Can someone explain the logic of taxing US citizens/companies as a way of punishing foreign countries? It’s never made sense to me. “You hurt my feefees, so I’m going to punch myself!”
By increasing the price of the product in your market, you decrease the demand for it in your market. This means the foreign companies lose out on revenue, and the foreign market loses out on export volume. The first decreases their GDP, the second weakens their currency.
It’s not totally useless, but kind of a self destruction attack in that sense.
The whole gambit fails on things with inelastic demand and no alternative sources.
That said I think there are alternative sources for potash, Canada is just the largest supplier globally (around a third, I’m reading) and by far the largest supplier of the USA.
Then it probably starts to matter how the price balances when one supplier can deliver but with higher shipping costs, and the other has lower shipping cost but a high tariff. If the tariff is high enough it would logically still depress the imports from Canada a bit.
But it seems like a really stupid economic warfare move, because that for sure hurts the USA more than Canada. That said, this is a stupid administration in the USA, so who the fuck knows.
He likely doesn’t understand how they work (or if he does, is using it as a way to implement sales tax illegally).
That said, traditionally they are used to discourage US consumers from buying competition to US businesses, like the tariffs they’ve had on light pickup trucks for a very long time that contributed to the shitty choices decades later. Also these are typically targeted on select products, since as you’ve seen, blanket tariffs on all goods from a country fuck up supply chains and screw everyone pretty badly.
Both are bad, of course, just the latest ones are also very very stupid.
Can someone explain the logic of taxing US citizens/companies as a way of punishing foreign countries? It’s never made sense to me. “You hurt my feefees, so I’m going to punch myself!”
By increasing the price of the product in your market, you decrease the demand for it in your market. This means the foreign companies lose out on revenue, and the foreign market loses out on export volume. The first decreases their GDP, the second weakens their currency.
It’s not totally useless, but kind of a self destruction attack in that sense.
What happens when it’s a product that is essential with no alternative… Like potash?
And that potash is essential to the entire farming economy
The whole gambit fails on things with inelastic demand and no alternative sources.
That said I think there are alternative sources for potash, Canada is just the largest supplier globally (around a third, I’m reading) and by far the largest supplier of the USA.
Then it probably starts to matter how the price balances when one supplier can deliver but with higher shipping costs, and the other has lower shipping cost but a high tariff. If the tariff is high enough it would logically still depress the imports from Canada a bit.
But it seems like a really stupid economic warfare move, because that for sure hurts the USA more than Canada. That said, this is a stupid administration in the USA, so who the fuck knows.
The supply is pretty much inelastic on single-presidency timespans, and I think the next largest exporter is Russia anyway.
No, I think you’ve got it.
He likely doesn’t understand how they work (or if he does, is using it as a way to implement sales tax illegally).
That said, traditionally they are used to discourage US consumers from buying competition to US businesses, like the tariffs they’ve had on light pickup trucks for a very long time that contributed to the shitty choices decades later. Also these are typically targeted on select products, since as you’ve seen, blanket tariffs on all goods from a country fuck up supply chains and screw everyone pretty badly.
Both are bad, of course, just the latest ones are also very very stupid.
Person who doesn’t know how tariffs or the US economy functions, blindly throws tariffs.