Posted on 07/09/2018 6:24:08 AM PDT by reaganaut1
Who’s the biggest loser when tariffs are imposed on imports? The surprising answer: exporters.
Though completely counterintuitive, theory and evidence show that taxes on imports act just like a tax on exports.
Though it’s early, the Trump administration’s recent round of tariffs is already rippling out to exporters: Soybean farmers face plunging prices as China raises tariffs, Harley-Davidson will move production of motorcycles destined for the European Union out of the U.S., and BMW says foreign retaliation may hit exports from its South Carolina plant.
Economists credit Abba Lerner, then a graduate student at the London School of Economics, for proving theoretically in 1936 that an import tariff was equivalent to a tax on exports. The Lerner Symmetry Theorem is considered a key principle of trade economics, like 18th century economist David Ricardo’s theory of comparative advantage.
The practical link was obvious to protectionists and free traders alike as far back as the 1600s, says Douglas A. Irwin, an economist and trade historian at Dartmouth College. They understood that a country that shuts out imports deprives its trading partners of money to buy exports.
This, Mr. Irwin notes in his book “Clashing Over Commerce: A History of U.S. Trade Policy,” is why Americans were so divided over tariff policy in the 1800s. When northern states succeeded in raising tariffs to protect their manufacturers, they angered southern states who paid more for manufactured goods and suffered falling prices for their exports such as cotton and tobacco. Mr. Irwin’s data show that while exports and imports have varied between 3% and 25% of gross domestic product since 1790, the two tend to move together.
(Excerpt) Read more at wsj.com ...
Any country whose leaders have half a brain will go to great lengths to protect their domestic agricultural industries -- for obvious reasons. That's why agricultural products aren't covered by many trade agreements -- including NAFTA (which is why Canada can impose a 200% tariff on dairy products without violating the terms of NAFTA).
Try to find something in an electronics store that is made in the USA!!! Or for that matter about 80% of all the crap in Wal-Mart. I am confident that the Chinese will give in when push comes to shove. And I am a Farmer and yes the price drops for my commodities hurts but the Chinese have manipulated the market to their advantage for decades and it is time for it to stop!!!
Thanks for proving my point!
There bikes look cool. They sound cool. But, they’re POS and need constant, costly maintenance.
On top of that, the folks that were buying them, when it was cool, guys in their 40s, 50s, 60s aren’t buying them anymore. Or the novelty wore off and they sold them. And the younger generation isn’t into that stuff the way them old guys were. I don’t see too many liberal hipsters rolling to get their spiced chai latte on a Dynaglide. Vespa, maybe. Definitely not a hog.
We're not supposed to be able to step outside of the author's imposed domestic bubble in our thinking, as if the United States is an island and such observations only apply here.
But, what the author says is true. And so, step outside his bubble. Which nation is by far dependent upon exports, the United States or China? The United States or Germany, or even the EU as a whole?
And what is the primary export market for these predominantly exporting nations? Why, I'll be, it's the United States.
Whenever the media; journalists, blogs, videos, articles, newspapers TV news—whoever—brings up this issue and doesn’t mention Trump’s promise to force free trade, I think are liars with an agenda, rather than simple purveyor of the news.
Tell the truth!
There should be at least one sentence of the President wanting the other country to drop a tariff, protection, subsidy, safeguard, whatever.
Why?
Because it is the truth! It’s his reason for all this.
Now, media types, you can argue against his reason, or say he’s wrong, but...
To simply leave that out is deceitful as best and just plain old lying at worse. Fake News!
I thought that is what the President and Sec Ross have been saying since all of this started?
If a country wants “free trade” with the US, then we get the same with them.
HD customer base is aging out and dying off plus Polaris Indian is eating their lunch with innovative desirable product that impinges upon their place in the market, some gorgeous retro-modern cruisers that beat the pants off of HD in every meaningful way. They need to wake up and raid Indian for some talent before they shuffle off into the sunset, that would be a pity. They are a heritage domestic brand with a grand history. Shame to lose that, ball’s in their court on that though.
Okay...
By why should we agree to this when it hurts OUR farmers?
I respect Canadian farmers, but not at the expense of American farmers.
The idea of free trade has to supply across the board, or it really doesn’t exist. I think we should strive for fairness to our farmers as we do for our steel workers or steel industry.
The whole idea of free trade is to promote the best price for the consumer and therefore promote industry between countries.
In the end, a 200% tariff on American dairy products might help Canadian farmers (at the expense of American farmers) but also hurts Canadian consumers.
Why is that a surprise? Tariffs imposed by us will result in retaliatory tariffs against our exports. That will cost exporters business. It isn’t rocket science.
“There bikes look cool. They sound cool”
Not if you live 200 ft from a busy CA. road. Those Hogs easily penetrate my dual pay windows with there noise, cars not at all.
Allow me to qualify my statement, as I’ve never been that big a fan, especially when it seemed like every 40-50yr old, going thru some life crisis got their hands on one.... they sound cool and manly to the lawyer, accountant, doctor, CEO-type that got one and his leather vest, grew a goatee and rode them to their favorite place for brunch on a Sunday afternoon, because that’s what all bikers do
Steel and aluminum are industries needed for defense. Ag and food also. China, India, Canada and many other countries ignore our patents and copyrights. Anyone who thinks global trade is anything but lawless is a fool. The rest of the world is mercantilist and has been waging trade war for 50 years and thought it was one.
Do you get paid for posting each POS Fake news from the WSJ?
Your hatred of President Trump is eating you up!
Ah, the head in the sand fallacy, with economic illiteracy on top, and blaming the victim. Pretty good for three sentences.
If US tariffs are bad for the US economy, why is no one discussing why country X’s current and retaliatory tariffs are bad for X’s economy?
Because the U.S. would do well to impose similar tariffs and restrictions to protect OUR agricultural producers.
Excellent historical reminder!
Exactly, which is why China and China exporters will be hurt the hardest
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