Comment by DeathArrow
7 days ago
>The United States will be an autarchy, similar to how LaTam was in the 70's, when tried this exact idea. The tariffs being as high instantly, will impact the economy, later, the country will probably grow, which is what they expect, but this is not a productive grow. Because your new factories now are not competing with external products, so your productivity go down, this means real income will also go down.
If what you say is true, tarrifs should not exist in any country. And yet, most countries are using tarrifs.
What if a particular country is using dumping and sell at prices so low, it will kill a particular industry? And after they kill it, they start jacking prices at unseen levels and you will have to pay because you don't have a choice?
Most countries do specific tariffs on areas of the economy they want to develop/protect them.
If a country is doing price dumping, there's even legal ways of protecting these sectors, by applying to WTO (but the U.S basically killed the WTO). But even if the U.S don't trust the WTO, they could apply antidumping tariffs to these specific sectors (like the 100% tariffs Biden administration did to EVs).
U.S is not doing this right now, it's protecting "all sectors" of the economy. There's no other reasonable developed country with a 29% tariff.
You can check here: https://data.worldbank.org/indicator/TM.TAX.MRCH.WM.AR.ZS
You'll also notice that most developed or growing economics have low tariffs...
>And yet, most countries are using tarrifs.
On specific industries they want to protect. Not completely across the board.
VAT on imports are across the board, as far as consumer goods go.
VAT by definition applies to domestic products as well, and is thus not putting foreign sellers at a disadvantage.
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VAT is like a sales-tax but along the supply chain (with credits) - so it's like a complicated sales-tax.
If you want to use that for argument, you should include US sales taxes in the calculation too. Which could be fair, I guess.
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