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Adding a tariff to goods has three drawbacks 1. very easy to cheat. E.g. during Trump's tariffs on China, there was mass cheating as goods were imported into V
by rsj_hn 5y ago
Adding a tariff to goods has three drawbacks
1. very easy to cheat. E.g. during Trump's tariffs on China, there was mass cheating as goods were imported into Vietnam, relabelled as made in Vietnam, and exported to the U.S. When there is big money at stake, the incentive to cheat goes way up. Trying to audit every exporter's Asian supply chain in search of Chinese inputs is tough.
2. Imposing a country-wide tariff does not incentivize any producer to adopt more efficient processes. Imagine if the EU decided the US gas taxes were too low, and so they slapped a tariff on American cars. Would that incentivize Americans to use less gas? Would it make Americans favor an increase in gas taxes?
3. They lead to retaliatory tariffs by the other side. There's no such thing as pure one way punishment, no matter how justified you think you are. The other side will punish you by the same amount, if they can, in order to punish what they view as your bad behavior in trying to punish them.
Now I'm a big fan of trade reductions, but that's because it's part of my personal war on globalism. But make sure you are signing up for the same mass trade restrictions - e.g. blanket bans on certain products coming from all of East Asia - because that's what this is. Don't think you can wage a war against CO2 without also waging a war against globalism. International conferences are fun, but they have no teeth and don't get the job done.
- blacksmith_tb 5y agoI don't disagree about encouraging onshoring for example (much easier to make those regulations stick that way). But I was mostly responding to the parent's idea that shifting the burden/choice to the consumer was a positive thing. My instinct is that, if we're talking about humane treatment of chickens, it would be best to impose regulations so that all the eggs met a minimum requirement - so consumers couldn't "choose wrong". But of course that makes them all cost more...
- rsj_hn 5y agoYes, I know the point you were making and it's a fair one. I was just elaborating. It's unfortunate that your post was downvoted, there is nothing wrong with it, IMO. I was taking this as a discussion.