Can Tariffs Actually Work?（原声文稿）

negotiating threat and a tool to fix a long list of identified economic problems.

policy of the United States, a policy that supposedly helped to keep income tax at zero and protected thriving industries.

So if it worked for the USA once, could it happen again?

room needed to lower taxes whilst reviving the old industrial impose tariffs that make economic sense.

That's why changed dramatically since the US last used tariffs with the breadth complex global supply chains that depend on low trade barriers.

to increase their prices just to stay profitable.

This would effectively mean that tariffs are just a sneaky way to tax consumers.

be worth a potential reduction in consumer purchasing power.

end of the day, tariffs are simply an economic tool.

which should be weighed up to get a sense of the net is key now more than ever.

So as always we have why might tariffs still be worth it even if they come a lot whether it's scripting videos for economics clear and effective communication is critical powerful features.

goods, paid directly by the domestic business that's importing it.

protectionism or even economic nationalism.

The basic idea is that a tariff on imports makes them more expensive.

employment and industrial growth in the domestic economy, whilst the government earns itself an additional source of income.

This is a process known as import substitution industrialization.

used tariffs as a means to protect and develop their industrial base.

Broadway fame, respected Adam Smith's newly published foundational economic it as a general rule for developing industry and building national wealth.

has chemicals, precision instruments and machinery relatively cheaply and on mass.

infrastructure, capital and skilled labour.

the significant technological barriers to international trade at the time.

instead, fostering domestic industrialization.

the average tariff rate on targeted goods eventually setting above 40%. And it worked.

from tariffs that income tax didn't even exist up until 1910.

However, the use of tariffs was hotly disputed at the time, just like it is now.

suffered from retaliatory European tariffs on their income.

The Merrill Tariff was an additional grievance for the Southern around tariffs in the US is nothing new.

But fast forward to the end begin competing as the leader of free trade.

Technological benefit from the principles of comparative advantage and absolute advantage.

was certified as the dominating economic order when the World Trade Organization their complexity to the point where it becomes common for an end of more different manufacturers or from different places in the world.

tariffs on its largest trade partner in 2018.

pretty strong recent evidence of what the impacts of tariffs will actually be.

So what can we learn from US tariffs during this period?

everyone's favorite semi-durable consumer appliance, the washing machine.

the 2018 tariff had on washing machines.

It found that the businesses who were domestic producers to follow suit and increase their prices, product which was not directly subject to a tariff, but became collateral damage since the two goods are often sold together.

elasticity of consumer prices was above one.

In layman's term, two that followed.

The complete pass through of the 2018 Economics.

In effect, this meant that tariffs were tax consumers without having to actually call it a tax.

on Americans, which amounted to one of the largest tax increases in decades.

Now, this part was already pretty well-known.

protecting domestic industries outweigh the price increases for consumers.

billion annually, whilst it only brought in an additional $82 million worth of government revenue annually.

1800 new jobs were created in the US, consumers of a whopping $815,000 a year.

This is clearly an of a much smaller amount.

The evidence also suggests that tariffs businesses too.

The washing machine is an end product, so it's not you know what is, steel.

A 25% tariff was whacked onto countless American industries needed as an input material became construction and machinery, triggering layoffs.

So despite the new hire in US Steel there were multiple layoffs in other industries.

industries where steel is the output of production.

accelerated it, at least in the immediate years that followed.

inevitable counter-strike in any trade war.

In light of the 2018 Paris USA, largely targeting agricultural food products.

resulting in less revenue to providing come in the products, but this came at a hefty price.

$61 billion was spent on additional $66 billion the US government collected on tariffs imposed on fiscal spending elsewhere, so it's like an expensive game of whack-a-mole.

Now, it's important to note that these studies run, which is clearly bad for consumers and a lot of industries.

bring more benefits than costs, as factors of production production, generating investment, employment and growth.

where the effects have marinated for decades.

A 25% tariff is placed on light trucks imported to the US in 1964.

Stellantis, serving as a lifeline for the US automotive industry where offshoring and outsourcing was driving industrial decline.

from the 1980s to the 2000s with Honda also downsides.

competition, which reduced pressure to innovate and increase efficiency. And here lies the key point.

complacency and the abuse of market power so that consumers get a fair deal.

that there is adequate domestic competition.

is not as fiercely competitive as it could be, and this has hurt consumers through market remains competitive, its positive effect will still be susceptible to sneaky again strong armed a foreign producer into investing parts into the automotive equivalent of IKEA Flat inefficiency created by the tariff barrier.

parts too, but it's an interesting example of the lengths that countries.

For example, when the US tariffs landed Vietnam or Mexico where tariffs did not apply.

country to relabel and repackage before bringing it into the domestic market.

relocating their manufacturing to the domestic economy.

tariff specifications markets targeted and countries affected.

charged debate ignore this nuance, and herein lies the problem.

wants to impose which makes it very difficult to assess the economic impact.

of higher input costs, inflated consumer prices and retaliation.

This net negative effect could possibly be long run and certainly short run.

economy now when they worked wonders in the 19th century?

cheap, with extremely loose labour regulations in developing economies.

This makes production efficient and prices low. The cat's out of the bag so to speak.

many industries to ever return to the US en masse.

operations to another country, or take the hit and pass it on to US consumers.

necessarily bringing jobs back to the US, which is the whole point.

universal level, where tariffs will be placed on things that never were and never can be made in the domestic economy.

Hamilton did, so that the market can prepare and adjust erodes trust and keeps industry leaders uncertain on their next best move.

where they're necessary, despite the economic costs.

relying on politically misaligned countries for their products.

energy, vehicles, rare earth minerals, and food.

war, one of the immediate moves would be to embargo trade with an enemy, which if offence. We're talking national security and at this point the debate