Will imposing tariffs be “a tax on the American people”? #codwarzone #tariffs #trumptariffs #cod

Political Gamer—Tariffs

Big Question: Will imposing tariffs be “a tax on the American people” (as said by Kamala Harris) or will it save the American economy?

What is a tariff?
Tariff is a tax on international trade. Can be compared to domestic sales tax or income tax, but international
- [ ] Importer pays tax directly, but importer can just then increase the selling price to consumer
- [ ] So then the tax incident (who end up paying tax) is American consumer—which is what some are concerned about
- [ ] But tariffs can also be used to level playing field btwn domestic and imported products—free and fair trade

Why can’t manufacturers produce in the US?
- [ ] We tend to tax things domestically at a higher rate than imports (border adjustment tax seeks to cancel that out)
- [ ] Regulations in US (costs 10s of thousands of dollars per worker)
- [ ] American worker needs to be 2x productive in order to be competitive with foreign workers
- [ ] If the only thing we taxed was domestic trade, it would encourage trade/production to move abroad, bc it would be cheaper to import things
- [ ] If you have the same taxes (through tariffs) on imports as domestic production, American businesses/workers will be able to compete

What is Trump’s plan regarding tariffs?
Trump wants to impose overall 60% increase in tariffs on imports on China, 100-200% increase on cars from China, and 10-20% increase in tariffs globally
- [ ] Media mocks these proposals, despite increase in inflation under Biden admin
- [ ] Trump uses tariffs as a weapon (tactical bombing): using tariffs as “protection” ends poorly. But using tariffs to increase govt revenue and as a negotiation tool proves to be successful
- [ ] Increasing ties with other trading partners results in less trade with China, and trade deficit btwn us and them also declining (it’s the lowest since 2010—Trump credited for that)

When have tariffs worked?
1. Trump admin targeted Chinese steel 2016: successful tariff approach
- [ ] Small increase in price American consumers had to pay, but overall had positive impact: 80% of tariff was just “eaten” by Chinese producer: (They were not able to pass the full weight of the tariff onto American consumer, business+individuals)
- [ ] This is bc there were too many alternatives produced domestically and in places like Sweden (price was nearly the same)
- [ ] Result was countering the subsidies steel industry received from Chinese Communist party—Chinese taxpayers payed for the subsidies, and in turn steel companies payed tariff to US
- [ ] Biden admin have not reversed these tariffs put into place by Trump admin, but still critique Trump’s economic policy

When have tariffs not worked?
1. 18 billion $ worth of tariffs on Chinese goods implemented by Biden admin in “green energy agenda”: unsuccessful tariff approach
- [ ] Drives up costs of clean energy bc there are not as many alternatives for “green energy” products, so American consumers just end up paying more for what is available
2. Biden admin inflation reduction act: unsuccessful tariff approach
- [ ] New taxes and new regulation on diff types of American energy production, while not imposing the same taxes/regulations on energy production used abroad. It encourages production to leave the country, which makes jobs and incomes leave as well

Inflation increase under Biden Admin: US Bureau of Labor and Statistics