[GIFtheory]

I don’t see how tariffs magically create wealth for foreign exporters that translates into higher wages. Let’s say I can buy a $10 shirt from Lesotho with zero tariff. Now a 50% tariff gets imposed. I can either eat the tariff and pay $15, in which case Lesotho still gets their $10, or Lesotho can eat the tariff to keep their exports competitive, in which case Lesotho now makes $5.

The part about giving a competitive advantage to local producers is true, though…

[colechristensen]

for countries that pay a worker $10 a day, put a tariff on the goods produced by that worker to total $10

for countries that pay a worker $15 dollars a day put a tariff on the goods produced by that work to total $4

therefore someone importing goods produced by one worker in one day from the lower wage country would spend $20 for the goods from the lower wage country but only $19 for the goods for the higher wage country giving a competitive advantage for higher wages

obviously that is a simplistic example but that's what i mean using tariffs to incentivize better behavior and level the playing field so the most exploitation doesn't make the most money

[zuminator]

If the shirt costs $10 in labor, and the pre-tariff wholesale price is also $10, how does the manufacturer make a profit? Surely the wholesale price would at least include some markup for profit? So like $10 labor + $3 markup (per employee-day) + $10 tariff ($23) contrasted with $15 labor + $3 markup + $4 tariff ($22), in your scenario.

But now you see that the low wage manufacturer has a third option, $10 labor + $1 markup + 10 tariff ($21), which would maintain their competitive advantage and in this scenario only cut their daily per employee profit by $2, as opposed to the $5 hit they would suffer by raising their employee wages to $15 day from $10.

[oblio]

These suggestions are... not based in reality. Lesotho has a GDP per capita of something like $1000 per year.

How do you expect them to magic higher salaries?

[GIFtheory]

That’s a nice idea, but I’m skeptical—where is the new wealth coming from that will allow Lesotho to pay its workers more? It’s not an issue of strong-arming some bad guys in Lesotho to pay their workers more using tariffs as a negotiation tool.

I feel that conflating tariffs with some sort of negotiation tool to bring about positive global change is disingenuous, because the real aim is clearly protectionism.

[lostlogin]

Maybe the $5 per garment could go to USAid, and fund care programmes in those countries.

A truely laughable suggestion.

[rocqua]

Such a tarrif on low wage countries would prevent the exploitation of low wage countries. Because any county could easily 'defeat' the tarrif by setting a minimum wage. It doesn't help raise the people being exploited out of poverty. But it does prevent countries from getting stuck in a cycle of depending on low wage labor.

Whether that works out better for the exploited is uncertain. But the alternative argument is effectively "these poor countries should be happy to let themselves be exploited" it is their only way out of poverty. And that really doesn't sit right with me.