Understanding Tariffs.

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arjay said:
Recession and inflation incoming
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Look at the bright side...can't be worse than the last four years! But I'll tell ya, the latrest hits to my 401k account with only a year to go until I planned to retire is very depressing...and working for a government contractor has my anxiety level through the roof.
 
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Bald1 said:
There is a trade deficit. Canada sells way more to the US than they buy. Crude oil can skew the numbers a bit but the US Govt feels as though they are propping up (subsidizing) Canada. They simply want Canada to do more. Especially with the military protection Canada enjoys by being a border country.
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That might have something to do with the disparate populations.

US 340 million
Canada 41 million
 
Seen this movie before (we lost).

"Smoot-Hawley Tariff ActUnited States [1930]
Also known as: Hawley–Smoot Tariff Act, United States Tariff Act

Smoot-Hawley Tariff Act, U.S. legislation (June 17, 1930) that raised import duties to protect American businesses and farmers, adding considerable strain to the international economic climate of the Great Depression.

Smoot-Hawley contributed to the early loss of confidence on Wall Street and signaled U.S. isolationism. By raising the average tariff by some 20 percent, it also prompted retaliation from foreign governments, and many overseas banks began to fail. (Because the legislation set both specific and ad valorem tariff rates [i.e., rates based on the value of the product], determining the precise percentage increase in tariff levels is difficult and a subject of debate among economists.) Within two years some two dozen countries adopted similar “beggar-thy-neighbour” duties, making worse an already beleaguered world economy and reducing global trade. U.S. imports from and exports to Europe fell by some two-thirds between 1929 and 1932, while overall global trade declined by similar levels in the four years that the legislation was in effect." Smoot-Hawley Tariff Act | History, Effects, & Facts | Britannica
 
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Didn't sleep at that famous hotel chain, and certainly ain't no exspurt. Can ask questions however.

What specific tariffs did Canada have in place against U.S. before this started?
Were there any trade agreements put in place before that favored canadian interests over U.S. ?
Are there any goods canada simply didn't allow in before this?

As for tariffs enacted in the 30's, it would appear trade relations and international trade are far more complex now?

Lets see here. Tariff threats have already worked for multiple countries?
 
zeke said:
Didn't sleep at that famous hotel chain, and certainly ain't no exspurt. Can ask questions however.

What specific tariffs did Canada have in place against U.S. before this started?
Were there any trade agreements put in place before that favored canadian interests over U.S. ?
Are there any goods canada simply didn't allow in before this?

As for tariffs enacted in the 30's, it would appear trade relations and international trade are far more complex now?

Lets see here. Tariff threats have already worked for multiple countries?
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218% on dairy products. They are more than a little protectionist on that one.
 
Empe said:
I'm not sure that I buy into the whole tariff scenario . Canada in particular is a strong ally of the USA . We share the longest undefended border in the world and it just doesn't make sense to me to be doing this to some of our long time friends and allies.
I'm not sure of the statistics but I can't imagine that much fentanyl is flowing from our northern border .
Also if fentanyl is flowing into our country ...which it is ... it's because there's such a demand for it .
We likely need to be looking after ourselves and cleaning up the issues we have here in our own country regarding illegal drug use first and not blaming our problems on our friends and neighbors...north or south.
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Neither Canada nor Mexico are our friends in any way.
 
biku324 said:
Seen this movie before we lost).


Quick Facts
Formally: United States Tariff Act of 1930
Also called: Hawley-Smoot Tariff Act
Date: June 17, 1930
Smoot-Hawley contributed to the early loss of confidence on Wall Street and signaled U.S. isolationism. By raising the average tariff by some 20 percent, it also prompted retaliation from foreign governments, and many overseas banks began to fail. (Because the legislation set both specific and ad valorem tariff rates [i.e., rates based on the value of the product], determining the precise percentage increase in tariff levels is difficult and a subject of debate among economists.) Within two years some two dozen countries adopted similar “beggar-thy-neighbour” duties, making worse an already beleaguered world economy and reducing global trade. U.S. imports from and exports to Europe fell by some two-thirds between 1929 and 1932, whileoverall global trade declined by similar levels in the four years that the legislation was in effect." Smoot-Hawley Tariff Act | History, Effects, & Facts |
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Kevin J. said:
People don't get it. This these are just negotiating techniques. What did TR say? Speak softly but carry a big stick? The difference is the speak is not so softly.
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Yeah I give up explaining it.
 
BigBoy99 said:
My understanding of tariffs is like this. An importer is currently purchasing an item for certain amount who them sells it the consumer. If a 25% tariff is imposed, the importer increases his price to the consumer who will pay an additional 25% for the item. What happens to the money used to pay the 25%? Does the importer get to keep the 25% or are they required to pay that 25% to the Government? Is this a program to increase the wealth of the importers or tax scheme where the consumers are paying the extra cost of the item and that money goes to the Gov’t.?

Perhaps there are some economics majors who can explain how all of this talk of imposing tariffs really works?
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Simply put, the importer pays the tariffs when the goods are received from overseas. That money goes to the government (it's a FEDERAL tariff, after all). He increases prices to his distributors/wholesalers/retailers right down the line to recoup the added expense.

When the end consumer finally buys the item, the price is obviously higher because nobody in between is willing to eat the added cost - they just raise prices on to the next guy. In the end the consumer is the one who pays for the tariffs.

So the short answer is YES, tariffs DO make prices higher for the consumer, and the money goes to the government. Tariffs are taxes.

As for replacing those goods with American production, I say that is a whole different discussion.
 
zeke said:
Didn't sleep at that famous hotel chain, and certainly ain't no exspurt. Can ask questions however.

What specific tariffs did Canada have in place against U.S. before this started?
Were there any trade agreements put in place before that favored canadian interests over U.S. ?
Are there any goods canada simply didn't allow in before this?

As for tariffs enacted in the 30's, it would appear trade relations and international trade are far more complex now?

Lets see here. Tariff threats have already worked for multiple countries?
Click to expand...

These aren't my words, but it's as good an explanation as any:

"The United States-Mexico-Canada Agreement (USMCA) replaced the North American Free Trade Agreement (NAFTA) on July 1, 2020. The USMCA is a trade agreement that aims to create a more balanced environment for trade between the United States, Mexico, and Canada. What is the USMCA intended to do? Support freer markets, support fairer trade, support robust economic growth in North America, and support high-paying jobs for Americans."

The USMCA was intended to build a multi-nation economic bloc to compete with the EU and BRICS. It was negotiated and implemented by the first Trump administration. The current and proposed tariffs on Mexico and Canada are a violation of this agreement.
 
Prior to a Constitutional amendment that authorized the federal government to levy an income tax…the government had traditionally been funded by tariffs on trade. I guess there’s an argument tariffs can help keep income taxes in check…but that’s a pipe dream considering how Congress loves spending our money.
 
We have have taken advantage of ourselves....

03hemi said:
They need us more than we need them, bottom line.
There's absolutely zero that we can't produce, enriching American workers in the end, making us totally self-reliant.
it's just another way to get other countries to fall in line and stop taking advantage of us. Eventually, they will all fall in suit.
Eggs are high due to the bird flue, but I paid around $3.00 a dozen yesterday, so don't take the bait.
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...by allowing any and every country to undersell us we moved much of our supply and manufacturing offshore. It's our own dam fault for allowing this to happen. "Cheap" goods ain't cheap in the long run.

[ame]https://www.youtube.com/watch?v=pKv6RcXa2UI[/ame]
 
dockmurgw said:
Look at the bright side...can't be worse than the last four years! But I'll tell ya, the latrest hits to my 401k account with only a year to go until I planned to retire is very depressing...and working for a government contractor has my anxiety level through the roof.
Click to expand...

Oh, yes it can. Chronic unemployment under 4% is nearly unobtainable. That's what we've had the past few years.
 
Bald1 said:
There is a trade deficit. Canada sells way more to the US than they buy. Crude oil can skew the numbers a bit but the US Govt feels as though they are propping up (subsidizing) Canada. They simply want Canada to do more. Especially with the military protection Canada enjoys by being a border country.
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Untrue. Since 2015, we've run a trade surplus with Canada 5 of 10 years. TD Economics - Setting the Record Straight on Canada-U.S. Trade
 
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SnidelyWhiplash said:
That's certainly part of it. But another part is an inducement for Canada and Mexico to make the effort to stop illegal immigration and fentanyl from coming across their borders into the US. It's already working...Mexico has caved and will be sending their military to the border for a pause in the tariffs.

Now...it's Canada's turn.

It's great to have a muscular foreign and economic policy again.
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1% of illegal immigration comes through Canada. 44 total pounds of fentanyl have been caught coming into the US from Canada in the past year.
 
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