What’s a Trade War and How Did We (Canada) End Up In One?
“A tariff is a tax that is levied on goods exported by one country and imported by another. This tax is charged to the importer in the destination country and paid to that country’s government. Hence, when President Trump instituted tariffs on all goods crossing from Canada to the United States, it is American businesses that now have to pay a 25% tax and remit it to the U.S. government.” - Challies
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President Trump seems to really like punitive and targeted tariffs, which differ from a traditional revenue tariff by the amounts charged (punitive is generally 20% and up, revenue 10% or less), and their applicability--Trump is targeting certain industries, whereas a revenue tariff will be across the board.
I personally like revenue tariffs, because it offers a way of reducing (definitely not eliminating) the income tax's role and cost in tax collection, but what Trump is doing with punitive & targeted tariffs is to encourage reciprocal hissy fits by the world's governments. Those governments need to be reminded of a basic reality as noted by Bastiat; if goods do not cross borders, armies will.
Aspiring to be a stick in the mud.
Tarifs are not always bad, but I can't make sense of what he is doing. He is selling Tarifs to the American people as a way to protect industries and increase revenue through the charging of other countries (tarifs aren't paid by other countries). What he is telling other countries is that he is imposing a punitive tarif until they comply with him, with the subsequent idea that if they comply the tarif is dropped. This contradicts his statement to the American people that it will protect jobs and create growth. Punitive tarifs don't do that. What it is actually doing to American's is hurting them financially, by either driving up prices (since the American consumer pays for the tarif), or hurting them financially by watching their 401K's shrink.
I don't understand at all what that guy is doing with tarifs. The financial world hates, hates, hates, uncertainty. And that is all that he is doing, with this on again off again tarif threat. He said day 1, he was going to do this and that, and he is missing this mark on this and the financial markets. The stunt he pulled on the White House lawn was detestable. He would have yelled at Biden if Biden had done it. The reason why Tesla stock is diving:
- Trump with his haphazard approach is killing all stocks
- Elon sells a product to a liberal base, who does not want to support what he does or what Trump does.
- Elon sells a product that is detestable to the conservative base.
- Elon sells a product that Trump is targeting to reduce, by removing incentives for electric grid or tailpipe emissions
All of Elon's wealth comes from Tesla, but he sides with a group that basically creates a hate for his product. Trump out on the WH lawn peddling Teslas to the American people? His base, hates the product, and his opponents hate him and everything he peddles. Who on earth is he selling it to?
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