Comment by kshri24
3 days ago
None of them have country wide tariffs (not counting reciprocal tariffs imposed after Trump imposed tariffs).
US has nearly double the GDP of second in line: China. It can easily dump goods at lower cost compared to China or any other country on the planet and destroy domestic competition. Which is why tariffs are imposed on select industries/products. It is an anti-dumping measure.
Like I said, US is behaving like a developing country by imposing tariffs. Which is only going to hurt its own citizens.
And this is the fractal spiraling hacker double-think I was looking forward to enjoy. Now China is a poor little developing country which is vulnerable to the USA dumping their low-cost goods onto them.
Edit: I appreciate that you are arguing your points like a gentleman, while I'm maybe not.
> Now China is a poor little developing country which is vulnerable to the USA dumping their low-cost goods onto them.
It is not about being poor or little per se, but more about being developing. Just because China is second in GDP and is a behemoth in various sectors (and clearly way ahead, in comparison to US in some of the sectors), it is still clearly not on the same level as USA both economically or militarily. Despite that, China does not apply a blanket tariff on all nations of the World. It is more targeted and specific to sectors where it feels the other nation can endanger it. Heck, it can even remove tariffs if it feels domestic production is more expensive. For example, China removed 30% import duty on Indian pharma sector because domestic production of the same generic as well as branded drugs was more expensive.
The higher you are in the economic ladder, it is only beneficial for you to reduce your tariffs. Because of two simple points:
1. You being higher in the economic ladder implies you have higher disposable income. That means your citizens can buy produce/services at cheaper rates from those below the ladder.
2. Lower/zero tariffs ensures no brakes on spending.
If you increase tariffs, you are going to reduce the disposable income of your own citizens. Because those tariffs are borne by the citizens. The tariff that is collected does not reduce any deficit that exists between your country and the countries below you in the economic ladder as deficits are reduced through increasing exports and not by taxing imports.
The problem with Trump's tariffs is that it is not targeted. It is across the board. This reduces disposable income of US citizens drastically, thereby forcing them to NOT spend on anything except for what is needed for survival. Wages are not increasing to offset the loss in disposable income (it is hardly keeping up with rising inflation). So what is the net result if citizens do not have sufficient disposable income to buy products/services beyond what is bare necessities? You end up in recession or worse a depression.
It is not the first time this has been tried. It has been tried before with devastating consequences for US and indirectly rest of the World. Read up on 1930's Smoot-Hawley Tariff Act which directly contributed to accelerating the depression: https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac...