Tariffs on products 2
Tariffs on products 2
NWO media and politicians have claimed that prices of USA made goods will go up because prices of raw materials will go up. This is another deception, they alter the meaning of phrases. It may be true only for a while with the approach followed currently. If tariffs are imposed on countries, prices of some raw materials may go up and this will cause an increase in the prices of products made in USA.
The same reasoning that we followed so far, applies to raw materials as well. Domestic producers of raw materials will take the market shares importers will lose. But this will take some time. In the meanwhile, USA companies will have to pay much higher prices for imported raw materials. Also there is another issue that applies not only to raw materials but to all products.
Maybe USA can't make certain raw materials or generally products. There are also reasons USA or any country may not want to make some goods whether these are consumer products or raw materials. Some sectors may have low productivity. It is not possible to have all sectors with high productivity but the higher the percentage of GDP in high productivity sectors, the richer a country is. Also, USA may not have the minerals used in raw materials.
Often it is much better to produce raw materials close to where minerals are extracted for some reasons. It is too expensive and irrational to transport minerals a long distance and pay high transportation cost, when in the production process a significant percentage of their weight / volume will decrease or they take forms that are easier and cheaper to transport.
If USA wants to produce more of some raw materials, tariffs on these should be imposed some time after they are imposed on the consumer goods they are used. An increase in raw materials prices may have different effect on the prices of different goods. It depends on what percentage of the total costs these are. In some products, raw materials are a large percentage of the total costs while in other products they are a small percentage of total costs.
Suppose tariffs make prices of imported consumer goods go up and also increase prices of raw materials used for them. The latter will bring up price of products made in USA. If raw materials are a high percentage of total costs, tariffs will have a small impact on deficit. There will not be a considerable benefit from tariffs. It is even possible that imports and deficit may increase.
We will give a simple example. Country A produces a consumer product and also imports it from country B. A significant part of the cost is raw materials which country A imports from country C. Suppose that raw materials are 50% of the total cost. Country A puts 30% tariffs on (products from) country B and 70% on country C. The price of the product will increase 30% while costs of local producers will increase more, 70 X 50 = 35%.
Tariffs on products approach is helpful for politics inside USA. Trump may not want some of his supporters to get harmed by tariffs whether these supporters are people or industries. Some people and industries have donated large amounts of money to Trump's campaign. These supporters produce specific products and services and use specific raw materials. In the approach we recommend, it is easier not to harm those supporters.
There is also the issue of EU. It is not a country but a supranational monstrosity, a failed experiment that must end. USA does not have significant deficits will all countries in EU occupied territory. With some countries deficit is very small and with many it is a surplus. But USA or any country can't put different tariffs on products from different EU countries. However, they can put different tariffs on different products.
USA imports different products from different countries in EU. If they want to decrease imports and deficits from specific countries, they will put tariffs on the products they import from these countries. For instance, if they want to decrease imports and deficit from Germany, they may put tariffs on automobiles. Most countries in EU occupied territory do not export autos to USA so this will not affect them.
Greece's prime minister suggested no tariffs between USA and EU. Trump made some positive comments about this very bad man and so did Greek American, Trump supporter James Dimon. After these comments, that monster's party, New Democracy gained points in the polls. Mitsotakis is a horrible human being, a NWO fanatic, a Biden supporter and a big traitor. NWO media in Greece that support him have been bashing and ridiculing Trump for a decade.
Zero tariffs is free trade, NWO ideology, free movement of people, products, services and capital. Trump is either in favor of free trade or against it. Free trade is not fair. Tariffs are a very useful tool to make trade fair. If they are used incorrectly, they can be harmful to the country that is imposing them. It is very important that tariffs are imposed the right way.
According to our opinion, this should be done on products instead of countries and slowly. There is no need to rush because the potential benefit from tariffs, in terms of GDP increase is not that much. USA could gain close to 4,32%. This is a one time gain and it is not annual. Let's say that it is done in four years. The average annual addition to growth rate would be 1,08% for four years. After that, there will be no gain, when deficit is close to zero.
There will be also an increase in the amount that will be collected from tariffs. Trump's plan is to decrease taxes. First of all, most of the tariffs will be paid by consumers in USA. So it is a trade off. Taxes may decrease but consumers will be paying more for imported products. NWO false propaganda claims that tariffs are bad because consumers pay more.
This is incorrect because the government collects tariffs and can reduce taxes or use receipts in other ways to benefit citizens. On the other hand, it would be also incorrect to claim that increase in government's receipts from tariffs does not come with a cost. Most of it will be paid by consumers of imported goods who are also citizens. Most importantly, receipts from tariffs will gradually decrease as imports decrease.
Trump's administration should start reducing deficit with tariffs but if matters move too fast, it could boomerang and hurt USA more than other countries. It is very important that this is done the right way and regarding tariffs slowly is better. Obviously countries that have their exports and deficits reduced do not benefit from that. But the harm to them can be minimized, if tariffs are imposed slowly and cautiously.
If this effort fails, NWO deceivers will claim that tariffs are bad. So it is very important that no mistakes are made. The worst thing would be if NWO monsters prove to be right, not because tariffs are wrong but because they were used the wrong way. NWO monsters should not be even slightly right and this is not happening with the current approach.