Economic and market musings / 2025

[BackInTheGame78]

I have a Bachelor of Commerce, and the only economics and finance courses I took were in my first and third years. That said, and speaking as neutrally as possible, the media’s focus on tariffs revolves around protectionism and the idea that the U.S. can produce everything domestically while isolating itself from globalization and supply chains. In other words, achieving 100% market autonomy.

I’m not sure how that would work, but from my perspective, it would lead to decreased production and innovation. For example, if BMW were forced to source all components from within the U.S. to sell cars in the American market, they would have to drastically reduce the number of models available to achieve any kind of economy of scale. Cutting off access to specialized foreign components would either drive costs up or eliminate certain features altogether.

This is highly unlikely to happen with how global the world has become and even if it could it would mean prices would skyrocket since we will be forced to buy materials produced at US Labor prices instead of the much cheaper foreign labor prices.

Now just consider something like a car that has hundreds of pieces and now each of those pieces costs 50% at minimum more due to it being made in the US.

Maybe back in the 1600s this made sense, but not in today's world.

 

[plumber]

I have a Bachelor of Commerce, and the only economics and finance courses I took were in my first and third years. That said, and speaking as neutrally as possible, the media’s focus on tariffs revolves around protectionism and the idea that the U.S. can produce everything domestically while isolating itself from globalization and supply chains. In other words, achieving 100% market autonomy.

I’m not sure how that would work, but from my perspective, it would lead to decreased production and innovation. For example, if BMW were forced to source all components from within the U.S. to sell cars in the American market, they would have to drastically reduce the number of models available to achieve any kind of economy of scale. Cutting off access to specialized foreign components would either drive costs up or eliminate certain features altogether.

your correct. but it will improve the position of the lower 80%. specifically those willing to go work hard. like the old days, reward for effort and results. yes the cost will increase on a bmw. the portion of income of the 80% used for basic needs should go down.