Taxes & Trade Wars

Last updated on March 2nd, 2018  

The United States has been on the losing side of trade policies for decades along with self imposed regulatory disadvantages that drive jobs out of the country.

The hyperbole you see going on in the press is just mindless rambling.

Actual numbers related to actual tariffs is likely the last thing you will ever hear from the major media outlets, if they mention them at all.

Though on occasion the major media outlets will dig up some obscure tariff which benefits the US. These are usually related to national security.

However, you will find the major sweep of tariffs around the world is to the disadvantage of the United States.

The only question that matters, for the fact based FiniteSpaces reader, is “What are the trade and regulatory policies?”

Car Import Tariff: EU 10%, US 2.5%

For example, the EU has a 10% tariff on car imports while the US has a 2.5% tariff.

Does that look fair to you?

The immediate response from those trying to rob you is to dazzle you with details. You must learn to ignore them. Complexity is meant to confuse and mislead.

There are simple measures you can find with a little effort that give you the true picture, such as the car import tariff mentioned above.

Reciprocal Tariffs

“Reciprocal Tariffs” means my country charges the same tariff as yours.

By what measure can that be considered unfair?

Bad Trade Deals

Why has the US made such bad trade deals?

“Follow the Money” or “Who Benefits”?

If you examine your politicians you will find their spouses or children are often involved in foreign businesses or domestic business with foreign interests.

The US negotiates bad trade deals to benefit the politicians whose family members are on the other side of the deal.

It really is that simple.

The connections are often not direct, but they are there, which is why I suggest you look up some of your representatives and see what their family members are up to. You will find a surprising pattern of foreign interests.

Often these foreign interests are obscured through  levels of shell companies but the links can be found, and as the game of selling out the US citizen has become more widespread the players have not felt the need to hide their efforts as much and thus it is easier to find the connections these days.

The business deals are not direct. The deals are often quid-pro-quos where the foreign interest invests in a entirely unrelated business owned indirectly by the politicians beneficiaries.

Look up Dianne Feinstein’s husband Richard Blum and you will quickly be able to find plenty of references to his foreign business deals. You can find similar information for most politicians.

And the funny thing is that selling out the citizens you represent to foreign interests and for the benefit of your family members is not illegal. It may be traitorous and corrupt, but it is not a crime. Or at least, that is what the beneficiaries of these corrupt and traitorous policies will say if someone points out the conflict of interest.

As described in more detail in Why Government Regulations Cost Jobs to keep from being robbed we should at least create a level playing field for ourselves.

And that means two things:

One, Reciprocal or Balancing Tariffs

our tariff’s dollar amounts are the same as your tariff’s dollar amounts

and two, a level regulatory field

If we are going to impose regulations on US workers and businesses those same regulations must be imposed upon all those doing business in the US.

for more details on regulation driving jobs abroad see Why Government Regulations Cost Jobs .

And to be fair, there are US protectionist tariffs such as those on sugar and milk.  However, other countries are free to adjust their tariffs as they see fit.

The problems occur when **our** politicians create policies that hurt the people they represent and benefit their relatives and foreign interests.

Why tariffs and trade wars get complex.

Trade wars and tariffs get complex when the following happens.

• I sell you cars
• you sell me sugar
• you put a 10% tariff on the cars that I sell you

Since you do not sell me cars, my responding to your tariff with a
reciprocal tariff does not work. If I put a 10% tariff on cars
that you sell to me nothing changes because I do not buy cars from you.

In this situation, I put the reciprocal tariff on sugar because that is something that I do buy from you.

And the reciprocal tariff is not a percentage but an equivalent dollar amount.

Which works like this:

You sell me $100 million dollars worth of sugar and I sell you $50 million dollars worth of cars.

If you put a 10% tariff on the cars that I sell to you I should respond by putting a 20% tariff on the sugar that you sell to me.

10% of $100 million is $10 million, and 20% of $50 million is also $10 million.

The tariffs balance each other from a dollar point of view.

Balancing tariffs are fair tariffs. They are used in situations where the
trading partners trade different items.

The balance or fairness is in the dollar amount, not the percentage.

Balancing tariffs are a little more work to understand because you must identify what items the tariffs are trying to balance.

I am all for free and open trade. For the most part I dislike tariffs.

However, to be fair, reciprocal and balancing tariffs are needed to
maintain a level playing field between trading partners.

Yes, no tariffs would be best, but if one party imposes tariffs the other party must do so also.

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