Tariffs Are Theft-Ron Paul

[planosteve]

The US and China came closer to a full-fledged trade war last week when China imposed tariffs of up to 15 percent on key US agricultural exports. This was retaliation for President Trump’s increasing of tariffs on Chinese exports to the United States from 10 percent to 20 percent.

China’s retaliatory tariffs show how export-dependent industries are harmed by protectionist policies. Even if other countries refrain from imposing retaliatory tariffs, exporters can still suffer from reduced demand for their products in countries targeted by US tariffs. Businesses that rely on imported materials to manufacture their products also suffer from increased production costs thanks to tariffs. President Trump acknowledged how tariffs harm US manufacturers when he granted US automakers’ request for a one-month delay in new tariffs on imports from Mexico and Canada.

Many American consumers who are struggling with high prices are concerned that President Trump’s tariff policy will further increase prices. They are right to be concerned. Contrary to popular belief, foreign businesses do not pay tariffs. Tariffs are paid by US businesses that wish to sell the imported goods. When tariffs are increased, the importing businesses try to recoup their increased costs by increasing their prices. Consumers then must choose whether to pay the higher price, find a cheaper alternative, or do without the product. Whatever they choose, consumers will be worse off because they cannot spend their money the way they prefer.

Tariffs may provide a short-term benefit to the protected businesses. However, tariffs could keep businesses alive that should be allowed to fail so the business owners and workers can put their talents to use in other endeavors that would more greatly benefit and the whole economy.

Defenders of tariffs, including President Trump, claim the revenue from tariffs can be used to “offset” the revenue government loses from tax cuts. Some even claim that tariffs can generate enough revenue to allow the government to repeal the income tax. The problem with this is that a tariff brings in more revenue to “pay for” tax cuts only to the extent the tariff does not cause consumers to cease buying imported goods. Thus, the tariffs, to bring revenue to the government, must not be large enough to discourage Americans from buying foreign products. The more tariffs increase government revenue, the more they will tend to fail in bringing about another often promoted tariff goal — an increase in the purchase of domestic goods.

According to the Tax Foundation, if President Trump’s tariff plan for China, Mexico, and Canada were fully implemented, it would increase federal tax revenue by 142 billion dollars this year — an average tax increase of over one thousand dollars per household. The tariffs would also decrease economic output. This does not account for the decline in consumer satisfaction caused by consumers being forced to alter their consumption choices because of government-caused price increases. It also does not account for the new businesses, products, and jobs that could have been created had government not drained resources from the productive economy via tariffs.

The economic effects are a good enough reason to oppose raising tariffs. However, the main reason to oppose tariffs is that tariffs, like all taxes (including the inflation tax), are theft.

[GFB]

Time to start shoveling dirt on Ron Paul.

[planosteve]

Why? If it wasn't for him you wouldn't have Senator Rand Paul.

[Mark]

Is the 270% tariff Canada has had on American dairy products theft?

ETA: Why shouldn't we reciprocate?

[planosteve]

Is the 270% tariff Canada has had on American dairy products theft?

ETA: Why shouldn't we reciprocate?

President Donald Trump correctly noted Friday, as he has before, that Canada has tariffs above 200% on dairy products imported from the US. But Trump again failed to mention a critical fact.

Those high tariffs kick in only after the US has hit a certain Trump-negotiated quantity of tariff-free dairy sales to Canada each year – and as the US dairy industry acknowledges, the US is not hitting its allowed zero-tariff maximum in any category of dairy product.

In many categories, notably including milk, the US is not even at half of the zero-tariff maximum.

“In practice, these tariffs are not actually paid by anyone,” Al Mussell, an expert on Canadian agricultural trade, said in an email Friday.

President Donald Trump delivers remarks in the Oval Office of the White House in Washington, DC, on March 7.
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Trump threatens new tariffs on Canada, including 250% tax on dairy

Trump also made a claim that is simply false. He told reporters Friday that the situation with Canadian dairy tariffs was “well taken care of” at the time his first presidency ended, “but under Biden, they just kept raising it.”

In reality, Canada did not raise its dairy tariffs under then-President Joe Biden, as official Canadian documents show and industry groups on both sides of the border confirmed to CNN. The tariffs Trump was denouncing Friday were left in place by the United States-Mexico-Canada Agreement, or USMCA, which Trump negotiated, signed in 2018 and has since touted as “the best trade deal ever made.”

The White House did not respond to CNN’s Friday request for comment.