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Thread: Tariffs

  1. #11
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by FDG View Post
    A trade war is already set in place with China keeping the yuan so low. So in a way I agree with Lateralus, tariffs should be raised until China agrees to let its currency float more freely.

    Of course though it would be stupid to impose tariffs on trade with say Europe or Brazil.
    I agree, it's not necessary for the US to raise tariffs on Europe or any other than nation with a standard of living comparable to the US. Tariffs should be raised on China until their standard of living is comparable to the US. The same goes for India, and every other nation with a low standard of living.

    Pure mercury, we're already in an economic war. The US used to be the predominant manufacturing power, by a wide margin. But we have given that away under the guise of free trade. Free trade doesn't help American laborers. It hurts them by forcing them compete directly with laborers in nations with low standards of living. Sure, we get some cheap products as a result, but the benefit (cheap junk from China) isn't worth the cost (an economy with little substance, that is completely dependent on consumer spending). If things don't change, the inevitable result of this policy is that American workers will be paid at the same level as workers in third world countries. Is it really worth conforming to a particular ideology if this is the result? I don't think so.

    We could lower our corporate income tax rate to 0, and companies would still move jobs out of the country. The corporate income tax rate is a red herring, to divert attention from the real problem.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  2. #12
    pathwise dependent FDG's Avatar
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    Why India, sorry? They're an open economy, they don't really deserve any trade war. As far as I know, they don't manipulate their currency, so any trade between the US and India will tendentially (directly or indirectly) result in Indians buying more US goods.

    I understand your argument anyway, but there's been plenty of people that argued for the opposite stance, namely that countries with lower standard of living and a meager industrial base should impose strong tariffs, in order to incentivate growth of their own high value added economic activities (the strongest proponent of such theory was Friedrich List, a german economist).

    Imho the main question we should ask ourselves is, are they playing fair, or are they keeping their prices artificially low? If the latter is correct, then imposing tariffs should be almost mandatory.
    ENTj 7-3-8 sx/sp

  3. #13
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by FDG View Post
    Why India, sorry? They're an open economy, they don't really deserve any trade war. As far as I know, they don't manipulate their currency, so any trade between the US and India will tendentially (directly or indirectly) result in Indians buying more US goods.

    I understand your argument anyway, but there's been plenty of people that argued for the opposite stance, namely that countries with lower standard of living and a meager industrial base should impose strong tariffs, in order to incentivate growth of their own high value added economic activities (the strongest proponent of such theory was Friedrich List, a german economist).

    Imho the main question we should ask ourselves is, are they playing fair, or are they keeping their prices artificially low? If the latter is correct, then imposing tariffs should be almost mandatory.
    Why India? Because their standard of living also low. If we impose a high tariff on China, companies will just move their manufacturing to another country with cheap labor. I want manufacturing jobs to come back to the US. The only way to do that is make it more expensive to manufacture goods in all third world countries. I know that would make it more difficult to export goods to India, but I'm more concerned with Americans/Europeans buying goods manufactured by Americans/Europeans because the US/European economies are so much larger. The Indian economy just isn't that important, yet. Once their overall standard of living is closer to ours, they will be more important and tariffs can lowered.

    You might even be able to make a formula to determine the proper tariff. Just make the tariff somehow proportional to the ratio of the standard of living in the US/Europe and the standard of living in the relevant country. As that country's standard of living increases, the tariff is reduced.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  4. #14
    pathwise dependent FDG's Avatar
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    If everyone moves their industries to India you can be pretty sure tha their exchange rate will shoot up and adding transportation costs the difference in price won't be that large anymore. I understand your point though, and I agree that some tariffs or subsides to national producers should be given for "strategic" industries and/or for agriculture, in order not to destroy the industrial base. But I don't think an economy-wide subside adds to the welfare of the laborers - as a collective - since the price of so many goods would shoot up, and the lower buying power would be equal to a lower salary with lower prices.
    ENTj 7-3-8 sx/sp

  5. #15
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by FDG View Post
    If everyone moves their industries to India you can be pretty sure tha their exchange rate will shoot up and adding transportation costs the difference in price won't be that large anymore. I understand your point though, and I agree that some tariffs or subsides to national producers should be given for "strategic" industries and/or for agriculture, in order not to destroy the industrial base. But I don't think an economy-wide subside adds to the welfare of the laborers - as a collective - since the price of so many goods would shoot up, and the lower buying power would be equal to a lower salary with lower prices.
    Well, I admit I don't know enough about economics to know how this would affect exchange rates. Could you explain how/why that happens? I'm curious.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

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