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Tariffs FAQ
Topic Started: Aug 9 2018, 06:23 AM (45 Views)
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For those who, like me, are confused about tariffs, here's a short handy explanation for dummies. Not that I think you're a dummy. It's just that . . . okay, forget that part.

As far as I can tell, this piece is apolitical, mostly. https://www.politifact.com/truth-o-meter/article/2018/jul/30/effects-donald-trumps-trade-war/

"Tariffs are taxes on certain imports from another country paid by a country's own population. They raise prices for manufacturers, which are passed onto customers, or for customers directly.

When manufacturing costs [go] up, manufacturers have to either adjust to the higher cost or find something to replace the imported good. Sometimes the replacement might create jobs domestically, but imports are not always easily switchable, like steel.

With higher prices, demand goes down, and so on the retail end, jobs suffer. However, experts said jobs are the last in a series of cost-reductions that firms will take in reaction to tariffs.

Other countries retaliate to U.S. tariffs by putting tariffs on U.S. goods sold in their own countries, like China's tariff on U.S. soybeans. China still has to get soybeans from somewhere, and so far their eyes are set on Brazil. As a consequence, U.S. producers lose valuable customers they may not regain, and must drive prices down to compete with the foreign goods.

The effect is lower prices and lower export levels, but some of these effects are only now starting to show. In anticipation of the tariffs, the agricultural industry pushed out more exports than usual, which postponed the price effects for months.

"People are saying, 'Why aren't exports down?' " said Laura Baughman, president of the Trade Partnership Worldwide, LLC. "It's because they were doing all this advanced preparation to get around all the harm that would be coming later. So it's going to be in the last half of the year that tariffs start showing up in producer and eventually consumer prices."
"If you can't be a good example, then you'll just have to serve as a horrible warning." -- Catherine Aird
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