Posted on 06/11/2018 11:38:09 AM PDT by Thalean
https://www.freerepublic.com/focus/bloggers/3662335/posts?page=1
The effect of tariffs and trade barriers on businesses, consumers and the government shifts over time. In the short run, higher prices for goods can reduce consumption by individual consumers and by businesses. During this period, some businesses will profit, and the government will see an increase in revenue from duties. In the long term, these businesses may see a decline in efficiency due to a lack of competition, and may also see a reduction in profits due to the emergence of substitutes for their products. For the government, the long-term effect of subsidies is an increase in the demand for public services, since increased prices, especially in foodstuffs, leave less disposable income. (For related reading, check out In Praise Of Trade Deficits.)
Tariffs increase the prices of imported goods. Because of this, domestic producers are not forced to reduce their prices from increased competition, and domestic consumers are left paying higher prices as a result. Tariffs also reduce efficiencies by allowing companies that would not exist in a more competitive market to remain open.
You need a new wife. I won’t tolerate that crap.
Only 4.3% of the economy was internationally traded at the time and Smoot-Hawley only affected about 1/3 of that (agricultural imports mostly) so you are arguing that a slight rise in tariffs affecting 1% of the rural economy was a major factor? Ridiculous.
Smoot-Hawley had, if anything, a slight stimulative effect on American farming and no major impact on anything else. International trade dropped because overall demand dropped following the crash.
The globalists themselves know they are lying when they trot that one out.
Lie.
China is one of the most mercantilistic countries on earth; so that right there kills your theory, fairy tale, or lie.
But that is stupid because there is still domestic competition for market share and that forces prices down you idiot. Man, you are stupid. Greed makes them, DOMESTIC manufactures, want to gain more market share and the cycle begins....
Tariffs can be justified on the revenue they generate alone, setting aside issues of trade. I AM FOR THEM 100%!
I don’t support income taxes either. I’m realistic enough to know we’re not getting rid of them any time soon. Cutting them is always a good thing.
Tariffs will undo the good that the tax cuts are doing.
I bet you have a major trade deficit with your grocery store. I bet you buy a lot more from them than they buy from you.
Actually when tariffs are dropped the country goes into economic demise. Look at GB.
From my alma mater, from a paper I wrote for when I was there:
http://hillsdalecollegian.com/2018/02/newsprint-tariffs-hurt-local-journalism/
Upon a complaint from a single paper mill in Washington state, the U.S. Commerce Department placed tariffs of up to 10 percent on Canadian paper last month. In choosing to protect one industry over another, the U.S. government is smacking the already struggling newspaper market, as 90 percent of all newsprint in the Northeast and Midwest come from Canada, according to a study cited by CNN.
Newsprint costs for local newspapers, such as The Collegian and The Hillsdale Daily News, have increased between 13 and 15 percent as a result of the tariff. Matt Davison, publisher and president of the Idaho Press-Tribune, told Bloomberg News he believes these tariffs could have a “catastrophic impact on community journalism.”
In a bipartisan letter published after the announcement of the tariff, U.S. senators argued that Canadian paper helps support more than 600,000 U.S. jobs in newspaper publishing and commercial printing industries alone. The impact, however, will be more widespread than this.
Local news plays a vital role in the community. Stories that may not garner any regional or national attention may be of utmost importance to smaller audiences, such as the description of a suspect in a string of neighborhood burglaries or the details of a fundraiser for a local family made homeless by a fire. Newsprint tariffs squeeze the already tight margins of the papers that report local stories, restricting the accessibility and freedom of local news.
Are you telling me Hillsdale is a hot bed of Free Traitors™? How depressing....
Austrian economics, the most free market school there is. Mises, Hayek, etc.
central_va: You attacked me (unfairly IMO) earlier on the Mark Levin thread, I then see your posts here, and now I understand: you are anti-free trade.
Please be careful attacking us “free traders,” because most of us are “free-and-fair” traders. Free trade isn’t free absent a level playing field, else the entire Ricardian comparative-advantage theory of trade goes out the window. So please keep that in mind. We’re not for tariffs either.
Also, I wish more people would keep in mind that the greatest ongoing experiment in free trade is called the United States of America! Throughout its history, the United States has allowed unrestricted trade among the states, and in my opinion the country has benefited greatly from the specialization that free trade allows. (Just imagine trade wars between the states. What would our national GDP be in that scenario?)
Quite he contrary. I’m as pro-trade as they come. I think you can sometimes use trade successfully as a foreign policy weapon, but to try to improve your economy by stifling trade is counterproductive.
Interesting take:
http://www.businessinsider.com/trump-trade-war-tariffs-study-on-economic-impact-lost-jobs-2018-4
President Donald Trump said his new tariffs on China and metals would boost the US economy.
A study by the Tax Foundation found the tariffs will actually hurt the US economy and cost Americans jobs.
The study also found that low- and middle-income Americans would pay the highest costs from the tariffs.
https://www.washingtontimes.com/news/2017/jan/5/the-problem-with-tariffs/
More than a year ago, when the billionaire mogul was preparing to enter the GOP presidential race, economists Stephen Moore and Larry Kudlow wrote a brilliant piece for Investors Business Daily that warned of the dangers in Mr. Trump’s plan.
“Here’s a historical fact that Donald Trump, and many voters attracted to him, may not know: The last American president who was a trade protectionist was Republican Herbert Hoover,” they wrote.
“Obviously that economic strategy didn’t turn out so well — either for the nation or the GOP,” they wrote, then posed this question:
“Does Trump aspire to be a 21st century Hoover with a modernized platform of the 1930 Smoot-Hawley tariffs that helped send the U.S. and world economy into a decade-long depression and a collapse of the banking system?”
Yes, Mr. Trump is right when he complains about the unfair trading practices by China and other economies around the world — pirating our technologies and patents, and counterfeiting our goods, say Mr. Moore and Mr. Kudlow.
“But clapping Trump’s punitive tariff on imported Chinese goods will hurt Americans at least as much as it does Beijing,” they said.
Many voters may have forgotten that Trump’s proposed 35 percent tariff on imported goods is nothing more than a tax added to the cost of the products they buy.
Not only would it be “the biggest tax increase on U.S. consumers in modern times,” the two noted conservative economists said, it would hurt the most vulnerable people in our economy.
“Wal-Mart has been one of the greatest anti-poverty programs in world history, and it has achieved the ‘everyday low prices’ that greatly benefit the poor and middle class in part through low-cost imports,” they point out.
Prices at these and other discount chain stores would rise sharply under Mr. Trump’s tariffs, hurting retail businesses across the country, resulting in store closings, widespread layoffs and a weaker economy.
My post wasn’t directed at you, rather to central_va. I only copied you because I was replying to his reply to you.
Her is some interesting information from Dave Ramsey.
https://www.daveramsey.com/blog/what-are-tariffs
Have you heard the buzz about tariffs in the news lately? Specifically, tariffs on goods imported from China? The U.S. government just released a list of over 1,300 Chinese goods that could be subject to tariffs.
So, what is a tariff, exactly? How do tariffs lead to trade wars? How do tariffs and trade wars impact the economy? And how does any of this affect your wallet? Those are good questions. Here are your answers.
What Is a Tariff?
A tariff is a tax that a government places on a group of imported goods. Tariffs benefit domestic producers of those goods, because the tax essentially makes the imported version of the good more expensive. Any country can impose a tariff on goods from any other country.
There are generally two types of tariffs. An ad valorem tariff is a fixed percentage of the good’s value. So, the tax on that product will go up or down as the international price of that good changes.
A specific tariff is a fixed amount that does not change if the international price of the good goes up or down.
Goods can include anything from tennis shoes to computer chips. A country may import retail items—like TVs—or it may import raw materials like steel or corn.
A Tariff Example
If a government thinks trade with another country is getting unbalanced, it might tax certain items from that country.
For example, the U.S. imports more goods from China than any other country in the world—to the tune of $505 billion in 2017. On the other hand, the U.S. exported just $130 billion in goods to China that same year. The gap between those two amounts—$375 billion—is called a trade deficit.(1)
In January, the U.S. government started to impose tariffs on a few items from China, like solar panels and washing machines.
In March, the U.S. announced a 25% tariff on steel coming into the U.S.(2) And in the beginning of April, the U.S. released a huge list of items it would tax—from cash registers to artificial teeth—if imported from China.(3) And those new tariffs could impact your budget. More about that later.
Who Benefits From Tariffs?
The theory behind a tariff is simple—at least on paper.
When taxes are imposed on an imported item, like steel, U.S. companies needing that item have to pay more for it. But as an alternative to buying imported (foreign) steel, a U.S. company could purchase it from a domestic supplier with a better price.
Why is the price better? Because it doesn’t include the import tax. Make sense? The goal is for the tariff to create a level playing field in the steel industry and help U.S. companies thrive. Again, in theory.
What Is a Trade War?
Here’s where it gets interesting. In response to the recent list of Chinese goods that could be subject to U.S. tariffs, China announced it would impose its own set of tariffs on U.S. goods sold in China, including fruits, wine, nuts and pork.(4)
When countries go back and forth with round after round of new tariffs on each other’s imports, the result is a trade war. Eventually, the two countries in question negotiate to make their trade partnership more balanced.
But in today’s global economy, a battle over tariffs doesn’t just impact the two countries involved. For example, the European Union has said that if they’re hit with U.S. tariffs, they’ll hit back—imposing tariffs on a range of things from jeans to motorcycles.(5)
And other countries that have had good trade relationships with the U.S. in the past, like Canada and Mexico, are getting jitters because they could be next. Everybody is nervous, including investors.
More on that later, too.
Are We in a Trade War With China?
It’s too soon to tell whether the U.S. is in a trade war with China. That’s because it takes time for the tariffs to go into effect.
The government will hold hearings with companies later this spring to negotiate the tariffs, so things aren’t set in stone yet.(6) As of now, think of the trade discussion with China as a heated dispute rather than an all-out fight.
How Do Tariffs Impact the Economy?
The goal of tariffs is to make marketplace competition fair. This helps economies grow as nations compete with each other to sell their resources. When the U.S. economy thrives, that trickles down to you and me in the form of more affordable goods. That’s one theory from economists. Others say tariffs could make the cost of goods go up because companies just increase their prices to cover the tariff.
For example, the U.S. government recently attached tariffs to imported Chinese aluminum. As a result, the cost of things like beer kegs and baseball bats (which contain aluminum) could go up in the U.S., and those higher costs affect the overall economy.
How Do the Tariffs Affect My Wallet?
That’s the big question on everyone’s mind. Once the tariffs take effect, you might see prices go up slightly on everyday items like peanut butter, orange juice, and even jeans. That means you need to keep an eye on your monthly budget so you don’t overspend.
Now you know why keeping track of your expenses throughout the month is so important!
You’ll really feel the tug on your wallet with big-ticket items affected by these tariffs.
For example, many televisions imported from China could cost 25% more—if companies increase their prices to cover the cost of the tariff.(7) So, a $560 television from China could cost you $140 more—making the final price $700. The same principle applies to other big items, like tractors, snowblowers, and boats.
If you’re in the market for a big item, you have four options: 1) Pay the higher cost; 2) Purchase the item from a company that’s not affected by the tariff; 3) Buy a used item; or 4) Wait to buy your item until the tariffs lessen again (and they usually do).
How Do Tariffs Affect Investing?
The people on Wall Street have been nervous about the tariffs, too. And if other countries jump in the ring to duke it out, that concern could increase.
On Tuesday, April 3, the Dow Jones Industrial Average dropped 510 points in response to the latest list of taxed goods. Ouch. But the next day, it bounced back and gained 230 points. That’s a 740-point swing in just two days.(8)
Now, if you panicked and sold investments that Tuesday because you were afraid of losing more money, you made a poor decision. You lost out on Wednesday’s gains. Plus, you will likely pay more for that same investment if you purchase it again. That’s not a smart investing strategy!
Instead of jumping out of the roller coaster while it’s still in motion, stay in your seat and keep your seatbelt fastened. Wait out the rocky ride of trades and tariffs. Keep investing every month. The market will go up and down, but if you ride it out, your investments will pay off. History has shown us that.
If you have extra cash on hand, you could even invest that money while mutual funds are on sale (when the market drops). So, if you play it smart, you could benefit from the dips in the market.
If these tariff and trade negotiations are making you anxious about your investments, or if you’re wondering if you should make some adjustments, talk with your financial advisor.
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