Are tariffs just straight up revenue for the US government, like income taxes?
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China Once Looked Tough on Trade. Now Its Options Are Dwindling
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Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#12I initially used to think China might have more leverage against any potential trade war agains the US, as:
1. The Chinese had option of imposing high tariffs on politically significant US agricultural products, like soyabean, which are not very large in $ value, but affect a lot of areas.
2. Since some swing states are highly influential in US elections, the Chinese always had the option of imposing tariffs which impact the swing states mostly.
Both of these thoughts arose from the fact that as a democratic country, the US would have to take into account both short and long term trade prospects. Now reading this article, it seems being a predominantly export driven economy and having a huge trade surplus with the US, the Chinese don't really have that much leverage.
Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#13Are tariffs just straight up revenue for the US government, like income taxes?
Yep, that's right.
Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#14That was a great piece, very insightful and enlightening!
Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#15I initially used to think China might have more leverage against any potential trade war agains the US, as: 1. The Chinese had option of imposing high tariffs on politically significant US agricultural products, like soyabean, which are not very large in $ value, but affect a lot of areas. 2. Since some swing states are highly influential in US elections, the Chinese always had the option of imposing tariffs which im…
Yeah their leverage ends up being limited but even if they had focused their tariffs on soy beans, it would have hurt them more than not given the Importance of the us in their imports.
Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#16>Proponents of the plan say letting Washington impose more tariffs than Beijing would actually hurt the United States more because tariffs are ultimately paid by consumers and businesses in the countries that levy them. Well, this is actually the fundamental problem, isn't it? There's no way actual trade evens out, so tariffs are the only real outcome here. Even if we "win", it's not actually winning.
The "winning" scenario for the United States is that China agrees to change its IP policies. IP is America's most valuable product, and the Chinese have been stealing it with 0 consequences for decades. A win on this front would see an end (or at least decrease) in cyberattacks and more US friendly IP laws.
Like which IP policy? Any specific policy document that you can point out?
China has been having IP laws and protection since around 1980, and China government never said once that stealing IP is okay. It is IP law execution and enforcement in China that is sub-par. Policing is sometimes hard.
Also, I believe the US really wants to treat IP as an "asset" rather than a "product".
Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#17Are tariffs just straight up revenue for the US government, like income taxes?
Yes, but they are paid by the importer and (usually) passed on to the consumer. In effect they become a subsidy for local industry paid by consumers.
Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#18China still hasn't pulled out the boycott card like they have recently done to both Korean and Japanese companies for perceived slights. A lot of F500 companies are reliant on China's consumer market to meet their quarterly goals, and would be vulnerable.
Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#19Are tariffs just straight up revenue for the US government, like income taxes?
Yes. There was no income tax for the majority of US history, and tariffs were a major source of revenue for the government back then.
I didn't know this was the case, thank you for sharing. For anyone else reading, it appears federal income tax was first implemented in 1913, more reading here: https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...
Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling
#20>Proponents of the plan say letting Washington impose more tariffs than Beijing would actually hurt the United States more because tariffs are ultimately paid by consumers and businesses in the countries that levy them. Well, this is actually the fundamental problem, isn't it? There's no way actual trade evens out, so tariffs are the only real outcome here. Even if we "win", it's not actually winning.
Additionally when we import from China, we pay with dollars. China can either buy US goods with the dollars, or buy US assets (typically Treasury bonds) with the dollars. If you end the trade surplus with China, you end a cheap source of funding for the US government.
Not clear if this is a feature or a bug.