There Are No Tariffs on Coffee. Care to Guess Why?

FEE ^ | March 10, 2017 | Donald J. Boudreaux

[Garth Tater]

Tariffs are taxes. They raise the cost of goods and services. That results in lower production, lower consumption, lower employment, and lower revenues. That’s not good for the economy.

You are either one very confused individual or you are intentionally spreading untruths.

1. "Tariffs are taxes" - truth.

2. "They raise the cost of goods and services. That results in lower production" - this is a hidden lie.

They result in lower production by the foreign manufacturers hit by the tariff. They increase our domestic production of the very same goods and services which are now produced by American workers instead of foreign workers

3. "That results in ... lower employment" - another hidden lie.

The lower employment happens to the foreign workers employed by the foreign manufacturers hit by the tariff. The employment of American workers increases as the goods are now being made here by American workers.

4. "That’s not good for the economy" - another lie.

It's not good for the economy of the FOREIGN manufacturers but it is GREAT for our economy where people are now hard at work making the items that were previously made by foreign workers.

Please go away and spread your disinformation elsewhere.

[bigtoona]

Yes absolutely! Then we have leverage for negotiation! Why would we not impose a fee when they already are? Why don’t they stop charging us THIER fees? Because they don’t have to, that’s why... there is no penalty, just pure profit for them. We let them get away with it.

[Garth Tater]

I would suggest that the U.S. as a nation has lost its competitive edge against foreign industries largely because we've eliminated many distinctions between states right here in the U.S.

Yep. The States used to be called the laboratories of democracy where new ideas were tried out by individual states and good ideas were copied and bad ideas were dropped - but now with the growth of the federal leviathan it's one-size-fits-all and we have lost the innovative edge we once had with 50 laboratories each hard at work trying to out do each of the others.

[Alas Babylon!]

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[TBP]

They result in lower production by the foreign manufacturers hit by the tariff. They increase our domestic production of the very same goods and services which are now produced by American workers instead of foreign workers

There is little evidence of that. In fact, what happens is that the price of the imported goods goes up, people buy less, and eventually, with demand going down, shipments get cut dramatically and there is a shortage. If domestic producers thought they could make a profit doing something, they'd already be doing it.

If we slapped heavy tariffs on, say, Toyotas, do you think that would somehow increase the number of Chevys and Fords on the road? Or would people just hold onto their cars a little longer?

The lower employment happens to the foreign workers employed by the foreign manufacturers hit by the tariff. The employment of American workers increases as the goods are now being made here by American workers.

Again, the evidence doesn't really support that.

What does happen is that jobs in the import-export business decrease. Dockworker jobs decrease. Ancillary jobs related to those jobs decrease.

It's not good for the economy of the FOREIGN manufacturers but it is GREAT for our economy where people are now hard at work making the items that were previously made by foreign workers.

Except that they're not, not in any great numbers. The loss of jobs isn't good for anyone.

[TBP]

We were developing as an industrial power then. Of course there would be an increase.

As for your claim that “Reagan’s tariff on Japanese motorcycles which saved Harley-Davidson”, it doesn’t appear that that is correct. Check this link:

https://www.fool.com/investing/general/2016/04/05/33-years-ago-today-tariffs-saved-harley-davidson.aspx

“In today’s political climate, the story seems to have particular relevance. But the history books seem to have gotten it wrong. The tariffs actually did little to help Harley-Davidson survive, though they likely did cost some workers their jobs and raised costs for consumers. What actually saved Harley-Davidson was Harley-Davidson.

“After being bought out in 1981 by a group of investors led by a former AMF executive, Harley-Davidson immediately set about to remake itself. Over the next several years it:

Retooled its factories
Introduced the innovative 1340 cc V2 Evolution engine
Developed the Softail hidden rear suspension system
Switched from rigid-mounted engines to rubber-mounted
Introduced just-in-time inventory management systems”

[And that is what saved Harley Davidson.]

It was Harley Davidson changing the way it did its business that saved it, not protectionism.

[Garth Tater]

Me: "They result in lower production by the foreign manufacturers hit by the tariff. They increase our domestic production of the very same goods and services which are now produced by American workers instead of foreign workers"

You: There is little evidence of that. In fact, what happens is that the price of the imported goods goes up, people buy less, and eventually, with demand going down, shipments get cut dramatically and there is a shortage.

So, prices going up results in demand going down and this somehow results into a shortage? I guess they have repealed the Law of Supply and Demand in your fantasy world. In the real world, market clearing levels of production (ie. no shortages) are created by the interaction of buyers and sellers in a free market. Note: please don't try to conflate Free Market with the false "Free Trade" philosophy you are pushing.

If domestic producers thought they could make a profit doing something, they'd already be doing it.

Do you mean exactly like they were previously doing until Free Traitors like you helped move production to 3rd world hell-holes where workers toil in slave-labor conditions? You are such a tool.

If we slapped heavy tariffs on, say, Toyotas, do you think that would somehow increase the number of Chevys and Fords on the road?

Of course it would increase the number of domestically produced vehicles sold if foreign vehicles went up in price. People don't stop buying cars because they have to pay more for a Toyota - they simply purchase fewer Toyotas as the price goes up. The demand for "cars" stays the same. The price of Toyotas goes up and you want us to believe the previous demand just goes away and is not filled by domestically produced vehicles? You are clueless.

I am having a very hard time believing that you actually believe what you are saying. Are you getting paid to spread these lies or does your job depend on cheap foreign manufacturers putting American manufacturers out of business and American workers out of work?

[central_va]

That results in lower production, lower consumption, lower employment, and lower revenues. That’s not good for the economy.

The one price adjustment in prices due to an import tariff is temporary and well worth if you want to make America great again.

Tariffs protect domestic industries which still have to compete with each other which raises employment in the industrial sector which then raises employment in the service sector. It also maintains and keeps the industrial knowledge base and supply chain mechanisms inside the USA which is vital to national defense. Domestic competition, once it comes online, will lower prices again to pre tariff levels and the tax burden will also go down as more come off welfare.

For anyone following this thread the positives to an import tariff are:

1. Increased domestic industrial production.
2. Lowers the income tax burden.
3. Increase federal revenue further decreasing income tax burden.
4. It is a consumption tax, NOT progressive and is optional. Don't consume, don't pay.
5. Keeps vital industries inside the USA.
6. Lowers unemployment and stimulates the economy in a massive way. New factories mean new construction and new secondary homes and retail construction.

No country in history closed it's factories off shored them, imported and retailed itself into prosperity, ever. The record shows the opposite is true.

[central_va]

Other countries already tariff our exports I but you are to stupid to realize that.

[central_va]

Yes our industrial might plus cracking the Enigma Code(Ulta) made the war way shorter than expected. All thought the war was going to last 10 years when it started. We out produced them and out smarted the enemy.

[JPJones]

“We were developing as an industrial power then. Of course there would be an increase.”

Then why was there a decrease prior to the tariff?

“But the history books seem to have gotten it wrong.”

The Fools are globalist stock traders/investors.

I’ll stick with the “history books”.

[JPJones]

“No country in history closed it’s factories off shored them, imported and retailed itself into prosperity, ever. The record shows the opposite is true. “

Yup. Very true and the good ‘ole USA has been gutted like pig.

If imported products were people, then we’ve been invaded, conquered and subjugated.

[TBP]

No, it’s not just a temporary effect. TAriffs drive up prices and drive down employment.

Whenever you protect any industry from competition, you distort the market, leading to higher prices, often lesser quality, and lower employment. Why spend all that money to be competitive if you don’t have to? Getting the government to protect you from competition is much easier. And you don’t vhe to worry too much about prices, either.

The only way to achieve a monopoly is through government protection.

[central_va]

Whenever you protect any industry from competition, you distort the market, leading to higher prices, often lesser quality, and lower employment. Why spend all that money to be competitive if you don’t have to? Getting the government to protect you from competition is much easier. And you don’t vhe to worry too much about prices, either.

Somehow you discount the domestic market competitive forces that keep prices in check. Why you do this is unknown to me, perhaps you are paid by K Street to put out globalist propaganda, perhaps you mentally deficient, or perhaps you are an anti American bigot Free Traitor™. Which is it?

[TBP]

Increased domestic industrial production.

Questionable. It may not. There are many cases where it does no such thing.

Lowers the income tax burden.

No evidence of that .g Teh Big Government statist Establishment will simply spend more and not cut taxes.

Increase federal revenue further decreasing income tax burden.

Again, only if it actually lowers the overall tax burden, which is dubious. Teh Big Government boys like to tax us beyond our capacity to pay.

It is a consumption tax, NOT progressive and is optional. Don't consume, don't pay.

Depends on the goods. If your car needs to be replaced, then steel tariffs are raising the price of your car. Goods subject to tariffs will cost more. WE pay that tax.

There are some items that are not optional. If it costs more for the metals that make the shelves at your grocery store, they pass that expense along to you and me. If it costs more to ship the goods, we pay that. A tariff is a tax and even if it's only on things ancillary to the mandatory purchases, that's still a cost to the people who provide those items. They pass that to you and me.

Keeps vital industries inside the USA.

Not necessarily. There are many factors that cause businesses to move or to go out of business. Reducing regulatory costs and reducing the tax on repatriated money would do more to keep industries here than a tariff would.

Lowers unemployment and stimulates the economy in a massive way. New factories mean new construction and new secondary homes and retail construction.

No, you're presuming that there will be new industries just because we make the competing industry less competitive. But as I said, there are many factors that go into these decisions.

Furthermore, tariffs cost jobs in the import-export business, on the docks, and in industries related to those industries, and they have a ripple effect.