I have already noted this morning that we need to be rid of neoliberalism if we are to have politics that cares about the well-being of people in this world.
Donald Trump's tariff policy is an example of how things can go horribly wrong when somebody builds their worldview upon the assumptions implicit within neoliberal economics, which are intimately related to neoliberal politics.
There is an assumption, often repeated in neoliberal economic papers published in leading peer-reviewed journals, that policy changes created as a consequence of the imposition of neoliberal ideas have an instantaneous effect.
So, it would be assumed that if Donald Trump created a tariff that increased the cost of car imports into the USA, meaning that the cost of European, Mexican, Japanese and Korean cars rise in that country, then US car manufacturing can increase its capacity instantaneously to meet the new demand that there will be for their products as a consequence of their prices now being relatively lower.
This assumption is very obviously completely absurd. It takes years to increase the capacity for car manufacturing in the USA, but neoliberal economists assume that this is not the case.
In fact, at one time, I think it was Paul Krugman who suggested that there were two main schools of thought in US economic thinking. The freshwater variety was based in Chicago, where Friedman and others were located, with the name deriving from the fact that it is near Lake Michigan. The seawater variety referred to the Ivy League universities on the East Coast, adjacent to the Atlantic Ocean. The freshwater variety of economic thinking presumed that changes in the economy arising as a consequence of policy changes were instantaneous. The seawater variety realised that there was always a time lag and that, as a consequence, government intervention in the economy was necessary to manage the processes of change that inevitably occurred as circumstances altered.
Both schools of thought were mainstream. Let's be clear about that. The difference was that the seawater variety was described as neo-Keynesian, because at least they thought that there was still a remaining role for government, and that role arose precisely because of time lags between decision-making and resulting actions.
Those who designed Donald Trump‘s tariff policy are clearly from the freshwater school of economic thinking. They think that if there are fewer Nissans, Kias, VWs or Minis in the USA, then, instantaneously, there will be more US-built Fords.
I have news for these people. That is not how the world works. You might get into a major economic journal making such a stupid mistake, but in reality, it will take years for Ford, General Motors, and others to up their production to meet demand for US manufactured vehicles, if they ever do given that there is going to be a massive slump in demand for vehicles in the USA because of the recession that is coming its way.
Let me draw the obvious conclusion. Neoliberal thinking is deeply dangerous. People who are able to persuade themselves of the merits of neoliberal thought processes do, as a result, detach themselves from the realities that exist in the world. There is no kind way of saying this, but there is a description for that detachment from reality, which is that it is madness. That is what we are witnessing.
We will pay a massive price for this madness.
Today's video could not be more appropriate.
We really do need to be rid of neoliberal economics.
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Being an amateur photographer, here is what one of the websites I occasionally use has said about the tariffs, the site is Thom Hogan’s:
‘A Sad Day for Photographers in the US
President Trump this afternoon finally announced his “reciprocal” tariffs, and it’s not good news for photography fans in the US.
Managers at the Japanese camera makers are all currently huddled around big tables trying to figure out how they’re going to weather the massive tariffs against their products in a market that comprises about a quarter of their sales. Meanwhile camera dealers across the US are already looking at the recent small uptick in sales with fond memories.
As with anything Trump, the details seem murky, somewhat contradictory, and subject to change, but the way things are being read right now is that starting on April 9th, shipments to the US are subject to:
24% tariff on imports from Japan
36% tariff on imports from Thailand
46% tariff on imports from Vietnam
34% tariff on imports from China (in addition to previous 20%; also deminimis avoidance is cancelled)
(Note that as I update this, various publications are reporting different numbers for China and different interpretations of how the new 10% tariff on everything works with the reciprocal tariffs. If you’d like to read the actual declaration Trump made, you can find it at whitehouse.gov.)
Canon has a majority of their production in Japan. Nikon has the majority of its production in Thailand. Sony manufactures in both those countries. OM Digital Solutions manufactures in Vietnam. So you can see that someone’s going to be taking it on the chin, perhaps everyone. Note that Nikon’s Z5II announcement was likely priced with some potential tariff accommodation in mind, but I can assure you Nikon was not expecting 36% tariffs on their gear coming into the US. I suppose the only good news for camera makers is that smartphone makers are also locked into the same nonsense.
Interchangeable lens cameras have not been made in the US since Kodak cancelled the SLR/n over nearing two decades ago (and that was basically reassembling a Nikon DSLR into an American made body). We’re not likely to get anyone thinking about making them again, even with substantive tariffs in place, so for photographers, the tariffs really represent a new tax on gear. A tax that is likely to be constantly changing as the administration starts to discover exactly what chaos they’re creating and tries to adjust their toupees policies. Of course, they don’t care about the camera market—it’s not big enough to offset anything they want to do—so it may be worse for photography than it is for other markets that have some sort of leverage to trigger renegotiations.
You may remember that after the US election last fall, I cancelled plans for changes and expansions to my business. I anticipated this chaos. You cannot plan into total uncertainty; the likelihood that you’ll waste both your time and money is not just high, but presumable. As it is, retaliation by other countries will likely impact my ebook business, and I may have to put a geofence on purchases because of that (a one person business cannot easily handle 200+ reciprocal grudge tariffs).
While I try to avoid political discussions, today’s announcement reminds me that most people don’t know the difference between ignorant and stupid. Ignorance is when you don’t know that you shouldn’t do something. Stupidity is when you shouldn’t do it and know what the outcome is likely to be, but you do it anyway. The US’s newly stated tariff policies are stupid.
__________________
Oh, you wanted the bulleted bottom line? Then:
Camera gear in the US will get more expensive because it will all be tariffed.
Predicting what you’ll have to pay for new gear will get impossible as tariffs may change, and if inventory piles up, there will have to be sales of some sort.
Sales of camera gear will slow as the economy slows.
More camera dealers will close their doors because they live off of sales turns, and those will go down at higher prices.
Many items will get harder to find in stock as camera companies shift new product shipments to non-tariff nations.
Repairs will take longer, as no camera subsidiary wants to bring in extra parts they have to pay tariffs on.
Repairs will cost more, as the tariff has to be recovered for the part that they waited for.
Camera companies will listen to American customers less, as we’ll be a smaller part of their overall sales.
Cheap Chinese accessories will go up in price because the loophole they were using (deminimis) is now closed.’
(End)
So, from the world of photography this has been the reaction, which does not seem dissimilar to the worries expressed here.
Everything to agree with.
With regards to:
“but in reality, it will take years for Ford, General Motors, and others to up their production to meet demand for US manufactured vehicles, if they ever do given that there is going to be a massive slump in demand for vehicles in the USA because of the recession that is coming its way.”
I am willing to be that auto parts supplier who sell parts for incorporation into new cars manufactured by Ford, General Motors, and Stellantis (who is truly global with manufacturing and supply chains) get their parts from the following countries with the associated tariffs.
24% tariff on imports from Japan
36% tariff on imports from Thailand
46% tariff on imports from Vietnam
34% tariff on imports from China (in addition to previous 20%; also deminimis avoidance is cancelled)
No parts supplier has the financial deep pockets of the Big-Three USA Auto Manufacturers, so therefore would not be financially capable of building a billion dollar parts manufacturing enterprise in the USA and probably would not want too with Trump and his cult on office.
Note: I pinched the above tariff figures from Pilgrim Slight Return without prior copyright approval. I look forward to Pilgrim Slight Return suing me in a Florida Court so I may meet him personally. When I lose the court case, I will take him to lunch!
🙂
And you are right – no one is going to build cars in the USA
BTB
Help yourself – no harm done
🙂
The issue with Trump’s tariff policy isn’t just ideological—it’s logistical. Economic models that ignore time, infrastructure, and human limitations produce fantasy-driven policy. The idea that domestic production can instantly ramp up to fill gaps left by imports misunderstands how industries actually function. Supply chains, investment cycles, and labour markets operate on long timelines. Tariffs without a realistic industrial strategy aren’t protectionism—they’re self-inflicted disruption. What we’re seeing isn’t just bad economics, it’s the result of treating abstract theory as if it governs the physical world.
It is only when the US does something like this, that we realise how important the US is, for everyone. It surprises me therefore how little discussion there has been on the core of American power; not just its military heft, but as the World Reserve Currency. Trump’s tariff spree has been created as if he hasn’t noticed this, or it didn’t matter; as a central part of the reason the US has followed the policy effectively established in 1945. It makes the US different; but the tariff increase implies Trump thinks the US is just one of the pack, albeit the largest. It isn’t. The US, not Trump is the hegemon, and the Almighty Dollar is a central part of that power. Everything is connected in the application and maintenance of US power, but Trump is acting as if it isn’t; as if he can sit in the pews and stand in the pulpit at the same time. The World will eventually stop believing.
As for Britain, ever since the seventeenth century America was Britain’s imagined future, the escape from itself; in spite of the fact that Britain is located in Europe; but for a free America after 1776, Britain is of no existential or politically determining significance, save as a convenient foothold for access to Europe (until the rise of Trump the US had promoted the EU as the best place for Britain, as a useful representative for US interests). Britain is lost in a longstanding incoherence that Trump is forcing to the surface. In the backdraft of this we are beginning to understand some rather unattractive characteristics of Britain’s longstanding nature and aspirations. We can expect of British politicians only one thing in consequence; a policy that fixes nothing, but pushes the unpleasant truths about ourselves back into their hiding place.
Spot on.
Britain is a privately owned backwater pretending to be a democracy. With the advent of Thatcherism, it just became increasingly less bashful about it, and also less squeamish about letting the country’s assets be owned abroad as long as the Establishment gets a nice pay out, a few houses and bit of land.
But America has failed too because it has also fallen for the disease of extreme wealth and conflated it with effective rule and other none existent attributes. I think America might survive yet because of its internal contradictions that helped it to be formed.
There are no such internal contradictions in Britain, where any contradiction to the capital order was tolerated up to a point but was always on a knife’s edge. The Establishment is Britain’s equivalent of a permafrost.
That’s why anything anywhere near authentic politics has stopped working in the UK. It’s strangled at birth anyway. If you want to see what this real Britain looks like, go to the Lord Mayors Show in the City of London and meet the real rulers of this dump.
“But America has failed too because it has also fallen for the disease of extreme wealth and conflated it with effective rule and other none existent attributes.”
Yes and No: The USA has failed this time around because 50% of the voting public believed that a magic charlatan (Trump, Musk and/or Johnson-pick one or take all three for the same price) could wave his magic wand to cast a spell giving positive direct tangible financial benefit to their household checkbook by deporting illegal immigrants and imposing tariffs on China and India. These people do not have a clue as they really believe that mass deportation and tariffs will result in a decrease in the price of housing, eggs and gasoline (petrol) and increase in the quality of their children’s (and grandchildren’s) education.
Again, these voting (Florida) people do not have a clue. Their three-times-removed by marriage English cousins, who also are part of The Daily Fail commentariat, were the English voting people who voted for BREXIT. (Yes, I periodically read The Daily Fail comments to keep abreast of English opinion and for entertainment playing “spot-the-bot”)
I know this very well as I live among them and have heard much of their chatter personally. (chatter not discussion because you cannot hold a rational discussion with these people)
Understood
Thank you, both.
What has puzzled, if not infuriated, me this week is how the airwaves and print have not featured retired diplomats, academics, business people etc., i.e. able to talk free of employment restrictions, about what the impact and what next. That’s not the case in France and I imagine / hope elsewhere.
My only quibble with John’s comment is that it’s not just politicians, but the MSM and civil society.
Further to John’s point about the UK as the US’ paw in Europe, in 2013, I dined with a British diplomat visiting London from his Paris posting. He reported how, especially under John Kerry’s leadership, the US was bigging up France as its representative in Europe, realising that Britain was isolating itself. Funding for the French American Foundation grew. More French people joined the European Council on Foreign Relations. London was notified, but the alarm bell fell on deaf ears.
BTB
You live in the U.S, I do not, I will defer to you always.
My view is really based in disappointment with America, I grew up an admirer and then Reagan came along.
As an Englishman and being much suppressed, I realised what a cunning tool he was straight away but still have hope for you – you shook free of us, so the U.S can shake this new (fuc)King off too.
Good luck – from the olde country. I mean, really.
But you’re talking as though 47 is trying and failing to benefit the US. He’s not. His motivation is to consolidate his own power for his own benefit.
“[The tariffs] aren’t designed as economic policy. The tariffs are simply a new, super dangerous political tool.
“… Now, one by one, every industry or company will need to pledge loyalty to Trump in order to get sanctions relief.”
https://bsky.app/profile/chrismurphyct.bsky.social/post/3lluxkmxpkc2m
Please can you clarify which part of ‘neoliberal economics’ promotes high tariffs and barriers to trade?
Or did you just make it up?
Read what I wrote
Do not make up what I did not say
For all car companies know, Trump will be gone by 2029 (assuming democracy remains of course). Tariffs will go with him. They aren’t gonna build any factories in the US.
Bit of a tangent but even in the lalaland of instantaneous productive capacity is there even a single US manufacturer that doesn’t reply on components and materials produced outside of the USA?
Even domestic production is going to be more expensive, plus they are simultaneously currently crushing their domestic consumption with their insane policies laying people off and defending entire govt depts.
Even their own defence industry has said previously they have around 3000 supply lines in a single highend missile.
Do they actually want a civil war?
WW3?
How do powerful entities like blackrock and vanguard respond when they are hemoraging trillions of $?
It’s mind boggling!
I honestly don’t know enough of the history, but it feels like priming for oligarchical takeover like occured during the chaos surrounding the collapse of the former USSR.
They want to force us all into being vassal states
This morning’s video really did get to the heart of it and, a quick scan of the comments, indicated many others thought so as well
Thanks
It seems it was liked
“Donald Trump’s tariff policy is an example of how things can go horribly wrong when somebody builds their worldview upon the assumptions implicit within neoliberal economics”
??
as your link says,
“6) Globalisation: Neoliberalism promotes free trade and globalisation, seeking to remove barriers to international trade and investment.”
I made clear what assumptions I was using.