Back to episode — Episode 2589 CWSA 09/06/24
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ire industry in your country. So because the country is behind it, not just the company selling goods, the country is behind it like China. They could subsidize the product until nobody would ever buy an American car because they seem too expensive. So we'd all have Chinese cars and then we would have no car industry and then China would slowly start raising the prices because it's the only place…
← Previous segment →ow about you pay whatever we charge you I guess I have to. So the first thing you need to know is that it completely depends on what product it is. If you're saying in general it's good or in general it's bad, well you're just stupid. It's not in general good or in general bad. It depends entirely upon the specific thing that's being tariffed.
So remember this. The first thing you need to know is it depends. If you had options, if you have plenty of options then your price doesn't go up at all. It's just that that company doesn't do business in the United States. It's too expensive. If you have to buy it then the government shouldn't put the tariff on it. Does that make sense? If we do it right there wouldn't be any tariff on something that you had to buy so there'd be no cost to pass on.
Did you already understand that? How many of you already understood that before I explained it? Because tariffs are kind of wonky and confusing. And then you get to the tariff to defend an industry. Here's what they never calculate when the people tell you so they'll just pass along the price. It's just like a tax on the consumer. It's just going to pass along the price. Did they calculate what it cost the United States to get rid of the car industry? Because that's kind of big. If you lose the entire automobile industry and the only way you could have kept it was some tariffs, did they include the cost of losing the entire automobile industry and all that pay and all the things that those people would have bought and they might have bought more things from you whatever it is that you're selling? No they don't. And that cost is enormous and they just sort of act like that's not part of the question. No, losing an entire industry is the question. It's not the oh there was a little tax. It was the tariff was a little tax that got passed on to the consumer. No that's the dumb view, right?
The sophisticated view is you're protecting an entire industry in some cases because the value of the industry is critical to America. In that case even if you paid a little more it'd be worth it. So if you put it on something that you have to get it's a bad idea. If you put it on something that you could get at the same price from America it's a great idea. If you put a tariff on something that would destroy an entire industry in America if you don't do it it's a great idea. So on balance are tariffs good id
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eas or bad ideas? Well in the political realm we deal with tariffs the way we deal with people, stupidly. Let me give you an example. There was a Democrat once who did some bad things and therefore all Democrats are bad. That's how we look at tariffs. Well there's one situation I could think of where a tariff would be bad which would be a tariff on a good that we couldn't get anywhere else and so…
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