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PaperclipPerfector  13d ago (text post)   32056 thread views

Culture War Roundup for the week of April 7, 2025

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Trump exempts smartphones and computers from new tariffs

US President Donald Trump's administration has exempted smartphones and computers from reciprocal tariffs, including the 125% levies imposed on Chinese imports. The move comes after concerns from US tech companies that the price of gadgets could skyrocket, as many of them are made in China. The exemptions also include other electronic devices and components, including semiconductors, solar cells and memory cards.

Some estimates suggested iPhone prices and other electronic goods in the US would have gone up three times if the costs of the tariffs had been passed on to consumers. Trump's move takes off "a huge black cloud overhang for now over the tech sector and the pressure facing U.S. Big Tech", said Wedbush analyst Dan Ives in a research note, according to the Associated Press.

The US is a major market for iPhones, while Apple accounted for more than half of its smartphones sales last year, according to Counterpoint Research. It says as much as 80% of Apple's iPhones intended for US sale are made in China, with the remaining 20% made in India. Along with fellow smartphone giants such as Samsung, Apple has been trying to diversify its supply chains to avoid over-reliance on China in recent years. India and Vietnam emerged as frontrunners for additional manufacturing hubs. As tariffs took effect, Apple reportedly looked to speed up and increase its production of India-produced devices in recent days.

Lot of sound and fury, but it seems at the end of the day nothing will happen. Over/under on how many more 'exemptions' we'll end up with?

Hilariously, this negatively impacts domestic US manufacturing, since it is now massively more favorable to import finished products over importing materials and manufacturing in the US.

My prediction is that we're going to end up with a swiss-chess-like set of trade barriers that mostly has the effect of negatively impacting American firms and the overall economy, but isn't disruptive enough to cause real economic disaster.

Some estimates suggested iPhone prices and other electronic goods in the US would have gone up three times if the costs of the tariffs had been passed on to consumers.

Estimates by who? This doesn't math out even if you do the naive thing and assume 125% tariff is on the retail price. A $1000 iPhone would cost $2250 then.

But aren't tariffs on the manufactured cost and not the retail price? Isn't the cost of an iPhone something like $300? A 125% tariff on that adds $375 to the price, not $1250.

Well I said high chance of him backing down a significant amount on it and just two days later, proven right https://www.themotte.org/post/1827/culture-war-roundup-for-the-week/316609?context=8#context

The de minimis exemption is still scheduled to end on May 2nd, but considering he already tried that in February only to reinstate it, and he then proceeded to delay again in March, https://www.supplychaindive.com/news/de-minimis-canada-mexico-trump-delay/741361/ I'm not holding out for this happening either. Maybe he gets to it and has it up for a few days before folding too but at this point who even knows.

(Moved to correct thread)

I believe you posted this under the wrong top level comment.

Thanks

So now the components from China for a laptop are 125% more expensive if you wanted to make the laptop in America, but the laptop made in China is only 10% more expensive? Is anyone still claiming there's some 5D chess going on? This isn't even the Art of the Deal because no deal was made and it's antithetical to the initial goal of wanting to reshore manufacturing.

If nothing else, it’s fascinating to watch just how impregnable the neoliberal world order really is.

”It’s easier to imagine the end of the world than it is to imagine the end of capitalism.”

Lot of sound and fury, but it seems at the end of the day nothing will happen.

Well, MAGA's dreams of working in apparel and shoe factories will finally come true.

What an awful sign for our civilization --- Trump's reversal reflects our lack to accept short term pain to achieve long term objectives. For my purposes here, it doesn't matter whether the tariffs on phones would have actually helped: what matters is that Trump believed they would, that he was the duly elected head of state, that imposing tariffs was within his legitimate authority, and that he had a majority in the legislature as well.

He still couldn't do it. If he couldn't, nobody can. And if our societal time preference really is this high, we are fucked.

For my purposes here, it doesn't matter whether the tariffs on phones would have actually helped: what matters is that Trump believed they would, that he was the duly elected head of state, that imposing tariffs was within his legitimate authority,

Counter-point: the political system of the US is not that once the president is elected, his or her will alone is making all of the decisions, and nobody is allowed to influence him or her.

and that he had a majority in the legislature as well.

Congress is not the electoral college. The people elected to Congress have a mandate independent of the president. For the time being, Congress has delegated the authority to pass tariffs to the president, but they can take that authority back.

Now, neither you nor I know what exactly went on behind the scenes to make Trump retreat from his announcements. If it was the deep state threatening to kill his family, that would be bad. But if it was Republican members of congress telling him that he should stop this madness, or they would pass a bipartisan law to constrain his power to make tariffs, that is the system working as intended.

what matters is that Trump believed they would [help]

This is a completely unfalsifiable statement. The behavior I have seen from Trump can be equally well explained by him trying to rip off the stock market through insider trading. Or by him having a kink which involves a statement of his being the top news in the worldwide media for a day, for that matter.

what matters is that Trump believed they would, that he was the duly elected head of state, that imposing tariffs was within his legitimate authority, and that he had a majority in the legislature as well.

Limiting the presidency's power was an explicit goal of the founding fathers. They didn't want a system where we elected a single person in a single election to control everything. The entire basis that Trump is even implementing these tariffs under is arguably unconstitutional because the commerce clause explicitly says Congress is the one with the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes".

The entire point is that you don't just win an election and become the ruler, you have to compromise and negotiate with other representatives and obey the court. "Checks and balances" is so fundamental to our system that it's hard to believe so many people shocked Trump has limits haven't heard about it till now.

Even if we accept the argument that they can delegate this power to the executive for "unusual and extraordinary threat" scenarios as the The International Emergency Economic Powers Act wishes to do (which is very arguable on its own considering the constitution doesn't make provision for that), it's hard to see what threat is so unusual and extraordinary to demand a plan like this.

Especially since this threat is apparently "unusual and extraordinary" but also very open to constant delays and personal negotiations. It doesn't sound very pressing if the claimed solution can be delayed for months without any noticeable problems.

Edit: To be even more nitpicky

and that he had a majority in the legislature as well.

The system wasn't designed for party majority to = complete control either. You still have to get the different factions within them to agree. If Trump is unable to rally the Republican majorities in Congress to pass the bills he wants then that's his failing, not the system. "Mandate" is a word used to describe a political phenomenon, not some encoded thing. If Trump does not have the political influence to push Congress using the bully pulpit then he de facto does not have the mandate to do it.

Supporters should be asking themselves why Congress isn't passing Trumpian tariff bills (most likely answer, they have upcoming elections too where they will be accountable to their constituents), rather than complaining about the intentional distribution of power not creating a king out of the executive.

It's pretty blackpilling. The US has basically devolved into a nation of crack addicts. If Americans aren't literally fat, and most of them are, they are spiritually fat. Endlessly chasing fulfillment via the next product purchase while never actually finding it. Capitalism is great at giving people what they want, and what they want is to be a cancer-esque fleshy growth on a couch in front of a screen.

Endless dollars flow to China, where they are spent on housing, industry, energy projects, military that dwarfs the US's in efficiency and output and soon will in size, and so on. While in return stuff that will be in a landfill in 2 years flows to the US. Housing is in a crisis, energy grids are strained, infrastructure is crumbling, industry and even the knowledge to build and repair stuff has been offshored. Meanwhile Americans are up in arms (as long as its via a screen and doesn't actually involve lifting something) that they will have to buy a new iphone every other year instead of every year. If tariffs get really bad all the modern cell phones where you can no longer replace the battery might make it to their planned obsolescence age!

The tariffs were a bad idea! Let's take the CCP's famous EV subsidies. Xi is taxing his subjects and giving that tax as a subsidy to his industries so they could charge a much lower price than the Americans or Europeans! That's a direct wealth transfer from China's productive class to the low-to-middle class consumer abroad! Is it a national security concern when the US has no steelmaking capabilities? Yes, maybe, and that's why Dimon initially said to get over the tariffs:

"If it's a little inflationary, but it's good for national security, so be it. I mean, get over it."

But he changed his mind when it became clear that no, Trump doesn't actually understand that the trading of our pork for plastic pieces of crap can largely be left alone and we'll be better for it. Dimon again weighed in and was reportedly the reason Trump buckled:

After JPMorgan Chase Chief Executive Officer Jamie Dimon issued a warning Wednesday on Maria Bartiromo’s morning show that a recession was “a likely outcome” of the president’s tariff regime, the Fox host chatted with a regular viewer.

Bartiromo, global markets editor and host of “Mornings with Maria” on Fox Business Network, said she spoke with President Trump about the interview and the economy after he announced a surprise overhaul of global tariffs that had caused a market meltdown.

“He said Jamie made some good points,” Bartiromo said in an interview, referencing her phone call.

And it's made worse when the US has to back off in a very cuckish manner such as this. Having a very high pain tolerance is useful, but Trump found the limits of it (about -20% in the index and a narrowly avoided liquidity crunch).

The tariffs were bad. Showing the world that the US was bluffing all along is worse. You get nothing. You don't get onshoring (you never would have, because supply chains would rather wait 4 years than be saddled in perpetuity with the US's uncompetitive (non-immigrant) labor standards), and you don't get China to come to the table.

In four years, everything will be reversed and more, and this policy instability is going to prove insidious.

Xi is taxing his subjects and giving that tax as a subsidy to his industries

And now China has this industry, that can be in case of need repurposed to, for example, drone industry.

National security was always, since the beginning , the actual reason for protectionism, not "our precious jerbs".

Back in the old times of wooden ships and iron men, shipbuilding in England had no economic sense. Timber, hemp(for ropes), pitch, tar and other naval stores had to be imported from Baltic. It would be economically efficient to build the ships in Sweden and concentrate on wool and cloth production.

(then war would came, and England would have no ships, only sheep)

This is the motte.

The bailey being free money and government granted monopolies, but then again, if the motte is a good enough argument, it can cover a lot of impious ground.

The motte would be stronger if the bailey wasn't full of people actively dismantling it. US "industrial policy" has been overwhelmingly aimed at protecting jobs and incumbent firms from competition, not preserving or building capability.

I'm not sure I'm getting my point across. You're still talking about the object level impact of the tariffs. I'm talking about the ability of the state to translate will into action when the action involves short term pain.

Did Trump have a sincere change of heart? Did Dimon convince him on the merits of the ineffectiveness of the tariffs in achieving his stated goal? Or did Dimon instead point out that Trump wouldn't last long if he kept doing this even if it was good for the country?

It looks to me like a chunky soup of unnamed elites was unwilling to suffer these short term consequences and blocked Trump despite their having no formal authority and Trump having all the formal authority. That they were able to do that is what doesn't bode well for the country.

How are we supposed to solve the problems with elder care and entitlements if we're unable to endure pain? It tells me we're going to just give up the Pacific the first time the Chinese sink an aircraft carrier. It tells me we're in for another episode of high inflation, because every other inflation solution involves pain. A man or nation that cannot endure pain is weak and not long for this world.

You're still talking about the object level impact of the tariffs. I'm talking about the ability of the state to translate will into action when the action involves short term pain.

Willingness to endure pain is not an independent quality - people are more willing to endure pain for an achievable goal they believe in and less willing to endure pain merely to prove that they can.

The tariff proposal elicited a sharp, widespread negative response because it was incredibly stupid and self-destructive. There's never going to be much of a constituency for chopping off your own foot to look tough, and the Trump administration has done a terrible job selling the idea that these tariffs would be a positive force for American manufacturing (probably because they're actually terrible for it).

I'm not sure I'm getting my point across. You're still talking about the object level impact of the tariffs. I'm talking about the ability of the state to translate will into action when the action involves short term pain.

It would help if that action weren't transparently dumb and futile.

I agree that this looks really bad for our prospects of diffusing the social security bomb.

One counterpoint: the Fed's recently-concluded historic rate-hiking campaign. Higher rates make it harder for the US to service its debt, and yet they raised the rates anyway. People were so concerned over the fallout that we spent two years predicting a recession that never came. But I believe that the Fed would have been willing to push us all the way over the cliff, because having runaway inflation is so, so much worse than a contracting economy.

You know why the Fed could do that? Because no one could fire Powell, and no one elected him. I won't take my conclusions too far, but one of Trump's pressure points in the last weeks has been Republicans panicking about the effects people's 401k balances will have on their 2026 reelections. And I believe them. I truly think that if Trump stuck to his guns, even if the long-term effects are worth it, the Republicans would have been finished as a party in the short term, and then you don't get those policies anyway.

You know why the Fed could do that? Because no one could fire Powell, and no one elected him.

Correct. I don't think our own problems get solved until we have an executive with unchallenged personal authority and immunity to firing.

I don't think our own problems get solved until we have an executive with unchallenged personal authority and immunity to firing.

Cool, and I'm sure you would still hold that belief if the executive was some blue-haired progressive who went by Ze/Zir pronouns right?

Of course not. Necessary != Sufficient

What makes you think Trump thinks the tariffs on phones would have helped? Just by imposing and exempting he promotes the desired diversification from China without having the country take the short-term pain. Win-win.

Just by imposing and exempting he promotes the desired diversification from China

But he isn’t doing that. What he’s doing is making it (even) more expensive to manufacture a phone in US instead of doing the whole thing in China because all the subassemblies and components still get tariffed to death.

What he’s doing is making it (even) more expensive to manufacture a phone in US

Good thing nobody manufactures phones in the US then, eh?

If we can make a phone, we can make AI killbots. If we can't make a phone, we can't make killbots. The Chinese can make both. They will win the next war if they have killbots and we don't, and it won't even be close.

We need domestic electronics manufacturing capabilities. All the pain-free ways of building them have failed. Tariffs might have worked. They probably wouldn't have, but they might have. And we didn't give them a chance because we cannot endure short term pain. That means we're fucked.

If we can make a phone, we can make AI killbots. If we can't make a phone, we can't make killbots. The Chinese can make both. They will win the next war if they have killbots and we don't, and it won't even be close.

This is, frankly, just silly. US phone manufacturing capabilities have little to do with "AI killbots", even if you think they're going to be the deciding factor in the next war.

US phone manufacturing capabilities have little to do with "AI killbots"

How do you imagine the first generations of killbots to look like? I imagine a state of the art mobile processor, a lithium battery, a camera module, lidar, GPS, compass, gyroscope, accelerometer, modem, beam forming GHz antenna package. Motors, props, shaped charge explosive.

Remove the last three and add a screen, what do you have?

Small process node lithography is dual use

If we can make a phone, we can make AI killbots. If we can't make a phone, we can't make killbots. The Chinese can make both. They will win the next war if they have killbots and we don't, and it won't even be close.

I like the vibe but I think you're imagining different kinds of killbots than I am? Aside from microprocessors I believe phones and killbots have very different tech trees?

Microprocessors, RAM, flash memory, cameras, digital radios, accelerometers, batteries, GPS... a small drone is basically just a smartphone + some brushless motors and a plastic body. You even need the display tech, it just moves to the control device.

A larger drone or another type of killbot might require more — jet engines or advanced robotics tech or whatever — but it will still require pretty much everything in the smartphone tree.

We'll just start an old-timey war effort to re-purpose old smartphones for military purposes. Win the War with your Brains and Brawn by recycling your old smartphones!

But more seriously, domestic production of smartphones is possible. Purism produces a Made in USA smartphone if you don't mind not having the SOTA. I expect interest in this space to increase from here.

There's plenty of US ally civilian manufacturers for all those things. And US manufacturers also, though they tend to be aimed at the military or aerospace markets and so cost a lot more.

Indeed. The closest thing to killbots we have are made by Boston Dynamics, which is owned by Hyundai -- though Boston Dynamics swears they won't weaponize the things. If you want flying killbots, there's General Atomics and there's Anduril, both fully American.

Well, this is the only argument for protectionism - rebuild national high tech industry to ensure independent supply chain.

Now, this is out, and protection of (nonexistant) clothing, shoe and plastic Mickey Mouse industry remains.

It doesn't matter whether they would have helped at the object level. What matters is Trump believed they would and had the mandate of the people to exercise his judgement in making policy. We just can't get stuff done. Yes, I'd have been hungry without breakfast yesterday although I had it.

I don't follow this line of thinking – are you implying that Trump wanted to continue the tariffs on phones regardless of the impact but was prevented from doing so?

This is the most likely explanation. Trump reversed course right before bear market territory and mere hours after a spike in 10-year treasury yields, which implied a brewing liquidity crisis. The pressure he was under to pause must have been insane.

Meanwhile we still have no hard data confirming the predicted tariff recession. Jobs were good, and CPI contracted month-over-month.

I believe Trump believed and still believes that tariffs are effective for causing import substitution and bootstrapping new domestic industry. He also wanted and probably still wants the US to be able to make phones. There are good reasons for a country to be self sufficient in strategic technologies.

Trump was forced to undo this policy, either through political pressure or his own assessment of the impact of the policy on his political capital. I don't think his mind was changed about the merits of the policy. I do think this reversal is evidence that the US is incapable of doing hard things.

Things are different, though, when everyone who knows anything about the thing you're trying to do knows it's a bad idea and explains to you why it's a bad idea. It's not like Trump had a bevy of economists in his ear and out in the media saying that the tariff policy was necessary and that the short-term pain would be worth it. The only people saying that were him and politicians whose constituents require supplication to him. The criticism he was receiving probably wasn't simply that this was a bad move politically, but a stupid move economically that wouldn't bring about the desired result even if we'd stuck to it for a hundred years. It may be an act of courage to do something necessary but politically unpopular, but it's pure stupidity to do something disastrous and politically unpopular.

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