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If USA keeps 10% tariffs for everyone equally, why should we interfere? Serious question. I believe that Trump is shaking things off, but his goal is to introd
by mk89 2y ago
If USA keeps 10% tariffs for everyone equally, why should we interfere? Serious question.
I believe that Trump is shaking things off, but his goal is to introduce a fixed "tariff" like a soft VAT.
He is just testing (and profiting with $$$$$) what happens when you do things like 30% there, 24% there, etc. But his long term goal is a fixed tax. In that context, who are we to judge them? We also have VAT on imports.
- cwillu 2y agoYou have VAT on more or less everything, imported or not. A “VAT” that _only_ applies to imports absolutely still deserves retaliatory measures.
- mk89 2y agoNot true. VAT is not applied on exports outside of EU.
- cwillu 2y agoI think you misunderstood: VAT is applied to (approximately) everything a citizen of a country buys: imports and domestically produced products. Exports from a country are entirely irrelevant to whether applying VAT to imports is unfair to US imports to that country, as compared to the US charging a “VAT” on _only_ its imports.
- mk89 2y agoVAT is applied to services too, at least here in Europe. Now, if we were to split VAT in two: 1. tax on imports, 2. tax on whatever goods/services people in that country pay/buy, you could keep just the 2 and have free trade with other countries with zero tax. Or the opposite, do tax on imports and free trade inside your country. The fact that VAT has always been like that (1 and 2 together), it doesn't mean it has to stay that way. Not sure why we should care about how a country decides to apply taxation in their own country, especially if that country sets a more or less equal tax for everyone - that's understandable.
- cwillu 2y ago> 1. tax on imports, 2. tax on whatever goods/services people in that > country pay/buy, you could keep just the 2 and have free trade with > other countries with zero tax. That is completely ridiculous. Why would there a VAT on, say, domestically produced pasta on the grocery shelf, while the Italian import pasta right next to it has none?
- mk89 2y agoTo allow free trade of certain goods which your country needs more. This is why tariffs are much more flexible, because they allow you to, let's say, trade oil at a cheaper price, while pasta (widely produced in europe) at a higher price.
- cwillu 2y agoThen you would just not tax those goods. We already do this with basic foodstuffs; this has nothing to do with tariffs.
- wqaatwt 2y agoSo what you are suggesting is a reverse tariff? Punish local producers for manufacturing goods that we’d rather import. Well.. that’s an idea.. I suppose..
- the_gipsy 2y agoVAT is never universal, different products already get different rates.
- Zanfa 2y agoVAT doesn't affect free trade in any way though. You're mixing up unrelated concepts.
- mk89 2y agoIt's how the EU today works BTW. In german shops you can buy locally produced pasta or imported Italian pasta (no import tax), both with 7% vat on it. Now you can claim "but this is EU...". Why can't this free trade be done with individual countries for specific products then?
- tim333 2y agoThere a lot to be said for ignoring other countries tariffs and just having free trade. Hong Kong and Singapore basically did that for decades and grew fast and became wealthy. Tariffs mostly hurt the countries introducing them. There are some exceptions. Sudden changes can be painful if you built a factory to service some market and they block the sales all of a sudden. But a 10% across the board tariff may not make it worth retaliating.
- thaumasiotes 2y ago> Hong Kong and Singapore basically did that for decades and grew fast and became wealthy. Tariffs mostly hurt the countries introducing them. Wouldn't you say the same thing about VAT?
- tim333 2y agoVAT is basically just a fancy sales tax. You've got to get money for education, health and the like somehow. HK and Singapore did have low tax and small government which probably helped them.
- thaumasiotes 2y agoSo... VAT is a better approach than tariffs because it does a lot more economic damage? That's not very compelling. Why forgive VAT what we can't stand in tariffs?
- tock 2y agoThis is like saying income tax is a tariff because it stops people from buying more imported product.
- thaumasiotes 2y agoIt's like saying income taxes and tariffs do their damage in similar ways. They do. Income taxes are another thing that mostly just hurts the country introducing them.
- rvnx 2y agoIt's not a fixed tax where there is the same rate everywhere: when you check the tariff table, you can see that there is a different rate for each item (e.g. 9.4% for Cotton Jeans) and then it says in Chapter 99 that you pay "9.4% + xxx%" where xxx is the special rate for the country. So it's xx% that goes on top of a rate defined by the type of the item.
- michpoch 2y ago> We also have VAT on imports. And the US has sales tax. VAT is paid on all products, it doesn't matter if it's domestic or imported!
- mk89 2y agoWho cares? From the standpoint of someone selling you something, their product will be sold for 20% more (and they don't get 1 cent out of it).
- notahacker 2y agoImporters care because unlike VAT or sales tax, it makes them x% more expensive than competitors. Consumers care because tariffs paid are in addition to sales taxes or VAT.
- michpoch 2y agoSo the US should drop the sales tax then?
- wqaatwt 2y ago> We also have VAT on imports. Maybe you should not repeat these nonsensical talking points? VAT applies to everything, both imports and domestically produced goods. This reasoning makes even less sense than Trump’s ChatGPT tables… > but his goal is to introduce a fixed "tariff" like a soft VAT. You really don’t understand at all what VAT is?