Loading ...Although he started out using them as threats, he went on to say that he would eliminate income taxes and the tariffs will replace that govt. revenue. It’s that aspect that does not add up, having $3tn of tariffs on $3tn of imports to replace $3tn of income taxes. If you placed a tariff on alumina, for example, which you don’t have, your suppliers won’t absorb a 100% tariff and your refineries will stop work. If you want to rebuild your steel industry you’ll need to import vast quantities of iron ore – you can’t go slapping a 100% tariff on iron ore to replace income taxes.
And let’s not forget that isolationist policies inevitably lead to inefficiencies. When you had car import tariffs, and the UK had a heavily subsidised car industry, the products were rubbish. The same in Oz. Toyota had an assembly plant here, but people preferred Japanese Corollas rather than Australian ones – especially second hand. The GM version of the Opel Omega, Vauxhall Carlton was crap. Expensive, inefficient, poor build quality etc. Like British Leyland in the seventies and eighties.
So I see how they can work as threats, but not as a long term replacement to income tax.
For the present however, I hope you’ve both got adequate supplies of popcorn and/or beer and crisps for the coming months.