Would you support a Constitutional Amendment banning all tariffs? (user search)
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  Would you support a Constitutional Amendment banning all tariffs? (search mode)
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Question: Would you support a Constitutional Amendment banning all tariffs?
#1
Yes
 
#2
No
 
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Total Voters: 72

Author Topic: Would you support a Constitutional Amendment banning all tariffs?  (Read 1192 times)
dead0man
Atlas Legend
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Posts: 46,562
United States


« on: February 23, 2019, 05:36:44 AM »

I think free trade is for the best (because it is), but I do not support an Amendment forcing it.
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dead0man
Atlas Legend
*****
Posts: 46,562
United States


« Reply #1 on: February 25, 2019, 11:55:14 AM »

No. Even if you favor low or no tariffs, it would be insane to unilaterally take away your own right to impose tariffs.

Imagine being in a (simplified) situation in which every other country in the world imposes 10 percent tariffs and your own country is constitutionally forbidden from imposing tariffs. Worldwide, all of your own goods would cost 10 percent more than other countries, and in your own country, your goods would cost the same as foreign goods. So you've put yourself at disadvantage for no reason.
why would all of your own goods cost 10% more than other countries?  Every country but yours has a 10% tariff so everything they import (yours and everybody else's) would cost their consumers 10% more.  Also, every imported thing you buy is cheaper to you than it is to everybody else in the world (because you don't have a tariff), there is value in that.

Take widgets.  Countries A, B, C and D all make and use widgets.  Country A does not have a tariff, B,C and D do.  When A buys widgets, they cost $100, doesn't matter where the widget was made.  When B,C or D buys a widget, they get a discount from buying domestically, but all imported widgets cost $110.  So of course they all buy domestically.  Whooray! right?  Well no, now there is no competition for the domestic widget industry.  They become more efficient slower or not at all, or maybe even become less efficient.  But not in country A.  A's widget industry has to compete with everybody else.  They can't become any less efficient.  In time, country A's widget industry can make a profit selling widgets for $95 (or the widget lasts longer, or comes with air conditioning or whatever).  So they get all their home country widget sales and are becoming competitive even in other countries.

When industries are protected from competition by govt forces (or by anything), they get complacent, they don't look as hard for efficiencies.  They get lazy and they get fat.  Sure, it's good for them in the short term, and maybe even medium term if they can really corner a market, but never in the long run.

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and everybody that buys steel in country A gets screwed.  This is exactly what's going on with Trump's tariffs right now.  All of the industry that uses steel and aluminium in the US are getting screwed and less competitive in their respective global markets.  Sure, maybe in the short term it's helping US steel, but it's hurting US auto, ship building, beverage makers, and on and on.
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