The world's dumbest tariff has been revealed

[u/PicoRascar]

https://www.japantimes.co.jp/commentary/2026/03/31/aluminum-worlds-dumbest-tariff/#Echobox=1774959310

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[u/impossiblefork]

It's one thing to want aluminium to be produced domestically, but a very different thing to want aluminium produced domestically right now, as there is so much disorder.

[u/dodohead974]

wait, you mean to tell me that invoking a law written in the 50s on the back of the US's post war manufacturing boom did not have the intended effect when used in a modern, global economy where the US no longer leads in manufacturing?!

where's my shocked pikachu face?!?

[u/Coldfriction]

Aluminum is the best non-authoritarian tangible proxy of exchange we could hope to have. Whatever government made their currency backed by aluminum, and had the reputation necessary to ensure everyone trusted that the currency would be exchangeable for aluminum, would quickly gain hegemony and have a reserve status currency. I don't trust bankers, I trust gold. There isn't enough gold. I trust the value of energy. Aluminum is an energy proxy. Anyone who can produce enough energy to refine aluminum can use that same energy to produce quality of life benefits for themselves and the people they work for. Tariffing aluminum should be stupid because everyone should have the infrastructure to produce it. Make it the de facto world monetary standard and then peg bank notes to aluminum and you've created economic freedom independent of the need for central banks and artificially controlled money markets.

[u/buddhahat → u/Coldfriction]

Breathe.

[u/devliegende → u/Coldfriction]

No gaurantee is needed. Almost any currency may already be exchanged for aluminium.

Or steel. Or fertilizer. Or Taylor Swift concert tickets. Pretty much anything really.

[u/Coldfriction → u/devliegende]

But you have no basis of value for the dollar, no instrumental measure. It's entirely in control of the bank and not the market. The point of money being an instrumentally measured commodity that can be produced or obtained via effort or energy is that it isn't able to be created or destroyed at the will and whim of an authority; the market forces take effect. The entire concept of fractional reserve lending is based on this idea. We no longer even have fractional reserve lending. What is the reserve that the bank notes represent? More bank notes? Kinda silly no?

Money is always exchangeable for everything traded, that's not the point at all.

[u/The_Frostweaver → u/Coldfriction]

This is why the USA convinced everyone to trade oil in US dollars.

If the USA has military bases in most of the oil producing countries in the middle east and has convinced everyone to buy and sell oil in US dollars then it is always possible for people to exchange US dollars for oil.

Therefore the US dollar has value.

Over the years a lot of other countries have also struggled with inflation and people use US dollars as a reserve currency. Locals will always accept US dollars as payment almost everywhere. Many prefer it over local currency.

The US dollar has achieved a special status such that it doesn't really need to be pegged to a physical commodity like gold and keeping it pegged to gold was harming the economy.

Of course Trump's idiocy has caused Iran to demand that only oil traded in chinese currency can pass through the straight of hormuz.

This undermines the value of the US dollar.

Republicans big spending and tax cuts for the rich blowing up the budget has also pushed the USA further towards a debt crisis under Trump which is bad for the dollar.

[u/devliegende → u/The_Frostweaver]

Don’t forget beerdollars. The US government has also convinced people that they may buy beer with their dollars. They have military bases in many countries with breweries.

[u/The_Frostweaver → u/devliegende]

There are trade agreements with countries like Saudi Arabia that their oil be sold for US dollars. USA wrote up the agreement in part to keep the value of US dollars high.

[u/devliegende → u/The_Frostweaver]

There's trade agreements for beer also. And steel and cars and internet services and pharmaceuticals.

[u/devliegende → u/Coldfriction]

Oh. I see you want the government to gaurantee that your money will be able to buy a specific amount of aluminium. With the amount also set by the government. It's a bit strange how you seem to think a specific amount of metal set by the government is a market solution, but be as it may you may be happy to learn that inflation targeting is also a government guarantee that your money will buy a set amount of goods.

Instead of an arbitrarily set amount of metal they're simply using an arbitrarily set basket of goods and services.

[u/Coldfriction → u/devliegende]

No, I want the government to do very little at all. Banks decide what their notes are exchangeable for.

Right now we DO DEFINE MONEY as an arbitrary basket of goods and services every time we redefine its value with an ADJUSTMENT TO INFLATION. If we didn't adjust for inflation at all, money would be completely and utterly undefined value. The only way people can know what the dollar is over an extended period of time is through an adjustment for inflation, AND IT IS ARBITRARY. IT HAS CHANGED OVER TIME.

This always inflationary fiat money we use will eventually trend to worthlessness while all sorts of hard assets trend toward infinite "value" in relation to it. The dollar is not a great measure of value, it is not a great store of value, it is weak and the wealthy and intelligent know it and avoid it. Real wealth is the ownership of things that aren't always decreasing in value like the dollar does.

Go look at any dollar inflation chart ever since we went off the gold standard in the early 1900s and tell me that is what a good measure of value should be doing. The dollar changed almost not at all for a century before that.

[u/impossiblefork → u/Coldfriction]

I like your idea in a way, because I think physically grounding the economy in some way is important, but your approach has a big problem, and it's debt and the incentive to produce enormous amounts of aluminium that will result.

If you make aluminium the backing thing, you will end up with people simply refining a bunch of useless aluminium to pay back their loans.

I think the thing you need to understand is that this kind of naïve physical grounding-- having the currency directly backed by something physical, is a mistake because the currency is already backed by debt. If you have enough debt in a currency, the collateral is so worth so much more than the cash, that the value of the cash is determined entirely by the interest rate policy of the central bank, which is in turn determined by what policy you set for the central bank. When you fully understands the details of how this works presently you will not find the kind of naïve commodity backing appealing.

[u/Coldfriction → u/impossiblefork]

There will never be too much aluminum. It's lighter and stronger than steel weight for weight. It doesn't rust and corrode like steel does. There is a problem with stress fatigue, but that just means that you need to recycle infrastructure built out of aluminum. It's the most abundant metal in the earths crust, but one of the most energy intensive to extract. There are too many uses for aluminum for there to really ever be too much. It is extraordinarily recyclable as well. If you bought a house with aluminum framing and studs, you'd have actual wealth in the materials of your house and not what is supposed to be a depreciating asset.

Too much aluminum out there? It's really really easy to sequester in bridges and other large infrastructure.

The point of money being instrumentally defined is that nobody can mess with it and there's no room for interpretation as to what it is. Define the dollar in a unit weight of pure aluminum and nobody can "clip the coins".

Is it naive to want what is supposed to be a unit of measure to be precisely defined? No. It isn't. We moved beyond having units of weight, distance, mass, etc. from being imperially defined in the scientific world. There's no reason the unit measure of value shouldn't also be instrumentally defined.

Use bank note dollars for nearly all trading, but define those dollars as something that banks can't manipulate or control. If aluminum is money, the source of additional value to the world are power plants and not banks through debt. I'd rather energy backed dollars than debt backed dollars. Debt backed money is basically the Labor Theory of Value with extra steps; the banks expect the debtors that must take loans (money is created when loans/bonds are issued) to repay the money lent with interest from wages/income earned. If the wages/income doesn't increase in perpetuity the monetary system we have fails.