Trump's
overall Trade and Tariff policy description:
Bigly and Ugly
The man with his finger on the trade and tariff
weapon of choice
This
post ties directly into this earlier post I made here – read it first or second
the subject is generally the same: Trump’s Trade and Tariffs mess.
I call it Tariffs 101
Tariffs are a tax imposed by a
government on goods and services imported.
They increase the price of the goods imported and thus
make them less desirable to buy, and less competitive vs. domestic goods and
services.
Because of
this, domestic producers are not forced to reduce their prices from increased
competition, and domestic consumers are left paying higher prices as a result.
That
in turn decreases pressure on domestic producers to lower their prices.
So, in
two ways consumers lose because prices are higher and they lose as
domestic producers gain by the imposed tariff.
Tariffs are used to restrict trade, as they increase the
price of imported goods and services, making them more expensive to consumers.
They are one of several tools available to shape trade policy.
The U.S. Customs
and Border Protection (CBP) is the Federal agency, part DHS that is charged
with regulating and facilitating international trade, collecting customs
(import duties or tariffs approved by Congress), and then to enforce
trade regulations.
My 2 cents and the so-called bottom line: Tariffs are used to restrict
imports by increasing the price of goods and services purchased from overseas
and making them less attractive to consumers by helping domestic producers who
control the prices.
They hurt domestic consumers due to a lack of competition and
that pushes up prices thus benefiting domestic produces (but that assumes
their products are better than the imported less expensive ones and/or more consumer
popular).
And, Trump benefits himself – how – first of all his personal
bragging rights for this family and their export businesses.
Overall the benefits of tariffs are
uneven because tariffs are a tax. But, the government sees an increase in revenues
as imports enter the domestic market – thus they use that to spend and stay
popular but seldom do they spend on needed problem solving (like healthcare for
all).
Domestic industries benefit from a reduction in competition, since
import prices are artificially inflated – and they fork over more money to
incumbents in office to get favorable trade policy.
I call it: “We’ll
load your campaign coffers for more trade favors. You get more bragging rights
to stay in power.”
Thanks for stopping – hope this helps explain things.
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