But how and WHY are tariffs bad? The
point of tariffs is to remain competitive in the global market for the benefit of the host country. If businesses will outsource jobs and products but still expect the host country to pay full price, the tariff will have them reconsider their choices. Encourage domestic trade and business to strengthen domestic economy. What's wrong with that?
Tariffs are a cost borne by the consumer. Businesses will always try to pass on these costs to the consumer.
An economist views a tariff like a consumption tax on foreign goods, like a 20% sales tax on Chinese washing machines specially. The tax income is collected during import instead of sale but it amounts to the same thing.
If in the long term tariffs could accomplish what they're supposed, i.e. increase American wages, manufacturing, jobs, adapting would still take time and the lesseed affordability of things in the interim is still "bad".
However, tariffx aren't supposed to just make goods cheap, they're supposed to keep wages high and production local, protect the value of labor. A good thing.
They represent a significant bargaining chip in Trumps inventory. Tariffs do also objectively put foreign made goods at some competitive disadvantage.
But if a tariff / whatever policy is insufficient to force the desired change to happen, because foreign production is still more viable even with tariffs... Then it's literally just a tax. A 3% tax on GPUS wouldn't have TSMC scrambling to somehow build a copy of their factory abroad. That'd just be a 3% tax.
Really it's simple: Tariffs are 'bad' in that Businesses will produce in the US what makes sense to produce in the US when that becomes the most economical/expedient thing to do and no sooner. One wishes to be quite skillful and exacting in how to apply them to get the result one wants. There's a certain minimum threshold that needs to be crossed before the desired change starts taking place and no sooner. Either a factory comes home or it doesn't, there is no in-between.
I wouldn't say they're bad - but one can absolutely argue it's a little risky.
Funnily enough, Biden-admim policy has, for the most part, been to just keep Trump policies in this regard - as an instrument for bargaining and control. Basically condemning him for implementeing them while gratefully keeping them in place (haha).
