xkcd #3290: Trade

Title text:

"You legs may have a comparative advantage at running, but we arms have a competitive advantage at swinging hammers, so unless you accept that we're the dominant limbs and stop hogging the oxygen, that running advantage won't be around for long."

Transcript:

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Source: https://xkcd.com/3290/

explainxkcd for #3290

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[–] 125 points 1 day ago (3 children)

It’s even worse than that. When we complain about a trade deficit with Vietnam or whoever, what we mean is: they send us goods, like t shirts and shoes and electronics, and in exchange we increment a number in a database somewhere. A trade deficit means a goods surplus — we actually have physical things that we can use, and we’re complaining about it?

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  • [–] 67 points 1 day ago (4 children)

    I came here to start with the exact same first sentence. There is a use case for tariffs: when another country's prices on a specific item are lower because they pay their people slave wages, a tariff can make the prices on the US version more competitive and encourage people to buy domestically. But Trump is raising prices on things we don't make or materials we don't have enough of, and - like the cartoon says - he's acting like he's punishing the other countries when he's only punishing Americans.

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  • [–] 14 points 18 hours ago (1 child)

    And you would introduce those tariffs gradually. Just start with 0.1% and increase at a regular interval over several years so everybody has time to adjust and build out local production financed by investors that know exactly what's coming down the pipeline. No, instead you get wild swings, on and off again and a complete chaos where building and investing becomes a huge risk.

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  • [–] 20 points 22 hours ago (2 children)

    There are other cases to be made. There are things of stretegic importance you want produced domestically. Trump complains about Canada having tariffs on dairy. Obviously he mischaracterizes it, but there are indeed limitations of the amount of food Canada imports from the US.

    We don't want to become dependent on the US for food. Because we don't trust the US. For obvious reasons.

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  • [–] 5 points 1 day ago

    The only thing that would punish other countries there is that higher prices here means less people here buy it, which means less sold there.

    But it also means less logistics workers and such as well. It's just a bad deal all around.

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  • [–] -5 points 1 day ago (3 children)

    Trump has an economics degree yet doesn't understand simple shit like this

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  • [–] 19 points 23 hours ago (1 child)

    I remember some quip about how his professor said that he was the dumbest student that he had ever had.

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  • [–] 11 points 16 hours ago*

    “I remember the inflection of his voice when he said it: ‘Donald Trump was the dumbest goddamn student I ever had!’”

    - Marketing professor William T. Kelley (according to attorney Frank DiPrima, who was close friends with Kelley for 47 years)

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