Wednesday, July 4, 2018

Tariff Wars

   A tariff is nothing more than a tax on imports. Done selectively and judiciously, it may work. But typically, any set of tariffs imposed on goods from one country invites retaliation by the target country, imposing punishing fees on exports from the first country.
   Retaliation then brings on counter-retaliation by the first country, imposing still higher costs on yet more products.
   Punch brings counter punch.

   And so it goes, with the higher costs passed on to consumers on each side.
   So who wins? Possibly the producers, manufacturers and distributors, who gain revenue as they pass on the higher fees to consumers. And, of course, the government that levies the import tax.
   Until, that is, consumers can no longer afford to pay, so they stop buying stuff.
   Result: Everyone loses, and the economies of both countries recede.

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