 The first most obvious argument for tariffs is well they do it. I mean China has very high tariffs on American goods and China has for a long time maintained high tariffs. So they're significantly lower than they used to be and generally China has been on a trend towards lowering tariffs significantly and dramatically. But they have higher tariffs than we have on their goods. So on their goods in the past we have had I don't know something like four percent tariffs and they have had in the past or they still have although they just went up they just raised half some 60 billion dollars worth of goods but before that they had tariffs of something like 10 to 20 percent of our goods. So there was a clear asymmetry in tariffs before the Chinese before Trump escalated. Now right now tariffs on half of the China about half of Chinese goods is about 25 percent post Trump's increase and he wants to impose 25 percent on the rest of Chinese of Chinese goods. Now let's understand what a tariff is because there's the other thing that boggles mind because people say well the Chinese pay for tariffs. We'll get to that but let's first understand what a tariff is. A tariff is a tax on imported goods. So it's paid by the importer by the firm the company the person who imports goods from China pays an additional tax above any kind of sales tax or in Europe any kind of VAT or any other kind of tax. There is an additional tax now that is called a tariff and importation tax that the importer pays the government and then the importer turns around and sells those goods. If it's Walmart they sell it to all of us or Best Buy or whoever it happens to be they then sell it. Now they can't afford and they have no reason to absorb the cost of this tax. So what do they do? They raise prices so prices go up. So at the end of the day the person who pays the taxes is the consumer. Now it's also true that when you have high tariffs you buy fewer foreign goods so tariffs go up to 25 percent. So now we look at Chinese goods and say oh Chinese goods are 25 percent more expensive so we're going to buy fewer of them in that sense that's what hurts the Chinese. What hurts the Chinese is we're buying fewer of their stuff because it's more expensive for us we can't afford it or now it's not competitive with other stuff we can buy. So we take the Chinese out of the picture or we take a certain percentage of what the Chinese imports out of the picture and we'll get to all the complexities because there's a lot of complexity here but basically we take the Chinese Americans are still going to pay their tax on Chinese goods but now German goods, American goods, other goods become more competitive for a while because there's no tariff on them so they're going to be cheaper than the Chinese goods maybe I'm not sure 25 percent is enough but of course many goods that are made in China only made in China or for the most part made in China. And what happens when you take a competitor out of the business what happens when you exclude a major competitor like China what are the other firms typically do well they raise prices so typically what happens is prices go up across the board in the product that now has a tariff against it at least in industries that have little competition because you've just artificially priced out a competitor you've priced out Chinese manufacturers because you've raised their price by 25 percent artificially so this is the argument the Chinese do this to American goods right because they have a high tariff so we should do it the Chinese goods now who does raising tariffs hurt well it's domestic consumers so domestic consumers are now paying more either 25 percent if they're still buying Chinese stuff or they're paying more for non-Chinese stuff because of the reduction in competition right and that's what Donald Trump by the way said in one of his ignorant tweets he said well just don't buy Chinese stuff buy other people's stuff it's easy so so we can study this right as if you need to study it because economic theory is pretty clear again it's pretty simple you you reduce competition prices go up so here's a simple example a simple example that has happened in recent times under Trump and here's what happened in jenny of 2018 of the trumpet administration increased the tariffs on washing machines on imported washing machines primarily from south korea south korea is the biggest importer of washing machines into the united states samsung and lg they increased the tariffs between 20 to 50 percent on imported washing machines and economic theory would say that the price of all washing machines in the united states both imported and domestic would rise in roughly the same proportion as the tariff that's basic economic theory so what actually happened well people actually looked at it and and evaluated it and looked a year later have washing machine prices actually gone up well it turns out that yes surprise surprise shocking to anybody or yes who is not an economist the price of washing machines went up by 12 percent now you say wait a minute 12 percent but that's half of the tariff the tariff between between 20 to 50 it was averaged like on 25 because of the way it was implemented so it should go up it should go up by 25 and it only went up by 12 aha it turns out that washing machine and washing machine manufacturers figured out that it that it would do them harm with customers to raise it by 25 percent so they only raised it by 12 percent but they got to make up the difference because they're not going to subsidize this right somebody pays the taxes and it has to be it has to be american consumers so what they did is they raised the price of another good that you always buy with a washing machine what is that what is the good you always buy with a washing machine well it's a dryer dryer tariffs did not go up it's fascinating right no tariffs on dryers only in washing machines and yet the price of dryers also went up by about 12 percent so total increase was about 25 percent because dryers and washing machines I guess cost about the same and they usually bought in pairs and the total price went up by 25 exactly what the theory would have predicted so exactly what I've been saying all along that the people who pay for the tariff are consumers consumers pay the tariff now what happened to the South Korean manufacturers of washing machines well nothing much maybe they sell a few fewer washing machines in the United States because maybe the American companies can produce can actually actually sell more washing machines so they did the study they did the study so oh the other thing Trump says is a hundred billion dollars was collected in tariffs that's a big amount that's great we got the treasury got and we'll get to this argument that that more tax revenue and somehow tax revenue is a good thing he gets this idea of of tax revenue has gone up and the second advantage is more jobs in America created because American manufacturers of washing machines will sell more washing machines because the competitors have been you know burdened with the 25 percent tariff okay so they calculated they calculated the amount of the of the tariff the amount of this extra tax the washington collected and just so you know and understand that it's americans paying it it's the american treasury that's collecting it i mean american treasury doesn't collect taxes from china it only collects taxes from americans so of course americans are paying for it all right so americans paid 82 million dollars in tariffs in other words taxes on washing machines during this period over the last year and at the same time about 1600 new american jobs were created 1600 new american jobs were created yes make america great again 1600 jobs in making washing machines you know or in the whole you know what do you call production cycle in the whole supply chain 1600 new jobs this is terrific now if you divide the 82 billion dollars which consumers paid in taxes to create 1600 jobs it cost 800 thousand dollars for every job created every job created cost taxpayers buyers a washing machine who paid a tax on it 800 thousand dollars now this is worse much worse than the obama stimulus much worse than the obama stimulus where i don't i don't remember but like every job that was created cost 200 you know 200 thousand dollars or something every basically minimal wage job but here it's 800 thousand dollars what did we gain from this exactly who won here nobody won and maybe the american washing machine industry picked up some market share and is more profitable because it's selling at a higher margin and and long term it's going to do better but at what cost and of course you the buyer of washing machines were forced to buy an inferior product at a higher price than otherwise through force this is the moral point you are not left free to make a decision about what washing machine to buy but that decision was manipulated by government in favor of domestic producers so if you love samsung or you love the lg washing machine some president or bureaucrat in washington who decided that came or may tag a better or they create american jobs in the spot of make america great again you should sacrifice for the sake of making america great again you sacrifice your tax money i mean your dollars your wallet everything is going to cost you 20 25 percent more expensive because somebody decided you shouldn't buy korean washing machines how do you how does this work how is this right how is this defensible i'm waiting for the super chat to tell me how is this defensible by what standard is it defensible i mean i get people who say look trump was better than hillary but he sucks he's really really bad and this trade stuff is stupid and i wish he didn't do it i get that okay i have no problem with that but people who defend everything he does that's just mindless tribalism mindless unthinking loyalty to what to a mindless unthinking president so the empirical evidence is clear the theoretical evidence is clear morally consumers pay for tariffs so it's true that china has higher tariffs in the united states and who pays for them well the chinese do chinese consumers i think it's horrible that china has high tariffs i would argue against china having high tariffs i would yeah i mean it's despicable but the main victim of those tariffs are the chinese consumers and it's true it's true to some extent american manufacturers because they could sell more in china if tariffs were lower but american manufacturers you know they make as much as they make they sell to whoever will buy them we have no control should have no control of what china does or doesn't do economically there's a lot of economic policies that if china implemented we would be better off and they would be better off but that's their problem primarily it's their problem primarily so if i was a chinese i'd be really pissed off at chinese tariffs china is just as irrational china is just the statist more so even than donald trump but they are both on the same level they're both they're both ignorant of economics they're both statists in their belief that the economy should be managed and controlled by a central power and they are both inflicting damage on their own citizens so look china's economic policies are terrible so the way to fight them is to mimic them the way to get china to behave better the way to get china to treat its own people more justly by opening up their markets by having a freer market by lowering tariffs is to make americans suffer it's to raise the prices of washing machines and lots of other goods on americans by the way the washing machine tariff had nothing to do with china it's primarily south korea it had everything to do with protecting an american industry from foreign competition it has everything to do with our central planner in charge trying to manipulate and run the u.s economy and create so-called wonderful manufacturing jobs so it's not it's not that trump i mean everybody the other thing everybody tells me is Trump really wants zero tariffs with the world if only everybody else had zero tariffs we would have zero tariffs that's just not true or i mean when europeans offered zero tariffs on cars or car parts or whatever trump turned them down but you know china and would trump stop subsidizing all american businesses no would trump stop all subsidies and washing machines cars and everything else in america coming into america no he has no indication once in a while larry cadlow whispers in his ear say something about zero tariff world that would be the idea and he says it but he doesn't believe it if you read his tweets if you listen to what he actually says he has always throughout his history going back to the 1980s believed in managed trade that's what fair trade is that's the the name for fair trade is managed trade and fair trade by the way is a term is a term adopted by it's a term adopted it's adopted by trump but was created by the left the radical left who opposes trade right listen to read trump's tweets i'm not psychologizing just read trump's tweets read what he writes about trade read how he talks about trading as a zero-sum game read how he he writes this he says every time we trade with canada he wrote and we have because we have a trade deficit although we don't really have a trade deficit it doesn't even know the facts but every time we have a trade deficit we lose come on people read what he actually says not one not when somebody writes his speeches for him but when he actually says what he actually believes all right so they do it yeah they do it and they suffer the consequences economic growth in china would be dramatically higher if they had zero tariffs economic growth in china would be dramatically higher if they didn't regulate and control and try to run centrally plan much of their economy luckily for them they don't do that for the entire economy but for those parts of the economy that they do that they suffer they suffer so because the chinese suffer because they chinese have stupid bad economic policies we should adopt the same it just doesn't make any sense doesn't make any sense what we need today what i called a new intellectual would be any man or woman who is willing to think meaning any man or woman who knows that man's life must be guided by reason by the intellect not by feelings wishes wins or mystic revelations any man or woman who values his life and who does not want to give in to today's cult of the stare cynicism and impotence and does not intend to give up the world to the dark ages and to the role of the collectivist