I will give you an example of how tariffs work.
A US and German company decide to build X-bike. Everything is the same between the two bikes....technology, brakes, tires, etc.
So the US company sits down and figures up the raw material, labor cost, and company profit line (with taxes figured into this estimate). They come to a wholesale price that the middle guy will reach and pay. Let’s call this ‘Y’.
The German company does the same thing, figuring up the raw material, the labor cost, and company profit line (with taxes figured into this estimate). But we reach this interesting problem. You go and figure healthcare costs, personal taxes, VAT, cost of living, etc....and this German wholesale price is ‘Y’ + 15-to-20 percent. Because of gas taxes, property taxes, sales taxes, pension cost, etc....the German has a bigger umbrella to cover.
So these two bikes are delivered to a German store, and the US-made bike (without a tariff) would be probably 15-to-20 percent more....minus out the transport cost on the US bike to be delivered there.
Can these two bikes compete? No. Is it unfair competition? The German would say so.
So the answer, because the German can never compete on a fair and level field because of his cost of living and various taxes....is a tariff. You inflate the American’s bike cost to equal the German’s cost, and probably exceed it by 5-percent.
Imagine this across literally thousands of products and the nature of German tariffs...literally to cover up the fact that they can’t compete without the tariff existing.
Fixed it for ya.
I will give you an example of how tariffs work.
A US and German company decide to build X-bike. Everything is the same between the two bikes....technology, brakes, tires, etc.
So the US company sits down and figures up the raw material, labor cost, and company profit line (with taxes figured into this estimate). They come to a wholesale price that the middle guy will reach and pay. Let’s call this ‘Y’.
The German company does the same thing, figuring up the raw material, the labor cost, and company profit line (with taxes figured into this estimate). But we reach this interesting problem. You go and figure healthcare costs, personal taxes, VAT, cost of living, etc....and this German wholesale price is ‘Y’ + 15-to-20 percent. Because of gas taxes, property taxes, sales taxes, pension cost, etc....the German has a bigger umbrella to cover.
So these two bikes are delivered to a German store, and the US-made bike (without a tariff) would be probably 15-to-20 percent more....minus out the transport cost on the US bike to be delivered there.
Can these two bikes compete? No. Is it unfair competition? The German would say so.
So the answer, because the German can never compete on a fair and level field because of his cost of living and various taxes....is a tariff. You inflate the American’s bike cost to equal the German’s cost, and probably exceed it by 5-percent.
Imagine this across literally thousands of products and the nature of German tariffs...literally to cover up the fact that they can’t compete without the tariff existing.