Tariffs are a tax on consumers and a subsidy for producers. They distort market signals and result inevitably in misallocation of resources. Tariffs are admission of defeat and only delay the inevitable. They are not a solution.
tariffs create deadweight loss but also create incentive to onshore. consumers do not pay more for local goods. that's the whole point.
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Consumers are left with distorted price signals- not a free market. Inefficiently domestic production is continued when in a free market it would cease and the capital and labour it uses would be reallocated to a more efficient purpose. Tariffs are explicit admissions of failure to maintain a competitive economy. Consumers pay more than they would because they are denied access to more efficiently produced lower priced imports.
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Can you explain with a real world example?
What is a popular consumer product that has tariffs?
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I don't need to - the theory applies to all tariffs equally. Trump is proposing tariffs as if they are some magic fix whereas they are in truth market rigging and taxation of more efficient offshore manufacturers and producers to protect less efficient more expensive domestic manufacturers and producers. They all impose less choice and higher prices on consumers by protecting inefficient domestic producers who cannot compete in a free and competitive market. I have already given an example in a previous comment- Musks Tesla EVs vs Chinese EVs. Americans will pay higher prices for EVs to protect Teslas domestic market share because Tesla is not as efficient a producer than the Chinese manufacturers....that's in addition to the billions Tesla already receives in EV subsidies. Musk is a rentseeking parasite attaching himself to sugar daddy protectionist market rigger, Donald Trump. Crony capitalism writ large.
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Which Chinese EV models?
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Thanks for the info
I sent the battery article to a friend who is a materials scientist
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I have not seen BYD in California
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10 to 20 percent tariff is mild and reasonable?
Have you seen tariffs on steal? 400 percent or 400%
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Why is any tariff reasonable? They ALL obstruct free trade and protect inefficient capital allocation and impose higher costs on the host nation, its consumers and businesses.
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