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060218 Tariffs and trade war

060218 Tariffs and trade war

Seems like another chorus of Blame America!  As best I can determine from online search, other countries’ tariffs range from slightly higher than US tariffs to sharply higher.  So if one country having higher tariffs than another constitutes a trade war … then why wasn’t it described as a trade war when their tariffs were higher?

I favor government leaving us alone, so I’m not happy about tariffs at all.  However, if it was okay for other countries to impose higher tariffs on us, then why is it suddenly catastrophic for us to level the playing field?  And if ours go above theirs for a little while, why can’t that just be considered evening the cumulative score?  Why does America always have to give in or else be criticized by the media and “progressives”?

Maybe people will realize that they like it better when they are able to sell more stuff to Americans, and we’ll wind up with everyone agreeing to X% tariff to cover the cost of executing inspection laws.  Things will settle down with fair trade and equal tariffs.

Of course, there is an even better way to make American products more competitive:  replace our payroll and income taxes with a consumption tax.  Products made in America have dozens of layers of payroll and income taxes embedded in their cost.  Imports from countries with a typical value-added (consumption) tax structure do not have these costs embedded.  Thus, American-made products suffer a 23-30% price disadvantage by some calculations.

Switch to a consumption tax and we immediately make American products substantially more competitive … WITHOUT punishing imports with direct tariffs.  None of our trading partners could object to our following their example and implementing a consumption tax, could they?

 

ERpundit  –  06/02/18

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