Posted on 05/19/2019 5:07:18 PM PDT by WWII_Historian
The best tariff (tax on imported goods) equals zero — at least this is what standard economic theory says. However, such a rule is valid only when both trading partners are set at zero. If either side moves one iota above zero in tariffs, it makes its population pay for that move. So what happens when one party does not respond to an unfriendly move from zero to some non-zero tariff? In a short time frame, it hurts the side that makes such a move, but in the long run, it could eventually bankrupt businesses on the other side and, in turn, bring enormous benefits for those who made such a move first. The more time other side keeps indifferent, the more it loses in the end.
Enter China: it established non-zero tariffs years ago on practically all American goods and services, while the United States was busy discussing the stained blue dress, "hanging chads," "9/11 was inside job," "keep your doctor," and "Trump is Putin's marionette." As a result, many American businesses moved to other countries, including China, and took millions of jobs with them. The Maoist Chinese rulers were completely satisfied with this American complacency.
American decades-long inaction led to enormous imbalances in the world market. Every independent observer understands that the situation on Trump's plate does not have any suitable solution besides going back to the mutual zero tariffs mode. However, the United States cannot do this unilaterally, because the situation has reached a breaking point.
Trump knows all this. He also knows that any country that unilaterally increases tariff hurts domestic manufactures in the short term. The solution he implemented to alleviate this is brilliant. Trump decided to increase external taxes (tariffs) and, at the same time, to decrease domestic taxes.
(Excerpt) Read more at americanthinker.com ...
I don’t think other past Presidents would have been taken seriously. This one is different.
Yes, because Trump IS serious and everyone is finally figuring it out.
“The solution he implemented to alleviate this is brilliant. Trump decided to increase external taxes (tariffs) and, at the same time, to decrease domestic taxes.”
It is brilliant.
See my tagline.
Economic Illiteracy.
Anytime a thinktank or author talks about Tariffs,
expect childish illiteracy.
I read all this rah-rah-rah talk about tariffs.
America does have a large share of Chinese made products. It’s at 11%.
It’s not the 90% that American seem to think that it is.
Yes, I do agree that Trump is doing good, but when it comes to “experts” telling us what will eventually happen, I have to laugh. No one knows.
No one knows.
What happens when Trump is kicked out of office in 2020? What? You think that that is inconceivable? Apparently a deep state insider told the Chinese exactly that.. And they believed him.
Why? How? Just how was he able to convince the Chinese that Trump only has one more year in office?
Maybe you all should start to consider that reality.
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