Tariffs

Tariffs,

only a simpleton would think of this.

This is the first reaction to that situation

when imports are being used

more than what is being produced.

These are installed either to reduce the imports

and/or increase production.

These will be of no effect

if the imports are needed

and that what is produced is not that good

for consumption.

Think of steel as an example.

Steel is produced by melting iron over coal

resulting in a molten iron core

laced with carbon from the coal.

Such a process requires the industry of both

coal mining and steel factories.

Steel production is either scarce in the US

or it is cheaper to import than produce.

So the first reaction is to impose tax on

the importation of steel.

This tax, or tariff, is pegged on the exporter who

is now obligated to add the amount to the price of steel.

The importer, referred to the Americans here,

shoulders the tarrif expense.

That is,

if the importer still goes through with the importation.

A further consequence is that the exporting country

will start leveling tarrifs on the American products

which, by some chances, are of a better quality

and more expensive already than what is available locally.

The importing countries will, of course,

prefer cheaper commodities when opportunities allow.

The American products will therefore be set aside

in preference to the cheaper products.

There would be no such thing as Free trade

when tarrifs are imposed.

But there would be such a thing as Trade War

in lieu.

I guess I have to forego explaining the master Stroke idea. From the looks of it, it would only be manhandled afterwards. Also, the solution to school shootings. What the hey, eh?

 

 

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