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To: Non-Sequitur
Everybody tries to pass the tax to someone else. The only group that is powerless to pass the costs on further are the exporters, who have to sell at world prices, and swallow those costs. In essence, a tax on imports becomes a tax on exports.

Leaving aside the insults and the smart-ass remarks that our posts have degenerated to, please explain this quote of Tommy's. Why are exporters the only ones who have to swallow the costs? Why are they any different from anyone who produces a fungible commodity, regardless of whether it is for export or domestic consumption? The Northern wheat farmer is no more able to add to his price to cover his additional cost for imported goods than is the southern cotton exporter. He has to sell at the market price, regardless. And the market price doesn't care if he had to assume additional costs because of the tariff or not. The market price is determined by the supply of wheat only. Same as the cotton exporter.

400 posted on 05/15/2003 5:14:51 PM PDT by Non-Sequitur
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To: Non-Sequitur
Leaving aside the insults and the smart-ass remarks that our posts have degenerated to, please explain this quote of Tommy's. Why are exporters the only ones who have to swallow the costs?

First off, that's not a quote of Dilorenzo. It's from a college level economics textbook. Second, it does not say that exporters are the only ones that swallow the costs of a tariff - it says that they are the ones who are hurt the most because they, more than anyone else, cannot do a thing about it to pass on the costs. Third, the reason this is so has to do with the fact that exporters are ultimately unable to avoid the economic costs of a tariff, which is in the destruction of trade.

The Northern wheat farmer is no more able to add to his price to cover his additional cost for imported goods than is the southern cotton exporter.

You are missing the issue entirely, non-seq. The northern wheat farmer may indeed have to pay higher prices because of the tariff, but that is not where the worst cost of it occurs. Tariffs hurt exporters the most because they kill off trade. If trade does not happen, exporters do not make money. The south made 75% of the nation's exports and had an economy that made its money almost entirely off of them. If you kill off trade, the region that gets hurt the most becomes a simple matter of mathematics. Which do you think it will be? The region that provides 25% of the nation's exports or the region that provides 75%?

408 posted on 05/15/2003 8:28:11 PM PDT by GOPcapitalist
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