Tariffs against China are actually a tax on the American citizens, and only causes increased prices and unemployment.
Consumers faced with higher prices will spend less and save more. Taxes are only applied to transactions. Higher tariffs will shift consumption to lower-priced goods - you say those goods don't exist?
That's how new business and market opportunities arise. Production will shift geographies, as the tariffs are geography-specific.
China's government is playing checkers, I never thought I would say this, and Trump is playing chess.
"Tariffs against China are actually a tax on the American citizens" is undeniably true.
"Tariffs are a tax on imports. They're typically charged as a percentage of the transaction price that a buyer pays a foreign seller. Say an American retailer buys 100 garden umbrellas from China for $5 apiece, or $500. The U.S. tariff rate for the umbrellas is 6.5 percent for umbrellas. The retailer would have to pay a $32.50 tariff on the shipment, raising the total price from $500 to $532.50."
- https://www.cbsnews.com/news/what-are-tariffs-and-how-would-...
The latter clause is a matter of second order effects that people can disagree with.
So they are more likely selling at $5.15 (or some other higher number), which means that the US consumer pays an extra 15 cents per umbrella.
That 15 cents is additional and what people refer to as a "tax", though it isn't a traditionally levied tax.
It likely will take some event, some slack, some inelegance for a business or entrepreneur to notice that the delta between that $5/umbrella and where they can figure out how to deliver it for $4 is worth spending time and attention on.
Markets are not perfectly efficient. Markets are perfectly imperfect.
Totally get it. There's a line between a country being good at making a product through "natural" causes (having a climate to grow grapes for wine) and the government subsidizing the production of wine because they want a wine growing industry. Where that line is depends on a lot of actors, but some things fall on one side of the line and others on the other.
However, for the end consumer in the importing country, they win if the government of the exporting industry wants to subsidize wine production. The consumer gets cheaper wine.
Now the argument for fair trade is that the local producers of wine will be hurt. And I get that (especially when you are talking about job losses and/or loss of strategic capability around food production or technology).
But overall the consumer in the importing country wins. If China wants to give dollar bills to the American consumer for umbrellas, why shouldn't the consumer take them?
I understand where you are coming from, but markets are created by the rules of the government. Some governments (The Netherlands, CA) say that selling marijuana is OK. Some say that it is ok for some people to buy marijuana (medical) and others can't. Some US states say that no one can buy marijuana. Which is the "natural" market?
I understand that you are saying that the Chinese government is causing distortions and there is a fairer way to "trade" but that's something for the Chinese state and political actors to decide. This is the same as the way that the USA has decided that trucks are different than cars and should have a different set of import limitations--in both cases this is a political consideration.
Tariffs against China are actually a tax on the American citizens, and only causes increased prices and unemployment.
and as far as I can tell you believe:
Tariffs against China are actually a tax on the American citizens, which causes increased prices and (eventually?) a shift to a different producer.
but that's not the argument you're making.
Tariffs are a tax on imports and in some sense have to be paid by the customer, but they are also a problem for the supplier.
Global free trade benefited the American consumer by letting them keep more money in their pocket for other things through cheaper products. And these fake tariffs which China does not pay a dime of, are a regressive import tax that in that short term negatively impact the American consumer by taking money out of their pocket.
It's not at all clear how the market will adjust. Or even if it can because Trump keeps changing his mind on rather important details. What he supposedly ultimately wants is "fair trade" as in no tariffs for anyone? I doubt that he's completely non-protectionist if it turns out some other country can simply out compete the U.S.
But then what does 0% tariff/import tax actually translate into in terms of the geographic location for production? It definitely moves to the location with the cheapest net cost for labor and taxes. And that's not going to be the U.S. Which is fine, the American consumer still comes out ahead, but that is not at all compatible with the claims Trump makes about his notion of protectionism creating high paying American jobs. That is a fantasy on the face of it.
Chinese citizens have become dramatically richer through exports and the price of Chinese goods simply reflects that costs are lower in China (though the difference is narrowing).
Most taxes associated with externalities are arbitrary (in amount), because externalities are much easier to see than to quantify.
Before trump came in 4million jobs was lost to China alone, in exchange we got cheaper flatscreen televisions.
I'll take more expensive flatscreen televisions to make sure that China doesn't end up running over us all any day.
The chinese government (not the chinese people) is being controlled by a bunch of powerhungry men who will do everything to take over the world.
This is not just about economics it's about taking a stance for a more fair market.
So yes it will cost but it will be worth it.
Right now we have tariffs and all the negative things in the first sentence.
And thats despite us already having started the tarrif game with China.
I can live with a few things being a little more expensive when the jobs are coming back even in blue collar areas as they are right now.
Make of that what you want.
Do we have a moral obligation to trade with China so that they are raised up? No, I think not. They are already an incredibly rich and powerful country and have begun to challenge world democracies for influence.
Will the tariffs collapse our economy? Why should they? There's a big world market out there and plenty of countries to trade with that share our values, or at least do not threaten us.
Will the Tariffs make US companies less competitive? Why would it as long as the tariff is applied evenly to goods being imported.
Will the Tariffs make the US consumer worse off? Our largest consumer expenses in the US are housing, education, healthcare, transportation and food. If electronics and minor appliances get more expensive, I don't expect that would have a big impact on most people's budgets.
Will China go to war with us to protect their interests? They couldn't yet anyway.
Maybe someone with more knowledge on this topic than me could explain who stands to gain (besides China) from getting rid of tariffs.
People seem to believe there was some well-balanced system that Trump is just destroying for the fun of it. There was no free trade to begin with but instead a corrupt set of agreements to allow US companies to export jobs out of the country in exchange for cheaper products.
I for one is grateful for the fact that we finally have a president who doesn't just allow China to run over us and provide them with all sorts of special treatment. Sometimes you need someone rude and obnoxious and tough to implement the necessary politics rather than just allowing the "experts' to run a game that's obviously been hurting america.
Free market means both sides have access to each others markets. China haven't lived up to their side of the bargain. It's time to stop that.
America was not run by the "experts", it was run by politicians just like it is today. The situation was different, China was not this assertive nor this powerful, nor this rich. It seamed like/was a good trade-off to get cheap labour so that US companies could export competitively worldwide. It worked.
To me it's just the way it was supposed to work. Situation is different now so terms have to change too. China is now a rich and great market for US products which was not the case 20 years ago.
What you experience now is a bit of envy and naive confusion. "You" expected China to be forever the cheap way to produce US products and sell them worldwide. I'm pretty sure that both the experts and the less experts knew this day will come.
I wouldn't mind if Africa would follow a similar path(except the communism/dictatorship). I don't think it would be bad for the world nor for the US. Some countries need to "cheat" a bit to have any chance of catching up with the developed world.
Trump is running the country on gut-feel about a lot of things. His way of doing it which all the experts scream "dont" about.
And not the experts didn't know it would come as they believed in globalism and had no problem exchanging american workers for it.
what happens is this:
1 User consumers spend less choosing other lower price non China products. 2. Factories move from China to India and other Asian locations 3. Some Tariff money does get into US Treasury 4. I do not think that really any US Politician is worried about any increase in China unemployment...
The real strategy is this...
China monetary system upholds Russia's
Trump's real move is against Russia not China despite his shaddy collusion dealings with Russia