 2025, 07:32 AM Apr 2025

Even if it works, protectionist tariffs would still be inflationary

The stated goal of these tariffs is to bring American manufacturing back home.

There are some arguments for protectionist tariffs in the right context. But they only work when the timeframe for the tariffs are long term. No sane company is going to invest in a manufacturing strategy based on tariffs that could disappear at any time. They would find themselves with an expensive factory trying to sell items in the same competitive market that they had previously abandoned. So at face value, this stated goal will largely fail.

But even if it worked, the price of goods will still go up. Tariffs don't make it any cheaper to manufacture here. They just create less competition. So the baseline cost of the goods will still go up to match the domestic costs.

Sure there would be accompanying benefits of employment and circulating cash at home. But let's not pretend that the extra money paying for that comes from somewhere else. It will be US consumers paying more.

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