are trump's tariffs going to lead to inflation?
that would be a very free market position, which thinks all tariffs are bad, and which has little to do with any actual existing free trade agreement. it's a talking point amongst right-wing politicians, but it doesn't reflect any existing economic policy anywhere.
the discourse reflects the attempt by kamala harris to position herself to the right of donald trump on economic issues, which everybody can see is the empirical fact.
it is not the case that tariffs always lead to inflation. in practice, politicians tend to use tariffs when local economic factors favour foreign production as more cost effective, so it does lead to inflation. this is politics, not economics.
tariffs are supposed to help domestic production by increasing the costs of foreign goods, which is supposed to help domestic producers compete. that will lead to an increase in costs in the short term. however, if the tariffs actually work, the domestic producers begin to outcompete the importers, and costs come down via economies of scale. in the long run, there is no inflation, but there is an increase in local production and an increase in local jobs.
in order for the tariffs to actually work, the underlying economics have to work. that is the question to ask: can american producers scale up production in such a way that they can offer locally produced goods at a cheaper cost than foreign producers, or do the foreign manufacturers have a comparative advantage in the production of these specific goods that makes it impossible for local manufacturers to compete?
as everybody knows, the major input factor has long been and remains the cost of labour. it is difficult to make trump's economics work, and the result will probably be more inflation and less local production. however, there's a caveat to this, and it is prison labour.
yeah. prison labour is legal in the united states, and it allows local firms to compete with chinese manufacturers. that's not what those union workers are voting for, but it's what they're going to get, and it makes sense if you're the pentagon, as it brings production of sensitive materials home and harms the export economy of your most serious global opponent. much of the "reshoring" that has occurred over the last ten years is using prison labour, which requires capturing blacks and mexicans into the prison-industrial complex. that is what trump's tariffs are really about, and why they're likely here to stay.
the united states is becoming more like china every year.
tariffs on developing industries is also a good idea in general as it helps them develop without facing pressure from outside competitors.
the way to get what american workers want is actually to build organized labour movements in asia. the uaw and other big unions should be sending agitators to china and vietnam to do the very difficult job of organizing union movements in very oppressive workplaces. american intelligence agencies should be working with the unions to do this, as it is in america's strategic interest to develop organized labour movements in asia.
you won't get that kind of thinking from trump.
tariffs are neither bad nor good. tariffs are hard. trump won't get the outcome he's marketing, but he is likely to get deep state and systemic support, if he focuses on specific items of national security. it's up to union workers to understand what they're voting for.