Becker Private Equity & Business Podcast
Tariffs: The Good, the Bad, and the Ugly 1-25-24
Sat, 25 Jan 2025
In this episode, Scott Becker breaks down the complex topic of tariffs. He explores the pros, such as protecting local industries and workers, the cons, including inflationary effects, and the potential global risks of trade isolation.
Chapter 1: What are tariffs and why are they important?
This is Scott Becker with the Becker Private Equity and Business Podcast. So today's discussion, and we try each day to teach, to entertain. We try and be largely nonpartisan or bipartisan. You know, we assume you're not that big a fan today of either party, so bear with me. We're going to talk today about tariffs, the good, the bad, and the ugly. So here are a couple thoughts on tariffs.
Chapter 2: What are the positive impacts of tariffs?
And so tariffs have been traditionally used to protect a local country's industry. And there could be good or bad reasons for that. It's gone back and forth being a tool of the capital class, those that own businesses that want protection from overseas businesses, and being the sort of effort of unions where people really want them because they're protecting U.S. jobs.
Chapter 3: How have tariffs been used historically?
And who has been the bigger champion of tariffs over the last 100 years is has gone back and forth over the years politically. We've got the Trump administration that is very aggressive about utilizing tariffs, and it's not been particularly a Republican policy for a long time.
Chapter 4: What are the arguments for and against tariffs?
Now, the good in tariffs is, let's say we're buying goods from China, and China's manufacturing them at $3 an hour with child labor, and they're polluting the heck out of the world. Well, of course, we want to put a tax on that to
Chapter 5: How do tariffs affect local industries and workers?
To try and make sure that they bring their cost up, that they improve what they're paying the workforce, and that our workers and our businesses aren't unfairly challenged by the fact that somebody's using child labor or really inexpensive labor. Because we can't pay our workers what we want to pay them if we're buying stuff from overseas for $2 an hour.
Chapter 6: What are the implications of tariffs on global trade?
It just doesn't work if we want to be paying $40 an hour here. for buying goods for $2 an hour there. So that's one reason for tariffs. And I would say that's the good reason.
The bad concept on tariffs is that at the end of the day, it ultimately leads to inflation because we are reducing the amount of places we could buy goods from, which means less competition for selling goods and ultimately higher prices and brings up inflationary and as inflationary tones to it. So that's the bad.
Now, the ugly about tariffs is, I'm a believer that greater trade throughout the world likely leads to us being more vested in not having battles and wars and fights with others. And the more that we have trade with others, the more likely we're able to stay in tune with them and reach peace with them and avoid things blowing into armed conflict. So the ugly of tariffs is,
The more that you isolate countries from each other, the more likely you are to ultimately have challenges that can grow into military and other kinds of conflicts. So, again, we're talking today about the good, the bad, and the ugly.
Good reasonable tariffs protect us from just undercutting our workforce, undercutting us in what we think of as unfair ways, places where they pay below-living wages. in places where they're polluting the heck out of the world. The bad is it does have inflationary aspects here. It gives us less of a pool from which to buy goods.
And the ugly is if we really end up with trade isolationist policies, sooner or later that can lead towards more and more conflict between nations, which is a bad thing. So there's tariffs for you, the good, the bad, and the ugly. We're always looking for suggestions for ideas on episodes 773-766-5322.
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