US Administration announces 34% tariffs on China, 20% on EU

Original Article ↗ Hacker News Discussion ↗

Scope of Tariffs & Immediate Reaction

  • New regime: baseline 10% on all imports, with much higher country‑specific rates (e.g. ~54% on China when stacked with existing China tariffs; high rates on Vietnam, Thailand, EU, etc.).
  • Tariffs apply broadly to all goods from targeted countries, not specific sectors. Some exemptions: chips, some minerals, certain Section 232 categories.
  • Many commenters see this as a massive, regressive tax increase on US consumers and the largest protectionist move in modern US history.

Economic Impact & Inflation

  • Broad expectation of higher prices on clothes, electronics, furniture, toys, industrial equipment; estimates in the thread put extra household cost in the thousands of dollars per year.
  • Worry that businesses will add an extra margin on top of tariffs, using them as cover to raise prices.
  • Several predict a US recession and global slowdown; others stress the main damage is long‑run uncertainty and misallocation of capital.

Manufacturing, Labor & Feasibility

  • Strong skepticism that factories will “come back”:
    • US labor costs, housing, and regulations make low‑end manufacturing uncompetitive.
    • Factory projects have long payback periods; few expect firms to invest heavily into US plants on a 4‑year, unstable policy horizon.
    • US already has worker shortages in construction, logistics, and manufacturing; commenters doubt there is a large, willing industrial workforce at current wages.
  • Some argue higher tariffs could eventually drive up blue‑collar wages, but others expect stagnant wages and falling living standards instead.

Rationale, “Reciprocity” & Calculation Method

  • Administration markets these as “reciprocal” tariffs responding to foreign tariffs, VAT, and “non‑tariff barriers.”
  • Multiple commenters reverse‑engineer the poster: “tariffs charged to the USA” column appears to be each country’s goods trade deficit with the US divided by its exports to the US, not actual tariff rates.
  • VAT inclusion is widely criticized as wrong: VAT applies equally to domestic and imported goods and is more like sales tax than a border tariff.
  • Debate whether there is a coherent strategy (re‑industrialization, dollar devaluation, restructuring foreign-held debt) versus ad‑hoc, politically driven “vibe‑governing.”

De Minimis & Small Parcels

  • Removal of the de minimis exemption from China (and a floor of $25–$50 or 30% per shipment) is viewed as a huge change:
    • Direct‑from‑China platforms (Temu, AliExpress, etc.) likely to become far more expensive or restructure via US/EU warehouses.
    • Expectation of chaos for small buyers used to cheap parcels, and higher courier fees for customs handling.

Global & Political Fallout

  • Expectation of retaliation focused on US exports and digital services (cloud, ads, tech platforms).
  • Concern that this accelerates de‑dollarization, weakens US soft power, and pushes countries toward EU/Asian arrangements or deeper ties with China.
  • Many see this as alienating traditional allies more than adversaries, and as politically timed: impose pain now, partially roll back or offset with tax cuts before midterms.