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A Note on Tariffs

Tariffs or import duties are a tax on American consumers plain and simple. They are the ones who ultimately foot the bill. Tariffs can hurt corporations and reduce the number of available jobs in the office or in retail. Tariffs definitely sound like a good idea to force the consumption of domestic goods, but that is a closed off view of the world. We cannot produce everything ourselves nor would it be efficient to try.
Tariffs on our allies are unreasonable. These are the very people we should be trading with. Raising Tariffs could work out if our allies lower theirs in response. Assuming we would lower in return it all would work out, except nations do not respond nicely when tariffs are raised. This is not what is happening or has happened in the past. Look up the Smoot-Hawley tariffs.
Even with trade deficits (and even with uneven duties) both parties typically benefit. Economists, both right and left, deride tariffs as lowering economic efficiency. Money is literally lost in an emotional backlash to "protect" the blue collar worker.
If we took these actions to their logical extremes it would be a literal disaster. Thankfully, the tariffs raised or proposed are typically limited in scope and sometimes duration. Now, imagine losing your job and having to pay more for everything, oh and to top it off we made it harder to find a retail job to tide you over until you can retrain. That hypothetical alone shows that tariffs hurt the very people they are trying to help. Retraining and lower taxes are better courses of actions. Most economic data on tariffs are negative.
Additionally, raising tariffs on our allies makes us look like an unfair player. The United States benefits greatly from its international trade, and when our allies retaliate, that benefit will shrink. Tariffs take from the economic pie whether you are importing goods or exporting them. Consumers have less money to save, invest, or spend when they are forced to pay artificially high prices. Companies are forced to be less competitive abroad when tariffs are in place. Raising tariffs harms American companies because of the incentive it gives our trading partners to retaliate. Less commerce leads to all sorts of issues at home and abroad.
We live in a rapidly changing world.
It has always been this way. The agricultural economy became the industrial economy, which later became the service economy. Business is our business. We have manufacturing niches as well. Tariffs hurt blue collar, white collar, and retail workers alike. The future looks bright, the economy is always growing in the long term and there are millions of job openings right now. Change is inevitable, and the proper response is not regression.
Further reading on tariffs:
http://money.cnn.com/2017/01/03/news/economy/obama-china-tire-tariff/index.html
https://www.nytimes.com/2018/04/11/business/economy/trump-economists.html
http://www.aei.org/publication/top-economic-experts-unanimously-agree-steel-and-aluminum-tariffs-will-not-make-america-great/
https://www.investopedia.com/terms/s/smoot-hawley-tariff-act.asp


This post first appeared on Thoughtcoin, please read the originial post: here

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A Note on Tariffs

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