Halls of Shrewd'm / US Policy❤
No. of Recommendations: 14
A few members of the Administration, including Trump himself, have suggested that the proposed new tariffs could bring in an additional $600 billion in new revenue per year. That's an astonishing claim.
U.S. imports of goods constituted about $3 trillion per year under current trade policy. For a new tariff scheme to yield an increase of $600 billion in revenue, that would have to be an effective 20% tariff on every good from every country, on average. Some might be higher or lower, but the overall rate of the new tariff would have to work out to 20% across all imports.
Of course, even that wouldn't yield $600 billion - because people respond to incentives. New tariffs of that magnitude would drive imports down, reducing the amount of revenue. So if the Administration is genuinely thinking that they can yield $600 billion in revenue, the overall effective rate has to be even higher than 20%.
I guess we'll find out in a few days where the rates are going to be set, but their revenue figures suggest that they're going to set them really high. Going to be quite a shock to the system....
No. of Recommendations: 3
Going to be quite a shock to the system....
The only shock will be to people who actually think Trump, or anyone in his administration, is capable of telling the truth.
The $600 billion number is more like the old “tax cuts pay for themselves” lie. Just another lie to pull the wool over the eyes of fools so they can rationalize a huge tax cut for billionaires.
Gosh, didn’t see that coming.
No. of Recommendations: 3
Oh, and just to be clear, whatever the tariff revenue amount actually turns out to be, it is money that will predominantly come out of low income and middle class family’s wallets.
Oops, another shock.
No. of Recommendations: 1
snippet from CNBC who dont get what they are reporting...sense that japan, korea and china will respond with en bloc tariffs if USA goes ahead....
if this has any truth (and it could be a self fulfilling prophecy) imagine other countries 'en bloc-ing"....if Trump goes ahead this week....
No. of Recommendations: 5
The $600 billion number is more like the old “tax cuts pay for themselves” lie. Just another lie to pull the wool over the eyes of fools so they can rationalize a huge tax cut for billionaires.
I agree - they'll never collect anywhere near that number.
But they can do basic math. U.S. imports of goods "only" total about $3 trillion. They know that if imports are only $3 trillion, you need a minimum 20% tariff to get anywhere close to $600 billion in revenue. So the fact that they keep talking about $600 billion suggests that the tariff rate is going to be north of that.
No. of Recommendations: 3
There has been a fair amount of research into the impact of these types of taxes on black or grey market activity. If the tariff is too high, these markets will develop, bypassing the tariff. The risk of the illegal activity is offset by the financial gain.
In addition, it is certain that companies will adjust their supply chains to minimize the tariff impact. Many products touch several countries before reaching the final consumer. If it is expensive to move components into the US, it is more likely they will ship those elsewhere for assembly into the final product.
Also, repeating that the tariffs are a new tax on the poor and middle class.
Alan
No. of Recommendations: 5
People never learn from history...[sigh]
Of course, I actually first learned about this from Ferris Buehler. The Hawley-Smoot Tariff Act of 1930. An attempt to raise funds to ameliorate the Great Depression. It actually made the Depression worse, because a tariff doesn't happen in a vacuum. It provokes behavioral responses (e.g. people shift their buying habits), and also retaliatory tariffs. Which, again, will shift buying habits.
For very specific applications (e.g. a nation "dumping" product on the market), it can be a useful tool. As a general policy, it is stupid.
No. of Recommendations: 1
That means there will be more opportunities for the oligarchs to imprison people for violating the tariffs. Once people are in prison they can be enslaved. The 13 Amendment only did away with chattel slavery. It enshrined as a right of government to enslave those convicted of crimes.
No. of Recommendations: 0
I think reality will force Trump to modify his idiotic tariff proposals and then he will declare it all a great victory.
No. of Recommendations: 11
A few members of the Administration, including Trump himself, have suggested that the proposed new tariffs could bring in an additional $600 billion in new revenue per year. That's an astonishing claim.
Al, Al, Al... Clearly you don't understand the system here. Trump said it. His yes-men (and yes-women) said "yes". So that settles it. It must be the truth. Because they said so.
The $600 billion will magically appear out of thin air and there will be no impact on the economy at all. It just takes enough faith to believe in it for it to happen. And if it doesn't happen, it's Joe Biden's fault. And Hillary! for not being prosecuted for her not-crime. Probably Hunter, too.
--Peter
No. of Recommendations: 3
U.S. imports of goods constituted about $3 trillion per year under current trade policy. For a new tariff scheme to yield an increase of $600 billion in revenue, that would have to be an effective 20% tariff on every good from every country, on average. Some might be higher or lower, but the overall rate of the new tariff would have to work out to 20% across all imports.
It would be even higher than 20%, because the tariff would inherently reduce that $3T trade amount significantly.
No. of Recommendations: 4
It would be even higher than 20%, because the tariff would inherently reduce that $3T trade amount significantly.Yes....but that's in the details. When running around pointing to a topline number, the Administration is probably going to ignore the pesky details of how people will actually respond to tariffs.
Reuters today is reporting that the overall tariff rate is indeed going to be at least 20%. So that's where they got the number:
https://www.reuters.com/world/us/trump-aides-draft...
