4 ms·

The import tariffs are paid by the people inside the importing nation. A US import tax on Chinese goods is a tax on American consumers and manufacturers. The

The import tariffs are paid by the people inside the importing nation. A US import tax on Chinese goods is a tax on American consumers and manufacturers. The way to tax China itself would be an export tax on money bound to China, including the transfers of immobile or intangible assets to Chinese nationals or corporations via domestic exchanges or brokerages--and including the cash value of transferred intellectual property. Imports are paid for by exports. If you're worried about a trade imbalance, you could always say that the other nation can keep sending more goods if they want, but we'll only pay for them with trade goods and services, not with cash, or ownership of land and capital.

logfromblammo 7y ago
Another way to wipe out a history of past trade imbalances would be to announce the retirement of the domestic currency, citing counterfeiting or hacking, hyperinflation, or whatever else that may sound plausible. You then allow only your own nationals to exchange old money for new money. In order to avoid losing all of the value of their old money, foreign holders would have to buy something from a domestic person, who could then exchange the currency. A smart exchanger would then either keep the new cash, or buy back their sold things at a lower price. In effect, it ends up being a one-time tax on domestic currency being held abroad. Any country that had been building up a reserve of your currency via trade deficits either has to settle up immediately by importing a giant bolus of your trade goods, or it gets screwed.
- dpark 7y ago
  That sounds like a great way to lose reserve currency status immediately.
  - logfromblammo 7y ago
    If your currency is a reserve currency, this measure is unnecessary--you can just print more of it.
    - Fjolsvith 7y ago
      That has the unfortunate disadvantage of devaluing the currency your own citizens hold.
      - logfromblammo 7y ago
        Only the rich ones. The citizens who have their debts devalued, and whose assets are mostly in residential real estate, would see it as a fortunate advantage.
  - Fjolsvith 7y ago
    What's the benefit of having reserve currency status? US States have right and left been legalizing precious metals for currency this last year, perhaps in preparation for a return to the gold standard and dumping federal reserve notes after an audit of the federal reserve...
    - dpark 7y ago
      > What's the benefit of having reserve currency status? You get to print absurd amounts of money without significant inflation because every other nation in the world hoards your currency because it’s the de facto standard for trade. US dollar stability owes a lot to the fact that everyone else holds a ton of dollars. > US States have right and left been legalizing precious metals for currency this last year... It’s never been illegal to trade precious metals for goods or services. Precious metals may not be legal tender but no one has been prevented from using them as currency. To the extent that some states may make gold or silver coins legal tender, it’s just pandering to conspiracy theories and paranoia. In the event that the dollar collapses, having gold as an alternative legal tender does nothing. Anyone saying otherwise is either lying or ignorant. If someone owes you $1300 dollars, having gold as an alternative legal tender doesn’t help you if the dollar collapses. The person owing you is absolutely not going to go find a Troy ounce of gold coins to pay you. They’re going to happily pay you the $1300 they owe you in devalued US dollars. And you’ll accept, because that’s what legal tender means.
burfog 7y ago
Taxes on transactions, such as tariffs, are almost never paid only by one side. The side with less flexibility is going to pay most of it, adjusting prices as needed to make this so. China has less flexibility. Idled factories are a huge problem, and there is no other buyer as large as the US. It is relatively easier for the US to buy elsewhere, both abroad and domestic. About 83% of the tariff burden is getting paid by China. (analysis by European financial firm) Even the part we do pay isn't all bad. It reduces the need for other taxes. It supports American workers, reducing income inequality.
- DuskStar 7y ago
  Seriously, 83%? That's insane! Seems things are going far better in this little trade war than I was expecting. If the 17% paid by US consumers displaces other taxes, that's a huge net gain.
CharlesColeman 7y ago
> The import tariffs are paid by the people inside the importing nation. While that's technically true, the tariffs have the effect of increasing the price of goods, so the exporter may need to lower their price and drop their profit margin to remain competitive. > The way to tax China itself would be an export tax on money bound to China, including the transfers of immobile or intangible assets to Chinese nationals or corporations via domestic exchanges or brokerages--and including the cash value of transferred intellectual property. That's an interesting idea, but doesn't the US Constitution ban export taxes? https://fas.org/sgp/crs/misc/R42780.pdf https://fas.org/sgp/crs/misc/R42780.pdf
- logfromblammo 7y ago
  It bans taxes on "articles exported". Banknotes, shares of stocks, bonds, title to real property--these are arguably not "articles". You couldn't tax a crate of polypropylene combs going from Chicago to Shenzhen. You might be able to tax the sale of 100 shares of stock in Acme Unbreakable Combs, Inc. to Chan Jingwei of Shenzhen on the Nasdaq exchange. Maybe tax the transfer of technical plans and patent rights for a comb-making machine from AUC Inc. to Acme Shenzhen Manufacturing, a Chinese corporation. And you might be able to tax the sale of a Seattle 4000-sqft 5-bedroom house to Mr. Chan. In all those cases, you're not moving goods, you're moving ownership.
  - CharlesColeman 7y ago
    Is there any caselaw that takes that view?
    - logfromblammo 7y ago
      Someone would have to enact a law establishing an export tax first. As far as I am aware, you can't challenge a law as unconstitutional until it has been passed and signed.
paganel 7y ago
> US import tax on Chinese goods is a tax on American consumers and manufacturers. And a regressive tax at that, as it will affect poor people more compared to the better off.
- toasterlovin 7y ago
  A 25% tariff results in low-singe digits % price increase at in the store. The tariffs are on cost of goods, but cost of goods is usually a fairly small fraction of retail price.
  - paganel 7y ago
    Even a 5% increase in the monthly costs of a lower-income family is 5% too much in this era of stagnating real wages. And
    - toasterlovin 7y ago
      Most families don't spend all that much money on stuff manufactured in China. Family budgets are largely comprised of rent/mortgage, food, and transportation. Then you have clothing and household goods, some of which is manufactured in China. So we're looking at a 5% increase in a small fraction of a family's monthly budget. As a point of comparison, families regularly weather much larger fluctuations in their monthly budget due to changes in the price of gasoline.
deleted 7y ago
[deleted]

logfromblammo 7y ago

Another way to wipe out a history of past trade imbalances would be to announce the retirement of the domestic currency, citing counterfeiting or hacking, hyperinflation, or whatever else that may sound plausible. You then allow only your own nationals to exchange old money for new money. In order to avoid losing all of the value of their old money, foreign holders would have to buy something from a domestic person, who could then exchange the currency. A smart exchanger would then either keep the new cash, or buy back their sold things at a lower price. In effect, it ends up being a one-time tax on domestic currency being held abroad. Any country that had been building up a reserve of your currency via trade deficits either has to settle up immediately by importing a giant bolus of your trade goods, or it gets screwed.

dpark 7y ago
That sounds like a great way to lose reserve currency status immediately.
- logfromblammo 7y ago
  If your currency is a reserve currency, this measure is unnecessary--you can just print more of it.
  - Fjolsvith 7y ago
    That has the unfortunate disadvantage of devaluing the currency your own citizens hold.
    - logfromblammo 7y ago
      Only the rich ones. The citizens who have their debts devalued, and whose assets are mostly in residential real estate, would see it as a fortunate advantage.
- Fjolsvith 7y ago
  What's the benefit of having reserve currency status? US States have right and left been legalizing precious metals for currency this last year, perhaps in preparation for a return to the gold standard and dumping federal reserve notes after an audit of the federal reserve...
  - dpark 7y ago
    > What's the benefit of having reserve currency status? You get to print absurd amounts of money without significant inflation because every other nation in the world hoards your currency because it’s the de facto standard for trade. US dollar stability owes a lot to the fact that everyone else holds a ton of dollars. > US States have right and left been legalizing precious metals for currency this last year... It’s never been illegal to trade precious metals for goods or services. Precious metals may not be legal tender but no one has been prevented from using them as currency. To the extent that some states may make gold or silver coins legal tender, it’s just pandering to conspiracy theories and paranoia. In the event that the dollar collapses, having gold as an alternative legal tender does nothing. Anyone saying otherwise is either lying or ignorant. If someone owes you $1300 dollars, having gold as an alternative legal tender doesn’t help you if the dollar collapses. The person owing you is absolutely not going to go find a Troy ounce of gold coins to pay you. They’re going to happily pay you the $1300 they owe you in devalued US dollars. And you’ll accept, because that’s what legal tender means.

burfog 7y ago

Taxes on transactions, such as tariffs, are almost never paid only by one side. The side with less flexibility is going to pay most of it, adjusting prices as needed to make this so. China has less flexibility. Idled factories are a huge problem, and there is no other buyer as large as the US. It is relatively easier for the US to buy elsewhere, both abroad and domestic. About 83% of the tariff burden is getting paid by China. (analysis by European financial firm) Even the part we do pay isn't all bad. It reduces the need for other taxes. It supports American workers, reducing income inequality.

DuskStar 7y ago
Seriously, 83%? That's insane! Seems things are going far better in this little trade war than I was expecting. If the 17% paid by US consumers displaces other taxes, that's a huge net gain.

CharlesColeman 7y ago

> The import tariffs are paid by the people inside the importing nation. While that's technically true, the tariffs have the effect of increasing the price of goods, so the exporter may need to lower their price and drop their profit margin to remain competitive. > The way to tax China itself would be an export tax on money bound to China, including the transfers of immobile or intangible assets to Chinese nationals or corporations via domestic exchanges or brokerages--and including the cash value of transferred intellectual property. That's an interesting idea, but doesn't the US Constitution ban export taxes? https://fas.org/sgp/crs/misc/R42780.pdf https://fas.org/sgp/crs/misc/R42780.pdf

logfromblammo 7y ago
It bans taxes on "articles exported". Banknotes, shares of stocks, bonds, title to real property--these are arguably not "articles". You couldn't tax a crate of polypropylene combs going from Chicago to Shenzhen. You might be able to tax the sale of 100 shares of stock in Acme Unbreakable Combs, Inc. to Chan Jingwei of Shenzhen on the Nasdaq exchange. Maybe tax the transfer of technical plans and patent rights for a comb-making machine from AUC Inc. to Acme Shenzhen Manufacturing, a Chinese corporation. And you might be able to tax the sale of a Seattle 4000-sqft 5-bedroom house to Mr. Chan. In all those cases, you're not moving goods, you're moving ownership.
- CharlesColeman 7y ago
  Is there any caselaw that takes that view?
  - logfromblammo 7y ago
    Someone would have to enact a law establishing an export tax first. As far as I am aware, you can't challenge a law as unconstitutional until it has been passed and signed.

paganel 7y ago

> US import tax on Chinese goods is a tax on American consumers and manufacturers. And a regressive tax at that, as it will affect poor people more compared to the better off.

toasterlovin 7y ago
A 25% tariff results in low-singe digits % price increase at in the store. The tariffs are on cost of goods, but cost of goods is usually a fairly small fraction of retail price.
- paganel 7y ago
  Even a 5% increase in the monthly costs of a lower-income family is 5% too much in this era of stagnating real wages. And
  - toasterlovin 7y ago
    Most families don't spend all that much money on stuff manufactured in China. Family budgets are largely comprised of rent/mortgage, food, and transportation. Then you have clothing and household goods, some of which is manufactured in China. So we're looking at a 5% increase in a small fraction of a family's monthly budget. As a point of comparison, families regularly weather much larger fluctuations in their monthly budget due to changes in the price of gasoline.

deleted 7y ago

[deleted]