Would you consider tariffs a consumer concession?

[Mika]

Poll question: Would you consider tariffs a consumer concession?

I was just wondering this while listening to a teevee economic discussion that included mention of more concessions that 'must" be made by labor.

[MikeNearMcChord]

1. Not only that, but punishment taxes on American companies

that outsourced American jobs. Make Levi Strauss pay 90% tariff on every jean they sell in this country.(for example)

[dipsydoodle]

3. Presumably

that will be 180% for a pair of jeans then. :shrug:

[Cessna Invesco Palin]

4. What positive benefit does that have...

...aside from putting Levi's out of business, to no doubt be replaced by foreign clothing manufacturers who aren't subject to your tariff?

[jwirr]

5. Are any of their products manufactured in the USA? If not then we

loose nothing if they go down. What needs to be added to a tariff bill would be giving any company that starts to make the same product in the USA a tax break and start up help. Competition.

I also think we tried a tariff on something early in the bushie admin. and it was struck down when England threatened on something. NAFTA and other trade agreements made it illegal to use tariffs.

[Cessna Invesco Palin]

6. Well, obviously it would result in all of Levi's US employees being...

...thrown out of work, not to mention all of Levi's overseas workers being thrown out of work. (I know we're not supposed to care about non-Murikans, cause obviously the financial crisis only impacts Murikans, but there it is.) So basically you favor a trade policy that would put US companies at a distinct disadvantage to their foreign competitors by imposing ridiculous tariffs on products produced overseas - but only those produced by American companies. So a French company that produces jeans in Malaysia would be at a distinct advantage compared to an American company that produces jeans in Malaysia.

What needs to be added to a tariff bill would be giving any company that starts to make the same product in the USA a tax break and start up help.

Why? Why would I ever start a company manufacturing blue jeans in the US when I can do exactly what I described in the first paragraph, make more money, and not be subject to onerous 90% tariffs?

[jwirr]

9. So you are still thinking that globalization is working? The world is

becoming more and more unstable and that will mean that less is made in the unstable areas. Not to mention oil peak/depletion etc. coming in the not so distant future.

We and all other areas of the world need to become more regionally self-sufficient and sustainable. That means producing products we really need for survival in our own country or region. That means bringing manufacturing back into the USA.

The worst thing that has ever happened to China is to become so dependent on American buyers who are loosing their jobs. The buyers quit buying because they are broke or they have no more credit and then both countries are in trouble.

[Cessna Invesco Palin]

12. That is totally irrelevant to what I said.

The post to which I was originally responding proposed a specific idea to remedy the situation you are talking about, and I proposed reasons why it would not work. My views on whether globalization is good or bad are totally irrelevant to the specific solution that was put forth. If you'd like to address any of my arguments on substance, be my guest.

[Greyhound]

27. How many American employees does Levi's still have and what positions do they hold?

None of the working class jobs are here any longer except for two small, expensive, lines that are retained to get around the few remaining laws. Technically, Nike still makes shoes here too, but you won't find any of them for sale in the mall.

The jobs you're "saving" are primarily the jobs of those that sent everyone else's jobs out of the country. The rulers and their gatekeepers.

[MikeNearMcChord]

8. How about any American or foreign company who wanted to produce jeans in this

they would get the tax break, plus they would prosper. Free Trade practices like what Levi Strauss did(and I used them for an example)is why America is in early stages of the Greater Depression. Outsourcing needs to put to such a disadvantage, that no American company would consider it.

[mrreowwr_kittty]

15. And isn't it funny how Levi's jeans didn't get cheaper?

One of the arguments against protectionism is "OMG prices will go up!!1!" Well, why don't they ever go down when companies move offshore to take advantage of the cheaper labor?

[mrreowwr_kittty]

11. Why would they go out of business? Levi's products are sold all over the world.

If they lose all their U.S. business an American company would take their place.

[Cessna Invesco Palin]

14. Levi's IS an American company!

And actually the likeliest outcome of the solution proposed is not that they would go bankrupt - it's that they'd move overseas and incorporate in another country where their US imports would not be subject to tariffs as suggested in the OP. That was a complication I really didn't want to get into, but since you brought it up...

[mrreowwr_kittty]

16. So what?

First you said ZOMG!!1! they'll go bankrupt!!. Now it's ZOMG!1! they'll incorporate in another country!! What, like you think the fact that they're technically an American company means diddly to us? They probably never paid much in corporate taxes to begin with and when they put all those American workers out of their jobs we lost all the payroll, state, and local taxes they paid. That's something the Free Traders conveniently forgot about - and now we have cities and states in this country that are bankrupt.

Let Levi's go overseas. But put a tariff on every pair of jeans or whatever they send here.

[Cessna Invesco Palin]

24. Great. Tell that to all the Levi's employees in the bay area.

Really. I'd like to see you tell one of them face to face that their job doesn't matter because it doesn't fit with your ideological preconceptions.

[mrreowwr_kittty]

36. They're not MY ideological preconceptions.

They're the ones of the poster I was responding to. I want Levi's to bring all the jobs they outsourced from the Bay Area back. About 5 years ago the CEO of Levi's had the nerve to fire off an email to employees threatening them with termination if they wore another brand of jeans on the job site. Then he proceeded to close 11 U.S. plants and send them to South America.

[Donald Ian Rankin]

41. This is a stupid idea.

I am all in favour of protecting American labour at the expense of American capital. I am *not* (speaking as a non-American) in favour of protecting American labour at the expense of non-American labour.

There is nothing immoral about employing workers in countries other than America.

More practically, if you impose that sort of tarrif then other countries will retaliate with similar tarrifs, and everyone's a loser.

[Kalyke]

2. It might wake Sen. "Dumber 'n rocks" Shelby up regarding

what he thinks is a coup for the foreign car companies in his state (I don't think he realizes they'll go down if GM goes down).

[Phred42]

7. Tariffs PROTECT Jobs - They always have

[JVS]

10. Tariffs also cause force people to pay more for less quality.

Tariffs sound great until you have to pay $20,000 for a Ford Focus because there is not enough competition.

[mrreowwr_kittty]

13. "Free Trade" sounds great too.

Until you lose your job to outsourcing and find that your unemployment check isn't even enough to afford the cheap Chinese-made crap at Walmart.

[JVS]

17. I haven't seen any automobiles in the US made by people earning payment as low as in China.

Japan pays their auto-workers a wage that is comparable (if not superior when one considers benefits) to that of US auto worker. While South Korean wages might be a bit lower, one must remember that South Korean labor is used by both American and foreign companies, and that production in Mexican factories at low wages is done my both US and foreign compaines. So you can drop the crap about plastic crap at walmart, the Auto market is already "fair trade"

[mrreowwr_kittty]

18. I have no idea what your point is there.

I was simply countering the Free Market twaddle you were trying to push about tariffs and prices. BTW, guess what countries like Japan and China do to an American car that we ship to them? That's right, they slap a big old tariff on it! And yet, oddly enough, I haven't heard about problems with the people in Japan being forced to buy poorly made vehicles for high prices. IOW, your "$20000 Ford Focus" line is a myth.

[JVS]

19. have you seen what people in Europe and the UK pay for cars?

They get hosed.

[mrreowwr_kittty]

22. Wrong!

The high costs of vehicles (and fuel) in other countries is due to a variety of factors, of which tariff policies are but a small part. I was stationed in Japan from '92 and '95 and my friends there described how onerous the government made it to own a car. You actually had to prove you owned or rented a parking space at your residence in order for the government to permit you to buy a car. There was a reason for that. Japan is a crowded-ass country, particularly in urban areas, and if everyone had their own car the traffic would be intolerable.

They also have excellent public transit in both Europe and Japan so it's not like people don't have other options besides driving a car.

[JVS]

28. WRONG!

See, I can declare victory too.


It's not my fault that you are unwilling to consider what kind of effect a tariff has on a market.

[mrreowwr_kittty]

34. Give us one example of a market that is experiencing the effect you claim.

You've already been proven wrong on the Ford Focus in England by yibbehobba and I know you're full of shit where Japan is concerned.

And why did you dismiss my earlier comment about the cheap crap at Walmart? Is there not a lot of cheap made-in-China crap that is sold at Walmart, despite the lack of a tariff? Given how Walmart has put numerous merchants out of business and is now the only game in town in many U.S. localities doesn't that sorta put the lie to your whole argument?

[Cessna Invesco Palin]

32. Not particularly.

Things in the UK are a bit different than the rest of Europe, as everything here seems to be about 20% more expensive than elsewhere in Europe. That said, the primary difference that makes comparisons between US and UK car prices incompatible is that people actually pay a premium here for smaller, more fuel-efficient cars. That's a phenomenon that simply doesn't exist in the United States, because fuel prices are so much lower. Small, fuel-efficient cars (VW Golf, Renault Megane, etc) tend to hold their value very, very well. The depreciation on mid-size sedans and SUVs here is eye-watering.

[JVS]

21. UK Ford Focus starting price £12,528 which is about $25,000

So, here we have a car, most likely with a weaker engine than is standard in the US costing way more. You could get a better car here for that much?

[mrreowwr_kittty]

25. You are comparing apples to oranges.

This is a typical tactic of a Free Trader. Ignore things like currency differentials, laws, customs, infrastructure, etc., of other countries and just pretend all things are equal.

Fail.

[JVS]

26. You're dismissing the truth because you have nothing to counter it with.

That price on a Focus is a fact. The exchange rate is also a fact. Yeah, I can imagine a custom among the British. The custom is probably to not own a car because it costs so fucking much, or to but a smaller car like the Ka or a Fiesta because they cost about $15,000 and $17,000 respectively, which is still a bad deal compared to the Focus here. Tariffs cost the consumer money.

[mrreowwr_kittty]

30. "Tariffs cost the consumer money" So what?

EVERYTHING costs the consumer money. One way or another. So called Free Trade policies externalize the social, health, environmental, and economic costs of industry so that the wealthy can make obscene profits. At least tariffs incent companies to keep jobs here. Do you know what happens to FICA and unemployment insurance revenues when high wage jobs leave the country? Not to mention revenues to cities and states? Is your state bankrupt yet? Mine is.


Sometimes I think people see the "free" in Free Trade and take it a tad too literally. You're paying for it whether you like it or not.

[JVS]

35. That's kind of the point of the argument, duh

Tariffs don't magically solve a country's economic problems, what they do is they make products from other countries more expensive, and allow domestic producers to charge higher prices. If you raise tariffs, the product will definitely be more expensive. There is no guarantee that this will be matched by better wages at home.

[Cessna Invesco Palin]

29. That's including tax and your exchange rate calculation is wrong.

It's about $18,500, and they're generally of a higher quality than Foci built in the states. The European Focus and the US Focus are quite different in some ways. I've had experience with both, and the German built ones are definitely a cut above. I've actually considered buying one (I live in the UK) because they're probably the best car in that class to drive (excepting Alfa Romeo) very economical, and very durable by all accounts. The US one never really did anything for me.

[mrreowwr_kittty]

31. I'm assuming the UK has different fuel economy standards too? nt

[Cessna Invesco Palin]

33. I think we're subject to the same standards as the rest of the EU...

...but I'll check.

[chrisa]

20. Tariffs don't work... Ever...

They do nothing to protect industries. They just encourage inferior production. Then, companies jack up the price because there's no competition. If you want something that's not a piece of junk that other countries make better, you have to pay extra $$$ from what the price would normally be.

I believe that workers in this country should have equal power to the rich. However, competition-choking tariffs aren't the way to go.

[Phred42]

23. Corporatist talking Point

tariffs funded this country from the beginning and allowed us to become the industrial giant we were before Reagan and the last 28 years of insane conservative economic policies. Mos other industrialized countries use tariffs to protect their industry - this is part of the reason we have gone into the toilet

[MannyGoldstein]

38. Sorry, Wrong Answer

They work fine; for example, tariffs against micro-wage countries are precisely the reason that Europe still has an actual middle class.

There is no way on Earth that labor in industrialized nations can compete with $2-a-day labor.

[MazeRat7]

37. Yes, its a consumer concession...

We import far more then we export. Corporations, and more specifically their shareholders, are not going to let the increased cost of bringing goods into this country erode their margins. They will simply pass that cost directly to the consumer. It will impact everything from high-tech gadgets, to automobiles, to clothing, to raw materials for our planned "public works"/"infrastructure" development. I can't think of one commodity, perhaps other than perhaps a few agro-products, we do not import more of than we produce.

What we need is to find something of value that we produce, other than entertainment, that the world wants. We need to balance the trade deficit we have with the world.

Peace,
MZr7

[mrreowwr_kittty]

39. We come up with plenty of things of value to produce. All the time.

But every time we do, the Titans of Industry eventually find a way to get them produced cheaper overseas. Lack of U.S. innovation is not yet a real problem, though there's less incentive to innovate under the current economic structure and the suckage of our educational system will take care of the rest in a few decades.

As for passing the costs of tariffs or other protections of U.S. labor onto consumers, why is it that it never works the other way around? I haven't noticed that the costs of most things went down after their manufacture was outsourced to cheaper labor markets. Inflation of consumer items has gone on a fairly good clip, with the exception of high tech products (which normally go down in price once they can be mass-produced). But a pair Nike shoes didn't stop costing over $100 after they started having people make them in other countries for pennies an hour, did they? By all rights they should have gone down by at least half the price. They never seem to pass the savings on to the consumer, do they?

The prices of things are still ruled by the principle of Supply and Demand. If people are willing to pay a certain price for something, that is what it will sell for. If you raise the price beyond that, they either won't buy it, will buy less of it, or will buy something else.

[MazeRat7]

40. Yes, it is a one way street, so to speak....

Sadly, I've had too much exposure (like 20+ years) of working for high-tech manufacturing and the mantra is "reduce cost". You are dead on, when those titans figured out they could operate overseas at a fraction of the US OPEX, they jumped at the opportunity. But did we see any reduction in cost on consumer side? No. What was seen was an increase in "margin" which translated to an increase in "share holder value". So if you were a shareholder in say Nike, then you saw some income and benifited from their "cost reductions". If you were a consumer only of Nike, you didn't see a dime. As a matter of fact, your cost just might have gone up due to the logistics cost of managing a global supply-chain.

Maybe every man, woman, and child should start thinking about owning a few shares of products they buy routinely from publically traded companies? At least that way they too would benefit and build something for their retirement/school/medical/etc.

(That last sentence was half sarcasm and a half-ass idea combined..excuse me for thinking out loud.) But if more of us actually had stakes in these companies, which includes voting rights, we might actually begin to make a difference. Sigh.. I know... I'm a dreamer.

Peace,
MZr7

edit... more typos: grrrrr

[Cessna Invesco Palin]

42. What do you think you are buying and paying for when you buy a pair of Nikes?

You're not paying for a pair of shoes. You're paying for a marketing campaign. Companies inevitably sell products at the price point where they will make the most profit. The price point for a pair of Nike shoes is quite high because they have spent decades developing a brand identity that says they are the ultimate shoe for athletics, via an extensive marketing campaign. Nike is not a shoe company. Nike is a marketing company that sells shoes.

I happen to have a thing for Italian clothing and shoes, but you'd never see me buying anything from Versace or D&G for exactly the same reason I'd never buy anything from Nike. Again, these are marketing companies that happen to make clothes. There are plenty of small companies out there that make better products which sell for less money because they don't have the burden of a worldwide advertising program to support.

[mrreowwr_kittty]

43. Well, we're certainly not paying for the labor it took to make them.

The quality and workmanship are definitely better with lesser-known brands.

[mrreowwr_kittty]

44. Well, we're certainly not paying for the labor it took to make them.

The quality and workmanship are definitely better with lesser-known brands.