2019 May 12 - Chinese Tariffs

Sometimes discussions about economics are nuanced and complex, just imagine the difficulty trying of trying to discuss the fishing industry’s net worth or the construction industry’s aggregate demand. Sometimes they say the point of studying PPE (politics philosophy and economics) is that at least when you’re unemployed you’ll be able to discuss in depth the reasons why.

Well the world of economics is back in the news now with President Trump proceeding with a wide range of import tariffs on Chinese products. Friday saw the level of existing tariffs rise from 10 to 25% and Saturday saw the tariffs imposed on all remaining imports, not just those previously announced. For consumers, it will be a bit like when the health inspector forces your Chinese takeaway to close, or at least stop serving seafood, and when it reopens a few weeks later the old owner’s brother has raised the prices. Except in this case the money will go straight to the government and you won’t get any fortune cookies for filing a tax return on a regular basis.

In terms of impact, some manufacturing will return to the US, though other industries with complex logistics chains will have no alternative but to pass on the costs and continue buying from overseas, at least for years to come. A tax rise for all intents and purposes, equivalent to a 10% sales tax by the time the goods are being paid for at the checkout. I say checkout, even with 10% price increases, it's still better than having your online purchases stolen from your doorstep, although if you're trying to get rid of an old mattress or broken television and the council are wanting a week's wages to remove it, why not put it in an amazon box and let the thieves do it for free?

Anyway, the tariffs, they're expected to bring in anywhere from $100-300bn at a time when the budget could do with some balancing. Bizarrely though, those on the left who are calling for higher taxes are the first to criticise these taxes because of course they would, anything the President does must be wrong. In many respects, if President Trump wants to leave a long lasting legacy, then he should make sure that when he leaves office he writes a book demanding action on climate change, gender rights and an open border policy, thus making every last one of them toxic for any left wing politician to advocate for.
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