More tariffs....gonna hurt

[sammy the sage]

middle & low income people, retiree's and small business people...upper 1% will be unaffected...

[elysiantraveller]

Gotta love taxes!

Amiright?

[chadk66]

Won’t last long.

[Clocker]

Originally Posted by chadk66

Won’t last long.

Trump says tariffs are only a temporary tool to get our "trading partners" to negotiate "better deals".

Trump's idea of better deals is that we export more and import less. The alternative to tariffs is negotiated quotas. While tariffs result in higher prices for American consumers, the only impact of quotas will be higher prices for American consumers.

Basic economics of trade: We don't have "trading partners". The US does not trade with the European Union or China. American companies trade with companies located in the EU or China, and only engage in deals that they find beneficial to those American companies.

[classhandicapper]

The more I think about tariffs, the more I realize I was just as wrong about that as I was about free trade 30 years ago.

Let's assume a country raises tariffs on a bunch of foreign goods and generates 50 billion of tax revenue for the government.

How will those foreign companies respond?

1. raise prices to recover the cost of the tariffs
2. operate with lower profit margins

The argument is that generally the consumer will have to pay higher prices!

That's probably true.

They may have to pay up to 50 billion more for goods.

But what if the country also gives them a tax break equal to or greater than the 50 billion cost of the tariffs?

Then both the government and consumers are even! Government raises 50B from foreign companies and then gives it back to US consumers and business which they can use to pay the higher prices.

But there's more to the story. If foreign companies raise prices to make up the cost of the tariffs, they will probably lose at least some market share to US companies over time because of the higher prices they are charging or eventually decide to move to the US to avoid the tariffs (and employ US workers). Either way we win.

The key is that if you raise tariffs, you have to lower other taxes to offset the higher prices on imported goods. Then the country wins.

Trump lowered other taxes. So whatever tariffs he's raising will simply be offset by the tax cuts and still leave consumers in good shape. However, the US position has improved long term because US companies are going to be competing with foreign companies whose prices are now higher.

The worst case scenario is a short term disruption as US companies gear up to steal market share.

I'm at the point where I'm pretty sure he should stop using tariffs to push for better trade deals. He should slowly impose higher tariffs to raise cash for government and then put that revenue back in the pockets of US consumers and businesses with lower taxes, steal market share, and let foreigners pay for our government instead all our tax revenue paying interest on the bonds they accumulate because of our trade deficits. He'll only be able to take it so far before they bail, but he should take it where it can go.

[Clocker]

Originally Posted by classhandicapper

The argument is that generally the consumer will have to pay higher prices!

That's probably true.

They may have to pay up to 50 billion more for goods.

But what if the country also gives them a tax break equal to or greater than the 50 billion cost of the tariffs?

Then both the government and consumers are even!

And the consumers then have no price incentive to buy domestic rather than imported goods. Which is the whole point of Trump's plans.

[Clocker]

Originally Posted by classhandicapper

The more I think about tariffs, the more I realize I was just as wrong about that as I was about free trade 30 years ago.

Let's assume a country raises tariffs on a bunch of foreign goods and generates 50 billion of tax revenue for the government.

How will those foreign companies respond?

1. raise prices to recover the cost of the tariffs
2. operate with lower profit margins

The argument is that generally the consumer will have to pay higher prices!

That's probably true.

Tariffs on Chinese imports are not paid by the Chinese company that produced them, they are paid by the American company that imports them. The Chinese company would never raise prices, because the American importer is already paying more because of the tariffs.

The American importer would likely have to increase prices and/or cut profit margins to cover its costs of the tariffs. This is already being seen in the housing market in this country. American importers are paying higher prices for lumber because of the new Trump tariffs on Canadian lumber (supposedly imposed for national security purposes ). Those price increases are passed on to home builders, who are now passing them on to home buyers.

[fast4522]

Originally Posted by Clocker

Tariffs on Chinese imports are not paid by the Chinese company that produced them, they are paid by the American company that imports them. The Chinese company would never raise prices, because the American importer is already paying more because of the tariffs.

The American importer would likely have to increase prices and/or cut profit margins to cover its costs of the tariffs. This is already being seen in the housing market in this country. American importers are paying higher prices for lumber because of the new Trump tariffs on Canadian lumber (supposedly imposed for national security purposes ). Those price increases are passed on to home builders, who are now passing them on to home buyers.

Screw China let them burn, the heat has not even started yet.

[Clocker]

Originally Posted by fast4522

Screw China let them burn, the heat has not even started yet.

The people that are taking the heat here are American consumers because of our tariffs on Chinese goods. And American farmers and manufacturers because of retaliatory tariffs by the Chinese on our exports.

What part of that do you not understand?

[Clydepuckett]

The people that are taking the heat here are American consumers because of our tariffs on Chinese goods. And Ame

I get that. You are correct and I honestly don't like protectionist moves.

BUT, China is a cheating turd on trade and needs a bitch slap to get back in line. And believe it or not, they will suffer faster than we will. Soybeans.....remember that commodity. Big deal in China.

[reckless]

Originally Posted by Clocker

The people that are taking the heat here are American consumers because of our tariffs on Chinese goods. And American farmers and manufacturers because of retaliatory tariffs by the Chinese on our exports.

What part of that do you not understand?

China steals $60 billion annually from US corporations. You're OK with that and the heat it causes American consumers and corporations?

Plus, the billions in trade deficits worldwide these past 40+ years has caused lower GDP growth, dampened our savings rate and caused trillions of dollars in budget deficits that we'll pay through higher taxes, etc., for years to come. You're OK with that too?

US consumers and corporations -- especially with the destruction of our manufacturing industry and loss of blue-collar jobs which I mentioned countless times that you and others have ignored -- have taken a lot of heat as well from these pre-Trump, anti-USA trade policies.

What part of all that do you not understand?

[elysiantraveller]

Originally Posted by reckless

China steals $60 billion annually from US corporations. You're OK with that and the heat it causes American consumers and corporations?

They aren't stealing anything.

I can simply not do business there. In my industry a bunch of states have reciprocity agreements. I want to do business there I simply pay the licensing fee and proceed as if nothing is different. Then there are states that don't have reciprocity and I'm required to do more to conduct business there. I simply farm out my business in those locations, collect a cut, and call it a day.

I don't throw a temper tantrum and scream "unfair".

This is the same thing.

[Clocker]

Originally Posted by reckless

China steals $60 billion annually from US corporations. You're OK with that and the heat it causes American consumers and corporations?

China does engage in some questionable if not illegal business practices. The tariffs imposed on Chinese imports generally do not address those issues.

The charge that Chinese imports are killing American jobs, a whole other issue, is nonsense. America has lost a lot of manufacturing jobs in recent years. Roughly 10-15% of those jobs were lost to imported goods or to jobs moving off-shore. Over 85% of manufacturing jobs lost here were because of automation. The products are still made in America, but by robots, not humans.

What does any of this have to do with tariffs put on products from other countries, like Canadian lumber or South Korean washing machines?

[Clocker]

Originally Posted by Clydepuckett

China is a cheating turd on trade and needs a bitch slap to get back in line. And believe it or not, they will suffer faster than we will. Soybeans.....remember that commodity. Big deal in China.

How are they "cheating"? Chinese companies pay their workers a lot less than Americans make, and therefore they can sell their products here much cheaper. That's cheating?

In retaliation for American tariffs on Chinese products, China recently put tariffs on American soy beans. This was as stupid as our tariffs, because it increased the price of soy beans to the Chinese. But the result was that Chinese demand for American soy beans declined, while demand for soy beans from other countries, especially Brazil, increased. As a result, American farmers are hurting.

https://www.desmoinesregister.com/st...ion/705121002/

[chadk66]

We can do this much longer than China.